Bulls n Bears Daily Market Commentary : 23 January 2023

Tue Jan 24 07:08:16 CAT 2023

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Bulls n Bears Daily Market Commentary : 23 January 2023

 <mailto:info at bulls.co.zw> 

ZSE commentary

ZSE ekes out gains in week opener.

ZSE gains persisted into the new week as the primary AllShare Index extended
0.79% to end the day at 21835.43pts while, the ZSE Top Ten Index added 0.82%
to 13945.76pts. The ZSE Agriculture Index put on 0.23% to 88.79pts while,
the Mid Cap Index rose 0.69% to 43911.33pts. The top gainer of the day was
General Beltings that advanced 9.26% to $1.9667 followed by banking group
CBZ that notched 5.67% to $148.0769. African Sun improved 5.58% to $30.5417
while, conglomerate Innscor charged 3.39% to $672.0072. Tea company Tanganda
capped the top five winners of the day on a 1.34% lift to $130.0000.
Partially offsetting the day's gains were losses in Willdale that dipped
13.51% to $3.2000 trailed by, Star Africa which dropped 6.85% to $2.0494.
First Capital retreated 5.92% to $13.1723 erasing previous session's gains.
Retailer OKZIM slipped 2.90% to $38.0339. Fintech group Ecocash held the
fifth position of the fallers' table having trimmed 1.62% to settle at
$54.1111.

Activity was depressed in the session as volumes plummeted 47.00% to 2.09m
while, turnover plunged 52.60% to $328.11m. Top volume contributors were
Proplastics, Econet, Delta and OKZIM that claimed a mutual 86.38% of the
aggregate. Delta, Innscor and Econet accounted for 36.90%, 27.05% and 25.09%
of the value outturn apiece. On the VFEX market, Simbisa was the only
counter to trade as it ticked up 0.02% to USD$0.4800 on 6,773 shares. The
two ETFs that traded in the positive were the Cass Saddle and Datvest ETFs,
the duo put on 1.08% and 0.57% to end at $2.2282 and $1.5102 apiece. The Old
Mutual and the Morgan and Co MCS traded in the negative territory as the
former shed 0.31% to $7.4660 while, the latter let go 0.14% to $23.2000. The
Tigere REIT edged up 14.99% to $50.6200 on 4,107 units. In other news,
Getbucks financial holdings issued a cautionary statement advising
shareholders that the group is considering delisting on the
ZSE-efesecurities

Global Currencies & Equity Markets

South Africa

South African rand slips; eyes on Reserve Bank this week

(Reuters) - The South African rand slipped on Monday as the U.S. dollar
edged up on global markets, with investor attention this week pinned on the
South African Reserve Bank's first interest rate decision of the year.

At 1525 GMT, the rand traded at 17.2050 against the dollar, over 0.4% weaker
than its previous close. The dollar was about 0.3% firmer against a basket
of major currencies .

The SARB will announce its rate decision on Thursday, with 11 of the 20
economists polled by Reuters predicting a 50 basis point (bps) hike to 7.50%
(ZAREPO=ECI). Eight forecast a 25 bps increase and one no change.

Data last week showed December consumer inflation slowed to 7.2%
year-on-year (ZACPIY=ECI) from 7.4% the previous month, in line with
analysts' forecasts but still well above the central bank's 3%-6% target
range.

Most economists polled by Reuters see no further rate hikes after this week.

The rand lost more than 1% against the dollar last week on investor concerns
over a power crisis that has led to daily electricity outages this month.

On Monday, struggling utility Eskom said in a statement that the outages
would remain at "Stage 4" from 4 p.m. local time (1400 GMT) until 5 a.m. and
"Stage 3" from 5 a.m. to 4 p.m. the following day until further notice.

Almost half of Eskom's 46,000 megawatt (MW) nominal generating capacity is
currently offline because of breakdowns or repairs. Stage 4 means up to
4,000 MW of capacity needs to be shed from the national grid, resulting in
about six hours of power cuts a day for many households.

The government's benchmark 2030 bond was little changed on Monday, with the
yield down 1 basis point at 9.78%. The Johannesburg Stock Exchange's
All-share index (.JALSH) ended 1.08% higher, mirroring gains in global
equities.

The Thomson Reuters Trust Principles.

Nigeria

Katsina traders reject old naira notes

Many bank customers in Katsina State, on Monday, suffered delays before
being attended to following pressure by some of them who wanted to change
their old naira notes for new ones.

The development also coincided with the decision of some traders and
commercial cyclists who had started rejecting the old naira notes from
customers.

The upsurge in the number of customers experienced by the banks on Monday
made some of them (the banks) lock out their customers while some banks also
sought the assistance of law enforcement operatives to restore sanity.

A bank customer, Hadiza Hamza, said she was in one of the banks located
along Kofar Kaoran road to obtain new ATM  card, adding that the unruly
attitude of some of the customers prevented her from being attended to till
later in the afternoon despite being in the bank since 8.30 a.m.

She said "I arrived here at 8.30 in the morning but the inability of the
bank officials to control the customers prevented the officials from
attending to me until 1.30p.m. Those who came to swap their old naira notes
for the new ones caused the problem.''

Another customer, Hassan Hamisu said he was not attended to by his bank
which was located along Fadama area, also in the state capital, until about
3p.m due to the large number of customers who thronged there.

 Hamisu said, 'I was not supposed to stay in the bank for more than 30
minutes for the transaction I went there for. Initially, we were not allowed
into the premises of the bank because of the unruly behaviour of some of the
customers.

"Later, the police and members of the Nigeria Civil Defence Corps were
called to regulate the number of customers allowed inside. That was when I
was able to enter the banking hall and carried out my transaction. But what
I observed was that the problem was caused by some of the bank's customers
who were there to change their old notes for new ones."

All the banks' officials approached for comments declined, referring
enquiries to their headquarters that were either in Lagos or Abuja.

Meanwhile, traders, food vendors and commercial cyclists in katsina had
started rejecting the old naira notes.

They hinged their action on the problems they allegedly encountered in banks
while trying to get the new naira notes.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar edges lower vs euro on ECB rate hike bets

(Reuters) - The dollar slipped against the euro on Monday, at one point
hitting a fresh 9-month low, as the common currency found support from
European Central Bank officials' comments signalling additional jumbo
interest rate rises in Europe.

The euro reached as high as $1.0927 , to trade at its highest level since
April last year, before paring gains to trade up 0.05% at $1.08605.

The euro's early gains were aided by comments from European Central Bank
(ECB) governing council members Klaas Knot and Peter Kazimir, who both
advocated for two more 50 basis point hikes at meetings in February and
March.

The ECB will keep raising interest rates quickly to slow inflation which
remains far too high, ECB President Christine Lagarde said on Monday,
largely repeating the bank's most recent policy guidance.

A Reuters survey of analysts also favoured hikes of 50 basis points at the
next two meetings and an eventual rate peak of 3.25%, from the current rate
of 2%.

"Really what's driving things is central bank policy divergence," said Joe
Manimbo, senior market analyst at Convera in Washington.

"At least in the current cycle, the market thinks the Fed's most hawkish
days are behind it. So when you weigh the outlook for central bank policy,
it depicts the dollar at a disadvantage, given market bets on the Fed moving
more slowly than its counterparts abroad," Manimbo said.

Fed fund futures have priced out almost any chance the Fed could move by 50
basis points next month and have steadily lowered the likely peak for rates
to 4.75% to 5.0%, from the current 4.25% to 4.50%.

With monetary policy meetings for both the Federal Reserve and ECB set for
next week, major currency pairs stuck close to familiar ranges on Monday.

The euro was also being supported by an easing of recession fears amid a
fall in natural gas prices, according to Rabobank head of currency strategy
Jane Foley.

"The growth in confidence in the economic outlook, or at least the removal
of a lot of the pessimism, is part of the euro story," Foley said.

The dollar, which has risen against the yen after the Bank of Japan (BOJ)
defied market pressure to reverse its ultra-easy bond control policy last
week, was up 0.83% at 130.67 yen , following last week's wild gyrations
between 127.22 and 131.58.

"The Bank of Japan, this month, signalling a hesitancy to turn hawkish has
really taken some steam out of the yen's rebound," Manimbo said.

Analysts assume the BOJ will stand the line until at least the next policy
meeting in March, though one hurdle will be the expected naming of a new BOJ
governor in February.

Sterling retreated on Monday from a seven-month high against the dollar hit
in Asian hours, having been helped last week by data showing the British
economy was performing better than feared, which also drove expectations of
more interest rate hikes. The pound was down 0.25% to $1.23685.

Meanwhile, bitcoin was little changed on the day at $ 22,849, steadying
after having jumped by about a third in value since early January, as
investors shook off pessimism following the high-profile collapse of the FTX
crypto exchange FTX.

-The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold edges higher as dollar weakens; traders await U.S. data

(Reuters) - Gold prices edged up on Tuesday as the dollar weakened, while
investors awaited U.S. economic data amid hopes of slower interest rate
hikes by the Federal Reserve.

Spot gold rose 0.2% to $1,935.69 per ounce, as of 0208 GMT. U.S. gold
futures were up 0.4% at $1,936.00.

The dollar index dipped 0.2%. A weaker greenback makes dollar-priced bullion
more affordable for many buyers.

Register for free to Reuters and know the full story

Investors are now focused on the U.S. fourth quarter GDP growth estimates
due on Thursday.

"Any signs of a weaker U.S. economy will be taken as a reason for the Fed to
tighten less aggressively, and that could support gold, which would also
take in safe haven flows," said Matt Simpson, a senior market analyst at
City Index.

"Disappointing numbers likely to help gold climb above $1,960, but might not
break through $2,000 in its first attempt, given the significance of the
number."

Traders are mostly pricing in a 25 basis point (bp) rate hike by the Fed at
its Jan. 31-Feb. 1 policy meeting, after slowing its pace to 50 bps in
December, following four straight 75-bp hikes. FEDWATCH

Lower interest rates tend to be beneficial for bullion, decreasing the
opportunity cost of holding the non-yielding asset.

On the physical front, India is expected to slash the import duty on gold,
which could lift retail sales by making the metal cheaper ahead of peak
demand season in the world's second-biggest bullion consumer.

Elsewhere, spot silver gained 0.4% to $23.54 per ounce. Silver is used in
photovoltaic applications including solar panels.

With the Chinese economy reopening and less disruption from COVID, it could
support a consecutive year of record photovoltaic silver demand, analysts at
Heraeus Precious Metals said in a note.

Platinum rose 0.8% at $1,054.88, and palladium inched up 0.6% to $1,713.88.

The Thomson Reuters Trust Principles.

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

National Unity Day

December 22

Christmas Day

December 25

Boxing Day

December 26

Counters trading under cautionary

CBZH

Meikles

Fidelity

TSL

FMHL

Turnall

GBH

ZBFH

GetBucks

Zeco

Lafarge

Zimre

Invest Wisely!

Bulls n Bears 

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DISCLAIMER: This report has been prepared by Bulls 'n Bears, a division of
Faith Capital (Pvt) Ltd for general information purposes only and does not
constitute an offer to sell or the solicitation of an offer to buy or
subscribe for any securities. The information contained in this report has
been compiled from sources believed to be reliable, but no representation or
warranty is made or guarantee given as to its accuracy or completeness. All
opinions expressed and recommendations made are subject to change without
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