Bulls n Bears Daily Market Commentary : 25 January 2023

Thu Jan 26 06:40:33 CAT 2023

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Bulls n Bears Daily Market Commentary : 25 January 2023

 <mailto:info at bulls.co.zw> 

ZSE commentary

ZSE retreats marginally .

The market retreated in the mid-week session after a four-day rising streak
as the primary All-Share Index lost 0.20% to 21817.48pts while, the
Blue-Chip Index declined by 0.17% to 13440.98pts. The ZSE-Agriculture Index
slid 0.80% to 89.34pts as the Mid-Cap Index shed 0.26% to 44241.80pts.
Headlining the laggards of the day was agricultural concern Ariston Holdings
that slipped 13.86% to $4.2513 followed by, Nampak that sank 12.41% to
$12.0878. Zimplow Holdings trimmed 10.71% to $21.4286 while; General
Beltings withdrew 6.68% to settle at $1.8000. Milk processors Dairibord
capped the top five losers' list on a 5.68% slump to end the day pegged at
$45.2727. Partially offsetting the day's losses was conglomerate Meikles
Limited that jumped 11.26% to close at $165.0000 while, Proplastics ticked
up 10.79% to $40.0000.

Clothing retailers Edgars edged up 3.51% to $9.8333 as Ok Zimbabwe grew
1.37% to $37.9997. Completing the top five winners' list was bankers, CBZ
Holdings that put on 1.17% to settle at $144.8333. The market closed with a
negative breadth of four after fifteen counters registered losses against
eleven that recorded gains. Activity aggregates were enhanced as volumes
traded jumped 99.21  to 4.93m shares while, turnover firmed up 29.66% to
$681.04m. OKZIM, Econet, Delta and Innscor were the top volume contributors
as they claimed a combined 77.93% of the total. Value leaders of the day
were Innscor, Delta, Econet and OKZim with respective contributions of
33.71%, 27.84%, 19.48% and 11.41% respectively. A total of 978 shares
exchanged hands on the VFEX as Padenga eased 0.47% to USD$0.2967 while,
Binduramand Simbisa remained stable at USD$0.0240 and USD$0.4800apiece.
Tigere Reit let go 0.05% to $50.5638 on 27,601 units. On the ETF market,
Datvest ETF was a lone loser after a 0.56% tumble to $1.5133. Cass Saddle
ETF, MIZ ETF, MCMS ETF and OMTT ETF climbed 0.45%, 0.72%, 5.60%, 0.09% to
end $2.2400, $1.3093, $24.5000 and $7.4673 in that order.-efesecurities

Global Currencies & Equity Markets

South Africa

South African rand flat; investors await rate decision

(Reuters) - The South African rand was little changed on Wednesday as
investors awaited an interest rate decision on Thursday.

At 1640 GMT, the rand traded at 17.1800 against the U.S. dollar, compared to
Tuesday's close of 17.1850.

"There is clear reluctance to adopt any significant directional momentum
while investors wait for the SARB's decision and guidance tomorrow," ETM
Analytics said in a research note.

A Reuters poll published last week showed that 11 of 20 economists expect
the South African Reserve Bank to hike rates by 50 basis points (bps) to
7.50% at its monetary policy meeting on Thursday. Eight project an increase
of 25 bps and one forecast no change.

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

"Any comments that come across as hawkish will help the rand recover lost
ground," ETM said.

Crippling power cuts have weighed on the rand in 2023, with struggling state
utility Eskom on Wednesday announcing an increase in the intensity of the
outages for the remainder of the week.

The Johannesburg Stock Exchange's All-share index (.JALSH) closed down about
0.4%. The yield on the government's benchmark 2030 bond rose 1 basis point
to 9.65%, reflecting a weaker price.

The Thomson Reuters Trust Principles.

Zambia

Kwacha will remain weak as long as KCM, Mopani issues aren't resolved -
Nkhoma

ECONOMIST Noel Nkhoma says the Kwacha will continue to lose ground against
major convertibles as long as KCM and Mopani issues are not resolved. In an
interview, Nkhoma stressed the need to resolve issues around the mining
sector, saying the industry would continue to be the largest supplier of
Zambia's forex requirements for years to come. "Now, as long as KCM and
Mopani still remain in the state that they are, unable to optimise
production, the Kwacha will remain weak. We need to really resolve issues
around the mining sector. We can't run away from the fact that, for many
years to come, the mining industry will continue to be the largest supplier
of our forex requirements as a country,....

Nigeria

Naira Extends Losses On Official Market

In Uyo, currency dealers said the rate stood at N744.00 per dollar against
the greenback

Naira extended losses against the United States dollar at the Investors and
Exporters window on Tuesday as the currency exchanged against the greenback
at N462.00.

This translates to a N0.39 or 0.08 per cent depreciation at N461.61 per
dollar it traded in the previous session on Monday.

According to data published on FMDQ website, where forex is officially
traded, the domestic unit reached an intra-day high of N440.00 and a low of
N463.00 per dollar before settling at N462.00 at the close of market
Tuesday.

The official window experienced a decrease in foreign exchange turnover by
15.61 per cent, with $112.04 million recorded on Tuesday as against the
$132.77 million posted in the previous session on Monday.

The Nigerian local unit depreciated further in the parallel market on
Tuesday amidst lingering forex scarcity and spike in demand.

In Uyo, currency dealers at the Udi street market said the currency was
exchanged at N744.00 per dollar and sold at N750.00 to a dollar on Tuesday,
as against the N743.00 per $1 it exchanged for on Monday.

In Abuja zone 4 market, currency dealers said the dollar was exchanged at
N743.00 and sold for N745.00 and above, on Tuesday.

-Premium Times.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar near eight-month low ahead of c.bank meetings

(Reuters) - The dollar lolled near an eight-month low against its peers on
Thursday, as a gloomy U.S. corporate earnings season stoked recession fears
and as traders stayed on guard ahead of a slew of central bank meetings next
week.

The U.S. dollar index , which measures the greenback against a basket of
currencies, last stood at 101.53, languishing near last week's eight-month
trough of 101.51.

Trading was thin on Thursday, with Australia out for a holiday and some
parts of Asia still away for the Lunar New Year.

Downbeat earnings and guidance from U.S. corporates and a string of tech
sector layoffs have deepened fears of an economic downturn in the United
States, leading investors to pare back expectations on how much longer the
Federal Reserve will need to aggressively raise interest rates.

"There are now signs the U.S. economy may be slowing in a more meaningful
manner," said economists at Wells Fargo.

"With the Fed no longer leading the charge on interest rate hikes and U.S.
economic trends set to worsen, we now believe the U.S. dollar has entered a
period of cyclical depreciation against most foreign currencies."

The Fed's policy-setting committee will begin a two-day meeting next week,
and markets have priced in a 25-basis-point interest rate hike, a step down
from the central bank's 50 bp and 75 bp increases seen last year.

Markets expect policymakers at the Bank of England and European Central Bank
(ECB), who will also meet next week, to deliver 50 bp rate hikes. The ECB is
seen most likely to remain hawkish.

Sterling was last 0.12% higher at $1.2415, while the euro rose 0.05% to
$1.0920, flirting with its nine-month high of $1.0927 hit on Monday.

"The euro does draw a lot of attention," said Jarrod Kerr, chief economist
at Kiwibank. The euro zone "had a favourable winter .... The energy crisis
that people were expecting hasn't quite played out yet."

Elsewhere, the Canadian dollar last traded at 1.3393 per dollar, after the
Bank of Canada on Wednesday raised its key interest rate to 4.5% but became
the first major central bank fighting global inflation to say it would
likely hold off on further increases for now.

The Aussie edged 0.06% higher to $0.7107, after jumping 0.8% on Wednesday
following shock data showing Australian inflation had surged to a 33-year
high last quarter, bolstering the case for the Reserve Bank of Australia to
raise interest rates again next month.

The kiwi steadied at $0.6480, having slumped 0.43% in the previous session
after New Zealand's fourth-quarter annual inflation came in below its
central bank's forecast.

In Asia, the Japanese yen rose 0.3% to 129.21 per dollar.

Bank of Japan (BOJ) policymakers debated the inflation outlook at their
January meeting, with some warning that it could take time for wages to rise
sustainably, a summary of opinions at their meeting showed on Thursday.

At that meeting, the BOJ kept ultra-low interest rates unchanged but beefed
up a monetary policy tool to prevent the 10-year bond yield from breaching
its new 0.5% cap. Its decision defied market expectations of further tweaks
to monetary policy.

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price surged to a nine-month-high, how far can it go?

The gold price has increased more than 8% in 2023 to a nine-month-high at
$1937. What are the key drivers behind the rising appetite for precious
metals?

Gold recovers its shine in 2023.

In the first three weeks of the new year, the gold price has increased more
than 8% to a new nine-month-high at $1937. This momentum could track back to
early November 2022. Since then, the value of yellow metal has soared by
nearly 20%.

Gold price: what are the key drivers?

Traditionally, Gold was viewed as an inflation haven. As the value of the US
dollar dip, investors are buying the precious metal to preserve the value
for money.

Just this time, the rising appetite for gold is not only bolstered by the
retail or institutional investors, but also the global central banks.

According to the World Gold Council, during the first three quarters of
2022, the global central banks had purchased over 670 tonnes of gold, a pace
never seen since 1967. Among all the major central banks, China and Turkey
are the biggest fans 

After being quiet for three years, the People's Bank of China (PBoC) kept
increasing its month gold purchase from the fourth quarter and has
stockpiled 2011t shining metal so far.

The global inflation crisis and the projected volatilities of the greenback
are the primary reason to see central banks falling in love with precious
metals instead of greenbacks.

Like in history, the love for gold stems from its unique strength that is
relatively stable thanks to its independence from any individual economy,
especially in times of high inflation and volatility.

Additionally, the yellow metal offered extra function in 2022. Since March,
the West's sanctions on Russian have frozen much of Russia's foreign
currency reserves. As such, for those countries that have to keep trading
relations with Russia, Turkey, for example, the shinning commodity offers an
alternative to exchange.

Either from the weekly or the daily's technical chart, the price of gold has
demonstrated a strong momentum into the new year. On the weekly picture, the
price has climbed for six straight weeks and moved above all the major
moving averages.

In the near term, the price might take a breather since both the weekly and
daily RSI have reached the overbought territory. However, the mid-term
sentiment should stay valid if the price remains in the ascending
trajectory. In this scenario, the buying opportunity may surface if the
price pulls back to the imminent support near $1920. On the other hand, the
next challenge in view sits at around $1960.

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
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opinions expressed and recommendations made are subject to change without
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