Bulls n Bears Daily Market Commentary : 01 November 2023

Thu Nov 2 07:05:34 CAT 2023

 <http://www.bullszimbabwe.com> Bullszimbabwe.com         <mailto:bulls at bulls.co.zw> Views & Comments        <http://www.bullszimbabwe.com> Bullish Thoughts        <http://www.twitter.com/BullsBears2010> Twitter         <https://www.facebook.com/BullsBearsZimbabwe> Facebook           <http://www.linkedin.com/pub/bulls-n-bears-zimbabwe/57/577/72> LinkedIn          <mailto:%20bulls at bullszimbabwe.com?subject=Unsubscribe> Unsubscribe

Bulls n Bears Daily Market Commentary : 01 November 2023

ZSE commentary

 <https://www.dulys.co.zw/>  

The ZSE All Share Index was up by 835.74 points to close at 157,918.80 points. Trading in the positive: AFRICAN DISTILLERS LIMITED added $260.8000 to $2,000.1500 and TSL LIMITED increased by $77.6500 to $595.5500. NMBZ HOLDINGS LIMITED gained $45.2987 to close at $347.4000, EDGARS STORES LIMITED was $12.3037 up at $97.3403 and DELTA CORPORATION LIMITED added $11.4042 to $2,950.2478.

Trading in the negative: BRITISH AMERICAN TOBACCO ZIMBABWE LIMITED shed $1,373.7500 to close at $13,500.0000, CFA HOLDINGS LIMITED shed $200.1000 to close at $2,000.0000 and MEIKLES LIMITED eased $59.4041 to $940.5959. ECOCASH HOLDINGS ZIMBABWE LIMITED lost $1.1261 to $136.8200 and ECONET WIRELESS ZIMBABWE LIMITED  was $0.9610 down at $499.0275.

EXCHANGE TRADED FUNDS (ETF)

OLD MUTUAL TOP 10 ETF added $0.6500 to $35.6500 and CASS SADDLE AGRICULTURE EXCHANGE TRADED FUND remained flat at $7.2500. DATVEST MODIFIED CONSUMER STAPLES EXCHANGE TRADED FUNDS lost $0.0400 to $7.2000, MORGAN & CO MADE IN ZIMBABWE was $0.1225 down at $6.7898 and MORGAN & CO MULTISECTOR EXCHANGE TRADED FUND retreated by $1.3553 to $251.5930.

REAL ESTATE INVESTMENT TRUST (REIT)

TIGERE REAL ESTATE INVESTMENT 4RUST was $0.0018 up at $238.0082.

Global Currencies & Equity Markets

South Africa

South African rand firms after mid-term budget, despite wider deficit forecast

(Reuters) - The rand strengthened on Wednesday after South Africa's mid-term budget statement, despite the proposal for tax measures next year to raise additional revenue as budget deficits are projected to widen over the next three years.

At 1510 GMT, the rand traded at 18.5975 against the dollar , over 0.3% stronger than its previous close.

The dollar last traded around 0.07% stronger against a basket of global currencies.

Finance Minister Enoch Godongwana announced that revenue collections in the current 2023/24 fiscal year were below estimates in the main February budget.

The Treasury said it remained committed to stabilising public finances through spending cuts and unspecified tax revenue measures, as well as a reconfiguration of government that would involve the merging or closure of state-owned entities (SOEs).

"The positive response by the ZAR is perhaps a sign of approval pertaining to the suggested fiscal discipline and no news of further allocations to ailing SOEs," said Shaun Murison, a senior market analyst at IG.

Major constraints on South Africa's economic growth in the past decade have been rolling power cuts, as utility Eskom struggles with breakdowns of its ageing coal plants, and underperformance at state-owned logistics company Transnet.

"The overall message is doubling down on spending-led fiscal consolidation and what is most striking... is the downward revisions to primary spending next year and in the forecast horizon," said Andrew Matheny, economist at Goldman Sachs.

International investors responded positively to the budget, after the government's sovereign dollar bonds fell as much as 0.6 cent earlier in the day.

Longer-dated notes rose the most, with the 2052 maturity up 1.021 cents on the dollar to 78.716 cents at 1508 GMT.

"The main positive is that there is no additional (bond) issuance over and above what was already factored in," Nick Eisinger, co-head emerging markets active fixed income at Vanguard, said. "That has seen the bonds rally a bit."

On the Johannesburg Stock Exchange, the blue-chip Top-40 index (.JTOPI) closed almost flat.

South Africa's benchmark 2030 government bond was stronger, with the yield down 11 basis points to 10.565%.

Nigeria

Naira exchanges 1,185/$, liquidity concerns persist

The naira exchanged at 1,185/$ on Wednesday at the parallel market, as liquidity challenge persisted, according to some Bureau de Change Operators.

Some BDC operators who spoke to The PUNCH, said this was a slight improvement from 1,190/$ traded on Tuesday, as the local currency was yet to gain its true value.

Figures obtained from AbokiFX said the naira was bought and sold at 1,170/$ and 1,175/$; 1,510/ £ and 1,550/ £; and €1,280 and €1,300 respectively on Wednesday.

A BDC operator, Jubril Mutiu, said, “We sold the naira at 1,185/$ today, it was 1,190/$ yesterday; we are buying at 1,175/$ today.”

Another BDC operator, Ismail Ahmed, said, “There is still a scarcity challenge. We are buying and selling at 1,180/$ and 1,200/$.  It was cheaper last weekend, but it has gone up because of scarcity.”

Last week, the naira hit a high of 1,310/$ on Tuesday before closing at 1,150/$ at the parallel market on Friday.

The Association of Bureau De Change Operators of Nigeria noted the recent gains and gave suggestion on sustaining the gain.

“While these positive impacts might be in the short run and to ensure continuity, there is the need to implement the democratisation and centralisation of the foreign exchange market and leverage on the BDCs moderating and correcting roles of the foreign exchange market,” the President, ABCON, Dr Aminu Gwadabe, said.

However, on the Investor & Exporter forex window, the naira commenced trading at 798.75/$, and rose to a high of 1,101/$ before closing at 786.02/$ on Wednesday.

It had earlier closed at 905.75/$ on the official trading platform on Tuesday according to figures obtained from the FMDQ.

The I&E window however recorded a total turnover of 105.98m at the end of Wednesday trading.

Analysts at Cordros Research stated that “The incentives for holding the naira continue to be limited by the day, coupled with the panic-buying arising from the expectations of further currency pressures amidst limited FX supplies.

“Consequently, barring any significant FX inflows or convincing action by the policymakers to turn the tide, we expect the exchange rate pressures to linger in the short term.”

 <mailto:info at bulls.co.zw> 

Global Markets

US dollar falls as markets believe Fed is done hiking rates

(Reuters) - The U.S. dollar fell against most currencies on Wednesday as investors perceived that Federal Reserve Chairman Jerome Powell's statements after its two-day policy meeting suggested the U.S. central bank may be done raising interest rates.

The policy-setting Federal Open Market Committee (FOMC), as expected, left rates in the 5.25%-5.50% range where they have been since July. The Fed did not rule out another hike as it acknowledged the economy's unexpected resilience despite its aggressive tightening launched more than a year ago.

But Powell's remarks in his press briefing were laced with mixed messages that left investors doubtful that the Fed will raise interest rates again.

Powell said the Fed has a long way to go to get inflation to 2%, noting the resilience of economic data and demand for labor that could warrant further rate hikes. But he noted financial conditions have clearly tightened, and cited plenty of risks.

"The most notable takeaway from his comments was that the risks around whether policy is 'sufficiently restrictive' are much more balanced," said Charlie Ripley, senior investment strategist for Allianz Investment Management in Minneapolis, by email.

"This signals that while there is a potential risk for the Fed to do more, the bar has become higher for rate hikes, and we are clearly seeing this play out with two consecutive meetings of no policy action from the Fed."

The dollar index, which initially rose after the Fed statement, was last slightly down at 106.64 . It has traded sideways since hitting an almost one-year high of 107.34 in early October on the back of a sharp rise U.S. bond yields driven by strong economic growth.

The Fed's latest statement noted that with job gains still "strong" and inflation still "elevated," the central bank continues to consider "the extent of additional policy firming that may be appropriate to return inflation to 2% over time."

That said, U.S. rate futures have added to bets that the Fed is done raising its policy rate and will start cutting rates by June. Bets on a rate hike in December and January have been pared back to 19% and 30%, respectively, from 28% and 39% late on Tuesday.

"Powell had several opportunities to threaten another rate hike, but passed on most of them," wrote Tom Simons, U.S. economist, in a research note after the Fed meeting.

"The answers to the questions from the press were consistent with the high level of uncertainty about the outlook, and about how much lagged tightening is still in the pipeline from previous moves."

Against the yen, the dollar dropped 0.6% to 150.89 . The currency pair typically tracks movements in U.S. two-year Treasury yields, which fell 11.5 basis points to 4.958.

The struggling yen has also gained, rising from a one-year low against the U.S. dollar and a 15-year trough versus the euro on threats of intervention from Japanese authorities, with more pointed-than-normal remarks from Japan's top currency diplomat, Masato Kanda.

Wednesday's data also showed slowing momentum for the world's largest economy, putting the dollar on the defensive for parts of the session.

U.S. manufacturing contracted sharply in October after improving in prior months as new orders and employment slumped.

Data on U.S. private payrolls increased less than expected in October and wage growth moderated. Private payrolls rose by 113,000 jobs last month after gaining 89,000 in September, the ADP National Employment report showed.

In other currencies, the euro was last flat at $1.0570.

The dollar fell 0.3% versus the Swiss franc to 0.9079 francs .

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold dips as Fed’s Powell stays hawkish after holding rates

Gold prices fell on Wednesday after the U.S. central bank announced its widely expected decision to leave interest rates unchanged and Chair Jerome Powell said the question of rate cuts is not on their radar right now.

Spot gold was down 0.3% to $1,976.39 per ounce. Gold futures settled down 0.3% at $1,987.50.

The Federal Reserve held interest rates steady but left the door open to a further increase in borrowing costs in a policy statement that acknowledged the U.S. economy’s surprising strength but also nodded to tighter financial conditions.

“While the macro shadows (from ongoing dollar strength, growing expectations of higher-for-longer rates and inflationary pressures easing) persist after the Fed meeting, the geopolitical premium has more than offset them,” said Standard Chartered analyst Suki Cooper.

Fed Chair Powell said the U.S. central bank is not thinking about lowering rates right now.

.

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

Counters trading under cautionary

CBZH

GetBucks

EcoCash

Padenga

Econet

RTG

Fidelity

TSL

FMHL

ZBFH

Invest Wisely!

Bulls n Bears 

Cellphone:      <tel:%2B263%2077%20344%201674> +263 77 344 1674

Alt. Email:       <mailto:info at bulls.co.zw> bulls at bullszimbabwe.com  

Website:         <http://www.bullszimbabwe.com> www.bullszimbabwe.com  

Blog:            <http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw%2Fblog&sa=D&sntz=1&usg=AFQjCNFoIy6F9IXAiYnSoPSgWDYsr8Sqtw> www.bullszimbabwe.com/blog

Twitter:         @bullsbears2010

LinkedIn:       Bulls n Bears Zimbabwe

Facebook:      <http://www.google.com/url?q=http%3A%2F%2Fwww.facebook.com%2FBullsBearsZimbabwe&sa=D&sntz=1&usg=AFQjCNGhb_A5rp4biV1dGHbgiAhUxQqBXA> www.facebook.com/BullsBearsZimbabwe

Skype:         Bulls.Bears 

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 notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

(c) 2023 Web: <http://www.bullszimbabwe.com>  www.bullszimbabwe.com Email:  <mailto:info at bulls.co.zw> bulls at bullszimbabwe.com Tel: +263 4 2927658 Cell: +263 77 344 1674

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20231102/582a4dc5/attachment-0001.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.png
Type: image/png
Size: 34378 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20231102/582a4dc5/attachment-0001.png>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.jpg
Type: image/jpeg
Size: 102299 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20231102/582a4dc5/attachment-0003.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.jpg
Type: image/jpeg
Size: 19909 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20231102/582a4dc5/attachment-0004.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image004.jpg
Type: image/jpeg
Size: 37760 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20231102/582a4dc5/attachment-0005.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: oledata.mso
Type: application/octet-stream
Size: 130973 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20231102/582a4dc5/attachment-0001.obj>