Bulls n Bears Daily Market Commentary : 06 November 2023

Tue Nov 7 06:40:10 CAT 2023

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Bulls n Bears Daily Market Commentary : 06 November 2023

ZSE commentary

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

The ZSE All Share Index soared by 6,667.12 points to close at 167,717.18 points. Trading in the positive: BRITISH AMERICAN TOBACCO ZIMBABWE LIMITED added $499.9500 to

$13,999.9500 and DELTA CORPORATION LIMITED increased by $291.2139 to $3,378.6229. SEED CO LIMITED gained $128.2051 to close at $1,010.0000, TSL LIMITED was $89.3000 up at $684.8500 and FIRST MUTUAL HOLDINGS LIMITED added $75.2703 to $660.0000.

Trading in the negative: CAFCA LIMITED shed $350.0000 to close at $2,000.0000, CBZ HOLDINGS LIMITED shed $13.7500 to close at $1,950.0000 and FBC HOLDINGS LIMITED  eased $10.0000 to $735.0000. TANGANDA TEA COMPANY LIMITED lost $0.9851 to $950.0000 and OK ZIMBABWE LIMITED was $0.2724 down at $161.3276.

EXCHANGE TRADED FUNDS 

MORGAN & CO MULTISECTOR EXCHANGE TRADED FUND was $16.6838 up at $269.6838, DATVEST MODIFIED CONSUMER STAPLES EXCHANGE TRADED FUNDS increased by $0.1000 to $7.3000 and CASS SADDLE AGRICULTURE EXCHANGE TRADED FUND added $0.0007 to $7.2507. MORGAN & CO MADE IN ZIMBABWE was unchanged at $6.7900 and OLD MUTUAL TOP 10 ETF shed $0.0137 to

$35.0000.

REAL ESTATE INVESTMENT TRUST 

TIGERE REAL ESTATE INVESTMENT 4RUST traded $4.2700 higher at $245.0000.-zse

Global Currencies & Equity Markets

South Africa

South African rand stable after week of gains

JOHANNESBURG: The South African rand was little changed in early trade on Monday against a weaker dollar as recent US economic data fuelled expectations that the Federal Reserve is done hiking interest rates.

At 0530 GMT, the rand traded at 18.2525 against the dollar , near the Friday close of 18.2575.

The rand has jumped more than 2% against the greenback since the start of November. The dollar last traded around 0.06% weaker against a basket of global currencies.

“More evidence that the US will experience a soft landing has created a perfect environment for the rand, with the USD weaker,” said Rand Merchant Bank analysts in a morning briefing.

South African rand weakens ahead of mid-term budget, Fed rate decision

On Friday, the rand jumped as US Treasury yields fell and data out of the US showed fewer than expected jobs had been created in October, boosting hopes the Fed is done raising interest rates.

Interest rate cuts in the world’s biggest economy could come as soon as May, RMB analysts added.

Like other risk-sensitive currencies, the rand often takes cues from global drivers like US monetary policy in the absence of local drivers.

South Africa’s benchmark 2030 government bond was flat in early deals at 10.310%.

Nigeria

Naira falls against the Dollar, depreciates to N809.02/$1 at the official market  

The Nigerian naira depreciates against the dollar on Monday, 6th November 2023, closing at N809.02/$1 at the official market. 

This represents a 4.06% increase from the N776.14/$1 recorded on Friday 3rd November day. 

The intraday high recorded was N1100/$1, while the intraday low was N720.50/$1, representing a wide spread of N379.50/$1. 

According to data obtained from the official NAFEM window, forex turnover at the close of the trading was $87.65 million, representing an 11.30% decrease compared to the previous day. 

However, on the black market where forex is sold unofficially, the exchange rate appreciated 16.18%, quoted at N1020/$1, while peer-to-peer traders quoted around N1063.50/$1. 

CBN’s double-edged sword measures

The Association of Bureau de Change Operators of Nigeria has warned those speculating against the naira to be wary. 

The President of ABCON, Aminu Gwadabe gave the warning and noted that the Central Bank of Nigeria was set to inflict pain on currency speculators. 

“What is happening in the market and the continuous naira rebounds are the manifestations of the CBN double-edged sword measures of dollar liquidity injection and naira mopping through the instrumentality of interest rates hikes. 

“It is a good development as it is the greatest risk to speculate, hoard, and substitute naira for other currencies,” Gwadabe declared. 

The naira had reversed the depreciating trend it had witnessed this year after the CBN started to clear the forex demand backlog in banks. 

“As we continue to observe developments, there is the need for a caution in attacking the naira, as it all appears that the CBN has gotten the arsenal and the logic to continue to enshrine the success recorded,” ABCON added. 

The association noted that there had been “panic selling as against panic buying”. 

The BDC operators called on the apex bank to continue to make clarifications and implement some of their recommendations to include them in the foreign exchange market. 

Gwadabe said that would enable BDCs to play their roles of meeting the needs of the critical retail end sector, “as they pose highly pass-through effects of the Central Bank foreign exchange rate policy of stability and elimination of disparities in the overall market. 

“The BDCs are necessary for the demand measures of the apex bank transaction monitoring mechanism, and client’s utilisation with correcting and moderating potential,” he said. 

 <mailto:info at bulls.co.zw> 

Global Markets

Australian Dollar continues to lose ground despite the RBA’s rate hike

China's Trade Balance reduced to $56.53B against the market consensus of $81.95B in October.

The Australian Dollar (AUD) continues to decline despite a 25 basis points interest rate hike by the Reserve Bank of Australia on Tuesday. The AUD/USD pair also faced losses as a result of the positive performance of US Treasury yields, aiding the US Dollar (USD) in bouncing back from its two-month low.

Australia's central bank has recommenced policy tightening, raising the Official Cash Rate (OCR) from 4.10% to 4.35% after keeping the benchmark interest rate steady for four consecutive meetings. The RBA's decision to take this step could be a reaction to the recent Consumer Price Index (CPI) data, which showed a third-quarter increase surpassing market consensus. Additionally, Australia's seasonally adjusted Retail Sales (MoM) for September exceeded expectations.

Investors likely pay close attention to RBA Governor Michele Bullock's commitment to the recent hawkish stance, indicating possible interest rate hikes down the road. Furthermore, major Australian banks such as ANZ, CBA, Westpac, and NAB have revised their forecasts for an RBA rate hike in response to resurging inflation and the hawkish statements from RBA policymakers.

China's Trade Balance data for October revealed a decrease in the surplus balance against the market expectations of an improvement. While Exports (YoY) experienced a more significant decline, surpassing the expected decrease and exceeding the previous decline.

US Dollar Index (DXY) recovers from its seven-week low, thanks to improved US Treasury yields. The 10-year US Treasury yield has bounced back from the six-week low noted last Friday. Moreover, Minneapolis Federal Reserve Bank President Neel Kashkari, in a Monday interview with the Wall Street Journal, conveyed a cautious approach to monetary policy.

President Kashkari leans towards being overly cautious, expressing a preference for overtightening rather than risking not doing enough to bring inflation in line with the central bank's 2% target.

Daily Digest Market Movers: Australian Dollar faces challenges despite the interest rate hike by RBA

RBA has resumed policy tightening, raising the Official Cash Rate (OCR) from 4.10% to 4.35% after maintaining the benchmark interest rate unchanged for four consecutive meetings.

Australia’s TD Securities Inflation (YoY) reduced to 5.1% in September from 5.7% prior.

Australia’s Retail Sales improved to 0.2% in the third quarter from the previous reading of -0.6%.

Aussie Trade Balance (Month-on-Month) decreased to 6,786M in September, falling short of expectations set at 9,400M and down from the previous figure of 10,161M.

In the twelve months leading up to September 2023, Australia’s monthly Consumer Price Index (CPI) recorded a 5.6% increase. However, the quarterly inflation rate dipped to 5.4% year-on-year in Q3.

US Bureau of Labor Statistics recently unveiled the Non-Farm Payrolls (NFP) data for October, disclosing a figure of 150K. This missed the expected 180K and marked a substantial drop from September's 297K.

US Average Hourly Earnings (Month-on-Month) saw a decline to 0.2%, deviating from the anticipated 0.3%. On a year-over-year basis, it came in at 4.1%, surpassing the 4.0% expectations.

US ISM Services Purchasing Managers' Index (PMI) declined from the previous 53.6 to 51.8. Additionally, on Thursday, the US Department of Labor released the count of initial claims for unemployment benefits for the week ending October 27, showing an increase from 212,000 to 217,000.

Technical Analysis: Australian Dollar extends losses toward major support at 0.6450

The Australian Dollar trades lower around 0.6460 aligned with the major support at 0.6450 level followed by the 14-day Exponential Moving Average (EMA) at 0.6406 lined up with the psychological level at 0.6400. On the upside, the 38.2% Fibonacci retracement level at 0.6508 could act as the immediate resistance followed by the September’s high at 0.6521.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold eases as spotlight turns to Fedspeak for interest rate cues

Gold eased on Monday as investors cautiously turned back to riskier assets, and positioned for a host of Federal Reserve speakers this week including Jerome Powell for clarity on U.S. rate cuts.

Spot gold fell 0.7% to $1,979.19 per ounce by 2:41 p.m. ET (1941 GMT) after rising above the key $2,000 level on Friday. U.S. gold futures settled 0.5% lower at $1,988.60.

Risk appetite is a bit better and there have been no major surprise developments from the Israel-Hammas war, and this is taking away a little bit of the safe-haven bidding for gold and silver, said Jim Wyckoff, senior analyst at Kitco Metals.

Bullion gained over 7% in October as the Middle East conflict boosted safe-haven demand.

Wall Street’s main indexes turned negative after inching up earlier, while Benchmark 10-year U.S. Treasury yields rose, as investors kept their eyes peeled for at least nine Fed members speaking this week, including Powell on Nov. 9.

Traders are pricing in a 90% chance the Fed will leave rates unchanged in December, according to the CME FedWatch tool.

“Gold and silver market bulls have a little bit of ammunition as the expectation is that there will be no further rate hikes, which is pressuring the U.S. dollar,” added Wyckoff.

Gold is sensitive to rising U.S. interest rates, as they increase the opportunity cost of holding the non-yielding asset.

For gold to sustainably move above $2,000/oz, it may need a clearer signal from the Fed that cuts are coming, and the return of investors to ETFs (exchange-traded-funds), Heraeus Metals wrote in a note.

Speculators raised their net long positions in COMEX gold futures by 15,661 contracts to 106,343 in the week ended Oct. 31, CFTC data showed on Friday. [CFTC/]

Silver was down 0.6% to $23.05 per ounce.

Platinum shed 2.5% to $906.86, and palladium fell 1.9% to $1,098.54, both eyeing their biggest daily declines since October.

.

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

Counters trading under cautionary

CBZH

GetBucks

EcoCash

Padenga

Econet

RTG

Fidelity

TSL

FMHL

ZBFH

Invest Wisely!

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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 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.

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