Bulls n Bears Daily Market Commentary : 03 October 2023

Wed Oct 4 07:47:32 CAT 2023

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Bulls n Bears Daily Market Commentary : 03 October 2023

ZSE commentary

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

ZSE reverses prior session's gains...

The market reversed prior session's gains as heavy cap counters dominated
the top five laggards list of the day. The primary All Share Index lost
0.44% to settle at 132,690.13pts while, the Blue-Chip Index fell 0.67% to
60,563.59pts. The Agriculture Index declined 1.51% to 512.01pts while, on
the contrary the Mid Cap Index rose 0.06% to 502,986.55pts. Milk processor
Dairibord led the laggards of the day on a 14.71% drop to end pegged at
$460.2175, trailed by telecoms giant Econet that eased 1.82% to settle at
$490.2063. Beverages giant Delta shed 1.64% to close at $2,593.3026 while,
Fintech group Ecocash retreated 0.18% to $137.7595. Star Africa

capped the losers pack on a 0.01% slid to $4.9900 as the market awaits the
company's audited FY23 results. Nampak led the winners pack of the day on a
14.34% jump to $251.5500, followed by CBZ Holdings that added 5.59% to
settle at $850.0480. Turnall inched up 4.23% to $24.6500 while, Zimre
Holdings Limited climbed 3.13% to $82.5000.

Seed producers Seed Co capped the top performers of the day on a 1.20%
uplift to $559.4569. The market closed with a positive breadth of two after
nine counters recorded gains against seven that faltered. Activity
aggregates enhanced in the session after volume traded ballooned 777.05% to
8.10m shares while, value outturn grew 122.88% to $2.19bn. Mashonaland
Holdings,Dairibord, Tanganda and Hippo were the top volume drivers of the
day after contributing a combined 92.42% of the total. The top value drivers
of the day were Mash (37.73%), Delta (21.37%), Hippo (12.49%) and Dairibord
(9.87%). On the ETFsection, a total of 18,000 units exchanged hands. Datvest
ETF inched up 1.98% to settle at $6.9300. Cass Saddle and Old Mutual ETF's
traded flat at $7.2200 and 29.0000 respectively.

VFEX records gains...

The VFEX recorded gains in Tuesday's session as the All Share Index firmed
up 0.65% to 74.80pts. Mining group, Bindura led the top performers of the
day on a 20.18% jump to close at $0.0137 followed by Innscor that surged
1.87% $0.0800. Bankers, First Capital completed the winners set on a 0.67%
hop to $0.0302. Partially mitigating today's gains was fast foods group
Simbisa, that parred 0.15% to $0.3994. Activity aggregates were enhanced in
the session as volumes climbed 114.51% to 282,015 shares while, value
outturn jumped 132.59% to $104,746.43. Simbisa dominated the activity
aggregates of the day after contributing 90.40% and 97.22% of the volume and
turnover traded.

Global Currencies & Equity Markets

South Africa

The rand is no longer volatile - now it's just weak

The rand remains squarely on the back foot, and South Africans should not
expect anything to change for the foreseeable future.

According to Investec Chief Economist Annabel Bishop, the rand remained
relatively flat last week, staying around the R19/$ area.

The rand did take a slight hit this week as the Absa Purchasing Managers'
Index (PMI) dropped from 49.8 points in August to 45.4 points in September,
with conditions in the SA manufacturing sector deteriorating more than
expected.

The local currency is now trading at R19.31/$.

ZAR/USD

Looking internationally, fears over a partial shutdown of the US government
over funding issues were averted last week after legislation which extends
funding to 17 November was signed - even if this is a temporary measure.

Meanwhile, in Europe, CPI dropped to a two-year low of 4.3%, which
strengthened investor sentiment somewhat as there are now signs that the
Eurozone interest rate hike cycle may soon be coming to an end.

However, Germany, the Eurozone's largest economy, is expected to see a
contraction of -0.6% this year as high interest rates and inflation weakened
demand in Q3 2023.

"The European Central Bank is likely to prove cautious on ending its hawkish
communications and will also most likely signal the need for higher interest
rates for longer, and the potential for more cuts, with inflation not back
at target," Bishop said.

Returning home, the rand will likely experience low volatility as the market
waits for the Fed's next meeting on 1 November, followed by the final one
for the year on 13 December. However, markets have not fully factored in a
further 25 basis point hike.

"That is, markets do not expect the US to hike its interest rates again this
year, but have shifted interest rate cut expectations for the US further
out, with the first seen to occur end 2024. These shifts in expectations
undermined the rand somewhat last month," Bishop said.

Higher US interest rates generally weaken the rand and other emerging
currencies as investors turn to the relatively low-risk, high-reward of the
dollar.

South African interest rates

Although the South African Reserve Bank (SARB) could hike rates in an
attempt to counter the dollar's appeal, this is unlikely to occur as several
analysts and commentators have predicted that South Africa has ended its
interest rate hiking cycle with inflation now in the central bank's target
range.

However, there are still risks to inflation, including rising oil prices,
drier conditions caused by the El Nino weather pattern and the struggling
logistics sector.

RMB Chief Economist Isaah Mhlanga said that this implies that SARB will keep
interest rates where they are for longer than initially expected, with the
central bank expected to cut rates only in the second half of the year.

However, Investec's base case still sees the SARB cutting rates by 25 basis
points as early as Q1 2024.

Nevertheless, many economists expect the SARB to start cutting rates in
2024, with Nedbank's economists expecting a 100 basis points worth of cuts
throughout the entirety of next year.

Nigeria

Naira gains as FX market resumes trading Tuesday

Naira on Tuesday gained 0.79 percent (N8) over the dollar as the foreign
exchange (FX) resumed after the independence holiday.

The market opened with the dollar trading at N1,000 on Tuesday as against
N1,008 on Friday at the parallel market.

At the Investors' and Exporters' (I&E) forex window, naira appreciated by
2.59 percent as the dollar was quoted at N755.27 on Friday compared to
N775.31 quoted on Thursday last week, data from the FMDQ showed.

The naira appreciation was attributed to a moderation in demand for the
greenback as the market awaits the next policy action of Olayemi Cardoso,
the new Central Bank of Nigeria (CBN) governor.

Cardoso, who was recently confirmed as the CBN governor alongside the four
deputy governors by the Senate, proposed to reset the apex bank.

He said his immediate priority would be to work out ways to aggressively
offset huge FX obligations as part of measures to attack the current naira
downturn, which has become a huge burden for the economy.

 <mailto:info at bulls.co.zw> 

Global Markets

Yen cowers near 150 as intervention chatter runs rife

(Reuters) - The yen sat on the stronger side of 150 per dollar on Wednesday,
after an unexpected surge in the previous session stoked speculation that
Japanese authorities could have intervened to support the currency.

The Japanese currency was last marginally lower at 149.12 per dollar in
early Asia trade, after having jumped nearly 2% at one point on Tuesday to a
high of 147.30 - a move that came after the yen tumbled to 150.165 per
dollar, its weakest since October 2022.

"Them stepping in here would be perfectly consistent with recent warnings
from top officials and past behaviour," said James Malcolm, head of FX
strategy at UBS.

"Authorities may be unable turn the trend in FX markets immediately. Yet
entering the market in size provides a strong signal and helps buy time for
other things to fall into place that in the fullness of time then contribute
to position unwinds."

Japanese authorities last year intervened to prop up the yen for the first
time since 1998.

Other currencies similarly fell against the yen in the previous session,
with the euro losing more than 1.5% to a low of 154.39 yen. It recovered
some of those losses and last bought 156.05 yen .

Japan's top currency diplomat Masato Kanda said on Wednesday he would not
comment on whether Tokyo intervened in the exchange-rate market overnight,
though said that "we have only taken steps that have the understanding of
U.S. authorities".

U.S. Treasury Secretary Janet Yellen said last month whether Washington
would show understanding over another yen-buying intervention by Japan
"depends on the details" of the situation.

DOLLAR POWER

In the broader currency market, the dollar charged higher on the back of
upbeat data on Tuesday showing U.S. job openings unexpectedly increased in
August amid a surge in demand for workers in the professional and business
services sector.

That sent the greenback to a near 11-month high of 107.34 against a basket
of currencies , with the dollar index last at 107.07.

Sterling edged 0.03% lower to $1.20745, languishing near the previous
session's close to seven-month low of $1.20535.

The euro similarly bottomed at $1.0448 on Tuesday, its lowest since
December, and was last at $1.0469.

"Markets have been rattled by yet another positive U.S. data surprise
vindicating the (Federal Reserve's) mantra of higher for longer," said
Rodrigo Catril, senior FX strategist at National Australia Bank.

"The jump in job openings suggests the U.S. labour market is easing less
rapidly than implied by recent data releases...That said, not all details in
the report pointed to a strong labour market."

Atlanta Fed President Raphael Bostic said on Tuesday the steady rise in
long-term U.S. Treasury bond yields hasn't yet shown signs of slowing the
economy more than would be expected in a typical Fed tightening cycle.
Meanwhile, Cleveland Fed President Loretta Mester said she is open to
raising interest rates again.

The Australian dollar was last 0.11% higher at $0.63085, having slid nearly
1% on Tuesday after the country's central bank held interest rates steady
for a fourth month and showed no urgency to hike again.

The New Zealand dollar gained 0.07% to $0.5912, with an interest rate
decision from the Reserve Bank of New Zealand due later on Wednesday, though
expectations are for the central bank to also keep rates on hold.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price falls Rs 660 to Rs 57,380, silver plunges Rs 2,000 to Rs 71,000

The price of ten grams of 22-carat gold in Delhi, Bengaluru, and Chennai is
Rs 52,750, Rs 52,600, and Rs 52,900, respectively

The price of 24-carat gold declined Rs 660 during Wednesday's early trade,
with ten grams of the precious metal selling at Rs 57,380, according to the
GoodReturns website. The price of silver fell sharply by Rs 2,000 to Rs
71,000 per kilogram.

The price of 22-carat gold fell Rs 600 to Rs 52,600.

The price of ten grams of 24-carat gold in Mumbai is at par with the prices
in Kolkata and Hyderabad at Rs 57,380.   

The price of ten grams of 24-carat gold in Delhi, Bengaluru, and Chennai is
Rs 57,530, Rs 57,380, and Rs 57,710, respectively.

The price of ten grams of 22-carat gold in Mumbai is at par with that of
gold in Kolkata and Hyderabad, at Rs 52,600.   

The price of ten grams of 22-carat gold in Delhi, Bengaluru, and Chennai is
Rs 52,750, Rs 52,600, and Rs 52,900, respectively.

US gold prices were flat on Wednesday near seven-month lows hit in the
previous session, as a surge in dollar and bond yields buoyed by strong jobs
data meant that there was room for a further monetary policy tightening.

Spot gold was flat at $1,823.59 per ounce by 0117 GMT, while US gold futures
eased 0.1 per cent to $1,839.20 per ounce.

Prices fell for a seventh consecutive session on Tuesday to touch their
lowest levels since March, as the US dollar strengthened on data showing US
job openings unexpectedly increased in August.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said
its holdings fell 0.2 per cent to 873.35 tonnes on Tuesday.

Spot silver was down 0.1 per cent to $21.14 per ounce, having slipped to its
lowest since mid-March in the last session.

Platinum slid 0.8 per cent to $864.93 to touch its lowest in a year.
Palladium dropped 1.2 per cent to $1,174.70 and hovered near 5-year lows hit
on Tuesday.

One kg of silver is currently trading at 71,000 in Delhi and Mumbai.

One kg of silver in Chennai is currently trading at Rs 73,500.

.

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 

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