Bulls n Bears Daily Market Commentary : 05 October 2023

Fri Oct 6 06:48:45 CAT 2023

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Bulls n Bears Daily Market Commentary : 05 October 2023

ZSE commentary

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

ZSE extend losses in Thursday's trades...

The market extended losses in Thursday's session to see three of the four
indices we review closed in the red. The All-Share Index lost a negligible
0.06% to close at 128,723.63pts while, the Blue-Chip Index was 0.84% weaker
at 57,286.85pts. The Agriculture Index eased 0.80% to close at 506.89pts.
Seed producer SeedCo Limited led the laggards of the day on a 12.74% plunge
that took it to $560.2035, followed by retailer OKZIM that declined 2.05% to
$135.0525. Fintech group Ecocash Holdings retreated 1.34% to $135.8294
while, beverages giant Delta shed 1.12% to end the day pegged at
$2,300.5971. Telecoms giant Econet capped the top five losers of the day on
a 1.10% slid to close at $475.0000 on waning demand. Partially mitigating
today's losses was Nampak that jumped 13.70% to $286.0000 while, Ariston
inched up 12.95%

to close at $35.2000. Turnall ticked up 7.42% to $26.4797 while, insurer
First Mutual Holdings added 7.14% to settle at $300.0000. Banking group ZB
Financial Holdings completed the winners' pack on a 2.93% uplift to end the
day pegged at $617.6000.

Activity aggregates enhanced in the session as volume traded rose 52.91% to
5.89m shares, while turnover grew 5.30% to $2.28bn. Top volume drivers of
the day were  ashonaland Holdings (71.40%) and Delta (10.59%). Delta
highlighted the value aggregate after contributing 62.86%, followed by
Mashonaland Holdings that claimed 23.04%. On the ETF section, a total of
55,830 units worth $670,750.16 exchanged hands. The Datvest ETF ticked up
0.20% to $6.9401 while, the Old Mutual ETF trimmed 3.33% to $29.0000. Morgan
& Co MCS was flat at $220.0000 on 610 units. The Tigere REIT shed 0.79% to
close at $233.0488 after 2,050 units exchanged hands.

VFEX reverses prior session's gains...

The VFEX reversed prior session's gains as the primary All Share Index fell
1.14% to 73.99pts. Axia headlined the fallers' set on a 5.88% drop to
USD$0.0752, followed by SeedCo International that dropped 3.08% to settle at
USD$0.2300. Innscor parred off 1.29% to USD$0.4837 while, banking group
First Capital lost 0.33% to USD$0.0300. In contrast, fast foods group
Simbisa added 1.83% to USD$0.3998.

Activity aggregates were mixed during the session as volumes traded
succumbed 6.66% to $228,840 shares while, value outturn ballooned 66.93% to
$87,130.69. Simbisa highlighted the aggregates of the day as it contributed
78.67% and 82.60% to the volume and value outturns respectively. The other
notable volume and value driver was Innscor which accounted for 12.77% and
16.22% apiece.

Global Currencies & Equity Markets

Nigeria

Naira appreciates to N997/$ in parallel market

The naira yesterday appreciated to N997 per dollar in the parallel market
from N1,000 per dollar on Wednesday.

However, the naira depreciated in the Investors and Exporters, I&E, window
yesterday to N775.2 per dollar.

Data from FMDQ showed that the indicative exchange rate for the I&E window
rose to N775.2 per dollar from N756.21 per dollar on Wednesday, indicating
N18.99 depreciation for the naira.

Consequently, the gap between the official and parallel market exchange
rates narrowed to N221.8 per dollar yesterday from N243.79 per dollar on
Wednesday.

South Africa

South African rand falls as markets await US employment data

JOHANNESBURG: The South African rand fell on Thursday as analysts rued the
weakness of the local currency and markets wait for direction from U.S.
employment data on Friday.

At 1140 GMT, the rand traded at 19.5700 against the dollar, over 1% weaker
than its previous close.

The dollar last traded around 0.08% weaker against a basket of global
currencies.

South African rand falls further before whole-economy PMI

"Given South Africa's heightened fiscal risks and deteriorating economic
fundamentals, the ZAR lacks resilience against the broader ebb and flow of
market sentiment," Danny Greeff, co-head of Africa at ETM Analytics told
Reuters.

"The U.S. employment data scheduled for release tomorrow : will likely
determine its directionality into the new week," Greeff said.

The rand has already lost over 3% against the greenback this month and about
13% this year, but central bank Governor Lesetja Kganyago said on Thursday
that the bank would not step in to protect the local currency.

"It's a futile exercise trying to defend the exchange rate," Kganyago said
during a webinar, adding that the rand was caught up in a realignment of
global currencies.

Like other risk-sensitive currencies, the rand often takes cues from
international factors such as dollar moves and U.S. economic data in the
absence of major local data points.

On the Johannesburg Stock Exchange, the blue-chip Top-40 index last traded
about 0.6% higher.

South Africa's benchmark 2030 government bond was stronger, with the yield
down 7 basis points to 11.015%.

 <mailto:info at bulls.co.zw> 

Global Markets

U.S. dollar falls as Treasury yields retreat

(Xinhua) -- The U.S. dollar lost in late trading on Thursday, as U.S.
Treasury yields retreated ahead of the release of key U.S. jobs data.

The dollar index, which measures the greenback against six major peers, fell
0.42 percent to 106.3469 in late trading.

U.S. initial jobless claims ticked up slightly to 207,000 in the week ending
Sept. 30, according to U.S. Labor Department data Thursday. After initially
jumping on the jobless claims report, the yield on the 10-year Treasury
later pulled back at 4.71 percent, down from 4.73 percent late Wednesday.

"The small rise in jobless claims suggests layoffs remain historically low
overall, but that could change the longer the United Auto Workers strike
persists. As it expands, more suppliers might be forced to temporarily lay
off non-striking workers, who are eligible for unemployment-insurance
benefits," said Eliza Winger, economist at Bloomberg.

Investors now turned their attention to the release on Friday of the Labor
Department's jobs report for September, helping determine whether the
Federal Reserve will keep rates higher for longer.

In late New York trading, the euro rose to 1.0550 U.S. dollars from 1.0503
dollars in the previous session, and the British pound increased to 1.2194
U.S. dollars from 1.2137 dollars.

The U.S. dollar bought 148.4060 Japanese yen, lower than 149.0600 Japanese
yen of the previous session. The U.S. dollar decreased to 0.9129 Swiss
francs from 0.9170 Swiss francs, and it fell to 1.3713 Canadian dollars from
1.3745 Canadian dollars. The U.S. dollar slid to 11.0066 Swedish krona from
11.0701 Swedish krona. │

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold, silver lose their sheen; analysts expect prices to fall further

The movement of the Indian rupee has a direct impact on prices of precious
metals.

All that glitters is not gold (or silver) - the Shakespearean expression is
true literally - prices of gold and silver have crashed both in the domestic
and international markets over the last four months. The reason: investors
fled to other assets like the dollar and bonds as they offered better return
prospects. Analysts, on a consensus, forecast gold and silver prices to fall
further.

"Gold is no longer considered a safe-haven asset as the hawkish Fed rhetoric
smouldered its yielding nature. Silver, too, underwent a significant decline
due to slowdown in the Chinese economy, which dented industrial demand and
application of this white metal. As a result, investors turned towards
government securities after yields and the dollar index touched yearly
highs," said Deveya Gaglani, Research Analyst - Commodities, at Axis
Securities.

Naveen Mathur, Director - Commodities & Currencies at Anand Rathi Shares and
Stock Brokers, said that a sharp up move across precious metals is limited.
"We anticipate spot gold (current market price: $1,822 per troy ounce) to
trade in the range of $1,800-$1,835 in the near-term, while spot silver
(CMP: $21.15) to trade between $19.8-$21.75 per troy ounce," he added.

Overseas, too, prices of gold and silver skid by 24 percent in four months
to $1,836 per troy ounce and $21 per troy ounce, respectively.

The reaction follows a three percent rise in the US dollar index to the 106
mark (a 10 month high) and 70 basis points (bps) climb of yield on 10-year
notes (bps) to 4.8 percent during the same period.

Weaker rupee a bane for gold, silver

That apart, analysts also pointed out that the Indian rupee movement would
be a crucial factor to watch as it has a direct impact on prices of precious
metals.

The domestic currency's value has depreciated two percent in the span of 4
months to Rs 83 per dollar.

Since India is one of the leading importers of gold and silver, when that
dollar strengthens or rupee weakens, it forces the country to shell out more
money.

Recent data suggests that the value of inbound gold shipments grew 40
percent year-on-year (YoY) to $4.9 billion in August 2023, as against $3.5
billion in the year-ago period.

Can the festive season pull gold, silver out of doldrums?

Mathur of Anand Rathi anticipates festive demand in the upcoming Diwali
season to be weak. Gold prices, he said, were already 11-12 percent higher
as compared to last year, which could limit retail demand in India.

"Consumers may prefer to limit quantities with similar budgets being set
this year. On MCX, gold is likely to trade in the range of Rs 55,200 -
58,500 per 10 grams in December futures contract for the current month," he
added.

Gaglani of Axis Securities too said that the festive season would fail to
enthuse the bullion market as it is an international commodity. Other
factors like the movement in dollar index, interest rates, and geopolitical
tension would continue to impact prices of precious metals.

Differing from the consensus view, Hareesh V, Head of Commodities at Geojit
Financial Services said that the appeal towards gold and silver might
increase from here on due to economic turmoil in China and weakness in their
equity markets. 

.

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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DISCLAIMER: This report has been prepared by Bulls 'n Bears, a division of
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