Bulls n Bears Daily Market Commentary : 10 December 2024

Wed Dec 11 08:29:33 CAT 2024

 <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 : 10 December 2024

ZSE commentary 

ZSE remain subdued...

The ZSE remained subdued in Tuesday's session as heavies weighed down the market. The primary All Share Index fell 3.20% to 227 .74pts while, the Blue-Chip Index lost 3.58% to 222.45pts . The Agriculture Index declined 5.14% to 193.51pts while, the Mid Cap Index dropped 2.65% to 246.87pts. Brick maker Willdale led the laggards of the day on a 42 .86% dip that took it to $0.0400. BAT and SeedCo Limited dropped a similar 14.99% to settle at $79 .6200 and $3.1020 respectively. Banking group FBC holdings completed the fallers of the day on a 8.34% plunge to end the day pegged at $10.9995 . Trading in the positive was Star Africa that advanced 4.84% to $0.0240 while, ART ticked up 0.76% to $0.4400 . FMP completed the top performers of the day on a 0.05% lift to end at $0.9500

.-efesecrities

 <mailto:info at bulls.co.zw> 

South Africa

South African rand softens at start of data-filled day

(Reuters) – South Africa’s rand softened early on Tuesday, at the start of a day packed with local economic data releases.

At 0626 GMT, the rand traded at 17.81 against the U.S. dollar, about 0.2% weaker than Monday’s close.

South Africa-focussed investors will look to October’s mining production data at 0930 GMT and the manufacturing output figures for the same month at 1100 GMT.

Although the releases will not be market-moving individually, together they are important indicators of economic performance, analysts said.

Also on the investors’ radars will be November’s Business Confidence Index, due at 0930 GMT, for signs of private sector sentiment towards Africa’s most industrialised economy.

South Africa’s benchmark 2030 government bond was little changed in early deals, with the yield at 8.895%.

Nigeria

Naira appreciates marginally against dollar, euro, and pound in November 

The Nigerian naira recorded marginal appreciation at both the official and parallel markets by the end of November, according to data from FMDQ and Bureau de Change (BDC) operators.

In the official market, the naira strengthened against the dollar by 0.17%, improving from an opening rate of N1,675.49/$1 at the start of the month to N1,672.69/$1 by month-end.

Similarly, in the parallel market, the naira appreciated by 0.40%, moving from N1,750/$1 at the beginning of November to N1,743/$1 by the end.

The naira’s appreciation in the parallel market extended to other key currencies, gaining 1.76% against the pound to close at N2,230/£1 and 1.88% against the euro, closing at N1,830/€1 by the end of the month.

Key data points  

Official market performance 

The naira gained 0.17% against the dollar in the official market, closing at N1,672.69/$1 on November 30, compared to an opening rate of N1,675.49/$1 on November 1.

The month’s weakest official exchange rate was N1,690.37/$1 on November 18, while the strongest was N1,644.86/$1 on November 28.

Parallel market performance 

In the parallel market, the naira appreciated by 0.40% from N1,750/$1 at the start of November to N1,743/$1 at month-end.

The currency reached its strongest point at N1,725/$1 on November 12 and its weakest at N1,755/$1 on November 22 and 26.

Market Trends 

The naira saw sustained depreciation early in November before recovering in the final week of the month. Increased trading volumes were recorded, peaking at $1,403.76 million on November 8, up from $244.96 million the previous day.

Unlike the official market, the naira appreciated in the first two weeks of November but faced depreciation towards the month’s end.

Despite fluctuations, the parallel market remained relatively stable, with rates ranging between N1,725/$1 and N1,755/$1.

Key factors at play  

The federal government’s exemption of import duties and VAT on specific food items from July 31 to December 31, 2024, led to increased importation, raising dollar demand.

Nigeria’s crude oil traded at an average of $78.62 per barrel during the month, reflecting weak global energy demand, particularly from China.

In September, the Central Bank of Nigeria (CBN) sold $20,000 to eligible BDC operators at N1,580/$1, aiming to ease pressure on the naira. Such periodic interventions may continue to stabilize exchange rates.

The government’s directive allowing marketers to purchase refined fuel locally from the Dangote Refinery could reduce import dependency, potentially easing dollar demand.

Nigeria’s foreign reserves grew by 1.10% in November, from N39.78 billion to N40.22 billion, supporting the CBN’s capacity for market interventions.

What to expect 

With oil prices below $80 per barrel, Nigeria’s revenue is under pressure, compounding inflationary challenges and negatively impacting naira stability.

Inflationary trends, forex supply constraints, and broader economic policies will continue to play pivotal roles in shaping the naira’s trajectory in the coming months.

While the naira’s November performance provided a glimmer of recovery, its long-term stability remains tied to structural economic reforms and the broader global economic climate.

Increased importation for the holiday season may heighten dollar demand, potentially exerting renewed pressure on the naira. Nairametrics Research projects that the naira may test new lows, ranging between N1,700/$1 and N1,750/$1 in the official market, and up to N1,800/$1 in the parallel market.

 <mailto:info at bulls.co.zw> 

Global Markets

US dollar rises, Aussie drops after Chinese trade data

(Reuters) - The dollar rose on Tuesday ahead of U.S. inflation data that could offer clues about the Federal Reserve's monetary-easing path, while analysts assess the likely impact of President-elect Donald Trump's policies when he begins his second term.

The Australian dollar dropped sharply against the U.S. dollar as the Reserve Bank of Australia softened its tone on the inflation outlook. Its rally the day before sparked by China stimulus pledges also tapered off after weak Chinese trade data.

Money markets are pricing an 86% chance of a 25-bps rate cut by the U.S. Federal Reserve next week, but investors will still be looking closely at an expected readout of Consumer Price Index data on Wednesday.

"Obviously the market's kind of nervous about a stronger print, which might lead to a slightly more hawkish outlook on the Fed, or maybe a little bit of a repricing," said Brad Bechtel, global head of FX at Jefferies. "I think the market is looking to see if CPI influences the decision on the December meeting, which right now is pretty much close to 100% priced, but not 100% priced."

The U.S. dollar rose 0.47% to 151.925 yen . The dollar index , which measures the currency against the yen and five other major peers, rose 0.23% to 106.4.

Market participants see little action before a busy second half of the week with the U.S. data and European Central Bank policy meeting.

An ECB quarter-point cut is baked in, but investors will focus on the communication, which could provide clues about the central bank's future moves.

The euro dropped 0.27% to $1.0526.

The Aussie fell 0.93% to $0.6381, after earlier dropping to its lowest level since August.

It rose 0.8% the previous day after China pledged an "appropriately loose" monetary policy next year.

"If we can get Chinese stocks to rally, China-sensitive commodities like copper to rally, that could depress the U.S. dollar a little bit," said Erik Bregar, director of FX & precious metals risk management at Silver Gold Bull. "You can feel there's a lot of pressure over there to do something."

China's exports grew at a slower pace in November, while imports unexpectedly shrank, affecting expectations for the Australian economy, as China is its largest trading partner.

Chinese equities eased gains while Hong Kong stocks declined as the initial optimism over Beijing's policy shift faded.

The RBA held rates steady as expected, but noted the board had gained "some confidence" inflation was heading back to target.

"A full pricing-in (of a rate cut) over the next few weeks would weigh further on the Australian dollar," said Volkmar Baur, forex strategist at Commerzbank, recalling that two labour market reports and the inflation figures for the fourth quarter will be published before the next policy meeting in February.

The New Zealand dollar dropped in sympathy with the Aussie, declining 1.1% to $0.5801.

Investors will closely watch China's closed-door Central Economic Work Conference this week, which sets key targets and policy intentions for next year.

The yuan was last at 7.2602 per dollar in offshore trading , supported by Monday's surprise shift in Beijing's monetary policy stance toward more easing to boost the ailing economy.

Elsewhere, the Bank of Canada and the Swiss National Bank decide policy on Wednesday and Thursday, respectively, with deep rate cuts expected from both.

Against Canada's loonie , the U.S. dollar rose to its strongest level since April 2020 at C$1.4165.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold hits two-week high in the run-up to US inflation data

(Reuters) - Gold prices hit a two-week high on Tuesday, underpinned by rising geopolitical tensions and expectations of a third U.S. rate cut by the Federal Reserve next week, while the market's gaze shifted to Wednesday's U.S. inflation data.

Spot gold was up 1.3% at $2,692.32 per ounce at 01:41 p.m. ET (1841 GMT). U.S. gold futures settled 1.2% higher at $2,718.40.

"Concerns of heightened tensions in the Middle East are fostering safe haven bids," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

There is "also a kind of renewed focus on the global easing trend - we'll see the Bank of Canada cut rates, ECB and SNB later this week, and the Fed most likely next week."

The spotlight is moving to the U.S. Consumer Price Index (CPI) on Wednesday, which is expected to rise by 0.3% in November, according to a Reuters poll, and the Producer Price Index (PPI) on Thursday, both pivotal in shaping the Fed's rate-cut decisions.

"The CPI data will have limited impact on gold, especially if we get a print around the expected figure. A hot CPI report will reduce the odds of rate cuts in early 2025 further," said Fawad Razaqzada, market analyst at Forex.com.

With two U.S. rate cuts so far this year, traders predict an 86% chance of a further 25-basis-point cut at the Fed's Dec. 17-18 meeting, according to the CME FedWatch tool, opens new tab.

Gold is considered a safe investment during economic and geopolitical turmoil and tends to thrive in a lower interest rate environment.

Elsewhere, China will adopt an "appropriately loose" monetary policy and a more proactive fiscal approach next year, its Politburo was quoted as saying on Monday.

"Any big announcements should give gold a boost since China is the largest consumer nation, and especially ahead of the Lunar New Year celebrations when jewellery demand for gift-giving rises," Razaqzada added.

Spot silver added 0.7% to $32.04 per ounce, platinum rose 0.5% to $940.90 and palladium was down 0.4% at $969.52.

INVESTORS DIARY 2024

Company

Event

Venue

Date & Time

Counters trading under cautionary

CBZH

GetBucks

EcoCash

Padenga

Econet

RTG

Fidelity

TSL

FMHL

ZBFH

Invest Wisely!

Bulls n Bears 

 Invest Cellphone:            +263 71 944 1674 | +27 79 993 5557 

Email:               bulls at bullszimbabwe.com

Website:            www.bullszimbabwe.com 

Blog:                 www.bullszimbabwe.com/blog

Twitter (X):        @bullsbears2010

LinkedIn:           Bulls n Bears Zimbabwe

Facebook:          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) 2024 Web: www.bullszimbabwe.com Email: bulls at bullszimbabwe.com Tel: +27 79 993 5557 | +263 71 944 1674

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20241211/ddce088f/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/20241211/ddce088f/attachment-0001.png>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.jpg
Type: image/jpeg
Size: 29359 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20241211/ddce088f/attachment-0002.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.jpg
Type: image/jpeg
Size: 37760 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20241211/ddce088f/attachment-0003.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: oledata.mso
Type: application/octet-stream
Size: 130907 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20241211/ddce088f/attachment-0001.obj>