Bulls n Bears Daily Market Commentary : 03 January 2024

Thu Jan 4 07:54:12 CAT 2024

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Bulls n Bears Daily Market Commentary : 03 January 2024

ZSE commentary

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

Resurgent demand in heavies lift the market in Wednesday’s trades…

The market-maintained gains into the second session of the year to see all
the four indices under our review closing pointing northwards. The All-Share
Index was 4.31% higher at 223,005.30pts while, the Top 10 Index notched up
4.97% to settle at 96,450.75pts. The Mid Cap Index was up 1.88% to close
pegged at 943,640.76pts as the Agricultures Index added 1.53% to end at 637.
59pts. Wines and Spirit manufacturer AFDIS topped the gainers list of the
day as it charged 15.00% to $2,990.0000 while, cable producer Cafca
buttressed prior sessions’ gains as it garnered 14.99% to $4,422.4500. Seed
producer SeedCo recovered 14.89% to settle at $990.0000 as scrappy 600
shares exchanged hands in the counter. whiles surer Fidelity surged 14.81%
to close trading at $310.0000 while, property concern Mashonaland Holdings
closed at $160.0000, following a 13.07% uplift as it capped the top five
riser list of the day.  Partially weighing down the market was Turnall that
plummeted 8.93% to $36.4286 while, brick manufacturer Willdale parred off 0.
98% to close at $39.8630. Dairy processor Dairibord eased 0.16% to end the
day pegged at $606.0000 while, Zimre Holdings Limited continued to lose
ground in the session as it plunged 0.02% to $174.9500.

Activity aggregates improved in the session as volumes traded increased by
14.26% to 2.06m shares while, turnover ballooned 122.68% to see $1.43bn
exchange hands. Volume drivers of the day were OK Zimbabwe, Star Africa,
Econet and Delta with respective contributions of 32.24%, 22.03%, 14.99% and
10.77% in that order. Turnover drivers of the day were Delta and Econet as
they claimed a combined 76.15% of the value traded. The Datvest ETF inched
up 11.48% while, Cass Saddle ETF was 5.80% higher. Trading in the negative
were the Morgan & Co Multi Sector and the Old Mutual Top 10 that dropped
0.96% and 0.97% respectively. The Morgan & Co Made in Zimbabwe was stable at
9.50 as 62,300 units traded. The Tigere REIT retreated 2.02% to
$339.4862.-efe

Global Currencies & Equity Markets

South Africa

South African rand weakens again after big drop

(Reuters) - The South African rand fell again on Wednesday after a big drop
the day before when the U.S. dollar posted its best daily performance since
March 2023.

At 1547 GMT, the rand traded at 18.8250 against the dollar , nearly 1.4%
weaker than its previous close.

On Tuesday, the first trading day of 2024, the rand ended about 1.5% weaker
against the dollar, as elevated U.S. Treasury yields and a cautious turn in
risk sentiment boosted the dollar.

The dollar was last up 0.44% at 102.68 against a basket of currencies.

No major South African economic data releases were due on Wednesday. On
Thursday a whole-economy purchasing managers' index survey (ZAPMIM=ECI) will
be published.

The Johannesburg Stock Exchange's Top-40 index (.JTOPI) closed 1.8% lower.
The benchmark 2030 government bond slipped, the yield up 6 basis points to
9.915%.

Zambia

Kwacha depreciation likely to cause higher cost of living - Hambayi

ECONOMIST Trevor Hambayi says the depreciation of the Kwacha will directly
affect the prices of goods and services. As at close of the business day,
Tuesday, the US Dollar was selling at K25.78 and buying at K25.73. In an
interview, Hambayi said the cost of living would increase. “It’s a basic
principle. Unfortunately, Zambia is an import dependent country and the
price of goods and services is always pegged against the US Dollar and any
increases or depreciation in the Kwacha will directly affect the prices of
goods and services. What you do see is yes, generally speaking, there will
be an increase in the cost of living.

 <mailto:info at bulls.co.zw>

Global Markets

Dollar rebounds as traders rethink Fed rate cut expectations

The dollar edged higher on Thursday as investors reassessed their
expectations of the scale of rate cuts by the Federal Reserve this year,
with an air of caution hanging over markets after an impressive risk rally
last month.

The greenback was on the front foot in early deals in Asia, as trading
returned to full swing with Japan back from an extended New Year break.

Against the yen

, the dollar stood near a two-week peak and last bought 143.09 yen, having
jumped more than 0.9% against the Japanese currency in the previous session,
its best day since October.

The Australian dollar

, often used as a proxy for risk appetite, languished near Wednesday’s
two-week low of $0.6703 and last bought $0.6734.

The risk-sensitive New Zealand dollar

similarly changed hands at $0.6249, near its weakest level in two weeks.

Minutes of the Fed’s December policy meeting released on Wednesday showed
officials were convinced that inflation was coming under control and were
concerned about the risks of the central bank’s “overly restrictive”
monetary policy on the economy.

However, there was no clear-cut clues on when the Fed could begin easing
rates, with policymakers still seeing a need for rates to stay restrictive
for some time.

“The messaging that rates will stay elevated raises a second look at the
aggressive cut expectations markets are pricing,” said Christopher Wong, a
currency strategist at OCBC.

“Global growth concerns, risk-off sentiment in U.S. equities and markets
partially unwinding some of their aggressive bets on Fed cuts are some of
(the) factors driving the U.S dollar rebound so far.”

Against a basket of currencies, the greenback rose 0.06% to 102.46, flirting
with a three-week peak of 102.73 hit in the previous session.

The euro

eased 0.02% to $1.0921, while sterling

edged 0.05% higher to $1.2669 but remained pinned near its recent three-week
low.

Separate data out on Wednesday showed U.S. manufacturing contracted further
in December, though the pace of decline slowed, while U.S. job openings fell
for the third straight month in November, pointing to easing labor market
conditions.

Recent data pointing to a cooling U.S. economy have continued to underpin
bets of Fed rate cuts this year as inflation comes under control.

However, rising expectations of a soft-landing scenario in the world’s
largest economy have left traders divided over the pace and scale of easing
from the U.S. central bank.

Market pricing now shows a roughly 72% chance that the Fed could begin
cutting rates in March, compared with a 90% chance a week ago, according to
the CME FedWatch tool.

The closely-watched U.S. nonfarm payrolls report is due on Friday, which
will likely give further clarity on how much room the Fed has to lower
rates.

In geopolitics, Hezbollah in Lebanon and the Israeli army made statements
suggesting the two avowed enemies wanted to avoid risking the further spread
of war beyond the Gaza Strip, after a drone strike killed a Palestinian
Hamas deputy leader in Beirut.

 <mailto:info at bulls.co.zw>

Commodities Markets

Gold slips after U.S. Fed minutes signal uncertain start to rate cuts

Gold retreated on Wednesday, on course for its largest percentage decline in
over three weeks, after minutes from the U.S. Federal Reserve’s latest
policy meeting flagged uncertainty about the timing of potential
interest-rate cuts.

Spot gold fell 1%, to a nearly two-week low of $2,037.61 per ounce, its
biggest decline since Dec. 11.

U.S. gold futures settled 1.5% lower, at $2,042.80.

Fed officials appeared increasingly convinced that inflation was coming
under control, with “upside risks” diminished and growing concern that
“overly restrictive” monetary policy might damage the economy, according
to the minutes.

″‘Hold your horses’ is the message coming from December’s Fed minutes -
while we have seen highs for the cycle, rate cuts will take more time,
especially with easing financial conditions and high uncertainty,” said Tai
Wong, a New York-based independent metals trader.

The minutes said participants had noted “an unusually elevated degree of
uncertainty” about the outlook on rate cuts, with further interest rate
increases still possible.

Investors currently see a 70% chance the Fed will cut rates beginning at its
meeting in March, while economists on balance see it holding off until
closer to mid-year .Lower interest rates decrease the opportunity cost of
holding non-yielding gold.

The dollar index firmed 0.3%, making gold more expensive for other currency
holders.

Investors now keenly await a slew of U.S. economic data this week, including
the non-farm payrolls report on Friday.

Markets are also monitoring developments in the Middle East after the
Israel-Hamas conflict reached Lebanon with the killing of Hamas’s deputy
leader in Beirut.

Spot silver fell 2.7%, to a three-week low of $23.00 per ounce. Platinum was
down 1% at $972.32, its lowest since Dec. 22, and palladium also fell 1%, to
$1,070.39, set to decline for the seventh straight session.

INVESTORS DIARY 2024

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
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