Bulls n Bears Daily Market Commentary : 11 January 2024

Fri Jan 12 07:21:25 CAT 2024

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Bulls n Bears Daily Market Commentary : 11 January 2024

ZSE commentary

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

ZSE ends rising streak.

The market closed in the red, bringing to halt a fifteen day rising streak
as the All Share Index slid 0.96% to 259,732.34pts while, the Blue Chip
Index fell 1.76% to 115,406.43pts. The Agriculture Index inched up 0.08% to
678.00pts while, the Mid Cap Index gained 1.14% to 1,061,161.09pts. Apparel
retailer Edgars headlined the winners of the day on a 12.10% jump to
$170.3934 followed by Meikles that surged 11.40% to $1,927.2300. Proplastics
went up 3.02% to close at $652.1429 while, General Beltings edged up 1.23%
to $36.0000. Hotelier RTG capped the top performers of the day on a 1.22%
uplift to end the day pegged at $186.2500. In contrast, telecoms giant
Econet led the laggards of the day on a 10.61% retreat to $1,072.2569 while,
fintech group Ecocash Holdings eased 0.88% to close the day at $212.5022.
Nampak declined 0.20% to $349.2857 as beverage giant Delta sank 0.09% to
$4,999.6876. Mash Holdings completed the losers pack on a 0.02% slid to end
the day pegged at $155.3157. Ten counters recorded gains against seven that
faltered to leave the market on a positive breadth of three.

Activity aggregates declined in the session as volume traded succumbed
56.96% to 2.54m shares while, value traded plummeted 29.49% to $2.90bn. The
top volume drivers of the day were FBC Holdings, Star Africa and Delta that
contributed 50.07%, 20.69% and 13.06% respectively. The trio of Delta, FBC
Holdings and OKZIM contributed a combined 97.13% to the total value traded.
A total of 68,020 units exchanged hands on the ETF section. MCMS ETF lost
0.38% to $513.0000 while, OMTT ETF shed 5.64% to settle at $40.5760. The
Revitus REIT exchanged 1500 units flat at $600.0000 while, Tigere REIT
trimmed 0.12% to end the day pegged at $377.0000 as 48,770 units exchanged
hands.-efe

Global Currencies & Equity Markets

South Africa

South African rand tracks dollar ahead of US inflation data

(Reuters) - South Africa's rand firmed against a weaker dollar early on
Thursday, ahead of a U.S. inflation reading that is expected to provide
fresh direction for global markets.

At 0620 GMT, the rand traded at 18.6400 against the dollar ZAR=D3, about
0.3% stronger than its previous close.

The dollar =USD was last down around 0.1% against a basket of global
currencies.

All eyes are on the U.S. consumer price index report due later on Thursday,
which could influence the Federal Reserve's thinking on rate cuts.

South Africa's monthly manufacturing data is due at 1100 GMT but is unlikely
to influence trading, said analysts at ETM Analytics.

Trading in the rand will likely pick up next week as schools reopen and the
economy gets back into full swing after the holidays, they added.

South Africa's benchmark 2030 government bond ZAR2030= was slightly stronger
in early deals, with the yield down 0.5 basis points to 9.735%.

AFRICA-FX- Kenya, Ghana and Zambia currencies seen under pressure

(Reuters) - Kenya's shilling, Ghana's cedi and Zambia's kwacha are seen
weakening against the dollar in the coming week, while Uganda's shilling and
Nigeria's naira are expected to hold steady, traders said on Thursday.

KENYA

Kenya's shilling is expected to weaken due to increased demand for dollars
from all sectors of the economy and low inflows.

Commercial banks quoted the shilling at 159.00/160 per dollar, from last
Thursday's closing rate of 157.00/158.00.

The current level is an all-time low, LSEG data showed.

"There is a pile-up in (dollar) demand from across all sectors. We still see
the (weakening) trend continuing," a trader at one commercial bank said.

The trader said the demand was especially high from importers ordering goods
from China before their counterparts closed for the week-long Lunar New Year
holiday break.

GHANA

Ghana's cedi is expected to come under pressure due to increased demand from
the manufacturing and energy sectors amid low dollar supplies, traders said.

LSEG data showed the cedi trading at 11.9200 to the dollar on Thursday,
compared to 11.9000 at last Thursday's close.

"The bulk of the demand has been from the manufacturing sector. We expect to
see some marginal pressure on the cedi in the coming week as demand
continues to tick up," said Sedem Dornoo, a senior trader Absa Bank Ghana.

Head of Trading at Stanbic Bank Ghana, Chris Nettey, said positive
statements from the International Monetary Fund regarding talks between
Ghana and its official bilateral creditors about debt restructuring "should
give some support to the cedi in the coming sessions".

UGANDA

The Ugandan shilling is expected to hold steady as pending mid-month tax
payments force firms to trim back their demand for dollars.

Commercial banks quoted the shilling at 3,795/3,805, compared with last
Thursday's close of 3,805/3,815.

"Corporates will be preparing to clear their mid-month tax obligations which
normally softens their demand for dollars," said a trader at one commercial
bank.

He said the shilling was likely to trade mostly around 3,800 against the
dollar in the coming days.

NIGERIA

Nigeria's naira is likely to trade around its current level on the official
market, but occasionally drop close to levels on the parallel market in thin
trading, traders said.

The naira was quoted at 791 to the dollar on the official market on
Thursday. This compares with around 1,260 naira on the parallel market .

On Monday, the Central Bank of Nigeria (CBN) said it recently paid $61.64
million of foreign exchange backlog owed to foreign airlines, bringing the
outstanding forex forwards it has paid in the last three months to $2
billion.

"The news from the CBN on the recent forex backlog payment was timely. It
has helped to set the tone very early in the year and I think this will help
to boost market confidence," one trader said.

ZAMBIA

The kwacha is expected to remain under pressure against the dollar as the
market continues to witness high hard currency demand and low inflows.

On Thursday, the currency of Africa's second-largest copper producer was
trading at 26.05 per dollar, from 25.75 a week ago.

"The local currency is expected to follow a downward trajectory given that
current market trends hold," Access Bank (ACCESS.GH) said in a note on
Thursday.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar trims gains after uptick in US inflation, yields ease

The Dollar Index (DXY), which gauges the value of the Greenback against a
basket of 6 major currencies, trimmed its gains, finishing little-changed at
102.35 (102.31). Earlier in the session USD/DXY soared to 102.76, highs not
seen since mid-December.

US CPI climbed to 3.4% in December, beating median forecasts at 3.2%, and
3.1% previously. Claims in the US for Unemployment Benefits in the latest
week decreased to 202,000 from 203,000, bettering forecasts at 209,000.

Against the Japanese Yen, the US Dollar kept its bid, finishing at 145.65
(145.62 yesterday). The USD/JPY pair rocketed to a high at 146.41, before
easing at the close.

The Australian Dollar (AUD/USD) dipped to 0.6685 from 0.6700. Australia's
Annual CPI in November showed a slight reduction to 4.3% against analyst's
forecasts of 4.4%.

The Euro (EUR/USD) edged marginally higher to 1.0977 against 1.0967
yesterday. In choppy overnight trade, the shared currency rallied to a high
just under 1.1000.

Sterling (GBP/USD) rallied modestly to 1.2757 against 1.2740 yesterday.
Britain releases key data later today, starting with UK November Industrial
and Manufacturing Production as well as its November Trade Balance. Traders
also scaled back expectations of BOE rate cuts this year.

The Dollar eased against the Asia/EMFX pairs. The USD/CNH pair
(Dollar-Offshore Chinese Yuan) dipped to 7.1750 from 7.1840. USD/THB
(Dollar-Thai Baht) finished flat at 35.10.

Other economic data released yesterday saw Australia's Trade Surplus climb
to +AUD 11.44 billion, up from a revised +AUD 7.66 billion previously,
beating forecasts of +AUD 7.50 billion.

US December Core CPI (m/m) was unchanged at 0.3%, matching expectations. The
Eurozone Industrial Production (m/m) slipped to -1.5% from -0.2% previously,
missing estimates of -0.2%.

AUD/USD - The Australian Dollar eased to 0.6685 at the close of trade in New
York, marginally lower than its 0.6700 finish yesterday. In volatile trade
Aussie slumped to an overnight low at 0.6647 before rallying in late trade.
AUD/USD traded to a high at 0.6731.

USD/JPY - The Greenback finished little changed at 145.65 from 145.62
yesterday. The US Dollar soared to an overnight peak at 146.41 in choppy
trade before easing to its close. The overnight low recorded was 144.71.

EUR/USD - The shared currency finished marginally higher art 1.0977 against
1.0967 yesterday. The Euro climbed to an overnight high at 1.0999 before
easing. A drop in the Eurozone's Industrial Production weighed on the Euro,
sending it lower.

GBP/USD - The British Pound gained modestly against the Greenback to 1.2757
(1.2740). Sterling traded to an overnight high at 1.2785 before easing to
its close. The overnight low recorded was at 1.2690.

On the lookout:

Today's economic calendar kicks off with Japan's November Current Account
(f/c JPY 2385.1 billion from JPY 2582.8 billion - ACY Finlogix). Next is
Japanese Bank Lending (y/y f/c 2.8% from 2.8% - ACY Finlogix).

China follows with its December CPI (y/y f/c -0.4% from -0.5% - ACY
Finlogix), Chinese December PPI (y/y f/c -2.6% from -3% - ACY Finlogix) and
Chinese December Trade Balance (f/c +USD 74.75 billion from +USD 68.39
billion - ACY Finlogix).

Japan releases its Economic Watchers Sentiment - December (Outlook f/c 49.3
from 49.4 - ACY Finlogix). The UK starts off European data with its November
Goods Trade Balance (f/c -GBP 15.7 billion from -GBP 17.032 billion - ACY
Finlogix).

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold slides on brewing concerns of US rate cuts still far off

(Reuters) - Gold eased on Thursday to a one-month low as the dollar ticked
higher after hotter-than-expected inflation data, while hawkish remarks from
Federal Reserve officials fuelled worries that higher interest rates could
stay unchanged beyond March.

Spot gold was down 0.1% at $2,024.99 per ounce, as of 2:30 p.m. ET (1930
GMT), after rising as much as 0.8% before the data.

U.S. gold futures settled 0.4% lower at $2019.20.

The dollar index (.DXY) extended gains after data showed U.S. consumer
prices rose more than expected in December, which could delay a much
anticipated U.S. rate cut in March.

Cleveland Fed President Loretta Mester said it would likely be too soon for
the central bank to cut its policy rate in March, while Richmond Fed chief
Tom Barkin said gains on inflation have been too narrowly focused on goods.

"We got a little ahead of ourselves," said Phillip Streible, chief market
strategist at Blue Line Futures in Chicago, adding that the hawkish comments
call into question the timing and number of rate cuts that the market
anticipates this year.

Traders see a 67% probability of a rate cut in March, according to the CME
Fedwatch tool, compared with about a 71% chance seen before the report.
Higher rates dim the appeal of gold, which pays no interest.

"There has been a lot of hype behind bitcoin, so people tend to rotate out
of different asset classes and that could also be behind some degree of the
selling," Streible added.

Attention will turn to the U.S. producer price index (PPI) due on Friday.

"Gold is just grudgingly lower and (the market) hopes PPI will show softer
results tomorrow," said Tai Wong, a New York-based independent metals
analyst.

Silver fell 0.7% to $22.71 per ounce, its lowest since Nov. 14.

Platinum lost 0.5% to a one-month low of $914.85, and palladium fell 0.9% to
$989.36.

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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