Bulls n Bears Daily Market Commentary : 15 January 2024

Tue Jan 16 07:15:43 CAT 2024

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Bulls n Bears Daily Market Commentary : 15 January 2024

ZSE commentary

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

The market rebounded in Friday's session as the primary All Share Index
firmed up 1.72% to 266,752.43pts while, the Blue-Chip Index rose 1.35% to
119,063.78pts. The Agriculture Index gained 0.59% to 681.49pts while, the
Mid Cap Index added 0.87pts to 1,013,481.28pts. CFI Holdings headlined the
gainers list of the day on a 15.00% jump to $2,512.7500, followed by
telecoms giant Econet that surged 14.70% to end trading at a VWAP of
$1,299.9262. Banking group CBZ Holdings notched up 13.33% to close
$4,533.3333 as scrappy 300 shares exchanged hands while, milk processor
Dairibord advanced 4.13% to settle at $585.0833, where supply could be
found. Meikles fastened the top five gainers list of the day on a 3.78%
uplift to $2,000.0000. Trading in the negative territory was TSL that
retreated 8.33% to $1,100.0000 as scanty 100 shares exchanged hands in the
counter. Life assurer FML trailed on a 6.52% loss to $1,075.0000 following a
cautionary statement announced by the company that it had received a
response from IPEC indicating that the Commission was mandated by the
Minister to institute corrective measures on its subsidiary First Mutual
Life Assurance Company following a forensic investigation that was completed
in 2023. RTG completed the top five fallers pack of the day on a 3.36% slid
to $180.0000. 

Activity aggregates improved in the session as volumes traded increased by
170.26% to see 6.88m shares trade while, value traded increased by 149.06%
to $7.22bn. Econet was the top traded counter in the session as it claimed
55.87% of the volume and 63.18% of the value.  The other notable volume
driver was FBC that contributed 21.02% of the volume traded. The duo of FBC
and Delta claimed a combined 32.69% of the turnover traded. In the ETF
category, funds traded mixed as Cass Saddle ETF and the Old Mutual Top 10
ETF shed 0.01% and 0.07% respectively. Datvest MCS went up 0.08% to
$11.82000 while, the Morgan & Co MCS added 0.19% to settle at $514.0000. The
Tigere REIT rose 3.43% to settle at a VWAP of $389.9353 while, the Revitus
REIT dropped 8.33% to close at $550.0000. -efe

Global Currencies & Equity Markets

South Africa

South African rand weakens against stronger dollar

(Reuters) - South Africa's rand weakened as the U.S. dollar firmed on
Monday, but it was trading in a narrow range with no major local economic
data releases to drive direction.

At 1527 GMT, the rand traded at 18.6950 against the dollar , 0.3% weaker
than its previous close.

The dollar was last up about 0.1% against a basket of global currencies.

South Africa will release November retail sales figures (ZARET=ECI) and gold
and mining production data (ZAGLD=ECI), (ZAMNG=ECI) later this week,
providing more clues about the health of the economy.

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Global focus is now on the annual World Economic Forum, which kicked off in
Davos on Monday with participants expected to discuss current economic and
geopolitical bottlenecks.

On the Johannesburg Stock Exchange, the Top-40 index (.JTOPI) closed down
about 0.9%. South Africa's benchmark 2030 government bond was weaker, the
yield up 5 basis points to 9.725%.

Kenya

Shilling officially crosses 160 mark against US dollar

The shilling has officially crossed the 160 units points against the US
dollar, the lowest level on record. 

On Monday, the Central Bank of Kenya (CBK) quoted the local currency trading
at 160.23 units against the greenback, compared to 159.85 end of last week. 

The shilling has been falling against major international currencies since
2020, an aspect the apex bank blames on its overvaluation. 

"I think for several years now, we have had an overvalued exchange rate. We
have tried to maintain a fairly strong exchange rate artificially, [but] at
the cost of losing international reserves,'' CBK governor Kamau Thugge told
the Parliament in October.

He said that the World Bank and the International Monetary Fund considered
the shilling to be between 20 per cent and 25 per cent overvalued five years
ago.  

He added that Kenya's foreign exchange reserves had dropped significantly
and could only cover less than four months of imports. He said, "This is
still sufficient to deal with any emergencies.''

The depreciation of the shilling has contributed to the high cost of living
currently witnessed in the country as importers pass the extra bill to
consumers.

The consumer price index, a measure of the price of goods and services
purchased or otherwise acquired by households reached a record high of
137.55 points in December 2023, according to the Kenya National Bureau of
Statistics (KNBS). 

The country's CPI has averaged 45.34 points since 1984.

Last week, data by Bloomberg rated Kenyan shilling among the
worst-performing currencies on the continent last year.

The finding placed the Kenyan currency at number seven in Africa after
shedding 20.9 percent against the American dollar.

However, the Nigerian Naira plunged the steepest, having depreciated by 55
percent.

The Malawian national currency (Kwacha) depreciated by 39.1 percent, while
its Zambian counterpart followed at 29.5 percent in depreciation.

Other currencies on the list include the Burundi and Congolese francs, which
have depreciated by 27.6 percent and 24 percent, respectively.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar little changed on MLK Day, sterling slides in risk-off trading

(Reuters) - The dollar was little changed on Monday in cautious during a
U.S. public holiday, while risk-sensitive sterling slid ahead of a busy week
for UK economic data.

The dollar index , measuring the U.S. currency against six peers, was up
0.13% at 102.64, on the Martin Luther King (MLK) Day holiday.

Bets on Federal Reserve cuts this year, beginning as early as March, have
intensified after data on Friday showed U.S. producer prices unexpectedly
fell in December.

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Market pricing now points to a 77% chance that the U.S. central bank will
begin easing rates in March, up from 68% a week ago, according to the CME
FedWatch tool.

"Despite the upside surprise to the CPI on Thursday, investors grew
increasing confident that the Fed is likely to cut rates soon," said Jim
Reid, strategist at Deutsche Bank.

In the broader market, traders also watch out for UK inflation, jobs data
and retail sales due later in the week, as markets continue to focus on how
soon major central banks globally could begin easing rates this year.

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Sterling slipped 0.27% to $1.2717, though it remained close to a two-week
peak hit last week.

"It's a big UK data week," said Jeremy Stretch, head of G10 FX Strategy at
CIBC Capital Markets, adding that the general risk-off mood across markets
and speculation on the upcoming data is keeping the pound under pressure.

CIBC expects earnings, inflation and retail spending data to come all below
consensus forecasts.

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The euro hovered near the $1.10 mark and was last 0.08% lower on the day at
$1.0941.

In Asia, the yen remained under pressure, down 0.63% at 145.83 per dollar,
moving closer to its lowest level since mid-December, on expectations that
the Bank of Japan will keep its ultra-loose policy settings unchanged at its
policy meeting next week.

CHINA, TAIWAN

The yuan fell on Monday to a one-month low after China's central bank
surprised markets by keeping its medium-term policy rate unchanged, defying
market expectations it would cut rates to shore up China's bumpy
post-pandemic economic recovery.

That sent the onshore yuan sliding to a one-month low of 7.1813 per dollar
before it recouped some of those losses to trade down 0.08% at 7.1744.

"Some economists have argued that the PBoC may have chosen to hold rates
steady to avoid further downside in the yuan, and excess volatility in the
FX market," said Kathleen Brooks, research director at XTB.

Rate cuts could still be on the table, said Tommy Wo, senior economist at
Commerzbank.

"There will be more room for PBoC rate cuts when the timing of Fed's rate
reduction becomes clearer."

Elsewhere, the Taiwan dollar fell to a more than three-week low of 31.284
per U.S. dollar, after the Democratic Progressive Party's (DPP) Lai Ching-te
won the presidency over the weekend, though his party lost its majority in
parliament

Analysts now fear policy paralysis.

"DPP lost the majority in the parliament. Hence Lai is ruling with a weaker
mandate than Tsai Ing-wen," said Allan von Mehren, director at Danske Bank.

He expects continued tensions in the Taiwan Strait but not a further
escalation.

"China will continue to deter Taiwanese independence with military drills
around the island and Taiwan and the U.S. are likely to continue to have
closer relations but without crossing China's red line". 

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold frail as dollar, yields strength dim shine

(Reuters) - Gold prices were subdued on Tuesday as the dollar and Treasury
yields rose, while traders waited to hear from a slew of U.S. Federal
Reserve speakers this week for more clarity on the central bank's rate cut
prospects.

Spot gold was down 0.3% at $2,049.20 per ounce, as of 0402 GMT. U.S. gold
futures rose 0.1% to $2,052.90.

Reuters Graphics

Weighing on gold, the dollar has strengthened ahead of Christopher Waller's
speech, which is arguably the bigger event for the week, said Matt Simpson,
a senior analyst at City Index.

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The dollar index (.DXY) touched a 10-day high, making bullion less
attractive for other currency holders, while yields on benchmark U.S.
10-year Treasury notes rose above 4%.

At least six Fed officials are due to speak this week, with Fed Governor
Christopher Waller scheduled to deliver a speech on the economic outlook
before the Brookings Institution at 1600 GMT.

"With multiple rate cuts having been priced in by market, I wouldn't be
surprised if Waller feels inclined to push back...a move back to $2035 (for
spot gold) could be plausible," Simpson said.

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At the end of its Jan. 30-31 meeting, the Fed is expected to hold its policy
rate steady.

Traders are betting on six rate cuts of 25 basis points each this year, with
about a three-in-four chance that the first one could come as soon as March,
according to LSEG's interest rate probability app, IRPR.

Lower interest rates increase non-yielding bullion's appeal.

Elsewhere, European Central Bank officials pushed back against market
expectations for rapid rate cuts this year.

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According to Reuters technical analyst Wang Tao, spot gold may retrace to
$2,042 per ounce, after its repeated failures to break resistance at $2,060.

Spot silver fell 0.4% to $23.11 per ounce, platinum declined 0.6% to
$909.37, and palladium slipped 0.7% to $964.89.

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 

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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
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opinions expressed and recommendations made are subject to change without
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