Harare – The Zimbabwe Stock Exchange lost further ground on Friday as investors speculated on chances that bank balances, which have been losing value against real US dollars for the better part of the year, could strengthen in the wake of a potential new dispensation in the country’s political arena.
For much of 2017 Zimbabweans have been piling into stocks in an effort to hedge against falling bank balances against real US dollar notes.
Real US dollars are currently trading at an 80% premium to bank balances.
In October and November more than US$200m was invested on the Zimbabwe stock market, more than the $193m that was invested during the whole of 2016.
But this week’s developments have given some investors hope than the country’s bank balances might regain strength and be valued nearer to the actual value of US dollar notes.
On Tuesday, the Zimbabwe Defence Forces took control of the country in what they said was an effort to pacify a degenerating political, social and economic situation in the country which, if not addressed, could result in violent conflict.
The developments have prompted market speculators to take positions, pushing the ZSE main Industrials index to shed 11.32% to 432,72 points.
The ZSE had already lost 7.46% on Thursday.
Market analysts expect downward pressure to continue until there is a clearer picture on where the country’s economy will be heading when and if the current economic impasse is settled.
Some of the counters that tumbled include heavyweights Delta, which lost 19.94%, Econet, which was down 19.99%, and Old Mutual, which closed the day 19.58% lower.
Meanwhile President Robert Mugabe on Friday afternoon officiated at the Zimbabwe Open University graduation ceremony.
This was Mugabe’s first public appearance since the army seized control of the country on Tuesday.