Zimbabwe’s Stock Market outpaces global competitors with stunning 800% growth
Gains occur at breakneck speed in Harare, Zimbabwe, the location of the largest stock market surge in history: 5%, 10%, and even 20% in a single session. Add them all up, and the market has increased by an astounding 800% year-over-year.
The rapid rally, though, should raise more anxiety than excitement in a nation where up often comes down and the next currency crisis is always just around the horizon. This is based on a report put out by American news agency, Bloomberg.
Market watchers claim that this is a telltale indicator that investors are preparing for an inflationary spiral and looking for a hedge to preserve the value of their money. Over 100% yearly growth in consumer prices is causing unease in a country still feeling the effects of hyperinflation.
The stock market may be small with its total capitalization at $1.8 billion, a small sum compared to the $1 trillion+ exchange in neighboring South Africa, but at least it’s a location where residents can readily invest. Few companies will also take it as payment for any significant transaction, including real estate, automobiles, and even petrol, as the value of the Zimbabwe dollar is falling practically daily.
Zimbabwean stocks have quickly outpaced the other notable gainers for 2023. While S&P 500 investors must be pleased with a 16% increase, Argentina’s Merval index has just doubled. Foreign investors no longer make up the majority of trading on the Zimbabwe equities market due to the nation’s economic woes, which only account for 15% of trade.
When compared to the aggregate trades of the Wall Street benchmark, which total $240 billion, turnover on major exchanges is a small fraction at roughly $650,000 each day.
The Zimbabwe exchange is one of Africa’s oldest, having been founded in 1894. Its mansion is in the upscale Harare neighborhood of Highlands, which is well-liked by diplomats and wealthy retirees because of its swanky homes in lush and well-kept streets and contrasts with the chaotic activity of the capital’s center. In contrast to the chaos occurring on its trading platform.
There are 55 firms available to stock pickers in Harare. The blue chips, which include beverage manufacturer Delta Corp., telecom company Econet Wireless Zimbabwe Ltd., and mobile money provider EcoCash Holdings Zimbabwe Ltd., are the most well-liked.
They are among the most liquid equities on the exchange and belong to businesses that Zimbabweans rely on for goods and services. This supports their revenues and sales even during periods of exorbitant inflation.
