• Login
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
  • Home
  • News
    • General
    • Political
  • Economy
  • Business
    • Agribusiness
    • Aviation
    • Banking & Finance
    • Energy
    • Insurance
    • Manufacturing
    • Markets
    • Maritime
    • Real Estate
    • Tourism
    • Transport
  • Technology
    • Telecom
    • Cyber-security
    • Cryptocurrency
    • Tech-guide
    • Social Media
  • Features
    • Interviews
    • Opinions
  • Reports
    • Banking/Finance
    • Insurance
    • Budgets
    • GDP
    • Inflation
    • Central Bank
    • Sec/Gse
  • Lifestyle
    • Sports
    • Entertainment
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video
No Result
View All Result
No Result
View All Result
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
Home Business

Zimbabwe’s ZiG wipes out 330% stocks rally

1 year ago
in Business, Economy, Features, highlights, Home, home-news, latest News, Markets
2 min read
0 0
0
42
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

Zimbabwe’s ZiG wipes out 330% stocks rally

Zimbabwe’s new currency has wiped out a more than 330% gain on the stock market this year, leaving investors dealing with the fallout.

The Zimbabwe Stock Exchange All Share Index fell 99.95% since the introduction of ZiG, short for Zimbabwe Gold, on April 5. The gold-backed ZiG succeeded the Zimbabwean dollar, which had lost 80% of its value this year.

The volume of trades and value of transactions have also plunged as share prices were converted from the old currency to the new.

Prior to the conversion, investors piled into stocks as they sought refuge from the local dollar’s collapse and surging inflation that in March stood at a seven-month high of 55.3%.

The bourse offers one of the few investment options in the southern African nation for investors to hedge against exchange-rate volatility and inflation. However, a surge in stocks usually is a cause for concern and not jubilation, as it signals that the next currency crisis is around the corner.

Justin Bgoni, the chief executive officer of the bourse, said a combination of factors including the long time it took for the nation’s lenders to complete a conversion from Zimbabwean dollars to ZiG and tight liquidity conditions in the market led to the exchange’s poor performance.

RelatedPosts

Parliament Adjourns Sine Die After Intense Legislative Session Marked by Reform Calls and Tributes

GACL Terminates Evatex Revenue Assurance Contract Amid OSP Probe

Cyber Security Authority Flags Rising Mobile Data Scam, Cautions Public

“Generally, people are also hesitant and don’t understand what the value is in ZiG terms,” he said Monday by phone.

Share prices were converted by the bourse at a swap rate of 1 ZiG to 2,498 Zimbabwean dollars after an April 5 central bank order that the ZiG will be the new transacting currency used for everything from bank account balances to prices displayed in supermarkets.

‘Early Winter’ 

The decline in trading volumes has seen revenues of some brokerages fall at least 50% with most experiencing a “big hit to earnings,” said Lloyd Mlotshwa, the head of research at Harare-based brokerage firm IH Securities. For stockbrokers, the new currency has had a domino effect resulting in low “average daily turnover, which speaks to liquidity and then a knock-on effect to the stockbroking industry,” he said.

Stockbrokers in the capital, Harare said Monday they are experiencing “a painful early winter” marked by limited trading volumes on the stock market.

Their expectation is that the entire stock market architecture — and not only the stockbroking industry, which relies on market turnover — will suffer. That includes custodians, government taxes and the ZSE company which collects fees and commissions.

With 80% of the economy using dollars for transactions, it is also a “major downside” for stockbrokers that the stock exchange, which has 56 securities decided to trade in ZiG, according to Enock Rukarwa, a research and investment consultant at FBC Securities. “In the face of such headwinds stockbroking boutiques need to recalibrate their business models derisking commission income,” he said.

Imara Asset Management, the nation’s largest independent brokerage, which oversees $100 million in assets, also expects “some upheaval” over the next month with share prices converted to ZiG yet to find new levels.

“It would have been much more sensible for the Zimbabwe Stock Exchange to convert to US dollars in line with the Victoria Falls Stock Exchange especially now that many of the underlying listed businesses are reporting in US dollars and paying US dollar dividends,” John Legat and Shelton Sibanda, the chief executive officer and chief investment officer at Imara wrote in their April client note.

Source: bloomberg
Via: norvanreports
Tags: stocks rallyZiGZimbabweZimbabwe’s ZiG wipes out 330% stocks rally
No Result
View All Result

Highlights

Gov’t Reopens Talks With PayPal to Restore Full Service Access in Ghana

Financial Sector Assets up 34.6% in 2024 to GHS 525.59 Billion

Banking Sector Soundness Remains Robust in 2024 Amid Strong Profitability, Adequate Capital Buffers

Sha’Carri Richardson Withdraws from US Trials Following Arrest

From Singuluma to El Kaabi: Can CHAN 2024 Unleash the Next Hat-trick Hero?

Ghana to Welcome King’s Baton Relay on August 8 Ahead of 2026 Commonwealth Games

Trending

Features

Parliament Adjourns Sine Die After Intense Legislative Session Marked by Reform Calls and Tributes

August 2, 2025

Parliament Adjourns Sine Die After Intense Legislative Session Marked by Reform Calls and Tributes Parliament has adjourned...

GACL Terminates Evatex Revenue Assurance Contract Amid OSP Probe

August 2, 2025

Cyber Security Authority Flags Rising Mobile Data Scam, Cautions Public

August 2, 2025

Gov’t Reopens Talks With PayPal to Restore Full Service Access in Ghana

August 2, 2025
Bank of Ghana

Financial Sector Assets up 34.6% in 2024 to GHS 525.59 Billion

August 2, 2025

Who we are?

NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World

NorvanReports is a unique data, business, and financial portal aimed at providing accurate, impartial reporting of business news on Ghana, Africa, and around the world from a truly independent reporting and analysis point of view.

© 2020 Norvanreports – credible news platform.
L: Hse #4 3rd Okle Link, Baatsonaa – Accra-Ghana T:+233-(0)26 451 1013 E: news@norvanreports.com info@norvanreports.com
All rights reserved we display professionalism at all stages of publications

No Result
View All Result
  • Home
  • Business
    • Agribusiness
    • Aviation
    • Energy
    • Insurance
    • Manufacturing
    • Real Estate
    • Maritime
    • Tourism
    • Transport
    • Banking & Finance
    • Trade
    • Markets
  • Economy
  • Reports
  • Technology
    • Cryptocurrency
    • Cyber-security
    • Social Media
    • Tech-guide
    • Telecom
  • Features
    • Interviews
    • Opinions
  • Lifestyle
    • Entertainment
    • Sports
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
NORVANREPORTS.COM | Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.