Zimbabwe Stock Exchange has dipped 21 per cent since reopening two weeks ago, the latest data release reveals. ZSE blames foreign investor flight for the slump with Bloomberg reporting that the investors have sold stock worth $2.5 million.
The government had halted operations at the bourse blaming firms with listings outside the country for causing volatility in the local currency. The ministry of Finance investigation revealed a correlation between local currency price behavior and transactions patterns of dually listed shares and the behavior of the parallel market.
The government reopened on August 3 without three firms; Old Mutual Ltd, PPC Ltd, and SeedCo Ltd which remain suspended to date. The month long suspension hurt investor confidence which has seen many indices move to the red territory. Government efforts to boost liquidity by releasing funds into the market have borne little fruits.
The Zimbabwean authorities have already unveiled plans to set up the country’s first US dollar denominated bourse, Victoria Falls Exchange (VFEX). The move is aimed at attracting foreign investment into the country as it will seek partnerships with other global exchanges. The VFEX, a wholly owned subsidiary of the ZSE, is currently awaiting licensing by the Securities and Exchange Commission of Zimbabwe (SECZ).
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