THE value of shares that were traded on the Zimbabwe Stock Exchange (ZSE) was up 74% in the first 10 months of the year to $715,3 million as resurgent inflationary pressures forced investors to seek refuge in equities, an official has said.
BY MTHANDAZO NYONI
In the same period last year, turnover was at $411,9 million.
ZSE acting chief executive officer Martin Matanda told NewsDay in emailed responses that the increased trading activity was on account of flight to safety by investors worried by the negative inflation outlook.
“Significant growth in money supply as reported by the Reserve Bank of Zimbabwe on a monthly basis resulted in investors seeking inflation hedging investments such as the stock market and real estate,” Matanda said.
“Resultantly, demand for shares has been on the upsurge, thereby leading to increased volumes, increased prices and higher turnover,” he said.
Inflation figures for October 2018, released by Zimstat, show that annual inflation gained 15,46 percentage points to reach 20,85%, while the month-on-month rate for October 2018 was at 16,44%, representing a 15,52 percentage points increase on the September level.
Inflation statistics released by the government agency are, however, considered conservative as prices of fuel and other basic goods reflect a different scenario.
Matanda said the volume of shares traded during the period under review was 2,219,076,350 compared to 2,457, 889, 590 shares for the same period in 2017.
He revealed that in the period under review, the local bourse was handicapped by hard currency shortages which led to delayed payments to foreign investors and suppliers.
“The delays in remittance of dividends and capital payments reduced the attractiveness of market to foreign investors, whilst the delay in payments to foreign suppliers resulted in maintenance service disruptions,” he said.
Matanda said the ZSE expected continued growth on the market as demand for equities remains high.