Zimbabwe’s stock market is bucking the trend for bourses in emerging markets to sink in August after investors clamored to buy shares ahead of elections on Wednesday.
(Bloomberg) — Zimbabwe’s stock market is bucking the trend for bourses in emerging markets to sink in August after investors clamored to buy shares ahead of elections on Wednesday.
The Zimbabwe Stock Exchange All Share Index has risen 5.5% so far in August, its best performance for the month since at least 2019, to lift gains so far this year to 521% in dollar terms. By contrast, the MSCI Emerging Markets Index, buffeted by concerns about China’s economic health and rising US debt yields, is down 7.3% this month.
In a country where the next currency crisis is never far away, the latest rally could mark a fresh bout of buying by Zimbabweans seeking to shield their currency from inflation as voters head to the polls. Local investors often turn to equities as a haven from currency meltdowns and episodes of hyperinflation, a trend that helps explain the surge in stocks seen this year.
President Emmerson Mnangagwa, 80, who is seeking a second term, told the state-owned Zimpapers Television Network on Tuesday that the economy and Zimbabwe dollar in particular, are under “attack” from Western nations that are fostering instability so they can effect regime change.
Zimbabwe devalued its dollar earlier this year to rein in triple-digit inflation and hiked interest rates to among the world’s highest.
The currency slumped more than 85% against the US dollar in May, before staging a turnaround after the Treasury introduced measures to boost demand for it including ordering corporates to pay taxes using local money.
The currency was scrapped in 2009 after hyper-inflation rendered it worthless. Mnangagwa presided over its reintroduction four years ago.
“The Zimbabwe dollar is there to stay,” Mnangagwa said on Tuesday.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.