Since the military seized power last week in Zimbabwe, investors have been dumping stock. The market shed nearly a third of its value in the past week.
CGTN’s Farai Mwakutuya reports on the current economic situation in the country.
For a while, the Zimbabwe Stock Exchange looked unstoppable.
A record-breaking bull run, fuelled by inflation-wary investors seeking refuge in stocks, propelled the market to a peak of about $15 billion in early November.
Analysts expected a self-correction to cap the spectacular run but say last week’s military operation has only accelerated matters.
“To date I think we have lost north of 4 billion in terms of market capitalisation. Are we still going down in my view? Yes, there is still a lot of down side. We believe the market is going to bottom down somewhere inside of $10 billion, and we still have a few days to go before see stability in the market.” Farai Vengesai, an investment analyst said.
Some foreign-owned businesses have taken precautionary measures to safeguard their human and capital assets.
But despite initial fears, most have remained open and are trading as normal.
Impending changes on the political landscape could lure investors with a long-term focus.
“Right now we are staring into real possibilities — possibilities that probably we will see changes on the policy front. There are possibilities that we might actually see changes on the indigenisation front, tax laws and so forth. And if you look at that I think this is actually good for companies.” Vengesai added.
If a new administration emerges, it has the massive challenge of addressing the festering issues that have plunged the country into the current economic crisis.
“I suspect that everyone knows that fixing the economy is very urgent issue, giving confidence to the young people without jobs, giving confidence to investors, working with the rest of the world so that whatever we can get from anywhere to get our country going again is done.” Dr Davison Gomo, an economic political commentator said.
Under President Robert Mugabe, Zimbabwe has largely been isolated by the international community and has struggled to attract significant foreign investment.
Experts are hoping a change of guard in the government will also bring change to the economy
