Seeking a sign of investor confidence in Zimbabwe? Look for falling stocks
The deeper Zimbabwe’s economy has sunk, the more equities have soared — its main gauge is up 322% in the past year in dollars, the best performance globally
If investors want a sign that confidence is returning to Zimbabwe following the armed forces’ seizure of power from President Robert Mugabe on Wednesday morning, they should look for stocks to fall. In Zimbabwe’s dysfunctional market, the deeper the economy has sunk, the more equities have soared. The nation’s main gauge is up 322% in the past year in dollars, the best performance globally, even as a cash shortage choked businesses and forced people to sleep in streets near banks so they could make withdrawals in the mornings. That’s happened because Zimbabweans see stocks as one of the few protections against inflation, which has been spurred by the government’s printing a new form of money — called bond notes — to deal with the lack of dollar bills. Greenbacks have been the main legal tender since Zimbabwe scrapped its own worthless dollars in 2009, but have become scarce as Zimbabwe’s balance of payments position worsened. Similarly, bitcoins trade at about $13,000 on Zimbabwean ...
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