Rejecting Mugabe-nomics – foreigners dumping Zim equities at a record rate

Harare – Foreign investors are dumping Zimbabwean-listed equities like never before. In a bid to minimise their losses, foreigners have sold $52.5m worth of listed shares since the beginning of the year, according to figures released by the Zimbabwe Stock Exchange on Thursday.

That is more than the $33.4m worth of shares foreigners have bought in the five months ended May 31 2016.

Stockbrokers trade on the floor of the Zimbabwe Stock Exchange (ZSE) in Harare, February 24, 2015. ZSE on Monday lifted the suspension of hotel group Meikles Africa after the company threatened to take court action, shelve new investment and a possible listing of a subsidiary. Meikles, which owns two premier hotels in the capital Harare and the resort town of Victoria Falls, was suspended last week to allow for an investigation on whether it overstated a debt owed by the central bank. REUTERS/Philimon Bulawayo (ZIMBABWE - Tags: BUSINESS)
Stockbrokers trade on the floor of the Zimbabwe Stock Exchange (ZSE).

This is the first time since dollarisation in 2009 that foreigners have sold more shares than they have bought, becoming net sellers by shares worth $19.1m.

An analyst with a local advisory firm said the current scenario is part of a broader trend that gathered steam in the last two years, with foreigners being net buyers by very slim margins.

“If you look at the trend, you will see that in 2015 foreigners bought and sold shares worth $63.7m and $63.8m respectively so this has been long coming,” said Jeremy Negonde, a local analyst, adding that in 2014 the gap was a bit bigger with foreigners selling $98.6m worth of shares and buying $133.4m.

Another analyst, who requested anonymity, said the sell-off is a result of increased risk in the country where the “United States dollar appeal is not there any more, given the current monetary challenges.”

“So if there is still a window to remit funds, then they are taking it,” said the analyst.

Other analysts said the current sell-off is to be expected, given the continued economic decline with no prospects of a turnaround in sight.

“I think there is investor fatigue; we have all being waiting for an economic turnaround for far too long but it’s not coming.

“I also think these foreign sales are fundamentally driven. The country’s economy doesn’t seem to be improving,” said Negonde. – Fin24

Source: http://www.fin24.com/Markets/Equities/foreign-investors-dump-zim-equities-at-record-rate-20160602

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