Market analysts say government policies such as the suspension of the fungibility of Old Mutual, PPC and Seed Co International stocks for a year and the closure of the ZSE for a month could have unsettled investors and driven the sell-off.
Trading on the bourse was suspended for a month on June 26 to pave way for investigations into alleged illicit trades that were blamed for the routing of the local unit against major currencies.
When ZSE was told to stop trading, it was enjoying a bull run.
Trading resumed on August 3, minus Old Mutual, PPC and Seed Co International which will debut on the soon to be launched Victoria Falls Stock Exchange (VFEX).
In August, foreigners were net seller by ZWL$391. 6m after selling shares worth ZW$485. 2m and buying stocks valued at ZWL$93. 6m.
In an analysis of the August trades, FBC Securities said the fungibility suspension and ZSE trading suspension dampened the little confidence that had remained for foreign investors.
In September, foreigners sold shares worth ZWL$ 3,782,044,956. 28.
They bought shares worth ZWL$ 28,704,145. 02.
The September sales were propelled by ASA disposal of its interest in Bindura Nickel Corporation to a Zimbabwean based company.
Market watchers say Zimbabwe is now deemed an unattractive investment destination due to regressive economic policies, perceived disrespect of private property rights and policy inconsistency.
Investment analyst Ranga Makwata said foreigners started leaving when the country began experiencing foreign currency shortages which resulted in delays in international money transfers before the situation worsened to a total blockade with banks failing completely to move funds out of the country. “Things really got worse when the government introduced bond notes and subsequently reintroduced the Zimbabwe dollar to replace the multicurrency. 🔗 Read Full Article
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