Published by the government of Zimbabwe
4 November 2008
Harare — SHARES on the Zimbabwe Stock Exchange are stopping at nothing, and last week fired on unhindered, as speculation, and the belief of hedging against inflation drove prices through the roof.
Punters are hoping inflationary pricing will nurse the sick economy back to health and help restore some value to the dollar.
Some have kept a firm grip to their stock, and help create a shortage of scrip that has propelled prices higher.
In Friday's trading, the mainstream industrial index climbed a massive 368,95 percent to break the quadrillion mark and reached 1 835 393 087 392 070.00 points.
Minings rose similarly closing up 301,1 percent at 1 049 566 560 269 850.00 points.
Equities gained throughout last week.
Industrials opened up 12,5 percent but minings shed 35,2 percent.
On Tuesday, the main index leapt 154 percent, 126,6 percent at mid-week and closed up 303,9 percent Thursday.
In mining, the index closed up 222,58 percent on Tuesday before rising 113,5 percent on Wednesday. It ended 214,85 percent higher on Thursday.
In early trading yesterday, equities showed no signs of easing. Early gains were posted in second liner shares with Redstar leading the pack rising 4 662 percent followed by Afdis, which gained 1 567 percent.
Murray and Roberts rose 900 percent while Astra and ZB Financial Holdings gained 433 percent and 400 percent in that order.
Volume was low with less than one million shares traded. Several counters did not trade.
But last year, just as banks were waking up to their problems in the US, Zimbabwean investors rode a rapidly expanding stock bubble as the value of shares accelerated faster.
The feat continued into 2008 with industrials posting a year-to-date growth of 960 quadrillion percent, which is 4,15 billion times as much as July's annual inflation of 231 million percent.
The resource index is up 444 quadrillion percent since January. And so, from the look of things, ZSE investors may have indeed managed to hedge their assets against the effects of high inflation but some have been at a loss in US dollar terms.
The Old Mutual Implied Rate, the broadest measure of the rate of foreign exchange on the market, has widened rapidly than the two indices. Over the year, the OMIR has gained 2 244 quadrillion percent to $11,2 trillion per US$.
In the short-to-medium term, analysts expect the market to continue on the upside, helped by negative inflation forecast and receding economic growth. Weak money market rates have also aided the equities rally.
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