21 Nov

Mugabe’s Woes Wipe Out $5 Billion From Zimbabwe’s Skewed Stocks

Investors dumped Zimbabwean stocks every day since the military seized power on optimism that 93-year-old President Robert Mugabe will be forced to step down.

The stocks, which are denominated in U.S. dollars and were used to hedge against rising inflation, fell 10 percent on Monday to an eight-week low of 387.38, bringing the Zimbabwe Stock Exchange Industrial Index’s retreat since the army’s takeover on the morning of Nov. 15 to 27 percent.

The bourse’s market capitalization has plunged $4.8 billion in that period to $11.1 billion, according to data compiled by Bloomberg and the Zimbabwe Stock Exchange.

Zimbabwe’s stocks soared this year after the government printed a new form of money — called bond notes — to deal with a cash shortage, stoking concerns over price growth in a nation that saw inflation jump into the billions of percent about a decade ago. While the southern African nation has mostly used the dollar since scrapping its own worthless currency in 2009, greenbacks have become scarce as Zimbabwe’s balance of payments position has worsened.

Read more: Mugabe’s Woes Wipe Out $5 Billion From Zimbabwe’s Skewed Stocks