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Zimbabwe stock market gives in

THE stock market finally succumbed to the chaos and uncertainty surrounding the presidential election yesterday, having spent much of the week resilient to the electoral crisis.

The Industrial Index shed 6,01% to close at 18 175 248 922,10 while the Mining Index lost 8,67% to 13 950 523 647,77 as the market reacted to the political predicament that has resulted in an emergency Sadc meeting tomorrow.
Gains for the movers were marginal while losses were huge for the shakers as the stock market reflected the volatility of the situation in Zimbabwe.
Zimplow gained $200 000 to close at $12 million while the Rainbow Tourism Group (RTG) gained $500 000 to close at $2 million.
Star Africa Corporation was up by $1 million to close at $7 million while Hippo Valley closed the day $2 million higher to end at $25 million.
On the other end, the situation had all the signs of big trouble. Kingdom Meikles Africa Ltd (KMAL) arguably took the largest knocking, slipping by $10 million to end the day lower at $19 million.
Econet lost $8 million to end at $140 million, while PPC shed $2,1 million to end up at $22 million.
Innscor ended the day $7 million lower, closing at $38 million while Natfoods lost $5 million to close at $20 million.
Cottco shed $2,8 million to close at $11 million, while Delta, Afdis and Colcom all lost $2 million each to close at $25 million, $11 million and $13 million respectively.
All the major losses have ridden on the back of the worsening shortages of basic commodities and inputs.
KMAL’s retail chain, TM has been suffering from dwindling supplies, while Hippo and Star Africa have come short in sugar deliveries. Delta has stopped manufacturing soft drinks owing to sugar shortages while Natfoods is struggling to secure maize in what promises to be a disastrous farming season.
However, yesterday’s plummeting followed three days of successive gains as the bulls stampeded home from Monday to Wednesday, with the Industrial Index gaining 12%, 14% and 5% successively while the Mining Index gained 4%, 2% and 12% on the same days.
The equities market appeared strongest despite the political crisis that had left many businesses reeling from the non-availability of commodities and other supplies.
Market analysts had predicted that a significant change in macroeconomic policy was the only long term thing that could halt the domineering influence of the equities market over the money market.
They argued that this change could only come through a change of government as President Robert Mugabe’s government was unlikely come up with any major policy changes that could revive other sectors of the economy. 
The stock market looks set to rebound next week despite a policy vacuum created by a desperate government vetoing the release of the presidential results.
This will be achieved on the back of negative real interest rates which trail inflation by a long shot. Inflation is currently at 165 000%.
With month-on-month inflation pegged at 125,9%, market analysts said the local bourse would only cease to being the only attractive investment destination once a new macroeconomic environment was in place.
Stocks picked up momentum Monday to see the industrials up 12% to 16 072 871 975,70 points while minings were up 4% to 13 311 209 741, 68 points.
Major movers included Radar up 65% to $13 200 000, Edgars 16% to $4 000 000 and Innscor 50% to $45 000 000.

By Paul Nyakazeya/Kuda Chikwanda

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