STOCKS maintained an upside rally set in motion last week by government’s decision to raise fuel by 150% as investors seek safety in stocks amid inflation fears.
Investors and analysts see the fuel price increase stoking inflationary pressures in the economy. Stocks are generally believed to be a safe hedge against inflation. This often inspires investors and fund managers to take positions in equities in economically turbulent times. Shares opened the week with a solid 2,53% gain buoyed by gains Old Mutual, Delta, Innscor and Cassava.
On Tuesday, the stock market rose 2,37% to close the day at a total market capitalisation of US$21,59 billion. The Industrial Index was up 2,37% to 537,21 points buoyed up by gains in Delta, up 2,90%, Econet gained 2,84% and Cassava up 1,38%. The Mining Index rose 0,10% to 207,04, attributed to a 0,03% gain in RioZim.
The All Share Index increased by 2,35% to 160,82 points, while the Top 10 Index climbed 2,66% to 163,13 points. Other notable gains for the day were recorded in Edgars, Zimpapers, Old Mutual, Ok Zimbabwe and FBC up 20%, 16,87%, OK Zimbabwe up 10,42% and FBC up 6,70%.
Last week, trading on Zimbabwe’s equities market was suspended after mass protests and government took the decision to shut down the internet for all citizens.
Stockbrokers opted not to trade amid safety concerns after protesters attacked motorists, blocked all major roads in and around the capital Harare and attacked those who were perceived to be ignoring the call to abstain from work and join the general strike.
Government also disconnected Zimbabwe’s main internet gateway port in an attempt to keep citizens in the dark as protests spread countrywide. This hindered trading, which is now fully automated.
Stocks gained a massive 3,5% in a single day of trade on Monday last week. Analysts had expected an upside in equities with investors hedging against expected inflationary pressures stemming from the fuel increase.