Posts Tagged ‘biggest gain’
First lets see what happened a day before. On Monday, the markets set a record of gaining 241% in a single trading session. And today, that is Tuesday, they gained another 257% !!
But the fact is that these figures are just meaningless. Citizens are turning to equities in a desperate attempt to protect their money from the country’s stratospheric hyperinflation. This is just a representation of Zimbabwe’s collapsing economy. Inflation is officially running at an annual pace of 231 million percent, but some experts put it more at about 20 trillion percent.
These sort of gains might prompt us to think that the guys from Wall Street might be landing their jets in Zimbabwe. But reality is different and on the contrary, only 2 percent of investors are foreigners. This is in comparison to about a decade ago when foreigners made up about 30 percent of investors.
If we talk about the exchange rate of currency, it jumped from 30 million Zimbabwean dollars to one U.S. dollar on Friday, to 100 million to a US dollar on Monday!
Some of the major gainers in individual stocks are -
- Government-controlled Zimpapers, which gained 3,471 %
- Cement maker Lafarge saw their share price rise 1,400 %
But everyone does not consider it to be another bubble ready to burst. With the newest listings in the mining sector. Zimbabwe has vast untapped mineral wealth including gold, diamonds and platinum. Munyukwi said markets were driven by strong, cheap assets which are offering returns that were more than matching inflation. He said -
“Some people think that this is a bubble about to burst, but I don’t think so.”
But he did agree that the market was largely overvalued in Zimbabwean dollar terms but said it is undervalued in U.S. dollars. And volumes being traded are very small and there was no real movement year on year.
So what lies in future, for Zimbabwe?
God help Zimbabwe…or rather Warren Buffet could better answer this question…isn’t it??