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Zim bourse in record losses

Harare - The Zimbabwean equities market recorded its worst trading month since the beginning of the year with both the main industrials and the mining indices falling by huge margins in the month of October.

According to a research note released by Zimbabwe based Lynton-Edwards Stockbrokers, the Zimbabwe Stock Exchange (ZSE) recorded its biggest monthly fall of 2014, after it tumbled -8.89% in October, beating the previous monthly record loss of -7.13% recorded in March this year.

On the other hand the mining index recorded its second biggest monthly fall after it lost 24.12%, slightly below the previous 2014 monthly record loss of 24.79% which was also recorded in March this year.

October’s overall turnover of $28.2m though low was however higher than the previous low of $25.2m recorded in July this year.

A total 38 stocks closed in the red on the ZSE in the month, with 12 of them recording losses above 20%.

The fall in the market is a clear reflection of the deteriorating economic environment that has continued to worsen with each passing day.

The country’s leadership has not helped matters either with the month of October having been characterised by political bickering, and in the process increasing the country’s political risk.

Investors normally shy away from countries where chances of political changes or instability are heightened as what is happening in Zimbabwe at the moment.

Reports of high profile government officials being correctly or falsely fingered in corrupt activities are also unnerving investors.

The economic situation in the country is unattainable and the IMF recently said the country needs to fast track the country’s policy reform agenda.

According to the director of the African Department of IMF Antoinette Sayeh, Zimbabwe needs to balance the primary fiscal budget, restore confidence in the financial sector, address debt challenges and enhance the business operating environment.

The RBZ has also voiced its concern on the economy with deputy governor Kupukile Mlambo saying the country’s economy is failing to respond to regional growth trends, a development that needs national attention.

  - Fin24

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