Zimbabwean Stocks Hit Record High as Inflation Soars Near 100%
Zimbabwean Stocks Hit Record High as Inflation Soars Near 100%
(Bloomberg) -- Zimbabwe’s stock market has hit a record high, for all the wrong reasons.
The southern African nation’s Industrial Index rose 5.6% on Monday to extend its gain this quarter to 80%, the most among any of the primary equity gauges tracked by Bloomberg globally.
Stocks are rising because local investors are desperate to hedge against inflation, which accelerated to 98% in May, the statistics agency said on Monday. Prices are rocketing amid a scarcity of foreign exchange, which is causing shortages of fuel, medicine and other imported goods. It’s a similar situation to crisis-ridden Venezuela, where equities are also soaring.
In Zimbabwe, investors’ fears about inflation are heightened by a plunging currency. The RTGS$, which the government de-linked from the U.S. dollar in February, has sunk about 57% since March on the black market. On the streets of Harare, the capital, it trades at 9.7 against the greenback, according to marketwatch.co.zw, a website run by financial analysts. That compares with the central bank’s official and much stronger rate of 6.08.
To contact the reporter on this story: Paul Wallace in Lagos at pwallace25@bloomberg.net
To contact the editors responsible for this story: Dana El Baltaji at delbaltaji@bloomberg.net, Robert Brand, John Viljoen
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