HARARE (Bloomberg) \u2013Traders have abandoned Zimbabwe\u2019s stock market as a lockdown imposed to curb the spread of the coronavirus adds to the strains on an economy that was already contending with severe drought, hyperinflation and a shortage of foreign exchange.<\/p>\n
The volume of shares changing hands on the bourse has plunged by 55% since the government imposed strict measures to limit movement on March 30, said Justin Bgoni, chief executive officer of the Zimbabwe Stock Exchange. Foreign participation has dwindled to just 10% of all activity, from 34% last year.<\/p>\n
\u201cBoth the Covid-19 outbreak and the subsequent lockdown has put a strain on our listed companies, with some having to suspend operations, which has an effect on performance,\u201d Bgoni said in an emailed response to questions.<\/p>\n
The fall-off in trading suggests the exchange is losing its status as a haven for local investors, who have in recent years turned to stocks as a way of protecting their savings from the ravages of inflation, which soared to 676% in March. The bourse\u2019s market capitalization in local currency terms has doubled since November, but a crash in the Zimbabwe dollar means that stock values in dollar terms have plunged to their lowest in a decade.<\/p>\n
Covid-19 and the measures to counter it are only the latest setbacks. In March, Bgoni bemoaned a government decision to restrict trading in three key dual-listed stocks, meaning they are no longer fungible, or regarded as being equal in value to their listings on other exchanges.<\/p>\n
\u201cThe suspension of fungibility has dampened the attractiveness of our market for potential issuers from other markets and consequently sets us back in terms of regional initiatives,\u201d he said.<\/p>\n
World Stocks<\/p>\n
Stock markets slid on Friday following more crushing economic data and a hit to hopes of finding a coronavirus vaccine, analysts said.<\/p>\n
European equities were knocked also by news that EU leaders stood divided over the size of a financial rescue package to stimulate the bloc\u2019s economy left battered by the pandemic.<\/p>\n
\u201cThey seem to have agreed on the idea of a recovery fund while leaving the details for a future date,\u201d Oanda analyst Craig Erlam told AFP.<\/p>\n
The United States on Friday approved nearly half a billion dollars in new stimulus but European leaders were split on their own measures as the world sought to salvage economies hammered by the coronavirus pandemic.<\/p>\n
Erlam added that \u201cinvestors may also be reacting badly to remdesivir\u2019s performance in its first randomised clinical trial\u201d.<\/p>\n
US stocks ended flat Thursday and Tokyo dropped Friday, following reports that the closely-watched antiviral drug remdesivir has had no effect on patients in a coronavirus test.<\/p>\n
\u201cThis was a ray of hope earlier this week and already we\u2019re learning the pitfalls of getting too excited about these cures at the early stages of testing,\u201d Erlam said.<\/p>\n
Economic data released Friday added to the bleak outlook.<\/p>\n
German business confidence plummeted to a record low in April as firms fret over COVID-19 fallout, the closely-watched Ifo survey said, describing morale as \u201ccatastrophic\u201d.<\/p>\n
The institute\u2019s monthly business climate index tumbled to 74.3 points, down from March\u2019s 85.9 points.<\/p>\n
Britain\u2019s retail sales by volume meanwhile slumped by a record 5.1 percent last month as the country\u2019s lockdown shut clothes and other stores, offsetting surges in food and alcohol purchases and online buying, official data showed.<\/p>\n
The European readings came after the US on Thursday said 4.4 million people applied for unemployment benefits last week, taking the total virus-fuelled job losses in the country to more than 26 million.<\/p>\n
Adding to the downbeat mood was a Financial Times report that said initial trials of the remdesivir coronavirus drug being developed by Gilead Sciences had flopped.<\/p>\n","protected":false},"excerpt":{"rendered":"
HARARE (Bloomberg) \u2013Traders have abandoned Zimbabwe\u2019s stock market as a lockdown imposed to curb the spread of the coronavirus adds to the strains on an economy that was already contending with severe drought, hyperinflation and a shortage of foreign exchange. The volume of shares changing hands on the bourse has plunged by 55% since the […]<\/p>\n","protected":false},"author":84,"featured_media":22411,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,12],"tags":[1388,852],"class_list":{"0":"post-22410","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-all-news","8":"category-policy","9":"tag-covid-19","10":"tag-harare-city-council"},"yoast_head":"\n