Panicked investors inundate brokers after Zimbabwe shuts bourse

Harare, Zimbabwe.
Harare, Zimbabwe.
Timothy Marks/Getty Images

Stockbrokers in Zimbabwe are struggling to explain to investors what’s happened to their money after the government shut down the stock exchange.

The Zimbabwe Stock Exchange announced Sunday it suspended trade to comply with a directive issued by the Information Ministry late Friday that the bourse close. It’s the latest in a series of measures the government has implemented to try and stabilize the nation’s currency.

Traders have been inundated with calls from “shocked and stressed” investors all morning, Thedias Kasaira, managing director at Imara Edwards Securities, said by phone Monday from the capital, Harare.

“Clients are asking and we don’t know what to tell them,” he said. “They want an explanation, but we haven’t been able to give one as we also don’t know the reason.”


Zimbabwe’s benchmark industrial index has risen more than sevenfold this year to a record. Investors have used the domestic bourse as a haven from the country’s collapsing currency and inflation of 786% -- the highest rate in a decade.

Investors with cash in Zimbabwe prefer to buy shares to avoid their money losing value. Movements in domestic stock prices track the parallel currency markets on the streets of Harare, where the Zimbabwe dollar changes hands at about 100 per US dollar, compared with the official rate of 57.35.

“People are looking at a hedge against inflation; that’s why they are switching from Zimbabwe dollars to equities,” said Lloyd Mlotshwa, head of equities at Harare-based IH Securities. “The stock exchange serves as a proxy to parallel market rates.”

ZSE Chief Executive Officer Justin Bgoni said he wasn’t immediately able to comment when contacted by phone.

ZAR/USD
16.98
(+1.02)
ZAR/GBP
21.30
(+1.03)
ZAR/EUR
19.17
(+0.89)
ZAR/AUD
11.80
(+0.96)
ZAR/JPY
0.16
(+0.98)
Gold
1803.20
(+0.55)
Silver
18.40
(+0.91)
Platinum
841.00
(+0.54)
Brent Crude
42.97
(-0.05)
Palladium
1931.00
(+1.22)
All Share
55524.99
(+0.51)
Top 40
51228.95
(+0.60)
Financial 15
10234.81
(+1.47)
Industrial 25
77387.06
(+0.69)
Resource 10
52049.17
(+0.06)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1770 votes
I am taking a hit, but should be able to recover in the next year
23% - 2324 votes
My finances have been devastated
35% - 3474 votes
It's still too early to know what the full effect will be
25% - 2496 votes
Vote