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Exotic stock exchanges – cash shortage boosts Zimbabwe's stock market to record high News

Saturday, September 16th, 2017 | Economy

The leading index of the local exchange rose to 301.03 points this week. This is the highest level since its reissue in 2009, when the African country abandoned its own currency due to hyper-inflation and introduced the US dollar as a means of payment.
"Stocks have become an attractive asset for bankruptcy because of the failed financial system, the US dollars on the bank are worth less than in cash," said an analyst from a local broker's house. The economy of Zimbabwe is still based on cash, although the central bank promotes cashless deals. In the banking sector, however, virtually no dollars are currently available. Companies often have to deal with high costs on the black market with the currency.
Against this backdrop, the leading index of the exchange in the capital Harare has more than doubled since the beginning of the year. The rally was driven, among other things, by the price gains of the brewery Delta, the mobile phone Econet and Padenga. The title of the exporter of crocodile leather has even quintupled its course over the past nine months.
Overall, however, the market capitalization of the Zimbabwe stock market is only 8.1 billion Swiss francs. For comparison: the Swiss Mid-Cap Straumann alone has a capitalization of 9.3 billion Swiss francs. The annual economic output of Zimbabwe is about 14 billion dollars.
(Reuters / cash)

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