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Zimbabwe: Delistings – Bigger Crisis in the Offing

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THIS year has been one of the most eventful on Zimbabwe’s fragile capital markets.What with the government’s unpresented crackdown on three big ZSE counters with fungible stocks.

These were accused of undermining efforts to fight an inflationary scourge and terrifying price hikes.

At the time of the unprecedented onslaught on business in June, emotions were running high, and President Emmerson Mnangagwa’s government chose to shut down the entire ZSE to deal with Old Mutual, PPC and SeedCo International.

In the end, the economy lost ZW$240 billion (about US$3 billion) during five weeks of resentment and madness on the ZSE, even as the government intensified its hyped “Open for Business” campaign.

The government’s heavy handedness was shocking.

Investors queried the government’s seriousness about its “Open for Business” mantra if influential counters were openly resented and harassed.

The battering that the ZSE suffered in October confirmed the market’s verdict – Zimbabwe remains the most difficult market to trust.

This should have worried the government. But judging by the way it responded, nobody cared.

Farms have since been invaded and taken by force, for instance. For that, Zimbabwe has been punished. We wonder if the ZSE will attract new investment portfolio funds, and if companies still have the appetite to list under the circumstances. By harassing big investors, the government messed up.