Investors pumped in billions into stock market
Investors pumped in more than $65 billion into the Zimbabwe Stock Exchange in 2021, 282 percent more than the $17 billion invested in 2020.
Market watchers say the huge turnover in stocks was driven by excess liquidity in the market and attraction from improved performance by listed entities.
According to the RBZ’s latest report for the month of October 2021, broad money stood at $417,56 billion an increase of 145,95 percent compared to the money stock in October 2020.
The annual growth in broad money largely reflected increases of 179.32 percent, 246.62 percent, and 211.68 percent in net claims on Government, public non-financial corporations and credit to the private sector, respectively.
The growth in broad money is in a market that also has limited investment options. For instance, self-Administered Pension Funds have as much as 60 percent of their investments in the stock market.
The month of December, which coincides with payment of bonuses for individual investors had the highest turnover of $17,5 billion or 26,8 percent of the year’s total turnover.
November followed with $9,8 billion while February had the least amount of $1.5 billion.
Returns on the ZSE this year, have not only beaten inflation which closed the year sitting at 60,7 percent but has also beat currency depreciation.
A gain of 315 percent at the close of trading in 2021 compares favourably to the inflation outturn.
On the parallel market, the Zimbabwe dollar lost approximately 50 percent of its value against the US dollar last year. Gains on the ZSE compensated for this, plus more.
By the close of trading for the year 2021, the ZSE was valued at $1,3 trillion compared to a value of $317,8 billion at the close of trading in 2020.
Using the official exchange rate of $108 for every US$1, the market was valued at US$12 billion at the close of 2021.
Using the parallel market rate of $200 to every US$1, the market cap would be US$6,6 billion.
It means overall, on average, stock market investors earned a combined US$3,5 billion.-ebusinessweekly
