The number of the day relates to the Zimbabwe Stock Exchange.
The industrial index on the exchange lost 7.46% today after months of massive gains. This a day after a military coup was confirmed and while the President Robert Mugabe remains under house arrest and is reportedly refusing to negotiate a settlement that will lead to his exit. Now the Zimbabwe Stock Exchange is interesting because losses do not mean that investors are distressed. But this is actually a sign of renewed confidence in the Zimbabwean economy. The economy is so dysfunctional that the deeper it has sunk the more stocks have soared and this index has soared by more than 260% this year.
Zimbabweans have been buying bitcoin and stocks as a protection against inflation which has been spurred by the government printing a new form of money called bond notes to deal with a lack of dollars.
So many stocks have been inflated and the market may be in bubble territory. The fact that investors are selling today means that they believe some degree of normalcy could return and then it’s no longer worth overpaying for equities.
For more news, visit: http://www.sabc.co.za/news