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Harare - The Zimbabwe Stock Exchange's (JSE's) main Industrials index reached the 150.90 level for the first time in two years as investors continue to buy into assets as a hedge against currency uncertainties.
By close of trade Wednesday, the index was up 2.12% to close at 150.90 points.
This is the first time since June 23 2015 that the local bourse has traded above the 150 point mark; the highest it has been since then is 149.98 points reached on December 15 2016.
The last time the main Industrials index was above this mark was on June 22 2015, when it closed at 151.85 points. The ZSE is now up 4.41% year-to-date as stocks rallied.
Local investors have been buying into the equities market as a hedge against currency uncertainties.
With the current cash shortages as well as depleted US dollar balances with foreign banks bedevilling the country, there are fears that local authorities might resort to printing more bond notes.
According to the June research report by Business Monitor International (BMI), a Fitch Group company, the currency challenges faced by Zimbabwe will force the government to print more bond notes beyond the planned $200m.
"We remain confident that further expansion of the Zimbabwean government's bond note programme is inevitable over the coming quarters," it said.
"One of the main reasons we believe the bond note programme has further to run is that it would fall well short of its main objective, were it to be left at its current size.
"Estimates put the cash shortage as high as $2.5bn," said BMI. Government puts the figure circulating in the economy at an estimated $400m to $600m.
BMI said government's eventual recognition of a sovereign currency is almost inevitable.
"We believe the government's actions suggest the process is already under way. In addition to the introduction of bond notes, the growing difference between the supply of cash in the economy and M2 money held in the banking sector is indicative of the country's de facto move away from dollarization."
It is against this background and these fears that stocks are seen as a safe haven against currency changes.
