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Harare - Fear of the recently-introduced bond notes as well as tight liquidity conditions saw most Zimbabwean institutions and individuals pile their money into the equities market in the month of November.
A total $23.6m was invested into the market in November, against a monthly average of $15m per month throughout the year.
At the close of trading on Wednesday, the ZSE had gained 19.36% year-to-date to become one of the best performing markets in Africa in US$ terms.
Analysts said the rally in the market was largely a result of local investors looking for a home for their funds to try and hedge against the impending bond notes.
In July this year, the Reserve Bank of Zimbabwe (RBZ) announced that it was going to introduce bond notes into the market as an export incentive.
The move was however met with much pessimism among Zimbabweans, who felt the RBZ was trying to introduce the much-loathed local currency by the back door.
"Local investors have been the major participants on the equities market as they try to hedge against the bond notes. There is fear that they might lose their US dollar balances once the bond notes are in circulation," said analyst Walter Mandeya.
"At the same time foreign investors, who normally contribute 80% to ZSE's turnover, have been staying away as they fear being caught in the bond notes mess.
"The ZSE is currently a sellers’ market and this has seen share prices being pushed up to current levels," he added.
The rally has also been witnessed in other economic spheres, with retailers recording brisk business and increased turnover in November.
In a trading update on Wednesday, Truworths Zimbabwe chief executive Themba Ndebele told shareholders that trading was much improved in November.
“The first two weeks of trading in November was much improved compared to the first four months. However, the sustainability of this improvement in sales will be tested from this week with pay days in most sectors of the economy,” he said.
Furniture retailer TV Sales and Home also witnessed a similar trend, with management telling shareholders that the company registered significant growth in October and November.
"The group expects to maintain the growth in the year going forward," said chief executive John Koumides.
