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Harare - Zimbabweans seem to have found comfort in listed shares amid challenges to withdraw cash from banks as well as sending money out as free funds.
The Zimbabwe Stock Exchange added 8.39% in the month of April and in the process reversed some of the losses experienced in the first quarter when the bourse lost 15.02%.
With economic fundamentals remaining dire, the only probable theory given by most analysts we talked to was that investors were opting to “expose themselves to real assets given the risk that are borne in monetary assets”.
An analysts with a local asset management company said that investors were now opting to transfer their bank balances that they can’t withdraw from banks, to buy shares.
Of late Zimbabwean banks have been facing serious cash shortages that has seen some of the them disconnecting their ATMs and limiting cash withdrawals to $200 per day.
The Reserve Bank of Zimbabwe Governor John Mangudya confirmed the cash challenge and appealed to the banking public to adopt the use of plastic money in order to minimise high demand for cash associated with traditional payment dates.
The money challenges are, however, not only confined to cash withdrawals as the Reserve Bank of Zimbabwe has also put stringent and “priority” measures to funds transfers outside the country.
“I also think funds that were finding their way out of country through the banking system is now been invested locally because of the restrictive measures introduced by the RBZ,” said the analyst.
In its 2016 Monetary Policy Statement the RBZ said Bank statistics show that during the period January to December 2015, a total of US$684m was remitted outside Zimbabwe or externalised by individuals.
To mitigate externalisation of the funds, the RBZ introduced a raft of measures to close loopholes in the financial system including dispensing with the concept of free funds which it said had become a fertile breeding ground for illicit financial flows.
