Harare - The Zimbabwe Stock Exchange (ZSE) dropped to a seven-year low on Tuesday as the economic environment continues to decline.
By the close of trading the main Industrials index was at 95.08 points, a level last seen in April 2009 just after dollarisation.
The ZSE's current level is 59.22% lower than the peak of 233.18 points recorded in 2013 towards the end of the government of national unity, which saw the Zimbabwean economy stabilise from the freefall of 2008.
Market watchers said the current bloodbath is reflective of the country's economy, which has seen even well managed and well capitalised companies such as Delta struggling. Delta has been leading the market's downward spiral and is now trading at levels last seen in February 2016.
At the close of trading Delta stood at 52 cents, a year-on-year (y/y) low, down from a y/y high of 105c.
The company, which counts SABMiller as one of its top shareholders, has been reporting declining revenues and profitability in the past two years.
Analysts are on record as saying the sell-off on the ZSE is a result of increased risk in the country where the “United States dollar appeal is not there any more, given the current monetary challenges”.
Zimbabwe is facing serious challenges in paying suppliers of its huge import bill, and is now using a priority list to determine who gets paid first. The priority list has seen excluded economic activities facing raw material and inventory shortages.
Cash depositing clients in the retail and wholesale service industry are only included in priority list number three, described by the Reserve Bank of Zimbabwe as “low”.
Foreign investors on the stock market should however not panic, as they fall under priority list number one which includes capital disinvestments, profits and dividends.
By the close of trading the main Industrials index was at 95.08 points, a level last seen in April 2009 just after dollarisation.
The ZSE's current level is 59.22% lower than the peak of 233.18 points recorded in 2013 towards the end of the government of national unity, which saw the Zimbabwean economy stabilise from the freefall of 2008.
Market watchers said the current bloodbath is reflective of the country's economy, which has seen even well managed and well capitalised companies such as Delta struggling. Delta has been leading the market's downward spiral and is now trading at levels last seen in February 2016.
At the close of trading Delta stood at 52 cents, a year-on-year (y/y) low, down from a y/y high of 105c.
The company, which counts SABMiller as one of its top shareholders, has been reporting declining revenues and profitability in the past two years.
Analysts are on record as saying the sell-off on the ZSE is a result of increased risk in the country where the “United States dollar appeal is not there any more, given the current monetary challenges”.
Zimbabwe is facing serious challenges in paying suppliers of its huge import bill, and is now using a priority list to determine who gets paid first. The priority list has seen excluded economic activities facing raw material and inventory shortages.
Cash depositing clients in the retail and wholesale service industry are only included in priority list number three, described by the Reserve Bank of Zimbabwe as “low”.
Foreign investors on the stock market should however not panic, as they fall under priority list number one which includes capital disinvestments, profits and dividends.