The Zimbabwe Stock Exchange had the best performance of African stock market indices over the first nine months of 2020, according to a consolidated report by the African Markets platform.
Zimbabwe All-Share Index, the main index of this financial market, grew by 612% over the period under review when the values are taken in local currency. When securities are taken in dollar and euro, the ZSE ASI shows performances of 46.6% and 40% respectively. This means that foreign investors who made investments in dollars or euro in African financial markets made better gains in Zimbabwe.
Only two other African stock markets experienced positive performance in dollar terms. These are Rwanda (+6.8%) and Malawi (+2.9%). In euros, only Rwanda posted the second positive African performance (+2.56%).
The rest of the main African indices taken into account by the study posted declines in value. The worst performance analyzed is that of the Ugandan Stock Exchange where the main index, the Uganda Stock Exchange All Share Index, fell by 24.3% over the period analyzed. In dollar and euro terms, Zambia is the country with the worst returns among African stock market indices.
Zimbabwe’s performance is surprising for a very poor country that is struggling to emerge from the socio-political crises. But it is precisely this sluggish situation in the local economy, especially the money market, which has given weight to the Zimbabwe Stock Exchange.
The devaluation of the local currency has prompted investors to inject money into listed companies. Until the end of 2019, these shares were undervalued but are now the only factors of stability for investors.