Trade ban to worsen foreign investor flight

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THE recent suspension of trade is unlikely to see any foreign investors returning to the local bourse amid indications they sold off a record $508 million worth of scrip in June, analysts say.
An increasingly unstable economic environment characterised by policy flip flops and rising hyperinflation has unnerved the few foreign investors who still participate on the ZSE. Exchange data shows that foreign selloffs during May amounted to $136 million.
Analysts at Equity Axis said the selloffs heightened in the last week of the month when the foreign currency auction system was introduced.

“It was likely driven by two factors, the major one being the resumption of the interbank trading,” the research firm said last week in a note.
“We view the move to stop trading on the ZSE as having a negative impact in terms of investor perception, especially foreigners. This will likely result in further reduced foreign participation on the ZSE and in foreign direct investment into the foreseeable future”.