Bond notes issues push up Zimbabwe Stock Exchange

Reservations among certain investors on Zimbabwe Stock Exchange over monetary issues have driven bullish sentiment on ZSE stocks including fungible Old Mutual whose stock is trading at a premium to other markets.

Zimbabwe's biggest insurance and property group's stock, at 338 cents, appears to be trading at an average premium of 40 percent to other markets such as the London Stock Exchange and the Johannesburg Stock Exchange.

Equity analysts said on Friday that the reservations among certain investors about impending introduction of bond notes, whose value is pegged one-to-one with the US dollar, was partly the reason the stock has continued to appreciate over the last four months.

Old Mutual closed at 338,74 cents on Friday after gaining 1,56 percent to close a week where the ZSE posted strong gains. The stock is trading around 236 cents on the London Stock Exchange.

Reserve Bank of Zimbabwe governor Dr John Mangudya has repeatedly said all was on course for the introduction of the surrogate currency, which the central bank will introduce to monetise a 5 percent incentive to exporters, corporates or individuals, who generate much needed hard currency for the cash starved economy.