Zimbabwe’s Introduction to a New Gold-Backed Currency Led to a Stock Market Slump, 24 APRIL

by **Admin** Wed Apr 24, 2024 3:11 pm

Zimbabwe’s Introduction to a New Gold-Backed Currency Led to a Stock Market Slump, 24 APRIL

Zimbabwe’s Introduction to a New Gold-Backed Currency Led to a Stock Market Slump
Zimbabwe’s New Currency Leads to a Stock Market Wipeout

Story by Kailas Salunkhe, TIPRANKS, on MSN
Earlier this month, Zimbabwe introduced a new gold (CM:XAUUSD)-backed currency, called the ZiG (Zimbabwe Gold). However, even a well-intentioned path to fiscal prudence can become paved with unintended setbacks, including a stock market wipeout.
Zimbabwe’s Stock Market Slump

The introduction of the ZiG has resulted in a difficult-to-digest 99.95% wipeout in the Zimbabwe Stock Exchange All Share Index so far this month. This major change required local institutions and businesses to reconfigure their systems to accommodate the new currency, resulting in the rebasing of share prices for all listed companies in the country. According to Bloomberg, investors rushed into stocks prior to the conversion to escape inflation and the collapse of the local dollar (Zimbabwe’s previous currency).
However, the trading volumes and the value of transactions on the exchange have plunged after share prices were rebased in the new currency. The low trading volumes are also taking a toll on the country’s stockbroking industry.
Meanwhile, many Zimbabweans still prefer to transact in the more stable...FOR READ MORE: https://dinarevaluation.blogspot.com/2024/04/zimbabwes-introduction-to-new-gold.html