Harare, Zimbabwe — MININGREVIEW.COM — 19 April 2010 – Zimbabwe’s stocks have risen for the first week in three in the wake of a government statement that it would review the proposed law forcing foreign companies to transfer 51% ownership to black Zimbabwean citizens.
Bloomberg News reports from here that the 75-stock ZSE Industrial Index gained 1%to 136.79, bringing last week’s gain to 4.5%.
The stocks advanced after Prime Minister Morgan Tsvangirai declared the country’s new indigenisation law “null and void” on Wednesday. Immediately afterwards, Indigenisation Minister Saviour Kasukuwere “’ a member of President Robert Mugabe’s Zimbabwe African National Union-Patriotic Front party “’ responded by saying that the legislation had only been postponed while further consultations took place.
To add to the confusion, President Robert Mugabe subsequently publicly denied Tsvangirai’s statement, saying that Zimbabwe had not suspended its drive to transfer control of foreign firms to local blacks, but was simply trying to improve the regulations.
Nevertheless, if news of the review proves to be correct, it is eliciting a positive spinoff. “The review of the indigenisation law seems to be seen as positive news by foreign investors,” Patrick Saziwa, an equity trader at Kingdom Stockbrokers Limited, said by phone from the capital Harare. “There has been limited foreign investment this year because of the political uncertainty.”
Even after last week’s gains, shares are down 10% in 2010, matching Slovakia’s decline for the worst performing equity market worldwide, according to Bloomberg data.
The drop in Zimbabwean stocks this year reflects concerns over the political impasse, the announcement of the indigenisation law, and a slower than expected economic outlook, New-York based associate director at Exotix Ashley Bendell said in an e-mailed response to questions.