The operating environment remained challenging for the formal sector, characterized by liquidity constraints, high interest rates, exchange rate distortions and pricing dynamics.
The period under review was characterized by several headwinds such as local currency devaluations across the region. Sustained conflict and geopolitical tensions continued to disrupt supply chains and fuel inflation.
Key events for the six months ended 30 September included the introduction of the Zimbabwe Gold currency in April 2024. Reduced output from the El-Nino drought as well as lower mineral prices impacted aggregate consumer demand. Despite this, consumer spending remained resilient anchored by government infrastructure projects as well as diaspora remittances. South Africa held general elections in May.
The Zimbabwe Stock Exchange saw a 20.05% increase in market capitalization in nominal terms to ZiG87.34bn in October. In real terms, market capitalization grew by 3.12% to US$2.24bn. Mashonaland Holdings led in performance in the month with a 255% increase in share price in nominal terms, whilst Ariston followed with a 105% increase.
The first quarter was characterised by high inflation, exchange rate volatility and local currency depreciation. The introduction of the Zimbabwe Gold (ZiG) currency in April however brought about a more predictable market environment in the second quarter. However, Dairibord faced liquidity constraints during the period owing to the stringent monetary policy framework.
Although the period opened with relative stability in the Zimbabwean market, the second half was characterised by accelerated inflation, drought conditions as well as regulatory and tax changes which increased pressure on consumer liquidity.
