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Investors should maintain a steady hand ahead of watershed moments in Zimbabwe: Here’s why
Zimbabwe’s ruling party Zanu-PF have sacked President Robert Mugabe as its leader, CNBC Africa is joined by Neville Mandimika, Africa Analyst in the Global Markets division at Rand Merchant Bank for an analysis on the economic impact of the situation in Zimbabwe.
Mon, 20 Nov 2017 11:39:25 GMT
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AI Generated Summary
- The Zimbabwe Stock Exchange experienced a significant decline following President Robert Mugabe's removal as Zanu-PF leader, reflecting market volatility and uncertainty over the country's future direction.
- Investors are advised to exercise caution and maintain a steady hand amidst the ongoing political transition, refraining from making impulsive decisions in light of impending watershed moments like the 12 o'clock deadline and Tuesday Parliament sitting.
- The long-term economic outlook for Zimbabwe hinges on potential policy reforms that could attract foreign direct investment and promote macroeconomic stability, necessitating a reevaluation of existing laws like the Indigenization Act to foster a conducive investment climate.
In a recent turn of events, Zimbabwe's ruling party Zanu-PF has removed President Robert Mugabe as its leader, causing uncertainty in the country's political and economic landscape. To shed light on the potential economic impact of these developments, CNBC Africa spoke with Neville Mandimika, an Africa Analyst in the Global Markets division at Rand Merchant Bank. Mandimika highlighted the volatility of the Zimbabwe Stock Exchange (ZSE), which saw a 10% decline last week on expectations of change. Given the current ambiguity surrounding the nation's future, he cautioned investors to maintain a steady hand and avoid impulsive decisions. With key events like the 12 o'clock deadline and the Tuesday Parliament sitting looming, he emphasized the importance of staying patient and monitoring the situation closely. While the immediate market outlook may appear uncertain, Mandimika suggested that evaluating the long-term prospects of Zimbabwe hinges on potential policy shifts and reforms that could attract foreign direct investment (FDI). He stressed the need for greater policy openness and a critical review of laws like the Indigenization Act to foster economic growth and stability. Despite the current political upheaval, he advised against hasty actions and recommended waiting for clarity on the country's leadership and economic direction before making significant investment decisions. As Zimbabwe navigates through this period of transition, observers are urged to exercise caution and prudence to weather the uncertainty and capitalize on future opportunities.
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