Mugabe Win Sends Zimbabwe Stocks Into Tailspin
Mounting worries over President Robert Mugabe’s disputed election win sent share prices tumbling down as much as 20 percent for some of Zimbabwe’s top companies on the first full day of trading day since the July 31 election, according to a WashingtonPost report.
The Zimbabwe Stock Exchange reported the biggest fall in share prices since the last violent and disputed elections in 2008. Soon after those elections, the country abandoned its own currency and adopted the U.S. dollar to stop world-record inflation, the report said.
Delta Corp., a brewing and soft drinks maker allied to the international SABMiller group, lost 30 cents, closing at $1.20 a share, the report said.
Innscor, the country’s largest national food store and fast foods conglomerate, lost 14 percent of its price, dropping to 90 cents a share and a main rival supermarket chain dropped by 13 percent in share value.
Mugabe’s ZANU-PF party promises to move ahead with a black empowerment program and take control of the remaining 1,138 foreign and white-owned companies in Zimbabwe. It says it will also target the local subsidiaries of large international banks that have foreign shareholders.
Critics say the empowerment program and seizure of thousands of white-owned commercial farms in the formerly agriculture-based economy have benefited few outside the ruling elite of Mugabe’s ZANU-PF party and its loyalists, worsening unemployment and deepening poverty.
Many prime farms remain idle and the prospect of nationalized industries and mining has scared off outside investors, even from large corporations in China and India unwilling to yield 51 percent control to black Zimbabweans, the WashingtonPost reports.
Outgoing Prime Minister Morgan Tsvangirai alleges massive vote rigging by Mugabe-controlled state institutions in Wednesday’s vote that brought to an end a shaky coalition government formed after the last disputed elections in 2008. Tsvangirai’s Movement for Democratic Change party had promised to attract Western investment that fled the country in 13 years of political and economic strife.
His party is preparing to file a court action to challenge Mugabe’s victory.