Zimbabwe Stocks Fall on Coup as Companies Stay on High Alert

HARARE (Capital Markets in Africa) – Zimbabwean stocks fell the most in two months after the army seized control of the country, prompting shoppers to shun the main retail areas in the capital Harare, and Nedbank Group Ltd. to send some of its staff back to South Africa.

The country’s benchmark index slid 1.3 percent, the biggest drop since Sept. 19, led by a 20 percent decline in clothing retailer Edgars Stores Zimbabwe, and financial services and property investor Zimre Holdings Ltd. British American Tobacco Zimbabwe Holdings Ltd. lost 7.5 percent. The index has rallied this year, surging almost fourfold as more Zimbabweans piled into equities to preserve their wealth.

“Trading went on as normal,” said Kudzai Machuma, head of dealing at IH Securities, whose office is located outside of Harare’s business district. “We are watching the situation on the ground, but nothing really material has changed. Most people are anxious to hear what the way forward is.”

While dealing in stocks continued, with volumes climbing 27 percent from Tuesday’s levels, retailers in the capital city experienced quiet trading as armored vehicles sealed off parliament and the central bank.

“There is no foot traffic in the Harare city center and the main trading areas,” Truworths International Ltd., a Cape Town-based clothing retailer, said in an email. It was citing comments from its associate company in Zimbabwe of the same name, in which it holds less than a 35 percent stake. “As a safety precaution, stores are closing early to enable staff to find transport and get home.”

Digital Channels
Nedbank’s MBCA Bank Ltd. will keep its operations open and active, the Johannesburg-based lender said in an emailed response to questions, adding that it will take appropriate steps if required to ensure the safety of its workers. South African staff that aren’t critical to the banking operations were sent home, it said.

“All our staff are safe and we’re providing services via our digital channels and where possible our branches are open for business,” Standard Chartered Plc said of its Zimbabwe unit in an email. “We continue to monitor the situation on the ground.”

Johannesburg-based Standard Bank Group Ltd., whose Zimbabwe division is the third-largest lender in the country, said by email that the military action has had a minimal negative impact on its operations in the country. Some employees from Econet Wireless Zimbabwe Ltd., the country’s largest mobile-phone operator, are working from home and the company isn’t expecting any impact on its ability to run its network and service customers, the Harare-based company said via email.

The head of the military forces earlier this week said the army would stop those “bent on hijacking the revolution” that yielded the nation’s independence from the U.K. in 1980. The intervention that began on Tuesday followed a week-long political crisis sparked by Mugabe’s decision to fire his long-time ally Emmerson Mnangagwa as vice president to pave the way for his wife Grace to take over. The army has said that Mugabe, 93, is safe.

‘Appropriate Action’
Sibanye Gold Ltd., the Johannesburg-based precious metals company, said in an email that there have been no signs of unrest or a military presence at its operations in the country, which are “all located some distance from the capital.”

Anglo American Platinum Ltd., the world’s biggest producer of the white metal, said in an email that its Unki Mine is operating normally and that it will take “appropriate action necessitated by unfolding events.” The mine produced 19,800 ounces during the third quarter, it said last month. The company plans to commission a new smelter next year that will enable partial processing of ore in the country before it’s sent to South Africa for refining.

Pick n Pay Stores Ltd., which operates a grocery chain in Zimbabwe with TM Supermarkets Pvt Ltd., said in an email that all its shops in the country are open and its staff are safe.

Source: Bloomberg Business News