Zimbabwe remains one for brave investors
Jan 29, 2010
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After a decade of political and economic turmoil that wiped around 66% off Zimbabwe's GDP, things have been looking up. Last February a coalition government between Robert Mugabe's Zanu-PF and the opposition Movement for Democratic Change (MDC) was established. After that the Zimbabwean dollar was replaced with the US dollar, ending hyperinflation and paving the way for gradual recovery.
Exchange controls have been lifted and turnover on the stock exchange has picked up, says Peter Shearlock in The Sunday Times. Factories are buying new equipment and traffic volumes in Harare have risen "dramatically", which bodes well. Politically, though, the outlook is murky, with Zanu-PF and the MDC at loggerheads.
Investors with strong stomachs can play Zimbabwe via Aim-listed Lonzim (LSE: LZM), an investment company with various footholds in property, telecoms and electronic payment services. It has just reported a pre-tax profit of £1.1m in the year to September, compared to a loss the previous year. It is also trading on a large discount to its net asset value. "There is upside here," says Shearlock – provided Zimbabwe "does not slip back into anarchy".
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