The Aftermath begins: Stocks in free Fall

Brokers in Zimbabwe said stock prices tumbled sharply yesterday, reflecting mounting worries over the troubled economy after President Robert Mugabe won bitterly disputed elections. The official Zimbabwe Stock Exchange said some of the nation’s top companies lost up to 20% of their share price on the first full day of trading day since Wednesday’s election. This was the biggest fall since the last violent and disputed elections in 2008. Soon after those elections, the country abandoned its own currency and adopted the US dollar to stop world record inflation. As share offers crumbled on Monday, brokers were leaving the trading floor in downtown Harare, once seen as one of Africa’s most vibrant economic centres.

Delta Corp, a brewing and soft drinks maker allied to the international SABMiller group, lost 30 cents, closing at $1.20 a share. The biggest national food store and fast foods conglomerate, Innscor, lost 14% of its price, dropping to 90c a share and a main rival supermarket chain dropped by 13% in share value. “In a small market like ours, with less than 100 listed counters, these are big losses,” said the stock market official, who refused to give his name because he was not authorised to speak to the press. Mugabe’s Zanu-PF party has vowed to forge ahead with a black empowerment program to 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 programme and the seizures of thousands of white-owned commercial farms in the formerly agriculture-based economy have benefited few outside an elite of leaders of Mugabe’s Zanu-PF party and its loyalists, worsening unemployment and deepening poverty.

Many prime farms remain idle and the spectre of nationalised industries and mining enterprises have scared off outside investors, even from large corporations in China and India unwilling to yield 51% control to black Zimbabweans. Outgoing Prime Minister Morgan Tsvangirai’s opposition Movement for Democratic Change party had promised to attract Western investment that had fled the country in 13 years of political and economic turmoil. His party 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 party said on Monday its attorneys are working flat out to file a court action to challenge Mugabe’s victory, which was by an unexpectedly high margin.

Luke Tamborinyoka, Tsvangirai’s spokesperson, described court preparations as “going well”. “Everything is being put in place” to meet legal requirements for an early court session, possibly by Thursday, he said. Under the nation’s laws, a contest over presidential results must be filed within seven days of the announcement on Saturday that gave Mugabe 61% of the vote to Tsvangirai’s 34%. Another court is to hear disputes over parliament seats. Mugabe won 158 seats to 50 captured by the opposition. Those disputes must be filed within 14 days and be heard within six months. The election results have been given qualified approval by regional monitors of the Southern African Development Community, or SADC, and the continent wide African Union. Both organisations noted the absence of widespread violence, unlike in previous elections, and have demanded an audit of voters’ lists and allegations that up to 700 000 eligible voters were unable to cast their ballots.

The United States, Britain, the former colonial power, the European Union and Australia have criticised the vote. US Secretary of State John Kerry said the United States did not believe the results represented “a credible expression of the will of the Zimbabwean people” because of substantial electoral irregularities. Germany’s foreign ministry said the voting “cast a big shadow” on the country’s future and Australian Foreign Minister Bob Carr called for fresh elections using verified voters’ lists. There were few signs of celebrations by Mugabe’s party, apart from two demonstrations by small groups on Sunday, one displaying a coffin marked with Tsvangirai’s name. Extra armed police and army details were out in Harare on Monday and the presidential guard at Mugabe’s State House offices was reinforced with more soldiers.

Harare newspaper vendor Ben Gatsi said he normally sells about 350 newspapers on his corner by traffic lights each morning. Yesterday he sold less than 60. “People are dazed. They are not stopping for their papers and some of them don’t even seem to notice when the signal turns to green until they get hooted by cars from behind,” he said. Patina Gappah, an award winning Zimbabwean author and social activist, said in a post on a Zimbabwe social networking site on Monday she felt deep trepidation over Mugabe winning another term after 33 years in power since independence in 1980. “My thoughts are now on one single thing: how to survive the next five years with my sanity and my family whole and how to find a way to be happy again in a world that has shown that injustice wins over hope,” she wrote.

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