HARARE- The ZSE went into overdrive as panicky investors rushed for cover escaping the gravitating monetary crisis prevalent in Zimbabwe. On Tuesday the broader ZSE ASI went up 13% which is the largest inter-day gain since November. Since the MPS was released last week, which was further buttressed by fiscal measures to curtail govt’s unbridled appetite for spend, investors remained unimpressed, positioning themselves for the worst through risk aversion into equity from bare RTGS deposits. RTGS which is wired balances have come under heavy onslaught from the US dollar largely due to the growing mismatch between broad money supply and real cash, notes and coins circulating in the economy. The latest rates quoted from the parallel market were at over 300% for US dollar equivalent as at Tuesday and there seems to be no respite in place for further gravitation. Stocks have since gone up by an average of 31% since the 1st of October when the RBZ released its Monetary Policy. In just under 2 days since the weekend blitz the market has firmed by 20% which is a clear sign of disintegration of the monetary system in Zimbabwe. The stock market’s response also follows a blitz in prices which started on Friday of the previous week escalating into the week and now in the second week. Stocks typically consolidate against monetary crisis, due to the perception that stocks represent an underlying value with respect to the business operation the listed company undertakes. Normally investors choose stocks that are defensive and of value nature which means there are able to withstand market vagaries and preserve value in light of inflation and other attendant value eroding dynamics. There is serious speculation around envisaged shortages of goods in the economy and the drastic supply of fuel across the country has only helped heighten the expectation. Although the RBZ has moved in to stoke the flames by publishing that they have begun to drawdown a $500 million stabilization facility and assuring the country that essential imports will be prioritised , the efforts appear too little and too late given the intensity and sporadic nature of market responses. It is likely that the RTGS balances are heading for crash and eventual death factoring that the government is not capacitated in cash(forex) to sustainably discount the market imbalances that have given rise to foreign exchange rate discrepancies and the attendant inflationary pressures. - EQUITY AXIS NEWS