THIS year has been one of the most eventful on Zimbabwe's fragile capital markets.What with the government's unpresented crackdown on three big ZSE counters with fungible stocks.

These were accused of undermining efforts to fight an inflationary scourge and terrifying price hikes.

At the time of the unprecedented onslaught on business in June, emotions were running high, and President Emmerson Mnangagwa's government chose to shut down the entire ZSE to deal with Old Mutual, PPC and SeedCo International.

In the end, the economy lost ZW$240 billion (about US$3 billion) during five weeks of resentment and madness on the ZSE, even as the government intensified its hyped "Open for Business" campaign.

The government's heavy handedness was shocking.

Investors queried the government's seriousness about its "Open for Business" mantra if influential counters were openly resented and harassed.

The battering that the ZSE suffered in October confirmed the market's verdict - Zimbabwe remains the most difficult market to trust.

This should have worried the government. But judging by the way it responded, nobody cared.

Farms have since been invaded and taken by force, for instance. For that, Zimbabwe has been punished. We wonder if the ZSE will attract new investment portfolio funds, and if companies still have the appetite to list under the circumstances. By harassing big investors, the government messed up.

Old Mutual and PPC are not penny stocks that we can push around without repercussions. This is why there has been a spate of delistings on the ZSE. It means the ZSE is on course for another dismal year of delistings. At least five companies have dropped from the ZSE this year, or are in the process of doing so, which sends bad signals to the investment community and soils the country's image. The authorities are aware of this, but are too defiant to solve it because many a time those in high office have benefited from Zimbabwe's crisis.

Last week, Powerspeed said it was exiting the ZSE, adding its name to a list of firms including Falgold, Dawn Properties, ZimRe Property Investments and SeedCo International that have exited or are in the process of leaving.

We can trace these delistings back to 2011 when august firms like TA Holdings Limited and CAPS Holdings Limited, the pharmaceutical outfit, Cambria, Chemco, Interfin Holdings, ABC Holdings, Cairns Holdings, Apex Corporation Limited, Tractive Power Holdings, Gulliver Consolidated Limited, Steelnet Limited, Lifestyle Holdings Limited and Trust Holdings Limited went the same way. Very little or no action has been taken to rectify the situation.

What we have witnessed on the ZSE must be a cause for concern.

The image of the ZSE determines how an economy is viewed elsewhere. Turmoil in the capital markets paints a bad image about a country's investment climate. A stable and well-functioning ZSE builds up confidence among investors.

Copyright Zimbabwe Independent. Distributed by AllAfrica Global Media (allAfrica.com)., source News Service English