At 9 am every weekday, Albert Nangara, a chemical engineering student at Midlands State University, Zimbabwe, starts juggling his attention between studies and “the board”. 9 am is when the Zimbabwe Stock Exchange opens and Nangara needs to keep at least half an eye on prices. Nangara is one of a growing cohort of young Zimbabweans who have plunged into the stock market, buying and selling shares using social media platforms. But trading like this requires attention.
Without any formal training in investment or finance, Nangara credits the film Pursuit of Happyness, starring Will Smith, with the inspiration behind his foray into stock trading. The 2006 blockbuster follows the story of Chris Gardner, a single parent down on his luck who learns the ins and outs of the stock exchange to change his fortunes.
Shares are partitions of a company’s capital, offered for sale at the stock exchange. With as little as one Zimbabwean dollar, one can buy a share that can later sell at a higher or lower price. The exchange’s Zimbabwe Industrial Index had climbed from 25,513 on August 31 2021 to 97,112 on April 29, 2022.
According to the government, this would help contain the overpricing of stocks which it said was “fuelling inflation and weakening the exchange rate.” “Guys, relax” Godwin Mungwadzi, who describes himself as an entrepreneur, tweeted in response to the mayhem that gripped the youthful community of investors.
Key to the level of individual interest in trading on the ZSE is the buzz on social media. Investors and investor groups post updates from the exchange, share stock picks, brag about their growing portfolio, and cry about them, too, when the market does not perform as well as expected. These online communities and the launch of applications such as “C-trade” and the ZSE’s own “Direct” have made capital markets much more accessible.
A recent study on why the local bourse had not attracted many locals noted that the best shares are often held by local pension funds, banks, and insurance firms that do not want to sell because they have few alternative assets to buy with the sale proceeds. Research conducted by the ZSE in 2020 indicated that participation by individual Zimbabweans in the local capital market was marginal. Some of the barriers cited include a lack of appreciation of the investment process and the perception that it is the domain and preservation of the sophisticated in society.
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