News, Rumors and Opinions Monday Morning 7-6-2020
TNT:
Harambe: Bloomberg: For Zimbabwe Investors, Stock Exchange Closing Is the Last Straw
(7/6/20)
When Zimbabwe suspended trading on its stock exchange last week, James Hove was left with no access to the funds he needs to conduct his business.
Like many wealthy Zimbabweans, Hove invests in the local stock market. Not for the value he sees in the companies whose stocks trade on it, but as a hedge against surging consumer prices: while annual inflation is running at 786%, the benchmark Zimbabwe Stock Exchange industrial index has risen sevenfold this year.
The authorities halted trade because they say speculation, and the use of dual-traded stocks as an indicator of the future exchange rate, are undermining the nation’s currency.
“I’m locked out and I’m not sure how this is legal,” Hove, a 48-year-old property trader, said by phone from Harare, the capital. “They’ve just tied up money I really need right now. How can they do this?”
The shutdown of the stock exchange and the suspension of large mobile-money transactions, ordered by the country’s security chiefs, is the latest measure that robs investors in Zimbabwe, both local and foreign, of the certainty needed to make decisions.
Since 2000, when the government began encouraging the violent takeover of white-owned commercial farms, investors have faced the sudden seizure of assets and bouts of hyperinflation. They’ve also suffered a chaotic currency regime that’s in turn seen the abolition of the local currency, its reinstatement a decade later, and overnight conversions of U.S. dollar holdings in local banks into Zimbabwe dollars.
Throughout that period, and indeed since independence in 1980, the country has been ruled by the Zimbabwe African National Union-Patriotic Front.
The stock market, which in contrast to the cratering economy has often surged, has been seen as a store of value. Now that’s gone too.
“It’s a clear indication that Zimbabwe’s economy is not normal,” said Tara O’Connor, executive director at London-based Africa Risk Consulting. “The ZSE was the last facade of any normal economic activity. But in closing it, ZANU-PF locks Zimbabwe in -- capital and all.”
The closing of the bourse is likely to further complicate the administration’s attempt to drag the economy out of a two-decade slump.
‘Don’t Panic’
“Investors shouldn’t panic,” said Clive Mphambela, a spokesman for the Treasury. “The market will certainly reopen.”
Justin Bgoni, the chief executive officer of the exchange, said he is working on “getting this out of the way” as quickly as possible.
With his popularity waning, former President Robert Mugabe in 2000 encouraged subsistence farmers to invade the commercial farms that produced much of the country’s exports in the form of tobacco, roses and paprika. What followed was a downward economic and political spiral. A scarcity of foreign exchange hollowed out Zimbabwe’s mining and manufacturing industries as businesses struggled to buy inputs and spares.
The country’s central bank began printing additional bank notes to meet government costs and the currency tanked, leading to inflation of 500 billion percent in 2008 and the scrapping of the Zimbabwe dollar in 2009.
Desperate Population
With an increasing proportion of the desperate population supporting the opposition, Mugabe stayed in power through a series of elections marred by violence and irregularities. While he was removed by the military in November 2017, his replacement Emmerson Mnangagwa has failed to make good on pledges to revive the economy.
Multilateral lenders such as the International Monetary Fund have refused to offer the country more money until it pays arrears on $8 billion of foreign debt and enacts promised political reforms. Food and fuel shortages are commonplace, civil servants take home a 10th of what they earned two years ago and many Zimbabweans depend on remittances from relatives who have left the country.
“Our intention is to move expeditiously in our reform program,” government spokesman Nick Mangwana said in response to questions. “But we have to face the reality that structural and cultural reforms are not an overnight event. There are always unforeseen challenges which slow down the process.”
The local currency, pegged at parity with the U.S. dollar as recently as February 2019, trades officially at 64 to the greenback, but the rate on the black market is more than 100.
Zimbabweans lay the blame firmly at the door of the government.
“They took the farms, then they looted bank accounts, then they told platinum miners to relinquish half their claims,” said John Robertson, an independent economist in Harare. “What they’re saying is we own everything and we can take it.”
KTFA:
Samson: Legal expert: The constitution gave the central government the power to control the country's outlets and send special forces to monitor it
5th July, 2020
The legal expert, Ali Al-Tamimi, confirmed today, Saturday, that "Article 110 of the Iraqi constitution affirms that one of the exclusive powers of the central government is to draw up economic, financial and customs policy and regulate trade policy across regions and governorates."
Al-Tamimi added that, “As stated in Article 114 of the Iraqi constitution, one of the common competencies between the central government, regions and governorates is the customs administration, in coordination between the two.”
He continued: "From careful consideration of these texts, we find that policy-making is one thing and management is another. From that, we find that the administration is in coordination and cooperation between the government, the region and the provinces." He pointed out that "the Border Ports Authority Law No. 30 of 2016 which created the life of the border outlets and a council for these outlets from representatives of different ministries and supervises and manages the border outlets."
The legal expert explained in his speech, that under Article 78 a constitution can be sent to the Prime Minister to send special forces that follow the work of these border crossings.
Corruption of the border crossing points in Iraq is considered one of the biggest corruption files that the previous and current parliament tried to find solutions to, but the file was not resolved because of the control of Shiite armed militias in the southern provinces of the country to manage these ports. LINK
MilitiaMan: Now it is time to go to the international world with the new rate imo. We have the borders and the electronic system in place to get the money from the borders to the Federal Government.
They have the system in place. They have had a system in place, but, now they have an agreement with the Peshmerga and the Federal Government with the special forces bridging the gap at the borders.
They will secure the funds that will come from the borders and those funds will allow for salaries and to start exporting to other countries the exchange trade.
We see article today on the matter. This is a very bullish set of articles. Both supporting they are gearing to do what is in the White Papers. So we can see by the above and the below there is a direct motivation to get into the market economy, now, not later!! IMO They have another way of getting there and that is not by faulty decisions..AL Nassery knows the right decisions and that is not more debt imo.. He and the Crisis Cell know what to do.. imo, and my bet is they will make good choices.. . ~ MM
"This process will supply the budget in its darkest conditions and we now hear a movement towards the border outlets to save more than ten billion dollars that used to go to the paths of corruption with this amount. We will provide a quarter of the salaries annually after inhale it.
There is no doubt that the second line after the ports will reach the foreign exchange as supplied daily by the currency market, as it will shrink after closing the informal ports and operating the electronic performance as a guarantor condition, with a fee previously deducted from the import license, random import will shrink and the flow of the currency market will be strengthened, strengthening the dinar." post 160
Courtesy of Dinar Guru
Footforward [Do you feel we are within days] absolutely I do. I don't know how many days yet. But yes. The word is in motion.
Pimpy Iraq is talking about the rate change. Good or bad? Article: "Parliamentary Finance warns against moving toward changing the dinar exchange against the dollar: 3 categories will pay the price!" Quote: "...until now we have not seen the draft of the Financial Reform Law but there are information and leaks we report that there is an intention to change the exchange rate of the dollar against the dinar..." ...they keep making the case for why you can't devalue the dinar which we agree with 100% because we want them to increase the value of the dinar...
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