Factors influencing the withdrawal of foreign investors from the Zimbabwe stock market: June 2015 to June 2017

Abstract

The purpose of the study was to determine the factors that influenced foreign investors' exit from the Zimbabwean stock market from June 2015 to June 2017. Numerous reports on a big departure of foreign investors from the local stock market motivated the research. 50 shareholders, 10 stock analysts, and 6 asset/investment managers made up the representative sample. The study used a qualitative research paradigm with a case study approach. Unstructured interviews and a questionnaire were used to collect data. The data was presented and analyzed using qualitative data analysis and descriptive statistics. The findings revealed that macroeconomic instability, liquidity issues, and the political environment were the main factors affecting foreign investors' withdrawal from the Zimbabwean stock market. The stock exchange market was also discovered to play an important function in the economy. Risk diversification, equity financing, market capitalization, and economic growth were discovered to play these roles. The need to reinvigorate the country's economy, increase liquidity, investor protection regulations, trade openness and political certainty are among the recommendations presented. The implementation of proposals to demutualize the bourse was also urged to improve accountability in the way it is administered.