ESWATINI ESCAPES STOCK MARKET CRASH

MBABANE – It seems the country has survived the stock market crash that has been witnessed globally.
A global stock market crash that began on February 20, 2020 was covered extensively across the globe.

Of late, the stock markets worldwide reported their largest one-week declines since the 2008 financial crisis, mainly in response to the 2019–20 coronavirus pandemic.

It seems the country, has survived the crash, if recent figures from the Eswatini Stock Exchange are anything to go by.
In the March 31, 2020 report, ESE recorded an increase in the all-share index. 
Despite a small number of trades, the ESE all-share index between February 2020 and March 2020  slightly increased from 449.26 to 450.65.

increased

Year-on-year, the all share index increased by 6.54 per cent from 422.97 to 450.65.
All-share is a series of numbers which show the changing average value of the share prices of all companies on a stock exchange. It is a measure of how well a market is performing:

“The month of March 2020 had three trades.
This was the sale of Greystone Partners, Nedbank and Inala Capital shares, which collectively recorded a total value of E170 237.
Year on Year (i.e. March 2019 and March 2020) value traded decreased from E294, 7560 in 2019 to E170, 237 in 2020,” reported ESE.
at the time of compiling this report ESE Acting CEO Gugu Makhanya was yet to respond to a questionnaire sent on Wednesday.

crashing

Meanwhile, experts say there are a lot of effects of a crashing stock market.
The first impact is that people with shares will see a fall in their wealth. If the fall is significant, it will affect their financial outlook.
“Anybody with a private pension or investment trust will be affected by the stock market, at least indirectly. Pension funds invest a significant part of their funds in the stock market.

Therefore, if there is a serious and prolonged fall in share prices, it reduces the value of pension funds.
This means that future pension payouts will be lower,” shared an expert.
Often share price movements are reflections of what is happening in the economy.

The stock market itself can affect consumer confidence.
Bad headlines of falling share prices are another factor which discourages people from spending.

hamper

Falling share prices can also hamper firms’ ability to raise finance on the stock market.
Firms which are expanding and wish to borrow often do so by issuing more shares – it provides a low-cost way of borrowing more money. However, with falling share prices it becomes much more difficult.

On top of that, a fall in the stock market makes other investments more attractive.
People may move out of shares and into government bonds or gold.
These investments offer a better return in times of uncertainty.

investment

On the other hand, the stock market could be a source of business investment.
This could lead to more jobs and growth. The stock market can be a source of private finance when bank finance is limited.
However, the stock market is not usually the first source of finance. Most investment is usually financed through bank loans rather than share options. The stock market only plays a limited role in determining investment and jobs.

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