11th Oct 2018 12:56
LONDON (Alliance News) - Investment company Cambria Africa PLC said Thursday that pressure on the Zimbabwe currency may hurt its future earnings.
Cambria Africa shares were trading down 13% at 0.85 pence.
The company explained that: "The Reserve Bank of Zimbabwe has assured the public that the multi-currency system remains in place and that funds in bank accounts remain equivalent to US dollars.
"However, the parallel market is reflecting significant premiums to this rate - rumoured as high as 500%. We cannot say with certainty what the impact will be on Cambria going forward but to date our Zimbabwe investments have been able to fund their foreign obligations at one to one to the US dollar."
The company said that, "even if this reporting regime continues", it can assume there will be significant pressure on overhead costs in the Zimbabwe subsidiaries.
A presidential election in July was seen as a chance for Zimbabwe to move on from Robert Mugabe's repressive 37-year-rule. However, the victory by President Emmerson Mnangagwa, a former Mugabe enforcer turned reformer, was disputed by the opposition and led to a police crackdown on protests.
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