Inflation Hegding and Listed Stock in Zimbabwe - a Non-Linear Approach 

This study evaluated the ability of listed stocks to hedge inflation in Zimbabwe from 2009 to 2020. A non-linear autoregressive distributed lag (NARDL) model was used to capture the short and long-run asymmetric inflation hedging capacity of listed stocks. During the low inflation phase, Zimbabwe Stock Exchange (ZSE) stock returns were a poor inflation hedge and responded symmetrically to inflation shocks. The ZSE industrial index exhibited negative inflation shocks hedging ability in the short run during high inflation periods. This implies that ZSE-listed stocks are poor inflation hedges in general. Investors and fund managers are advised to look beyond the ZSE industrial index (and consider commodities and real estate) in their endeavor to preserve their wealth against inflation increases. Investors and money managers are Inflation hegding and listed stock in Zimbabwe - a non-linear approach.