The Zimbabwean Industrial Index could be one to watch over the next few months after returning about 50% in 2009. If we look at a chart of the performance last year, it is quite plain to see that the index was a bit of slave to politics. Each time there was a positive development the index strode confidently forth, while investors headed for the hills as soon as there were any signs of trouble. Take a look at the chart below (click to enlarge):

Now, with the World Cup in South Africa fast approaching, I think there is going to be a lot of pressure on the Zimbabweans to keep their squabbles to a minimum. The last thing that Jacob Zuma and his regional counterparts want is for the political situation to unravel while the eyes of the world are on their neck of the woods. This has become even more important following the tragic events in Angola last week.

From the Zimbabweans’ perspective, they will see the world’s biggest sporting event as a marketing opportunity. They will be keen to show that they are making progress in resolving at least some of their differences and will be hoping to attract some foreign money that they sorely need to rebuild their country. I am not for one minute suggesting that the world cup will be the panacea to rid Zimbabwe of all its ills, the underlying issues are too complex and sensitive for that. But if some progress is made and the market believes this to be significant, the index could be a reasonable bet for investors who have the stomach for a bit of risk.