HARARE – Zimbabwe’s capital markets are increasingly reflecting a period of improving economic stability, with performance on both the Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange (VFEX) pointing to strengthening fundamentals across key sectors of the economy.
Analysts say recent corporate earnings and trading trends suggest that, despite ongoing liquidity constraints, the broader economic environment is adjusting and gradually stabilising.
The positive market signals come as Zimbabwe’s economy is projected to grow by 6,6 percent, supported by a rebound in agriculture following last year’s drought, strong mining output, particularly gold, continued expansion in services, and a more stable macroeconomic framework. Central to this improvement has been lower inflation and relative stability in the gold- and foreign currency-backed ZiG currency, introduced in April last year.
Economic analysts note that the latest financial results from several listed companies indicate that businesses are adapting to the current policy environment, with currency stability helping to restore confidence and improve price discovery in equity markets.
Economist Malone Gwadu said that while performance across the market remains uneven, results from leading listed companies show resilience and sustained growth that mirrors developments in the real economy.
“Not all firms are moving at the same pace, but the encouraging signal is the clear growth trajectory among blue-chip companies,” said Mr Gwadu.
“These firms are expanding market share, increasing revenues and improving profitability, which reflects recovery in critical segments of the economy.”
He identified consumer staples, mining and financial services as among the sectors offering the clearest evidence of sustained growth, noting that firms in these areas have continued to invest and adapt despite tighter monetary conditions.
“These sectors demonstrate that strong fundamentals still allow businesses to grow, even in a constrained liquidity environment,” he said.
Currency Stability Improves Market Signals
The relative stability of the macroeconomic environment has enhanced the credibility of the ZSE and VFEX as indicators of economic health. According to Mr Gwadu, both exchanges now function more effectively as barometers of liquidity trends, investor behaviour and business confidence.
“The stock markets reflect what is happening in the wider economy, especially in terms of liquidity and capital flows,” he said. “Trading activity and capital-raising initiatives give a clear picture of how money is circulating.”
He added that the stabilisation of the ZiG currency has significantly improved the quality of trading on the ZSE, allowing share prices to better reflect company fundamentals rather than serving primarily as inflation or exchange-rate hedges.
Since its introduction, the ZiG has replaced the volatile Zimbabwe dollar, which had severely eroded confidence in the economy. Inflation has fallen sharply—from above 95 percent in June to around 15 percent by December—helping to anchor expectations and restore trust in pricing mechanisms.
“The stability of the local currency has helped to clean up market activity,” Mr Gwadu said. “We are now seeing valuations driven more by earnings and performance, rather than by speculative behaviour linked to inflation.”
Strong Trading Performance on ZSE and VFEX
In its third-quarter review, the Zimbabwe Stock Exchange Group reported a relatively stable operating environment, characterised by tight monetary policy and limited growth in money supply.
“Although these conditions initially weighed on sentiment, a renewed policy focus on exchange-rate stability improved price discovery and transactional efficiency,” the ZSE said.
Trading value on the ZSE rose sharply, increasing by 144,4 percent to ZiG 1,97 billion in the third quarter of 2025 compared to the same period in 2024. Activity, however, remained highly concentrated, with the top five counters accounting for more than 94 percent of total turnover.
The VFEX, which trades exclusively in US dollars, also posted strong gains. The exchange closed the quarter at its highest index level since inception, 150,83 points, while total value traded surged by 106,27 percent to US$16,79 million, up from US$8,14 million in the corresponding period last year.
Leading the market were Econet Wireless Zimbabwe, Delta Corporation, NMBZ Holdings, CBZ Holdings, and TN CyberTech Investments, whose performances drove much of the turnover and index growth.
Investor Confidence Gradually Returning
Investment analyst Gerald Amon said the improving operating environment is slowly restoring confidence among investors, particularly in well-managed and fundamentally strong companies.
“Consistent earnings from blue-chip counters are a strong signal that the economy is stabilising and that businesses are positioning themselves for future growth,” said Mr Amon.
He also emphasised the strategic role of the VFEX in attracting foreign currency investment and supporting export-oriented growth.
“The VFEX remains a compelling long-term platform,” he said. “As liquidity deepens and more companies list or migrate to the exchange, it can play a critical role in mobilising capital and supporting national development objectives.”
Positive Direction Despite Constraints
While challenges such as tight liquidity and uneven sectoral performance remain, analysts agree that the overall trajectory of Zimbabwe’s capital markets is positive. Improved corporate performance, greater currency stability and evolving investor behaviour suggest that the ZSE and VFEX are becoming increasingly aligned with the country’s broader economic recovery.
As policy consistency improves and confidence continues to build, Zimbabwe’s capital markets are expected to play a more central role in supporting investment, job creation and sustainable long-term economic growth.
