FOR decades, stockbrokers sat at the centre of Zimbabwe’s stock markets, earning decent commissions from matching buyers and sellers of shares.
That model is now under strain due to low trading volumes, shifting investor behaviour and rising regulatory and technology costs, forcing capital market intermediaries, particularly stockbroking firms, to rethink how they can ride the tide and grow.
While both the Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange (VFEX) remain operational, activity has become increasingly concentrated in a narrow cluster of counters.
A handful of large, liquid stocks often account for the bulk of daily turnover, while many listed companies trade sporadically or not at all.
On the ZSE, activity has been largely concentrated in stocks such as Econet, Delta, Tigere Property Fund, FBC, CBZ and RTG, while on the VFEX, the Eagle Real Estate Investment Trust, Axia, Innscor, Padenga and Caledonia dominate.
For brokers that rely on transaction volumes, this concentration has become a structural challenge rather than a temporary dip.
“The challenge is no longer just about winning trades, but about building sustainable, diversified revenue streams. Pure brokerage is no longer (viable) enough,” says one senior market participant.
At current levels, analysts widely agree that market volumes are insufficient to sustain all licensed stockbrokers.
Daily turnover on the ZSE is often low and uneven, while on the VFEX, despite its US dollar trading currency and offshore appeal, is yet to deliver consistent depth across counters.
Trigrams Investments analyst Mr Wafa Kuchera said the number of stockbrokers, 23, seems too high.
The stockbrokers serve only 36 747 retail investors with active accounts on direct market access platforms such as C-Trade and ZSE/VFEX Direct, as well as a significantly small number of institutional and foreign investors.
“While the current low volumes pose a medium to long-term threat to stockbrokers’ viability, the fact that they can maintain their licensing shows that they have strategies in place to fund themselves, perhaps through reserves from better times,” he said.
He said the concentration of trades in a handful of large counters poses a significant threat to operational viability and reduces attractiveness to investors.
“Large counters tend to draw in a disproportionate amount of the liquidity and investors prefer them because of the ease of entry/exit from these counters.
“However, when the liquidity becomes concentrated in a handful of counters, that distorts the market as a barometer for measuring the economy,” said Mr Kuchera.
Most stockbrokers, he said, have already diversified and are now more mindful of how they apply their reserves and capital, but driving trading is precisely the role stockbrokers are licensed to perform.
“Perhaps the question we should be asking is how much stockbrokers are doing to grow and educate the investor base on the one hand and attract companies to list on the bourse on the other hand?
“Stockbrokers cannot be passive participants in this respect,” he said.
Mr Kuchera noted that, while he sympathises with both the stockbrokers and regulators, he believes it is time regulators and exchanges start to engage investors and investor groups directly to explore strategies to grow the industry.
“For example, the market infrastructure is disjointed and clunky,” he said.
“Investors have to go to several places to get a full view of their investments, with each market participant having a different account number for that investor.”
Investment analyst Mr Enock Rukarwa said Zimbabwe’s stockbroking industry is facing growing sustainability pressures as trading volumes continue to decline, while the number of licensed brokers rises, creating a mismatch that is weighing on the sector.
Mr Rukarwa highlighted that trading activity on the ZSE has been highly irregular over recent years, with volumes trending lower compared to historical levels.
“When you look at current trading volumes, they have been very irregular, looking at the prior years 2023, 2024, 2025 and even the first month of 2026,” he said.
“If you compare current numbers with what we used to see five or 10 years ago, our numbers have declined.”
At the same time, he noted the significant number of stockbroking firms, compared to only a handful in the past, a development that has intensified competition for shrinking turnover.
“That has been eating a lot into the sustainability of the industry as a whole. By and large, the numbers are not sustainable and they are not congruent with the number of stockbroking firms and stockbrokers in our industry,” said Mr Rukarwa.
He said macroeconomic conditions continue to play a critical and strategic role in shaping activity on the stock market, particularly liquidity conditions in the local currency.
“What you tend to see on the ZiG (ZimGold) side is that there is no liquidity,” said Mr Rukarwa. “The broad money supply in the economy is ZiG16 billion, and if you ask yourself how much of that is finding its way into the stock market, you realise that the number is very insignificant.”
He added that, as a result, much of the activity on the ZSE’s local currency board is driven by portfolio switches rather than fresh inflows.
“The bulk of the transactions we are seeing are switches where one investor is moving from one portfolio to the other,” he said. “Secondly, we are seeing disinvestments by foreign investors, with local investors taking up those positions.”
Mr Rukarwa noted that investors with access to ZiG liquidity have been selectively taking advantage of foreign exits, particularly in large, liquid stocks.
“For the very few that are fortunate enough to be long in ZiG, they have been picking pockets that foreign investors are leaving behind,” he said.
This has supported activity in blue-chip counters such as Delta, Econet, Seed Co and Hippo Valley.
Mr Rukarwa said the scope of a traditional stockbroking licence remains limited, as it is largely restricted to securities trading, including equities, derivatives, fixed-term instruments and debt instruments.
However, brokers have increasingly sought alternative revenue streams.
“What we have seen of late is stockbrokers brokering other commodities that are not necessarily financial instruments. Some have penetrated the mining sector, brokering mining commodities, while others are placing investments where they earn dividends and capital appreciation,” he said.
Analysts also broadly agree that the most effective regulatory adjustment needed to improve intermediary sustainability without weakening investor protection would be greater proportionality, aligning compliance and capital requirements more closely with business scale and risk profile, without compromising investor protection.
“This could include differentiated capital thresholds, incentives for consolidation or regulatory support for shared infrastructure such as custody, clearing and technology platforms,” said another senior market participant.
“The goal would not be deregulation, but sustainability, ensuring that intermediaries remain viable enough to invest in governance, systems and research.” – Herald
