Nelson Gahadza
Zimpapers Business Hub
Foreign investor participation on the Zimbabwe Stock Exchange (ZSE) increased to 26,53 percent during the second quarter (Q2) 2025, from 15,39 percent in the first quarter, reflecting the positive impact of improved economic fundamentals and growing investor confidence in the country.
According to the Zimbabwe Stock Exchange’s latest quarterly newsletter, trades in value terms surged 153,94 percent to ZiG743,6 million in the review period compared to ZiG292,8 million in the prior quarter.
ZSE chief executive, Mr Justin Bgoni, in an interview, said the stability in the domestic currency, ZiG, boosted investor confidence, while the positive shift in real economic fundamentals has led to increased foreign investor participation.
“Over the past months, we have witnessed stability in our currency and this has boosted investor confidence due to the positive shift in real economic fundamentals.
“The currency has been stable for a while, meaning that investors are no longer hedging. If we continue to experience currency stability and policy consistency, we should experience this positive trend going forward,” he said.
Since the country adopted the ZiG in April 2024, the currency has achieved commendable stability, evidenced by low inflation and exchange rate predictability, anchored by prudent monetary policy management and other supportive Government measures.
Despite scepticism to transacting using the local currency by some speculators, major monetary policy indicators have shown that the ZiG is gaining higher economic momentum.
Mr Bgoni noted that while the ZSE has not yet reached the level of peak foreign investor participation achieved in 2013, initiatives by the securities exchange have increased the level of foreign investor participation.
Analysts believe that the renewed interest follows the launch of the new currency, a gold, foreign currency reserve and other precious minerals-backed medium of exchange, which managed to remain largely stable, helping in value preservation.
Economist Mrs Gladys Shumbambiri-Mutsopotsi noted that the country’s gradually improving macroeconomic stability, streamlined trading rules and bargain valuations on the bourse were attracting yield-hungry foreigners to the ZSE.
“If Harare sticks to currency liberalisation and corporate‑governance reforms, non‑resident inflows should stay elevated,” she said.
She highlighted that at 26,5 percent, foreign investor participation now tops its decade‑high range of 8–18 percent, reflecting a vote of confidence in Zimbabwe’s policy direction.
“Strong overseas support is already deepening liquidity and could catalyse wider foreign direct investment (FDI),” said Mrs Shumbambiri-Mutsopotsi.
She also said investors prize Zimbabwe’s resource exposure, double‑digit dividend yields and rock‑bottom price/earnings (P/E) ratios.
She added that to lock in this interest, authorities must continue to work on making repatriation rules more transparent, bolster disclosure standards and showcase growth sectors beyond mining.
FBC Securities, a stockbroking and equities research firm, recently said policy consistency and improved ZiG liquidity could sustain gains in 2025.
According to the ZSE second quarter 2025 newsletter, the securities recorded a total market turnover of ZiG 1,49 billion in the second quarter of 2025, representing a 53,14 percent increase from Q1 2025.
Financial analyst Mr Malone Gwadu said the increased foreign investor participation indicated the gradual increase in investor confidence on the local bourse and could be a result of various factors.
“These include lower-priced counters and also the prudent currency management framework, which has largely achieved reducing inflation and currency volatility to acceptable levels, which conserves value for investors,” he said.
Mr Gwadu noted that the renewed interest by foreign investors in Zimbabwe’s stock market reflected a positive reaction to the improved economic fundamentals. Stock markets, he said, were a key economic indicator and potential heartbeat of the economy.
“Sustaining the improved economic management framework, especially around anti-inflation and currency stability, is quite key, as it aligns policy frameworks with investor expectations. It improves the fundamentals, which is a good confidence-building mechanism,” he said.
Mr Gwadu also highlighted that Zimbabwe’s economy was largely a developing market with huge potential in the stock market; hence, sustaining the current improvements in key economic fundamentals was key in leveraging the growing investor in investor participation.
According to the Securities and Exchange Commission of Zimbabwe (SecZim), a strong capital market is crucial for the country’s economic growth, as it plays a vital role in facilitating access to capital for companies, which can then be used to drive economic growth.
SecZim chief executive Mr Anymore Taruvinga recently said the commission appreciated the interventions in 2024 by the Ministry of Finance, Economic Development, and Investment Promotion in lowering capital gains withholding tax and scrapping the vesting period and capital gains tax on marketable securities.
“Our challenge now is to improve liquidity on the main exchange, the ZSE, and for this we need to re-engage both domestic and foreign investors, and we also need to demonstrate that we have a good investment product,” he said.
Mr Taruvinga emphasised that the re-engagement was necessary because there was stiff competition for the limited liquidity at both global and domestic fronts.
Imara Asset Management Zimbabwe chief executive, Mr Shelton Sibanda, noted the increased foreign investor participation on the ZSE, but pointed out that it still lagged prior year peak periods.
“While at times political risk is highlighted as a major constraint, we do not agree. Ability to move in and out seamlessly and respect for property rights are key requirements by foreign investors,” he said.
Mr Sibanda also noted that the availability of foreign exchange on the interbank market was a key attraction.
“In recent days, even the ZSE has also moved to USD settlement, which is another positive, as that eliminates exchange/forex risk.
“Companies predominantly generate USD dividends, which in recent days have been repatriated seamlessly. Those are huge, but understated advantages of Zimbabwe against other comparable markets,” he said.
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