2024 Capital Markets in Zimbabwe: An Overview
The year 2024 brought about significant changes and challenges for Zimbabwe’s capital markets, with both the Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange (VFEX) navigating unique paths influenced by local and global events.
The ZSE demonstrated resilience despite economic turbulence, notably transitioning from the Zimbabwean Dollar (ZWL) to the Zimbabwe Gold (ZWG) in April 2024 to stabilize the currency and restore investor confidence. This move led to a 334 percent nominal return in ZWL terms, attracting both local and foreign investors. However, liquidity remained tighter compared to previous years.
On the other hand, the VFEX, operating in USD, faced liquidity challenges despite increased listings and a 2.7 percent rise in the All Share Index. Public mistrust in banks and inconsistent monetary policies hindered the market’s growth, although the exchange’s ability to raise capital in hard currency and lower trading fees provided hope for potential expansion.
Throughout 2024, several key events significantly impacted Zimbabwe’s capital markets. The introduction of the Zimbabwe Gold aimed to curb hyperinflation and stabilize the economy, crucial for mitigating volatility. Efforts to return to international capital markets, including compensation for white farmers and global economic trends, also influenced market dynamics.
However, the ZSE faces challenges such as declining value propositions for listed entities, an inactive debt market, low investor confidence, low liquidity levels, and increased transaction and regulatory costs. These factors contribute to economic instability, limiting investment opportunities and market vibrancy.
Addressing these challenges will be essential for promoting economic stability and restoring investor confidence in Zimbabwe’s capital markets. Through strategic reforms and initiatives to boost market activity and attract investors, the ZSE and the VFEX can overcome obstacles and thrive in the evolving financial landscape.
