ZIMBABWE’S capital markets are heading into 2026 with limited scope for broad-based gains, as leading securities firms caution that policy risk, liquidity constraints and a shrinking investable universe will force investors to prioritise selective positioning over market-wide rallies.
After a year marked by a clear divergence in market performance, analysts say the investment environment has become more disciplined but less forgiving, rewarding balance-sheet strength, foreign-currency earnings and liquidity, while exposing structural weaknesses across much of the listed companies space.
In 2025, the Victoria Falls Stock Exchange (VFEX) emerged as the standout performer, delivering a decisive breakout year. The VFEX All-Share Index surged 70%, far outpacing the Zimbabwe Stock Exchange (ZSE) All-Share Index, which rose 28%.
Market capitalisation on the VFEX expanded from about US$1,3 billion to roughly US$2,1 billion, supported by US dollar-denominated returns, improved price discovery and growing product depth.
By contrast, the ZSE remained highly concentrated, with market capitalisation rising to US$3,5 billion, but dominated by Delta and Econet.
That divergence is expected to persist into 2026.
In its 2026 Zimbabwe Equity Strategy and Outlook, Fincent Securities describes the current year as one of “cautiously constructive, but highly selective” opportunity.
“While macroeconomic stabilisation has improved relative to prior years — most notably through firmer monetary discipline, higher foreign-currency inflows, and a more orderly inflation trajectory — structural constraints, policy risk and liquidity segmentation continue to cap broad-based upside across asset classes,” the firm said.
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Fincent expects capital markets performance to remain bifurcated, with the VFEX consolidating its position as “the preferred platform for hard currency capital formation, price discovery, and institutional participation,” following its strong showing in 2025.
In contrast, the ZSE is seen as structurally constrained by concentration risk, declining breadth and heightened sensitivity to policy and liquidity shocks, particularly amid ongoing and prospective corporate delistings.
From an investment standpoint, Fincent said returns in 2026 are likely to be driven “less by market beta and more by counter-specific fundamentals, balance sheet resilience, and foreign currency earning capacity”.
Dollar earning and export oriented companies, dividend paying blue chips, select financials, gold linked counters and income generating real estate investment trusts (REITs) are expected to remain relative outperformers.
At a macro level, Fincent projects economic growth of about 5% in 2026, anchored by mining, financial services and agriculture, with elevated gold prices providing an external buffer.
However, it warned that fiscal pressures, rising indirect taxation and regulatory uncertainty continue to pose downside risks to corporate margins and consumer purchasing power.
Similar caution runs through Equity Axis’s 2026 Equities Review & Outlook, which warns against expectations of broad-based rallies.
“The environment favours selectivity over scale,” the firm said, noting that greater stability has removed distortions that once allowed weaker companies to benefit from macro driven repricing cycles.
As a result, Equity Axis expects performance dispersion to widen further, with earnings quality emerging as the defining feature of the year.
“Not growth at any cost, but growth that is repeatable, funded, and resilient,” the firm said, adding that patience and discernment are likely to outperform “activity and noise”.
Equity Axis also highlighted deeper structural challenges confronting the ZSE, including a shrinking investable universe driven by delistings, sustained capital flight and persistent valuation distortions.
The exit of counters such as National Tyre Services, it said, was symptomatic of a broader economic reconfiguration marked by increasing informality, which has weakened the revenue base of listed corporates and intensified pressure on formal retailers and manufacturers.
Market integrity issues, including the prolonged suspension of Old Mutual shares and the continued halt in PPC trading, have further undermined confidence, while higher transaction taxes have discouraged turnover in an already thin market.
Despite this, Equity Axis acknowledged recent reforms, such as reduced capital gains tax, shorter settlement cycles and the expansion of exchange traded funds, as important counterweights.
“The most notable positive development is the gradual emergence of the VFEX as a credible alternative platform,” the firm said, citing its US dollar-denominated structure as a partial hedge against currency risk and a driver of renewed confidence in value preservation.
Morgan & Co said the year has begun on an “unusual note” following news of Econet Wireless’ proposed voluntary delisting from the ZSE.
Given Econet’s status as one of the last remaining blue chip counters, the announcement has heightened reinvestment risk, particularly for institutional investors reliant on its dividends and liquidity.
“This has resulted in investors seeking the next best counter that limits reinvestment and liquidity risk on the ZSE — and Delta has been a clear winner,” Morgan & Co said, noting that Delta gained 50% in the first weeks of January 2026, exhausting much of its upside.
Morgan & Co expects continued flows into blue chips such as Innscor and Simbisa Brands, both on the ZSE and VFEX, as investors prioritise liquidity over valuation.
While acknowledging that many blue chips are now “hot” and overvalued, the firm said liquidity-driven demand is likely to support prices, especially on the VFEX.
For risk management, Morgan & Co recommends greater diversification into instruments with limited downside risk, particularly REITs, citing Tigere REIT on the ZSE and the upcoming Pfuma REIT on the VFEX.
For higher-risk investors, it sees selective opportunities in counters such as TSL Limited and Seed Co Limited.
