THE era of sweeping, momentum-driven rallies on Zimbabwe’s equity market is unlikely to return in 2026, according to a leading investment advisory, which says investors are bracing for a more selective and disciplined phase.
Equity Axis, a widely-followed advisory firm, said in its 2026 Equities Review that the market was entering a period in which stock performance will be shaped less by broad macro-economic swings and more by company-specific fundamentals.
“Looking ahead, 2026 is unlikely to deliver broad-based equity rallies. Stability, while supportive, removes the distortions that once allowed weak companies to ride macro-driven repricing cycles,” it said.
“As a result, performance dispersion is expected to widen further.”
The shift marks a clear break from past cycles in Zimbabwe, where inflation shocks, currency volatility and policy distortions often lifted share prices indiscriminately, masking weak balance sheets and poor execution.
In the coming year, Equity Axis said, investors were likely to reward quality over scale.
It said companies with strong balance sheets, defensible market positions and disciplined capital allocation were best placed to deliver modest but sustainable gains.
“Yield and income will remain central to investor decision-making, particularly if liquidity conditions remain tight,” Equity Axis said, adding firms banking on unproven turnaround strategies faced “an uphill task”.
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Patience and selectivity, it added, were likely to matter more than trading activity or market noise.
The cautious outlook comes as Zimbabwe’s equity market heads into 2026 under growing structural strain.
The investable universe has continued to shrink, weighed down by delistings, capital flight and persistent valuation distortions.
Recent exits, including National Tyre Services, and the anticipated departure of other large counters have reduced market depth and weakened the exchange’s role as a platform for long-term capital raising.
Equity Axis also pointed to the accelerating informalisation of the economy as a major headwind for listed companies.
In sectors such as retail and manufacturing, formal businesses are increasingly competing with informal operators that sit outside tax and regulatory frameworks, squeezing margins and eroding volumes.
Foreign investor participation has remained consistently net negative, with offshore funds choosing to exit rather than reinvest.
Weak valuations, lingering currency risks and limited exit options have discouraged fresh inflows, leaving the market increasingly dependent on domestic capital. That reliance has, in turn, reduced liquidity and narrowed price discovery.
At the same time, high listing and compliance costs have diminished the appeal of public markets, while the declining effectiveness of capital-raising tools such as rights issues has raised questions about the exchange’s ability to intermediate capital efficiently.
Market confidence has been further undermined by prolonged trading suspensions of major counters, including Old Mutual and PPC.
The absence of these stocks has removed important price signals and weakened the exchange’s credibility as a reliable valuation platform.
