Zim capital markets hit US$5.6bn

STAFF WRITER

Zimbabwe’s capital markets have surged past the US$5.3bn mark, underpinned by strong growth in Real Estate Investment Trusts (REITs), which have now crossed the US$100m threshold, the Securities and Exchange Commission of Zimbabwe (SECZim) has said.

The milestone comes as the capital markets regulator accelerates reforms, including the rollout of artificial intelligence-driven oversight, the introduction of virtual asset regulations, and the implementation of a sustainability roadmap designed to attract long-term institutional capital.

Speaking at the recent Insurance and Pensions Symposium in the resort city of Victoria Falls, organised by the Insurance and Pensions Commission (IPEC), SECZim director Norman Maferefa said the Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange (VFEX) have now reached a combined market capitalisation of US$5.63bn.

He added that funds under management (FUM) currently stand at ZWG98.16bn (US$3.78bn), while assets under custody have climbed to ZWG76.69bn (US$2.97bn), reflecting deepening activity across Zimbabwe’s financial markets.

“The stock market capitalisation-to-GDP ratio helps determine if a market is overvalued or undervalued. A ratio below 75% suggests a market is undervalued,” Maferefa said.

Zimbabwe’s ratio currently stands at just 12.74%, significantly below regional peers such as South Africa at 321%, Kenya at 45% and Botswana at 42%, highlighting substantial headroom for expansion.

Institutional investors, particularly pension funds and insurance companies, continue to dominate equities trading, accounting for a significant share of funds under management. However, Maferefa noted that the market still faces structural challenges, including the exit of foreign investors and the suspension of certain counters.

Despite these headwinds, the market has recorded notable progress. REIT investments have surged past US$100m, settlement cycles have improved, and digital trading platforms such as ZSE Direct and C-Trade are expanding access to retail investors.

On the regulatory front, SECZim is amending the Securities and Exchange Act to align with global standards set by the International Organization of Securities Commissions (IOSCO), with a focus on strengthening investor protection and tightening oversight of securities issuance and corporate actions.

The Commission is also spearheading sustainability reporting through its Sustainability Standards Panel, with listed companies and regulated entities expected to adopt IFRS S2 (Climate) by 2027 and IFRS S1 (Sustainability) by 2030.

“The goal of the roadmap is to influence thinking, practice and impact assessment disclosures on Environmental, Social and Governance (ESG) issues by companies,” Maferefa said.

To modernise supervision, SECZim is integrating artificial intelligence into its regulatory framework to enhance market surveillance, detect fraud, and improve decision-making.

“The adoption of AI will benefit investors through early identification of risks within the capital markets, enhanced market surveillance to detect fraud and abuse, and improved evaluation of service providers,” he said.

Virtual Assets Service Providers (VASPs) have also been brought under SECZim’s regulatory ambit, with a licensing deadline set for April 30, 2026, as stakeholder consultations continue.

To further improve the ease of doing business, the Commission is reviewing licence fees, listing rules, and investor protection provisions, while collaborating with the Ministry of Primary and Secondary Education and the Consumer Protection Commission to drive financial literacy and inclusion.