Zimbabwe asset managers shift away from equities

The Securities and Exchange Commission of Zimbabwe (SecZim) has called on the Zimbabwe Stock Exchange (ZSE) to urgently work on recovering lost market share, amid revelations that local asset managers have slashed their exposure to the capital market by 50% over the past five years.

The appeal came during a historic moment for the ZSE, which on Thursday listed itself on its own bourse in Harare, becoming one of the few stock exchanges globally to do so.

Speaking at the listing ceremony, SecZim chief executive officer Anymore Taruvinga highlighted worrying trends, including declining interest from asset managers and retail investors, which he said threatened the long-term vitality of Zimbabwe's capital markets.

"Figures from our Q1 2025 market assessment indicate that our own asset managers' exposure to listed equities has dropped to 29%, down from slightly over 61% in 2020," Taruvinga revealed. "During the same period, exposure to property has increased from 32% to 48%. So in just five years, our asset managers have halved their equity investments."

He pointed out that this decline in equity exposure was not necessarily a sign of absent liquidity but rather a shift in where that liquidity is going. Retail investor participation has also plummeted to just 1%, from an estimated 2% to 3% before dollarisation, further shrinking the pool of active market players.

Taruvinga warned that the Zimbabwean capital markets have endured a challenging period marked by reduced listings, declining liquidity, and investor apathy. He cited negative perceptions, high transaction costs, and limited awareness as key obstacles that need urgent attention.

"There is need to re-engage both domestic and foreign investors. We must show that the market still offers quality investment products," he said. "We are in stiff competition for limited liquidity both globally and locally, and we must rise to the challenge of reclaiming our market share. That's the challenge to our listing entity today."

ZSE chairperson Caroline Sandura said the decision to list the exchange on its own platform was a bold and deliberate move aimed at increasing transparency, attracting new capital, and demonstrating faith in the market's ability to drive national development.

"Self-listing is not just about us as ZSE Holdings," Sandura said. "It's about unlocking shareholder value, improving access to capital for growth and innovation, and providing liquidity to our shareholders. It also enhances our visibility and reinforces our commitment to best corporate governance practices."

She noted that the listing would boost investor confidence and encourage more companies to consider the bourse as a viable platform for capital raising. "We are sending a clear message that the capital market is open for business, and we are leading by example."

Sandura added that as a listed entity, ZSE will now be subject to the same rules and disclosures required of all listed companies, a move expected to strengthen investor trust and regulatory integrity.

With Zimbabwe's capital markets at a crossroads, both SecZim and the ZSE appear aligned in their vision to rebuild confidence, attract investors, and modernize the country's financial systems. However, market watchers say real progress will depend on restoring macroeconomic stability, addressing regulatory bottlenecks, and improving public trust in financial institutions.