Source: Zimbabwe reform spinoffs will be gradual: FBC Securities – The Standard
One of Zimbabwe’s leading investment advisory firms, FBC Securities, says spinoffs from last week’s wide-ranging reviews of the cost of doing business will be gradual, as it predicted the measures will stimulate capital market activity.
Treasury began sector wide reviews of the cost of doing business last week, after announcing in July it was determined to address investors’ concerns. Strong capital markets play a pivotal role in driving macroeconomic stability.
In a report looking at equities market dynamics, FBC said the measures would improve corporate profitability and drive the Zimbabwe Stock Exchange (ZSE) and Victoria Falls Stock Exchange (VFEX).
“The ongoing government led reviews of the cost of doing business are expected to ease structural cost pressures on companies, potentially enhancing profitability and stimulating greater capital market activity.
“However, the impact of these reforms is likely to materialise gradually, with benefits becoming more visible over the medium to long term rather than in the immediate future,” FBC said in the August 2025 stock pick report.
“Looking ahead, the ZSE’s near-term recovery will hinge on liquidity dynamics and corporate earnings delivery, while the VFEX remains positioned as the preferred growth platform into Q4 2025, supported by its strengthening depth and foreign investor participation.”
This comes as the ZSE and VFEX have struggled to make gains, with the former facing consistent exchange rate volatility and liquidity constraints.
Regarding the VFEX, its challenges stem from low liquidity, limited foreign investor participation, repatriation hurdles, export retention thresholds, and shifting government policies that have eroded its initial incentives.
The Confederation of Zimbabwe Industries recently called on the government to copy Argentina President Javier Milei’s ‘one deregulation per day’ model of eliminating or adjusting at least one regulation daily to support business growth.
But even as a review of business costs was rolled out, new presumptive tax rates for commuter omnibuses, taxis, driving schools, and haulage trucks were announced, sparking public outcry.
FBC said Zimbabwe’s economy was stabilising under the Zimbabwe Gold currency. Tobacco and precious minerals remain key foreign currency earners, supported by favourable prices.
“In August 2025, the ZSE advanced modestly, with market capitalisation rising 1,6% month on month to US$2,44 billion, while the All Share Index gained 1,5% to 208,74 points,” FBC said.
“This marks the third consecutive monthly gain, supported by renewed demand for defensive blue chips, although the bourse remains in negative territory year to date, with market cap down 1,3% and the index lower by 4,1%.”
FBC said the VFEX sustained its outperformance, with market capitalisation rising 2,7% month on month to US$1,48 billion and the All Share Index climbing 2,7% to 126,77 points.
“The VFEX has now delivered strong year to date gains of 15,7% in market capitalisation and 21,8% in the index, underpinned by encouraging export inflows and the appeal of US dollar-denominated dividend counters.”
It noted that African equities showed sharp divergence as of September 2025.
“Malawi and Zambia led the continent with triple and double digit gains year to date, underpinned by liquidity flows, inflation hedging demand, and mining optimism.
“Kenya and Rwanda also posted strong advances on banking, telecom, and reform momentum, reinforcing East Africa’s resilience,” FBC said.
“In contrast, Zimbabwe remained distressed, with negligible near term gains but a 3% drop over one year, while Egypt softened under currency and macro pressures. Ghana eased modestly yet continues to stand out as a multi-year outperformer on debt restructuring progress.
Overall, performance highlights a clear divergence between reform driven, liquidity supported markets and fragile, currency-exposed ones.”
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