Zimbabwe’s stock markets have started 2026 on a strong footing, but analysts caution this may be a precursor to selective gains ahead, anchored on consolidation rather than broad-based rallies.
The Zimbabwe Stock Exchange is up 31,13 percent for the period to January 20, reflecting a sharp early-year rebound led by bellwether counters. Heavyweights have driven performance, with mobile telecoms giant Econet gaining 62,98 percent and beverages maker Delta Corporation rising 45,03 percent over the same period.
Stockbroking firm, IH Securities, warned that the momentum may be running ahead of fundamentals.
“In our view, the market is now overbought and the pace of gains has outstripped underlying liquidity support, raising the likelihood of near term consolidation as positioning becomes more selective,” the firm said.
Currency dynamics have provided some support to sentiment. The ZiG has strengthened by about 1,47 percent since the beginning of the year, offering modest relief on imported input costs. Still, IH Securities stresses that earnings prospects will hinge more on operational performance.
“The fundamental earnings debate remains anchored on volumes and pricing power rather than currency alone,” the firm noted.
Against this backdrop, IH said its 2026 equities strategy is anchored on consolidating gains in proven, resilient counters, while positioning for shifts in market structure and global risks.
“Our strategy for 2026 is anchored in a consolidation of gains in proven resilient counters in the face of global geopolitics, in addition to taking advantage of the strengthening local currency,” IH Securities said.
The stockbroking firm expects a style rotation at the bourse level, driven by continued activity on the Victoria Falls Stock Exchange (VFEX) and increasingly concentrated value on the ZSE.
“A style rotation will likely occur at a bourse-level as the VFEX continues to see listings while its counterpart faces concentrated value,” it said.
Within this framework, IH Securities is constructive on select names with strong earnings visibility and exposure to global trends.
“We are constructive towards counters such as Padenga and Dairibord, whose earnings can directly benefit from global commodity prices, ensuring robust price appreciation and stable dividend payout and speculation on price appreciation, respectively,” the firm said.
New listings also form part of the opportunity set. “We are also partial toward new listings such as Pfuma REIT that exhibit significant growth potential,” IH Securities added, reflecting growing interest in real estate investment trusts as the market broadens.
On the VFEX, market depth has improved sharply at the start of the year.
IH Securities notes that liquidity is up 558,50 percent over the first 20 trading days compared with the same period last year, signalling a structural improvement in participation.
Price performance has been broad based, with Axia up 40,2 percent, Padenga 26,12 percent, Caledonia 25,98 percent, Simbisa 18,35 percent, Edgars 17,39 percent and Innscor 14,02 percent.
Even so, valuation discipline remains key. “Valuations are increasingly matching fundamentals, which makes the market broadly ripe for profit taking,” IH Securities said.
The firm still sees upside in specific themes, adding, “We still see room for upside in select gold-exposed counters, particularly Padenga and Caledonia, as bullion has broken higher and expectations remain constructive.”
Looking ahead, IH Securities expects the VFEX to deepen further through potential new entrants. “The VFEX could deepen further through new additions such as Econet Infraco and Pfuma REIT, improving liquidity and broadening the REIT opportunity set by complementing developmental exposure with an operational yield profile,” it said.
The 2026 outlook builds on a robust 2025, when the ZSE All Share Index rose 29,9 percent year-on-year to 277.86, supported by improved sentiment toward year-end and currency effects. Trading activity strengthened significantly, with total value traded reaching US$164 million, up 84,3 percent, and average daily value of about US$0,66 million.
The year also featured notable corporate actions, including ZSE Holdings’ self-listing and the delisting of National Tyre Services.
On the VFEX, performance was mostly positive, driven by strong gains in industrial and mining counters. Zimplow, Padenga and Caledonia emerged as standout performers, each posting triple-digit share price appreciation, while value traded rose to US$111,87 million, buoyed by large block trades such as the First Capital transaction.-herald
