ZIMBABWE'S stock market is facing a crisis of confidence as companies abandon public markets, billions of dollars in value are wiped out and investors question whether the country's bourses can still serve as credible platforms for wealth creation and capital raising.
The warning comes as Zimbabwe seeks to attract billions of US dollars in private investment to drive industrialisation, expand manufacturing and achieve upper-middle-income status by 2030.
More than 10 companies have delisted or initiated delisting processes from the Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange (VFEX) since 2020, according to a new report prepared by economic think-tank Africa Economic Development Strategies (AEDS).
The exits span telecommunications, manufacturing, retail and hospitality sectors and signal what analysts describe as a fundamental loss of confidence in the ability of public markets to create and preserve shareholder value.
"These are not isolated corporate events," AEDS said in its latest Market Watch publication.
"They reflect a reassessment of whether the domestic equity market still performs its core economic function: preserving and compounding capital in hard currency terms."
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The implications extend beyond the stock market.
Capital markets play a critical role in channelling savings into productive investment, funding business expansion and supporting economic growth. The departure of listed firms raises questions about whether Zimbabwe's financial system is equipped to support the country's industrialisation agenda.
At the end of 2021, the ZSE's market capitalisation stood at about US$12,19 billion. Less than a year later, following suspension of trading and a sharp depreciation of the local currency, the market's value had fallen to US$2,92 billion, wiping out more than US$9 billion.
"The collapse was not a conventional equity bear market," AEDS said.
"It was driven primarily by the June 2022 ZSE trading suspension and the rapid depreciation of the local currency against the US dollar, which eroded USD-equivalent valuations across the board."
Although the market rebounded in 2023 with a US dollar return of 18,8%, the recovery proved shortlived.
In 2024, the exchange posted a negative 75,55% US dollar return, reducing a US$100 investment at the start of the year to about US$24 by year-end.
By December 2025, market capitalisation had recovered to roughly US$3,49 billion, but remained more than 70% below its 2021 peak.
According to AEDS, the prolonged destruction of shareholder value has altered boardroom calculations on the benefits of remaining listed.
Some companies left voluntarily after concluding that public markets no longer support their strategic objectives, while others were effectively pushed out by depressed valuations that made raising fresh equity prohibitively expensive.
"Most companies that exited ZSE cited persistent undervaluation," the report said.
"The undervaluation reflected structural constraints, thin liquidity, unusable USD valuations and limited participation rather than operational weakness."
The economics of remaining listed have also become increasingly difficult to justify.
Annual listing fees, audit costs, sponsor charges, regulatory levies and compliance obligations can run into hundreds of thousands of dollars.
"When the company's own market capitalisation may only be a few million dollars, listing costs as a percentage of market value become unreasonable," AEDS said.
The report said Zimbabwe's implied equity risk premium rose from 13,82% in 2025 to 15,89% in 2026, reflecting concerns over sovereign debt, exchange-rate distortions and policy uncertainty.
Using a standard valuation model, AEDS estimated that a Zimbabwean company with the same earnings and growth prospects as a South African firm could trade at a discount of about 34% purely because of country risk.
"The entire gap is attributable to country risk," the report said.
"As discount rates rise, valuation capacity contracts non-linearly and the incentive to remain listed on a Zimbabwean exchange diminishes accordingly."
AEDS warned that continued erosion of the stock market threatens one of Zimbabwe's most important mechanisms for mobilising domestic savings into productive investment.
"In view of the fact that ZSE cannot retain its listed companies, the country's ability to mobilise domestic savings into productive investment is fundamentally impaired," the report said.
"That cost is borne not by the exchange or the departing companies, but by the economy as a whole."