Online Reporter
Nelson Gahadza
THE Zimbabwe Stock Exchange (ZSE) is intensifying efforts to diversify investment products and strengthen hard-currency investment platforms under a broader strategy aimed at improving long-term returns for pension funds and restoring confidence in Zimbabwe’s capital markets.
Presenting at the Zimbabwe Association of Pension Funds 2026 annual general meeting and conference, ZSE chief executive Mr Justin Bgoni said the exchange was responding to years of inflation volatility, policy uncertainty and weak foreign participation that have eroded investor value and undermined pension savings.
Mr Bgoni said the exchange’s key focus areas are now centred on product diversification, expansion of the United States dollar-denominated Victoria Falls Stock Exchange (VFEX) and the development of the Victoria Falls International Financial Centre (VFIFC), which is expected to position Zimbabwe as a regional financial services hub.
“I want to be honest in terms of how we have performed in the capital market. The market is not reflecting good returns for pensioners and investors,” he said.
He said inflationary pressures and currency instability had severely distorted valuations on the local bourse, leaving pension funds struggling to preserve value for contributors.
“The inflationary and currency volatility has played a big part in terms of the challenges that we have faced in capital markets. Policy uncertainty is a big part of what has happened in our markets,” he said.
Mr Bgoni noted that foreign investor participation on the ZSE had fallen sharply from historical levels of about 50 percent to between 10 and 20 percent, well below regional averages of 50 to 70 percent.
He said the deterioration in market performance had directly affected pensioners.
“The way I always think about it is that it has led to some of our people retiring poor. You hear stories where people say, ‘I put money for 20 or 30 years, but what do I get out of it?’”
Using Delta Corporation shares as an example, Mr Bgoni said an investor who invested in the company’s stock in 2019 would only have seen modest gains despite the company’s strong operational performance.
“If you had invested a dollar in Delta in 2019, at the current level, it is about US$1,50. But if you had put the same dollar into the S&P 500, it would have grown to around US$2,80.”
He said this highlighted the need for structural reforms and alternative investment products capable of preserving long-term value.
Mr Bgoni said the establishment of the VFEX was one of the exchange’s key responses to market instability.
“We established the US dollar-denominated Victoria Falls Stock Exchange to take out the currency volatility from the market so there is more reflection of company performance,” he said.
According to Mr Bgoni, the VFEX has delivered significantly stronger returns than the local currency-denominated market.
“The VFEX has reflected better the performance of the underlying companies compared to the ZSE,” he said.
Beyond equities, he said the ZSE was accelerating product innovation through Real Estate Investment Trusts (REITs), Exchange Traded Funds (ETFs), commodities and future infrastructure-focused instruments.
He urged pension funds to consider converting property portfolios into REIT structures in order to improve liquidity and unlock value for pensioners.
“What REITs do is that they subdivide a property into units, making it easier to sell part of a building and improving liquidity,” he said.
Mr Bgoni said REITs also offer tax advantages and regular dividend income, making them more attractive than conventional property ownership structures.
“We believe the yields that you are getting on REITs are much higher than what most people are getting out of properties at the moment,” he said.
On ETFs, Mr Bgoni said the exchange was seeking to broaden Zimbabwean investors’ exposure to international assets and commodities.
“The ETF structure allows you to bring assets from other countries. We can bring American shares, Chinese shares, or Indian shares onto our market. It helps diversify country risk.”
He cited the recently listed First Mutual Gold ETF, which combines exposure to Johannesburg Stock Exchange-listed shares and gold, as an example of the diversification strategy being pursued.
Mr Bgoni also highlighted the rollout of the Victoria Falls International Financial Centre, which he described as a transformative development for Zimbabwe’s financial sector.
“The Victoria Falls International Financial Centre is like a country within a country. The regulation, taxation and exchange control systems are different.”
Mr Bgoni said the financial centre would support capital markets, insurance, fintech, banking and investment advisory services under a permanently hard-currency framework.
“One of the big benefits for pension funds is international access,” he said. “You will not need to go outside Zimbabwe for international investment services.”
He said the VFEX was designed as a foundational component of the international financial centre and would remain permanently United States dollar-based.
