Zimbabwe’s stock market has delivered surprising results. In 2020, it recorded the highest returns of any African exchange—612% in local currency and 46.6% in U.S. dollars—while other markets on the continent declined. Yet foreign investors have largely pulled out, and new listings remain uncommon. Tanganda Tea Company, the country’s largest tea producer, recently joined the Zimbabwe Stock Exchange, highlighting the market’s unusual position.
The market that defies expectations
The ZSE’s performance stands out. Between January and September 2020, the Zimbabwe All-Share Index rose 612% in local currency terms. Even after adjusting for U.S. dollars or euros, gains reached 46.6% and 40%, outperforming every other African market. Malawi and Rwanda, the next best performers, managed only 6.8% and 2.9%.
The figures come with significant caveats. Kyle Bass, a U.S.-based fund manager, called the gains misleading, likening ZSE investments to “a crate of eggs.” His skepticism reflects broader concerns. Zimbabwe’s economy has faced instability for decades, and the stock market has mirrored that volatility. In 2020, the same year the ZSE posted record returns, the government suspended trading for weeks, accusing speculators of fueling inflation through shares of dual-listed companies like Old Mutual and Pretoria Portland Company (PPC).
The shutdown was sudden. The exchange only reopened after banning those stocks, prompting foreign investors to sell. The departure of foreign capital has left the market in an uncertain state: strong on paper but weak in structure.
Why Tanganda Tea is listing now
Tanganda Tea is not seeking new capital. Its listing stems from a corporate restructuring by the Meikles Group, a long-standing conglomerate that has shaped Zimbabwe’s economy. The company’s pre-listing statement clarifies this: “This document is not an invitation to the public to subscribe for shares.” Instead, it represents a demerger, separating Meikles’ agricultural and bottling divisions into an independent entity.
This trend is familiar. Most recent ZSE listings have involved spin-offs from established conglomerates rather than new funding efforts. The exchange’s difficulty in attracting fresh investment reflects wider economic challenges. With few companies issuing new equity or bonds, the market fails to serve its primary purpose: directing capital toward growth. Instead, it functions as a tool for corporate reorganization, where existing funds circulate but little new money enters.
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Tanganda’s move may not alter this dynamic. The company’s financials, detailed in its pre-listing statement, show stable revenue but no pressing need for outside funds. Its decision to list is more about unlocking value for Meikles’ shareholders than pursuing expansion. This approach isn’t flawed—it simply shows how much the market has shifted from its original role.
The ZSE’s strong performance has attracted notice but not trust. Foreign investors remain cautious, and local firms prefer spinning off assets over raising capital. Tanganda’s listing won’t resolve these. Rather, it highlights how the market has become a space for insiders, where the biggest benefits go to those already familiar with its rules.
Yet the listing could indicate gradual progress. Zimbabwe’s economy has struggled for years, so even modest signs of stability—like a routine new listing—merit attention. The real test is whether the ZSE can evolve beyond a refuge for those already inside.
For now, Tanganda’s shares will trade alongside companies that have survived hyperinflation, government interventions, and capital flight. That isn’t high praise. But in Zimbabwe, it’s often the best outcome available.
The country’s economic policies have faced scrutiny before. Last year, officials declined to sign a controversial law, signaling caution in regulatory decisions.
