Investor Confidence and Market Innovations



.... Zambia’s Capital Markets Demonstrate Resilience Amid Economic Challenges in Q4 2024

By Francis Maingaila ♥️

Lusaka, Zambia – Zambia’s capital markets demonstrated resilience and growth in the fourth quarter (Q4) of 2024, despite economic pressures such as rising inflation and currency depreciation.

Phillip Katali Chitalu, Chief Executive Officer of the Securities and Exchange Commission (SEC) of Zambia, highlighted increased investor activity, strong financial transactions, and regulatory reforms that strengthened market stability.

Total savings surged by 30.7%, closing at K221.8 billion as of December 31, 2024. Market capitalization grew by 29.7% to K216 billion, reflecting strong investor confidence driven by stable returns from listed companies.

Excluding Shoprite’s 61.5% price increase, however, market capitalization slightly declined by 3.3%, closing at K79 billion.

Key stock movements included declines from Standard Chartered Bank (-18.2%), National Breweries (-26.7%), Copperbelt Energy Corporation (-8.6%), ZANACO (-5.1%), and AECI Mining Explosives (-9.9%).

Despite these declines, the market capitalization-to-GDP ratio reached 38.6%, surpassing the 27% target set under the Capital Markets Master Plan (CMMP) for 2024.

Trading volumes rose by 61.1% compared to the previous quarter, with November recording 17.9 million trades, largely driven by CEC Zambia (CECZ) shares.

Corporate bonds totaled K2.7 billion, a 4.36% increase from Q3, fueled by new issuances in the microfinance and energy sectors. Government bond trading grew by 14%, with a 54% rise in nominal bond value to K26.6 billion, dominated by long-term bonds (10–15 years).

However, macroeconomic challenges persisted. Inflation rose from 15.6% in September to 16.7% in December 2024, while the Zambian Kwacha depreciated against major currencies: USD (K0.88), British Pound (K3.1), Euro (K2.1), and South African Rand (K0.2).

“These macroeconomic pressures influenced investor behavior, as many sought to protect their investments from inflationary risks,” Chitalu noted.

Collective Investment Schemes (CIS) grew, with assets under management rising by 8.4% to K3.001 billion.

The number of investors increased by 4.86% to 729,822, largely due to Hobbiton, a fund manager leveraging mobile USSD technology.

Additionally, the SEC advanced its Green Finance Strategy, marked by the issuance of a $200 million green bond and the listing of a $120 million Real Estate Investment Trust (REIT).

To enhance investor protection, the SEC issued scam alerts targeting fraudulent schemes on social media and extended its World Investor Week campaign to promote financial literacy.

In December, the SEC launched the Capital Markets Ambassador Program, training 41 individuals to promote financial literacy nationwide.

Despite economic challenges, Zambia’s capital markets closed 2024 with promising indicators of growth. The Lusaka Securities Exchange (LuSE) All Share Index (LASI) declined by 3.3% to 15,440.90 points but surpassed 16,000 points for the first time in October 2024.

“The SEC remains committed to fostering investor confidence, market integrity, and sustainable growth,” Chitalu concluded.

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