Boom Time for Investors

Stocks rise, bond yields fall, and confidence climbs in Q1 2025.

By Francis Maingaila ♥️

Lusaka, Zambia24 - (15- 04 - 2025) – Zambia’s capital market is experiencing a period of remarkable growth, with increased investor confidence, rising stock prices, and falling bond yields, according to Securities and Exchange Commission (SEC) Chief Executive Officer, Philip Chitalu.

Speaking during a media briefing in Lusaka on Wednesday, Chitalu attributed the capital market's strong performance in the first quarter of 2025 to improving macroeconomic conditions, including a relatively stable exchange rate, reduced inflation, and declining interest rates on government securities.

“Stability in key macroeconomic indicators is very crucial to capital market development,” he said.

“For instance, the kwacha depreciated by only 1.06 percent in Q1, a notable improvement compared to 8.86 percent and 10.5 percent in the third and fourth quarters of 2024, respectively.”

Inflation dropped slightly from 16.7 to 16.5 percent, and the 10-year government bond yield decreased to 22.49 percent.

This macroeconomic stability has fueled gains in Zambia’s equity markets. Market capitalization rose by 19.31 percent to ZMW 257.8 billion, representing 46 percent of GDP—well above the Capital Markets Master Plan’s 20 percent target.

The LuSE All Share Index grew by 5.9 percent, supported by strong performances from Airtel Zambia (72.4 percent), Shoprite (27 percent), and ZAMEFA (19.8 percent).

Chitalu highlighted a notable surge in Collective Investment Schemes (CIS), with Assets Under Management increasing by ZMW 144.4 million to reach ZMW 3.1 billion as of March 31.

“This reflects growing investor appetite for diversified and professionally managed portfolios,” he said.

Investor participation has soared, with the number of unique investor accounts reaching 955,825—equivalent to 9.6 percent of Zambia’s adult population.

“This is a major milestone compared to just over 60,000 accounts five years ago,” said Chitalu, crediting the success to digital onboarding, investor education, and public awareness efforts.

On the corporate bond front, ZMW 9.7 million was raised by one listed firm for solar energy projects, bringing the total outstanding value of corporate bonds to ZMW 5.52 billion.

Additionally, 1,729 government bond trades were recorded in the secondary market, signifying increased depth and liquidity.

Chitalu emphasized the strategic role of the capital market in financing Zambia’s development, particularly the transition to clean energy.

He revealed that the SEC had signed a Memorandum of Understanding (MoU) with the Law Association of Zambia (LAZ) to improve the legal framework for green finance.

“The capital market will play a central role in Zambia’s ambition to generate 1,000 megawatts of solar power by December 2025,” he said.

“We are also excited by the announcement that Stanbic Bank is funding about $70 million for a ZESCO solar project this December, which demonstrates the financial sector’s commitment to long-term structural development.”

He further stated: “The Commission reaffirms its position to consistently share information on capital market developments and to act as a trusted intermediary. Through our partnership with the media, we hope to build public confidence and encourage more participation.”

Investor education remains a top priority, with over 5,800 participants engaged through exhibitions, rural school visits, and town hall meetings in Q1.

He said latest SEC survey found that 96 percent of participants reported improved understanding of capital markets, while 72 percent said they felt more confident about investing.

However, Chitalu warned the public to remain cautious of fraudulent schemes falsely using the SEC’s name and logo.

“We are seeing scams promising returns above 30 percent. Given that government bond yields stand at 22.49 percent, such offers are unrealistic and risky,” he warned.

Chitalu concluded by reaffirming the SEC’s commitment to fostering a resilient, inclusive, and innovative capital market that supports Zambia’s economic transformation.

“We are on track to have over one million Zambians actively engaged in the capital markets, either through direct investment or managed portfolios,” he said.