The Lusaka Securities Exchange (LuSE) has surprised the global financial community in 2025 by emerging as one of the world’s best-performing stock markets. Between January and August, its main index surged by an impressive 56 percent, outpacing more established African exchanges such as Johannesburg, which gained 25 percent, Nigeria at 40 percent, and Ghana at 45 percent. This performance has not only put Zambia on the global investment map but also highlighted the growing importance of capital markets in shaping the country’s economic future.

Several factors have contributed to this great performance. One of the most significant has been the decline in government bond yields, which have dropped from highs of 34 percent to around 20 percent. With bonds offering lower returns, investors have shifted their attention to equities in search of better opportunities. At the same time, the limited supply of shares, due to the lack of new listings in the past five years, has intensified competition and driven prices upward. Corporate performance has also played a crucial role, particularly in the energy and mining sectors where companies such as Copperbelt Energy Corporation (CEC) and ZCCM Investment Holdings have crossed the US$1 billion market capitalization mark. Technological innovation, including the launch of a mobile trading app, has made it easier for retail investors to access the market, further fueling growth.

The boom is not just a financial story; it is reshaping Zambia’s economic landscape. By attracting foreign investors who bring in dollars to buy shares, the LuSE has provided much-needed support to the Kwacha without forcing the Bank of Zambia to deplete foreign reserves. The milestone achievements of companies like CEC and ZCCM-IH also mean Zambia is closer to being included in major global investment indices, which could attract even more international capital. Additionally, the movement of funds from bonds to equities channels investment into productive sectors such as energy, copper, and gold, driving economic diversification and long-term growth.

Despite this success, sustaining momentum presents challenges. The exchange currently has only 20 listed companies. This limited number of stocks means that while prices are rising, liquidity remains thin, which can increase volatility. Expanding listings is therefore crucial to deepening the market and maintaining investor confidence. Equally important is policy consistency. Global investors are often quick to withdraw if they sense instability, so Zambia must continue implementing reforms that encourage both local and foreign participation in the capital markets.

But what does this boom mean for ordinary Zambians who want to invest? For many, this is an opportunity to participate in wealth creation through equities. The first principle to remember is that investing in shares should be seen as a long-term journey rather than a quick win. While 2025’s surge is remarkable, markets rise and fall, and chasing short-term gains can be risky. Instead, retail investors should focus on companies with strong fundamentals, those with steady profits, good governance, and a record of rewarding shareholders with dividends.

Another important consideration is diversification. It may be tempting to put all your money into mining or energy stocks, given their strong performance, but this increases exposure to sector-specific risks. Building a portfolio that includes shares across different industries such as banking, consumer goods, and telecommunications spreads the risk and provides a more stable return over time. Diversification is essentially a form of insurance for your investments.

Technology has also lowered the barriers to participation. The LuSE mobile trading app makes it easier for individuals to buy and sell shares directly, even with modest amounts of money. This means anyone interested in the stock market can start small, learn gradually, and grow their confidence as an investor. Starting small is especially important for beginners, as it allows you to gain practical experience without risking too much capital.

Information is another powerful tool for success in the stock market. Investors who keep up with company announcements, dividend declarations, and expansion plans are better positioned to identify opportunities before they become obvious to the wider market. The performance of companies often reflects their future direction, making it vital to stay updated on both corporate and economic news.

Finally, retail investors should be aware of the broader economic environment. Factors such as government policies, interest rates, and global commodity prices particularly for copper and gold play a major role in shaping the LuSE. Understanding these dynamics allows investors to make informed decisions that align with both company performance and the bigger picture of Zambia’s economy.

For Zambian investors, this is a reminder that our local market is no longer a hidden gem but an emerging force in Africa’s financial landscape.

–Emmaria, Founder of NdalamaLens