Zambia's Markets Before the Vote: LuSE and the Eurobond

By Zambian Economist Analyst

Most election-and-investment commentary stays at the level of sentiment: policy certainty, continuity, risk appetite. That is useful, but it skips the part an actual investor would look at first, what the market is doing with real money, right now. Two data sets answer that more precisely than any opinion piece: trading on the Lusaka Securities Exchange, and the mechanics of Zambia’s restructured Eurobonds. Neither predicts who wins on 13 August. Both tell you something concrete about how capital is actually positioned going into it.

What the LuSE data actually shows

The LuSE All Share Index (LASI) has been softening in local-currency terms through the second quarter of 2026: it closed March at 27,289.81 points, fell 2.1% to 26,716.95 in April, then fell a further 4.2% to 25,596.87 in May, pushing year-to-date local-currency returns to roughly −1.25%, according to figures reported by LuSE chief executive Nicholas Kabaso. Read in isolation, that looks like a market cooling into election season.

It is only half the picture. Because the kwacha has been appreciating, the same period produced a positive 18.65% year-to-date return in US dollar terms as of May, and 20.83% in April, the kind of gap that matters enormously to an offshore investor and barely registers in domestic headlines. A market can be soft in kwacha and genuinely attractive in dollars at the same time, and 2026 is a clean example of exactly that.

Market capitalisation tells a similar story from a different angle: LuSE’s total market cap stood at roughly ZMW 336.4 billion (about US$18.5 billion) in early July 2026, up sharply from the US$9.8 billion recorded in April 2025, a rise driven substantially by currency effects and re-ratings rather than a wave of fresh listings.

Thin, and increasingly concentrated

The more important signal for anyone actually trying to deploy capital is liquidity, and it is thin. Turnover jumped 346% in May 2026, from K34 million in April to K571 million, but that spike was driven overwhelmingly by a single large transaction in Real Estate Investments Zambia (REIZ) shares, not broad-based buying. Kabaso described the underlying condition plainly: a net sell position, with limited buying interest across most counters. A single day of trading in early July 2026 saw only 20 of LuSE’s listed equities participate at all, with one gainer and two decliners on the day.

That pattern, low day-to-day turnover, occasional large block trades that swing the monthly total, and persistent net selling, is a structural feature of a small frontier exchange, not a real-time referendum on the election. Anyone reading a single month’s turnover figure as a signal of investor confidence in either direction is very likely reading noise.

There is a genuine bright spot underneath the headline numbers: retail participation continues to grow, with registered users on the LuSE mobile trading app up 10.5% to 38,669 in April 2026 alone, and a new listing, Klapton Reinsurance, via direct listing on 24 March 2026, shows the primary market has not gone quiet even in an election year.

The Eurobond side: restructuring mechanics, not election bets

The more consequential story for international investors this year is not equities at all. In June 2026, Zambia’s government sweetened a tender offer to holders of its US$1.36 billion Eurobond maturing in 2053, the bond created two years earlier as part of the country’s post-default debt restructuring, adding an early participation fee and requiring at least 75% of the outstanding notes to be tendered for the deal to proceed. That transaction sits at the centre of the debt-for-energy swap covered in our explainer on how the swap works.

The reason this matters more than any single equity trade is structural: the terms of Zambia’s restructured Eurobonds were locked in through a multi-year negotiation with a bondholder steering committee and the official creditor committee, concluded well before this election cycle. Whoever forms the next government inherits those repayment schedules; the election does not reopen them. What genuinely stays uncertain is fiscal policy beyond what has already been contracted, new borrowing, the pace of further reform, and how the next Ministry of Finance manages the relationship with the IMF programme, all covered in what the next government inherits.

S&P Global Ratings affirmed Zambia’s long- and short-term foreign currency sovereign credit ratings at CCC+/C in June 2026, a rating still deep in speculative-grade territory that reflects the country’s recent default history and ongoing fiscal constraints, even after the restructuring gains. That affirmation, not rally attendance or campaign rhetoric, is the kind of signal ratings-sensitive investors actually track.

Common mistakes in reading this as an election story

Treating one month’s turnover spike as sentiment. May’s 346% turnover jump was one large block trade, not broad buying.
Confusing local-currency and dollar returns. LASI was negative in kwacha and strongly positive in dollars over the same months, both are true, and they answer different questions.
Assuming the election reopens Eurobond terms. The restructured bonds’ schedules were fixed through a completed multi-year negotiation; they are not an election-cycle variable.
Reading a credit rating affirmation as an endorsement. CCC+/C is still a deeply speculative-grade rating; affirmation means no further deterioration was judged warranted, not that risk has gone away.

LASI’s first full trading week after 13 August, participation rates in the 2053 bond tender, and any rating agency commentary issued once the election result is known. See our 2026 economic calendar for scheduled releases in the interim.

Is the Lusaka Securities Exchange up or down in 2026?

It depends on the currency. The LASI benchmark index was down roughly 1.25% year-to-date in kwacha terms as of May 2026, but up 18.65% in US dollar terms over the same period, due to kwacha appreciation.

Is LuSE a liquid market?

No, not by international standards. Daily turnover is often limited to a small number of counters, and monthly totals can be dominated by a single large transaction, as happened in May 2026 with a Real Estate Investments Zambia deal.

Does the 13 August election affect Zambia’s Eurobond repayment terms?

No directly. The restructured Eurobonds’ repayment schedules were fixed through a multi-year negotiation concluded before this election cycle; the next government inherits those terms rather than renegotiating them as a result of the vote.

What is Zambia’s current sovereign credit rating?

S&P Global Ratings affirmed Zambia’s long- and short-term foreign currency ratings at CCC+/C in June 2026, still within speculative-grade territory.

What was the June 2026 Eurobond buyback about?

Zambia’s government sweetened a tender offer to holders of its US$1.36 billion Eurobond maturing in 2053, part of the debt-for-energy swap agreed as part of its post-default debt restructuring.

Has LuSE seen any new listings ahead of the election?

Yes. Klapton Reinsurance listed via a direct listing on 24 March 2026, and retail participation on LuSE’s mobile trading platform continued to grow through the second quarter.

Related analysis: Zambia’s Inflation Is Back in Target. Why Relief May Still Feel Slow provides the latest inflation and monetary-policy context for Zambia’s markets.

Zambia’s Markets Before the Vote: What LuSE and the Eurobond Show