South African funds Allan Gray, African Alliance and Renaissance are among those brokering deals for foreign investors.
The day Finance Minister Tendai Biti claimed the country had only $217 left in the bank, fund manager Alan Mutasa signed up a new American investor looking to spend millions on Zimbabwean stocks.
An article in a Nigerian newspaper last week claimed the Nigerian Stock Exchange's 13.4% January gain had "dwarfed all other stock markets globally". But, in fact, Nigeria was only a distant second to the Zimbabwe Stock Exchange, which rose 20.3% that month.
"That's probably because they, like many others, are still behind the curve and can't see Zimbabwe on the radar," fund manager Alan Mutasa said of the Nigerian press report. "They are missing the boat."
Foreign money is quietly pouring in, defying negative views on Zimbabwe.
"Some investors are looking past all that," Mutasa said. "They realise there's a big difference between what a politician said and what's real."
South African funds Allan Gray, African Alliance and Renaissance are among those brokering deals for foreign investors. One stockbroker said, however, that most of the South African-brokered money is not South African, but American and European.
The stock market's rise would be a surprise to an investor used to feeding on the standard fare of Zimbabwe news.
There are also the cold facts on the state of the economy. Growth targets have been revised downwards several times over the past year. From his initial 9.4% forecast, Biti lowered his targets to 5.6% midyear, before revising them downwards again to 4.4%. Manufacturing remains depressed, at 42% of capacity, and the Reserve Bank of Zimbabwe is raising alarm at the level of imports.
What was touted as the death knell for foreign investment in Zimbabwe, the indigenisation law, has not seen any of the major investors heading for the exits as had been feared.
The stock market has seen more than $60-million worth of trade since the start of the year, and foreign funds contributed 67% of those inflows. Brokers expect foreign contributions to rise as more foreigners invest. According to data obtained from brokers dealing with foreign investors, foreigners are net buyers – at present purchases are at $38.3-million against sales of $27.3-million.
So, given all the bad press that the country gets abroad, why are these foreigners buying into Zimbabwe? Players on the market credit a combination of some progress on the political front and the fact that Zimbabwean shares are now cheap compared with their regional peers.
"The trigger has been the recent progress on the draft Constitution, particularly its passage by political leaders and the pledge of support that is coming from parties in the inclusive government," Mutasa said.
But the biggest draw is a clutch of profitable companies whose share prices are cheap for big foreign money, compared with similar sized firms in other regional markets such as South Africa and Kenya.
"The few companies that have continued to receive interest from foreign funds have strong business fundamentals and yet have largely lagged behind peers in the region due to perceived high country risk. Until the recent rally they all looked relatively cheap," a broker said this week.
The Zimbabwe Stock Exchange was valued at $4.56-billion on Wednesday, a level experts say is far below its real value, reflecting how cheap it is.
Some of the gains the market has delivered were last seen in the Zimbabwe dollar days, when share prices, like all other prices, rose in thousands of percentage points daily.
If an investor had bought stock for example in small drugs company Medtech, they would have been 566% richer in only a month. Other big gainers were SABMiller's Zimbabwe unit, Delta, which rose 26% in January.
Fund managers say the stock market rally will continue for the medium term, although the political environment will be closely watched. The referendum on the Constitution is expected in March and elections are expected later in the year.
"The run is only sustainable if the positive outlook investors see on the politics is maintained, if not improved further," one dealer said on Wednesday.