Opinion / Columnist
VFEX topples ZSE in dramatic market coup
2 hrs ago |
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ZIMBABWE'S youngest capital market, the Victoria Falls Stock Exchange (VFEX), has overtaken the 132-year-old Zimbabwe Stock Exchange (ZSE) in a major structural shift that signals changing investor preferences toward US dollar-denominated assets.
The development marks a significant milestone for the VFEX, which was launched in October 2020 during the Covid-19 era, and has now emerged as the country's leading institutional exchange in terms of market capitalisation and liquidity.
Stock market data shows the VFEX reached approximately US$3,65 billion in April, surpassing the ZSE's US$2,77 billion by about US$880 million. By yesterday, VFEX market capitalisation had further strengthened to around US$3,72 billion, compared to the ZSE's estimated US$3,4 billion when converted using official exchange rates.
The shift underscores growing investor appetite for hard currency assets amid ongoing concerns over exchange rate volatility and inflationary pressures affecting Zimbabwe Gold (ZiG)-indexed securities on the ZSE.
Financial analysts say the crossover reflects a broader migration of institutional capital toward US dollar-denominated instruments, export-oriented companies and resource-based counters.
"A notable structural shift is also unfolding within domestic capital markets," said FBC Holdings in a recent analysis.
"During April 2026, the VFEX consolidated its position as Zimbabwe's primary institutional exchange, overtaking the 132-year-old ZSE in effective liquidity and investor relevance."
The VFEX's rise has been driven in part by the migration of major counters from the ZSE, including Econet Wireless Zimbabwe, alongside increasing listings of mining and resource-linked companies such as Caledonia Mining Corporation, Kavango Resources and WestProp Holdings.
Market data indicates that since 2021, more than 10 companies have shifted from the ZSE to the VFEX, contributing to a steady build-up in liquidity and investor participation.
Analysts note that VFEX turnover surged sharply in April, rising by nearly 489 percent to US$89,3 million, while cumulative year-to-date turnover exceeded US$125 million — more than double levels recorded in 2025.
Financial securities expert Kudakwashe Taimo said the VFEX's growth has been largely driven by strong performance in mining and resource counters.
He noted that Padenga Holdings Limited has become the largest counter on the VFEX, accounting for roughly a quarter of the exchange's market weighting, while Kavango Resources and Caledonia Mining have also recorded strong gains.
In contrast, the ZSE remains heavily concentrated in consumer stocks, with Delta Corporation alone accounting for nearly half of total market capitalisation.
However, analysts say valuation upside on the ZSE has been constrained by macroeconomic volatility and currency distortions.
"This shift is driven by an ongoing corporate migration seeking an escape from the severe inflation and currency risks that frequently distort asset valuations on the ZSE," said financial markets expert Tarisai Makuni.
He added that the VFEX offers lower transaction costs, tax incentives and a more stable US dollar-based trading environment, making it increasingly attractive to both local and foreign investors.
The ZSE, established in 1894, has experienced significant volatility in recent years. Its market capitalisation fell sharply from an estimated US$12,19 billion in 2021 to about US$2,92 billion in 2022, before partial recovery in subsequent years.
Analysts from Africa Economic Development Strategies (AEDS) said that despite recent gains, the ZSE remains more than 70 percent below its 2021 peak, reflecting deep structural challenges in Zimbabwe's capital markets.
The emergence of the VFEX followed government's 2020 decision to suspend trading in certain ZSE-listed counters amid concerns over exchange rate instability, prompting the creation of an offshore-style US dollar-denominated exchange in Victoria Falls.
Market observers say the latest crossover represents one of the most significant realignments in Zimbabwe's financial history, with the VFEX now positioned as the dominant platform for institutional capital while the ZSE continues to adjust to a changing investment landscape.
The development marks a significant milestone for the VFEX, which was launched in October 2020 during the Covid-19 era, and has now emerged as the country's leading institutional exchange in terms of market capitalisation and liquidity.
Stock market data shows the VFEX reached approximately US$3,65 billion in April, surpassing the ZSE's US$2,77 billion by about US$880 million. By yesterday, VFEX market capitalisation had further strengthened to around US$3,72 billion, compared to the ZSE's estimated US$3,4 billion when converted using official exchange rates.
The shift underscores growing investor appetite for hard currency assets amid ongoing concerns over exchange rate volatility and inflationary pressures affecting Zimbabwe Gold (ZiG)-indexed securities on the ZSE.
Financial analysts say the crossover reflects a broader migration of institutional capital toward US dollar-denominated instruments, export-oriented companies and resource-based counters.
"A notable structural shift is also unfolding within domestic capital markets," said FBC Holdings in a recent analysis.
"During April 2026, the VFEX consolidated its position as Zimbabwe's primary institutional exchange, overtaking the 132-year-old ZSE in effective liquidity and investor relevance."
The VFEX's rise has been driven in part by the migration of major counters from the ZSE, including Econet Wireless Zimbabwe, alongside increasing listings of mining and resource-linked companies such as Caledonia Mining Corporation, Kavango Resources and WestProp Holdings.
Market data indicates that since 2021, more than 10 companies have shifted from the ZSE to the VFEX, contributing to a steady build-up in liquidity and investor participation.
Analysts note that VFEX turnover surged sharply in April, rising by nearly 489 percent to US$89,3 million, while cumulative year-to-date turnover exceeded US$125 million — more than double levels recorded in 2025.
Financial securities expert Kudakwashe Taimo said the VFEX's growth has been largely driven by strong performance in mining and resource counters.
He noted that Padenga Holdings Limited has become the largest counter on the VFEX, accounting for roughly a quarter of the exchange's market weighting, while Kavango Resources and Caledonia Mining have also recorded strong gains.
In contrast, the ZSE remains heavily concentrated in consumer stocks, with Delta Corporation alone accounting for nearly half of total market capitalisation.
However, analysts say valuation upside on the ZSE has been constrained by macroeconomic volatility and currency distortions.
"This shift is driven by an ongoing corporate migration seeking an escape from the severe inflation and currency risks that frequently distort asset valuations on the ZSE," said financial markets expert Tarisai Makuni.
He added that the VFEX offers lower transaction costs, tax incentives and a more stable US dollar-based trading environment, making it increasingly attractive to both local and foreign investors.
The ZSE, established in 1894, has experienced significant volatility in recent years. Its market capitalisation fell sharply from an estimated US$12,19 billion in 2021 to about US$2,92 billion in 2022, before partial recovery in subsequent years.
Analysts from Africa Economic Development Strategies (AEDS) said that despite recent gains, the ZSE remains more than 70 percent below its 2021 peak, reflecting deep structural challenges in Zimbabwe's capital markets.
The emergence of the VFEX followed government's 2020 decision to suspend trading in certain ZSE-listed counters amid concerns over exchange rate instability, prompting the creation of an offshore-style US dollar-denominated exchange in Victoria Falls.
Market observers say the latest crossover represents one of the most significant realignments in Zimbabwe's financial history, with the VFEX now positioned as the dominant platform for institutional capital while the ZSE continues to adjust to a changing investment landscape.
Source - The Independent
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