ZSE and VFEX recover after weak 1st half

Published: 4 hours ago

Zimbabwe's equity markets had a subdued first half of 2025, with the Zimbabwe Stock Exchange (ZSE) shedding 3% in real dollar terms and the Victoria Falls Stock Exchange (VFEX) ending flat. However, both markets have staged a recovery, with the ZSE now up 16% year-to-date (YTD) and VFEX gaining 12,6%.

The ZSE's poor start was largely due to tight liquidity, with heavyweight Delta Corporation delivering a near-zero return that dragged overall performance. Mid-caps showed a mixed picture: Starafrica and ZHL led gains, while TN Cybertech and Tanganda were among the worst performers. Meikles' suspension was lifted in the second half, while ZSE Holdings also self-listed.

On VFEX, the Morgan & Co All Share Index slipped just 10 basis points in the first half, as its largest stocks Innscor and WestProp traded marginally. SeedCo International fell 29%, making it the worst performer, while African Sun surged 50% as it restructured its property portfolio. National Foods delisted, and London-listed Kavango Resources is expected to complete a secondary listing later this year.

ETFs and REITs

The Cass Saddle Agriculture ETF was the standout performer, tripling in price during the first half. Other ETFs managed single-digit growth, while the Old Mutual ZSE Top Ten ETF was delisted due to declining liquidity after several blue chips migrated to VFEX.

Among REITs, Tigere rose 6% on the back of adding Highlands Park Phase 2 to its portfolio, while Eagle REIT, listed in May, was flat by June. Revitus REIT performed worst, with a 22% loss.

Financial Securities Exchange

Old Mutual Zimbabwe Limited advanced 20,7% in the first half, driven by the suspension of price limits, though this also fuelled volatility.

Outlook and Strategy

Authorities' tight control of the Zimbabwe Gold (ZiG) currency has prolonged low liquidity on the ZSE, leaving many stocks undervalued but offering attractive dividend yields—some as high as 16%. Analysts see this as a buying window for fundamentally solid counters.

VFEX has benefitted from improved US dollar liquidity in 2025, with the currency now accounting for 80% of transactions and over 90% of loans. The Morgan & Co VFEX Index has gained 15% since June, lifted by Innscor, Simbisa Brands, and Padenga.

Looking ahead, analysts recommend investors focus on market leaders with strong US dollar revenues, low liquidity risks, solid fundamentals, and strong dividends. Delta, Econet Wireless, SeedCo Limited, and Padenga remain top picks, with significant upside expected in 2026 as liquidity improves.
- The Independent

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