ZSE Down 9.5%, VFEX Turnover Soars 254% in First 5...

ZSE Down 9.5%, VFEX Turnover Soars 254% in First 5 Months of 2025

Audrey Galawu- Assistant Editor

Zimbabwe’s capital markets showed diverging performance in the first five months of 2025, with the Zimbabwe Stock Exchange grappling with declining indices, while the Victoria Falls Stock Exchange experienced a significant surge in turnover, highlighting changing investor strategies.

According to the 2025 Mid-Term Budget and Economic Review by the Ministry of Finance, the ZSE All Share Index dropped 9.5%, falling from 217.50 points at the end of December 2024 to 196.6 points by 31 May 2025.

The ZSE Top 10 Index shed 12.15%, while the Mining Index took the heaviest blow, plunging by 38.2%.

Treasury attributed the downturn to “constrained trading activity, primarily driven by low market liquidity.” Despite the weaker index performance, ZSE market capitalisation inched up by 1.2%, rising from ZiG$58.9 billion in January to ZiG$60 billion by end of May — largely supported by investor concentration in high-value counters.

In a surprising twist, ZSE turnover ballooned by 314%, reaching ZiG$1.82 billion from ZiG440 million in the same period last year. This spike reflects renewed investor activity despite overall bearish sentiment, with institutional players likely driving the action in selective, undervalued stocks.

On the other side of the market, the VFEX All Share Index rose 4.1% from 103.02 points in January to 107.24 points in May 2025. Although total market capitalisation declined slightly by 2% to US$1.25 billion, turnover on VFEX surged 254%, climbing to US$66 million from just US$19 million over the same period last year.

This growth was driven primarily by a US$40.2 million negotiated deal in February, in which AFCARME offloaded its shares in First Capital Bank to FMB Zimbabwe Holdings. Treasury noted that the surge reflects growing confidence in the USD-denominated bourse as a “value-preserving platform.”

“The USD-denominated VFEX continues to attract both local and foreign investors seeking more stable and transparent capital markets,” the Ministry of Finance stated in its review.

As of May 2025, ZSE had 48 listings, comprising 41 equities (36 active), 5 Exchange Traded Funds (ETFs), and 2 Real Estate Investment Trusts (REITs). Meanwhile, the VFEX had 16 listings, with 12 equity instruments (11 active), 2 Depository Receipts (DRs), 1 REIT, and 1 debt instrument. Notably, 11 of the 16 VFEX-listed companies migrated from the ZSE, underlining the appeal of the foreign currency market.

In a strategic bid to elevate Zimbabwe’s profile as a financial hub, Government established the Victoria Falls International Financial Centre via Statutory Instrument 29 of 2025.

The Centre, headquartered at the Mosioa Tunya Development Company in the Masuwe Special Economic Zone, is envisioned as a gateway for foreign direct investment.

Treasury expects the VFIFC to “enable businesses and Government to invest in new ventures, infrastructure and development projects,” leveraging the global appeal of Victoria Falls and the regulatory benefits of SEZ status.