Zimbabwe’s capital markets offered a mixed picture in March, with divergent performances between the Victoria Falls Stock Exchange (VFEX) and the Zimbabwe Stock Exchange (ZSE). While the VFEX continued its upward trend, the ZSE faced headwinds from currency volatility and declining activity.
March saw a renewed wave of optimism on the VFEX, with its market capitalisation rising 7.41% from February to close at US$1.40 billion. The VFEX All Share Index also posted gains, rising 3.98% to end the month at 110.32 points.
Leading the pack was Padenga Holdings, which jumped 17% after announcing it would acquire the remaining 49.9% stake in Dallaglio through a share swap—a move widely seen as a strategic consolidation. First Capital Bank and Innscor also recorded strong gains of 11.13% and 8.81%, respectively. On the downside, Zimplow tumbled 21%, making it the weakest performer.
Despite the positive sentiment and price gains, trading activity on the VFEX saw a sharp drop. Share volumes declined by 98% to 26.72 million, while turnover plummeted nearly 100% to US$2.53 million. This dramatic fall reflects the absence of large transactions like February’s sizeable First Capital Bank block trade.
Foreign investor activity remained muted, with purchases amounting to just US$12,812 compared to sales of US$891,133. Nonetheless, future listings on the VFEX are expected to remain strong, buoyed by the appeal of hard currency counters and price stability, even after the February delisting of National Foods.
IH Securities, in their monthly outlook, noted: “With pricing on the exchange remaining stable, April is likely to benefit from dividend reinvestments following December year-end results. In a low capital appreciation environment, we lean towards defensive stocks with solid dividend histories.”
ZSE Overview: Gains Eroded by Exchange Rate Pressures
The ZSE, although registering some gains in local currency terms, struggled in real value. Market capitalisation in local terms increased 1.83% to ZiG 63.13 billion, but after adjusting for exchange rate losses, it dropped 3.44% to US$1.7 billion.
Performance across the ZSE’s indices was mixed. The All Share Index inched up to 205.25, while the Top Ten Index fell 2% to 200.55. The Mining Index declined significantly, ending March at 180.43 compared to 193.56 in February.
Top gainers on the ZSE included Nampak (+107%), TSL (+42%), and Willdale (+32%). On the flip side, Mashonaland Holdings led the laggards with a 24% drop in value.
Trading volumes also took a hit, falling 52.9% to 92.89 million shares. Star Africa led activity with 47.76 million shares, followed by Econet (18.71 million) and Delta (9.18 million).
Turnover mirrored this decline. In local terms, daily average turnover fell 56.13% to ZiG11.6 million. When adjusted to USD, turnover more than halved—from US$15.03 million in February to US$6.97 million in March. Delta and Econet continued to dominate in value terms, reflecting persistent investor interest.
Foreign participation dropped noticeably, with purchases totaling ZWG 6.65 million and sales reaching ZWG 9.04 million. The volume of foreign shares traded also saw a significant decline from the previous month.
IH Securities commented: “The ZSE’s trajectory remains tightly linked to monetary policy shifts and liquidity trends. In this uncertain environment, we prefer nimble businesses and dividend-paying stocks that can weather policy and currency volatility.”
The contrasting paths of the VFEX and ZSE in March underscore the different risk appetites and preferences among investors. While the VFEX benefits from US dollar-based pricing and relative stability, the ZSE remains vulnerable to exchange rate movements and macroeconomic policy shifts.
Still, one common thread across both exchanges is the investor tilt toward reliable dividend-paying stocks, as they offer a cushion in times of limited capital appreciation and unpredictable market dynamics.
