Surge in Trading Volumes on Victoria Falls Stock Exchange
The Victoria Falls Stock Exchange (VFEX), which operates on a forex-indexed model, has witnessed a remarkable surge in trading activity during the first half of the year. According to recent market data, turnover increased by an impressive 232%, reflecting a growing interest among investors seeking exposure to the US dollar. This growth is particularly significant given the initial skepticism surrounding the viability and policy intent of VFEX, which was launched four years ago.
Analysts are now closely monitoring the exchange as it gains recognition as a credible platform for capital raising. However, this upturn has not been driven by a surge in stock prices but rather by a substantial increase in trade volumes. FBC Securities reported that turnover reached $73 million between January and June, compared to $22 million in the same period last year. Share volumes also saw a dramatic rise, jumping by 795% to 1.28 billion from 143 million.
“The VFEX continues to position itself as a credible US dollar denominated platform for export-aligned and institutional-grade listings,” FBC noted. “Going forward, policy consistency, liquidity enhancement, and targeted product innovation will be critical to sustaining investor confidence.”
VFEX operates alongside the more established Zimbabwe Stock Exchange (ZSE). The number of trades increased by 26% to 7,394 from 5,874, indicating a possible rise in retail investor participation. This shift has been notable since the bourse’s launch in 2020, when retail involvement was minimal.
Despite the increase in trading activity, the VFEX All Share Index only recorded a modest 3% increase to 107.21. This growth was fueled by volume rather than price appreciation. In contrast, the overall market capitalization declined by 1.9%, influenced by stagnant valuations and the delisting of National Foods.
The recent rally is especially noteworthy considering the exchange’s challenging beginning. VFEX was launched under contentious circumstances when the government suspended trading on the ZSE in June 2020. The suspension was attributed to three fungible counters—Old Mutual, PPC, and SeedCo International—for contributing to currency turmoil and speculative attacks on the Zimbabwean dollar.
When the ZSE resumed trading in August 2020, these three counters were encouraged to consider joining VFEX, which was still in the planning stage. SeedCo eventually listed in October 2020, while PPC and Old Mutual opted out due to regulatory uncertainty and valuation concerns—issues that continue to persist.
After nearly five years, VFEX is gaining credibility. High-profile listings such as African Sun, Padenga, and Caledonia Mining have helped establish the platform as a serious player in Zimbabwe’s capital markets. However, structural challenges remain.
Critics argue that much of VFEX’s growth has come from companies migrating from the ZSE rather than attracting new capital or businesses. This trend has raised concerns about market cannibalization.
Meanwhile, the ZSE posted a mixed performance during the same period. Turnover reached ZiG2.35 billion, with trading concentrated in three key counters: Econet, Delta, and NMB. Share volumes surged by 179% year-on-year to 1.27 billion, but the number of trades fell sharply by 31% to 11,408, suggesting a market dominated by block trades and institutional activities.
The All Share Index declined by 9.35%, primarily due to constrained money supply and sustained foreign investor selling that outpaced purchases by nearly threefold. Despite these pressures, the ZSE’s market capitalization remained stable at around ZiG60 billion, showing a 3.41% increase from January. Analysts attributed this stability to sector rebalancing, as investors shifted towards more defensive or US dollar-linked assets.
For both exchanges, the second half of 2025 will be pivotal. Tight liquidity conditions, exchange rate instability, and changing asset allocation patterns—particularly a drop in pension fund allocations to equities, which fell to 19% by March—are reshaping Zimbabwe’s investment landscape.
While the ZSE explores structural reforms, including the self-listing of ZSE Holdings, VFEX appears better aligned with Zimbabwe’s de facto dollarisation and evolving investor preferences. Its US dollar-denominated structure offers a buffer against local currency risk and remains a key attraction for exporters and offshore-focused institutional funds.
Still, long-term success depends on one crucial factor: consistency. If authorities can deliver stable policy, deepen liquidity, and innovate around new financial products, VFEX could emerge as a cornerstone of Zimbabwe’s reconfigured capital markets—something that would have seemed unthinkable just five years ago.
