THE Zimbabwe Stock Exchange (ZSE) ended the second quarter with 88% of its securities dematerialised, while the Victoria Falls Stock Exchange (VFEX) recorded a 71,61% conversion rate, as companies increasingly shifted shares from physical to electronic registers.
Dematerialisation — the process of converting physical share certificates into electronic entries — enhances market efficiency by reducing settlement risks, lowering transaction costs, and improving transparency.
By crediting securities to investors’ digital accounts (known as “demat” accounts), the system aligns Zimbabwe’s capital markets with global best practices, making them more appealing to institutional and foreign investors.
“Throughout the second quarter of 2025, the demat ratio was maintained at 88%. Electronic holdings offer investors enhanced efficiency, improved security.
“The average demat ratio for the counters on the VFEX depository for the second quarter was 71,61%,” ZSE Holdings said in its trading update for the second quarter.
ZSE Holdings noted that five issuers on the ZSE attained 100% dematerialisation, while four on VFEX are fully dematerialised.
These are Cass Saddle Agriculture ETF, Datvest Modified Consumer Staples Exchange Traded Fund, Morgan & Co Multi-Sector ETF, Morgan & Co Made in Zimbabwe ETF, and the Revitus REIT on the ZSE.
On the VFEX, it was Caledonia Mining Corporation Limited, Nedbank Group Limited Zimbabwe Depository Receipts, National Foods Holdings Limited, and the Eagle REIT that were fully dematerialised in the period under review.
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The VFEX Depository currently holds securities for a total of 17 issuers, comprising 12 equities, three depository receipts, a REIT, and a bond.
In the period under review, ZSE Holdings reduced the settlement cycle from T+3 to T+2. This means investors can now receive their cash and securities earlier, thereby improving liquidity on the stock exchange.
During the review period, foreign investor participation on the ZSE increased by 11,14 percentage points to 26,53%. On the VFEX, the average foreign participation was 18,73%.
The ZSE recorded a total market turnover of ZiG1,49 billion (US$55,61 million), representing a 53,14% increase from the previous quarter.
The total market capitalisation stood at ZiG62,64 billion (US$2,33 billion), a decrease of 3,08% from the previous quarter.
The ZSE All Share Index closed the quarter at 197,23 points, a loss of 3,91% from the closing first-quarter 2025 index points.
The VFEX All Share Index had recorded a year to date gain of 3% by the end of the second quarter, closing at 107,21 points, with a total market turnover of US$15 million, up 48,96% from the prior year.
However, the VFEX recorded a 0,16% dip in market capitalisation to US$1,25 billion in the period under review
