IN the month of August, the Zimbabwe Stock Exchange (ZSE) extended its upward momentum, with market capitalisation rising by 1,61%, following a 5% gain, which was experienced in July.
By month-end, the ZSE recorded 15 gainers against 17 losers. Trading activity slowed, as monthly turnover eased slightly to ZiG 721 million (US$27 million) from ZiG 771 million (US$28,8 million) in July.
Meanwhile, the Victoria Falls Stock Exchange (VFEX) also closed August on a positive note, with market capitalisation climbing 2,72%, building on July’s strong 15% advance.
VFEX posted seven gainers against four losers. However, turnover retreated by 16% to US$3 million from US$4,3 million in July.
Over the month, the parallel market remained constant, hovering around a rate of 35 and this is largely due to the ongoing tight liquidity measures by the RBZ. The interbank rate firmed up by 0,12%.
Econet remained the most traded counter on the ZSE in August, accounting for ZiG488 million or 68% of total monthly turnover. Delta followed with ZiG153 million, representing 21% of the value traded.
This marked a shift from July, when Econet and FBC led activity with ZiG274 million and ZiG125 million, respectively, together making up 52% of that month’s turnover
On the VFEX, Padenga and Simbisa dominated trading, with transactions worth US$1,5 million and US$1 million, respectively, collectively contributing 72% of August’s turnover on the foreign-denominated exchange.
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Meanwhile, Innscor, Axia, and FCB also recorded notable participation, together accounting for 27% of value traded.
On the ZSE, foreign investor participation weakened in August relative to July, with both purchases and sales declining sharply. Foreign sales dropped from over ZiG300 million to under ZiG100 million, while foreign purchases fell from above ZiG90 million to below ZiG40 million.
A similar pattern was evident on the VFEX, where foreign sales contracted from more than US$1 million to under US$200 000, and foreign purchases declined from around US$150 000 to under US$30 000. This trend underscores the fact that trading activity during the month was largely driven by local investors.
On the ZSE, DZLH was the standout performer, rallying 64,78%, while Masimba posted the steepest decline, falling 37,69%.
RTG also featured among the gainers, though trading activity was limited to ZiG 32,590 in shares, suggesting mainly retail investor participation. Positive investor sentiment was likely boosted by RTG’s entry into South Africa through a US$5,6 million Cape Town acquisition.
Conversely, counters such as Tanganda were weighed down by declining export revenues and rising debt levels, placing it among the month’s losers.
Before turning to the VFEX, it is worth highlighting the performance of Delta and Econet on the ZSE. Delta advanced 7% during the month, while Econet slipped 1,92%.
Looking ahead to September, Econet is expected to firm following the declaration of an interim dividend of 0,60 US cents per share for the quarter ended August 31, 2025.
This brings its trailing 12-month dividend to 2 US cents per share, translating to an attractive annual yield of 15% at the current share price of 12,93 US cents (at an exchange rate of 35).
Once again, equities continue to demonstrate their ability to deliver returns that outpace many other sectors.
On the VFEX, SeedCo International released its annual report, where it highlighted decent performance in full year ending March 31 2025. Its top line surged by 5% to US$124 million, although OPEX surged by 11% to US$42,9 million.
The bottom line was up by 14% due to reduction in finance costs on borrowings and a surge in finance income from trade & other receivables.
Padenga and Caledonia, both gold producers, continued to benefit from rising gold prices, recording modest single-digit growth in production levels.
Edgars once again registered the sharpest decline — repeating its July performance, losing 11,30% of its value. The clothing retailer remains under pressure, as the formal wear segment in particular continues to face significant headwinds.
Delta and Econet remain the top two counters by market cap constituting 49,3% of the entire bourse’s market cap.
Outlook
I believe equities remain undervalued, with some counters starting to gradually reprise, as seen on the VFEX in both July and August for counters such as Innscor and Padenga.
On the other hand, many major stocks continue to trade below their historical averages, especially on the ZSE, offering attractive entry points for investors.
Often, investors tend to enter once counters have already started repricing, though this usually comes at the expense of reduced upside potential.
On the ZSE, Delta and Econet are likely to maintain their dominance in trading activity. However, with banks such as FBC and CBZ having recently released their half-year financials, we anticipate increased activity in these counters as well.
On the VFEX, the top five counters by value traded are likely to remain unchanged.
Taimo is an investment analyst with a talent for writing about equities and addressing topical issues in local capital markets. He is an active member of the Investment Professionals of Zimbabwe community, pursuing the Chartered Financial Analyst charter designation.
