TSL Limited’s proposal to voluntarily terminate its Zimbabwe Stock Exchange (ZSE) listing and migrate to the Victoria Falls Stock Exchange (VFEX) marks another significant shift in Zimbabwe’s evolving capital markets landscape.
Subject to shareholder approval at an extraordinary general meeting (EGM) scheduled for June 19, 2026, TSL intends to delist from the ZSE on June, 26 before listing on VFEX by way of introduction on June 29, with trading expected to commence on June 30.
Importantly, TSL’s transaction is structurally different from the recently-proposed delisting by First Mutual Properties (FMP). While FMP intends to delist and transition into the private space, in the meantime, TSL is remaining within the public capital markets ecosystem, merely migrating from a ZiG-denominated exchange to a US dollar-denominated one. In essence, this is more a repositioning toward a different capital market framework.
The distinction matters.
FMP’s proposal is fundamentally an exit from the listed space, motivated by low liquidity, flexible capital structuring requirements and the desire to pursue private funding alternatives more aligned with property development cycles.
The transaction also includes an offer mechanism for minority shareholders wishing to exit the company prior to delisting, with Morgan & Co underwriting up to 4,11% of issued share capital. FMP was expected to host its EGM on the 2nd of June 2026.
TSL, however, is retaining the same issued share capital, ownership structure and shareholder proportional interests. No new shares will be issued and no capital is being raised through the migration process. Instead, management is seeking a market environment it believes better reflects the company’s predominantly US dollar earnings profile.
The rationale is increasingly becoming familiar across Zimbabwean corporates.
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More than 97% of TSL’s revenues are now US dollar-denominated, leading the board to conclude that valuation in ZiG no longer adequately reflects the intrinsic value of the business or the currency profile of its earnings streams. Delta is already generating approximately 94% of its revenues in US dollars, while Dairibord is at roughly 96%, clearly reinforcing that the shift toward US dollar-based operating models is not isolated but increasingly structural across Zimbabwean corporates.
The proposed migration also highlights the growing divergence between Zimbabwe’s two exchanges. Although the VFEX currently hosts approximately 17 listings compared to the ZSE’s roughly 42 counters, the VFEX now commands a larger market capitalisation estimated around US$3,6 billion, ahead of the ZSE’s approximately US$3,4 billion using the interbank exchange rate. Using parallel market rates, the ZSE’s effective US dollar market capitalisation falls below US$3 billion.
More importantly, new capital market activity increasingly appears to be consolidating around the VFEX.
Year-to-date, the VFEX has already attracted listings, including Pfuma REIT, Econet InfraCo and FMW Gold ETF, while firms such as Avantis Technology, Ndarama and Green Dollar Stablecoin are targeting the US dollar-denominated exchange pipeline. Conversely, the ZSE has not recorded any meaningful new listing pipeline in 2026, while simultaneously facing continued delistings and migrations.
The migration trend is therefore not merely symbolic. It increasingly reflects issuer and investor preference for a US dollar capital market ecosystem at a time when authorities continue attempting to strengthen confidence in the local currency framework.
The implications for the ZSE are becoming more pronounced.
The local bourse has already lost major blue-chip counters including Innscor, Simbisa, Padenga and Econet to VFEX. Delta now remains the dominant anchor counter on the ZSE, accounting for approximately 46% of total market capitalisation and often contributing more than 85% of daily turnover. This leaves the exchange increasingly concentrated and vulnerable to liquidity shocks should further large counters migrate.
The economic rationale behind the migrations is commercially understandable. The VFEX offers lower trading costs of approximately 2,32% compared to 4,15% on the ZSE, zero capital gains tax on disposals, lower withholding tax on foreign investor dividends and more liberalised exchange control conditions around dividend and capital repatriation. These features remain highly attractive to both local and foreign institutional investors operating in a frontier market environment where currency convertibility and exit flexibility materially influence capital allocation decisions.
TSL also appears financially well-positioned to execute the migration without operational strain.
The group generated a strong improvement in operating cash flows during FY25, with cash generated from operations rising from approximately US$4,4 million to US$10,2 million. Cash and bank balances increased significantly to US$8,6 million at year-end FY25 from approximately US$1,8 million in FY24, while broader liquidity remained solid. Against this backdrop, the transaction cost attached to the migration process appears operationally immaterial and unlikely to affect near-term working capital adequacy.
However, some practical constraints remain.
TSL’s shareholding structure is relatively tightly held, with the top ten shareholders controlling nearly 90% of the company.
That concentration may limit free float availability and could temper secondary market liquidity on the VFEX despite the exchange’s improving activity levels.
Still, the broader market message remains difficult to ignore.
The continued migration of corporates toward VFEX increasingly suggests that issuers view the US dollar-denominated exchange as offering superior valuation transparency, capital preservation, liquidity conditions and access to foreign capital relative to the ZiG-denominated ZSE. Ultimately, companies are making rational capital allocation and valuation decisions based on prevailing market incentives.
The strategic challenge for policymakers and market operators is that the incentive structure continues to favour the VFEX materially more than the traditional local currency-denominated exchange.
Taimo is an investment analyst with a talent for writing about equities and addressing topical issues in local capital markets. He holds a First Class Degree in Finance and Banking from the University of Zimbabwe. He is an active member of the Investment Professionals of Zimbabwe community, pursuing the Chartered Financial Analyst charter designation.
