OLD Mutual Limited (OML) believes the Victoria Falls Stock Exchange (VFEX) has matured into a viable alternative to Zimbabwe’s main equities market, citing rising liquidity and trading volumes as the financial services giant prepares to migrate its suspended secondary listing to the bourse.
The assessment represents a significant endorsement of the six-year-old United States dollar-denominated bourse by one of Africa’s largest financial services groups, whose shares trade across several international markets.
The VFEX claimed capital markets dominance from the Zimbabwe Stock Exchange (ZSE), growing from one counter at its 2020 launch to 19 listings—comprising 15 issuers on the main equity board—with other various types of non-equity instruments.
OML, the South African-domiciled financial group, said its board had monitored the VFEX's growth and development since its shares were suspended from the ZSE in 2020.
During that period, OML explored several proposals with the government, regulators and exchange authorities to restore trading which has now, after six years of engagement, resulted in ZSE Holdings announcing last Friday that OML shares would migrate to the VFEX.
“Old Mutual’s ordinary shares are currently listed on, amongst others, the Zimbabwe Stock Exchange (ZSE), by way of a secondary listing. In June 2020, the government of Zimbabwe (GoZ) issued a directive which suspended trading on the ZSE, including trading in Old Mutual ordinary shares, to address the prevalence of an implied exchange rate and other market instabilities cited at the time,” OML told shareholders.
“Although trading on the ZSE resumed in August 2020, Old Mutual was amongst the shares that remained suspended (noting that Old Mutual was not responsible for such ongoing suspension).
‘Old Mutual has since the suspension engaged with the GoZ and key regulatory and exchange stakeholders in Zimbabwe and proposed various trading and alternative solutions to procure either the resumption of trading on the ZSE or implement an appropriate alternative solution.”
OML’s board of directors reportedly used the time of the financial services giant’s suspension to monitor the growth and development of the VFEX.
“The board is of the view that the VFEX has come into its own and has now developed sufficient scale and liquidity as a viable alternative trading platform to the ZSE and accordingly supports the migration of Old Mutual’s secondary listing in Zimbabwe from the ZSE to the VFEX (the Migration) and has therefore resolved to proceed with the Migration, subject to the requisite regulatory approvals,” OML said.
Locally, OML operates through its subsidiary, Old Mutual Zimbabwe Limited (OMZL), which had total assets worth US$1,8 billion as of the end of last year.
The VFEX listing will, therefore, restore a direct market link between Zimbabwean investors and the South African parent, allowing shareholders to trade OML shares and gain exposure to the value of one of Africa’s largest financial services groups.
OML itself reported total assets of US$83,8 billion as of the end of last year, highlighting the scale of the multinational financial services group whose shares will become available for trading on the VFEX.
The migration could also strengthen the VFEX’s case as a destination for future initial public offerings, demonstrating that the bourse has developed the scale and infrastructure to accommodate companies with substantial asset bases and international listings.
Based on guidance from the VFEX, the opening price of OML ordinary shares at commencement of trading on the VFEX will be entirely market determined.
“The initial price of Old Mutual ordinary shares at commencement of trade on the VFEX will be independently determined by the market via the submission and matching of bids and offers through the VFEX trading system (without the application of the VFEX’s usual trading price limits),” OML said.
“In line with the VFEX’s usual trading mechanics, normal trading limits of 20% of the previous day’s closing price will be applied from commencement of trade on the second trading day.”
In forming its view about the VFEX, OML’s board considered, among other factors, that the average annual turnover per issuer listed on the VFEX increased from US$0,3 million in 2021 to US$7 million in 2025.
This, according to OML, exceeded the average annual turnover per issuer listed on the ZSE.
Further, the VFEX expects its aggregate annual turnover of US$111,1 million in 2025 to exceed, or at least match, that of the ZSE’s US$196,1 million within the next two years.