Before anything else, thank you. I was away from this column for two weeks attending to a family emergency, and my editor tells me a good number of you called in to ask where the article had gone. That kind of loyalty is not something a writer takes lightly, and I am grateful for it. I am back, and I am glad to be back.
I usually spend this space on the United States and Canada — what the Federal Reserve is doing, where oil is heading, why a jobs number in Washington moves a currency in Toronto. This week I want to bring the conversation home, because I sat down intending to write a simple article about how well the Victoria Falls Stock Exchange (VFEX) has been doing, and the numbers sent me somewhere more interesting.
Here is the story everybody is telling right now: the VFEX is flying, Old Mutual has just come back to the market after six years in the cold, so it must be time to jump in. It is a good story. It is also incomplete in a way that matters, and I would rather you had the whole picture.
Over the twelve months to early August, the VFEX All Share Index rose 118.8%, closing at 265.96. Over the same period the Zimbabwe Stock Exchange All Share Index — the old market, the one people say is being abandoned — rose 134.3%, closing at 476.31. Both more than doubled. The ZSE gained more.
So the popular version of the story is not quite right. The VFEX is not winning because its share prices went up faster. Something else is going on.
The real difference is certainty, not size
The VFEX prices and trades shares in United States dollars. The ZSE prices them in ZiG. That single detail is what everyone is really reacting to. When your shares are priced in a currency you trust, a 20% gain means you can buy 20% more. When they are priced in a currency you are unsure about, you spend the whole year wondering how much of your gain is real.
Now, in fairness to the ZSE, this past year has not been a currency disaster. On the official rate the ZiG has been broadly steady — roughly 26.7 to the dollar a year ago and around 25.4 today — and annual inflation has come down to single digits. So you cannot wave away that 134 % as pure currency illusion the way you honestly could two or three years ago. A parallel-market premium still exists, and it still eats into the picture, but the gap between the two markets this year is less about arithmetic and more about trust. Money is moving to where it does not have to think about the currency question at all. That is a preference, and preferences can be strong without being a guarantee of returns.
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Doubling is repricing, not compounding
This is the part I most want you to take away. When an entire market doubles in twelve months while the real economy is growing in single digits, that is almost never companies suddenly becoming twice as productive. It is prices catching up to value after years of distortion, plus a lot of money looking for somewhere safe to sit.
That kind of move is called a repricing, and repricing happens once. Compounding — the slow, boring 10 or 12%a year that builds real family wealth — happens for decades. The mistake ordinary investors make everywhere in the world, not just here, is seeing a repricing and expecting it to repeat. If you look at Figure 2, both indices are sitting near the top of their range. The person who doubled their money bought near that hollow circle on the left, twelve months ago, when nobody was talking about it at a family gathering.
Why the companies are moving house
The VFEX has grown mainly because companies have relocated into it. Econet Wireless delisted from the ZSE, taking roughly 1.2 billion dollars of market value with it, and its infrastructure arm Econet InfraCo listed on the VFEX at about a billion dollars — the largest listing in our capital markets history. First Mutual Properties went. TSL migrated in June. Dairibord has signalled it is going. By June the VFEX was worth about US$3.9 billion C, having overtaken the 132-year-old ZSE in April.
Two quiet lessons sit inside that paragraph. First, a market that grows because businesses are moving into it is telling you where companies want to be priced — a genuine signal — not that every share on it is cheap. Second, when the biggest company leaves an index, the index is rebuilt around what remains. Part of why the ZSE number still looks strong is that it is now measuring a different set of companies. Indices flatter and mislead in both directions.
And note the red dot in Figure 3. In April, African Sun — one of our largest hotel groups — left the VFEX, complaining of thin trading and distorted pricing. Traffic on this road runs both ways.
What Old Mutual’s return actually means
Old Mutual matters emotionally in Zimbabwe. Many families have held those shares for years and watched them frozen since 2020. The relisting is good news in a specific, limited sense: shareholders can once again buy, sell, receive dividends and take part in corporate actions, in US dollars. That is a restoration of access, and it deserves the celebration it got.
What it is not is evidence that the share is cheap. On its first day the opening price was set purely by matching buyers and sellers, with none of the usual price limits applied — exactly the kind of session where excitement, not value, does the pricing. If you buy on the strength of a headline and a good feeling, you are not investing. You are hoping.
The risk that hurts small investors most
Liquidity. Thin trading means there are days when very few shares change hands, so prices swing on small volumes and you may not find a buyer at a fair price on the day you need your money. In May, VFEX turnover collapsed by 81% in a single month. With around twenty listed counters, a handful of large names drive the whole index — so a headline of 118 % does not mean the average investor made 118 percent. It means the biggest companies did well.
A framework before you put in a dollar
One: know why you are buying this particular company — what it sells, whether it makes a profit, whether it pays a dividend. If you cannot explain the business to a friend in two sentences, you are not ready. Two: only invest money you will not need for three to five years. Shares are not a savings account. Three: never put everything into one counter, however famous the name. Four: check you can realistically sell — look at how much of that share trades on an average day. Five: use a licensed stockbroker and understand your fees before you trade, not after.
Why I want more of us in this market
I write this as a caution, but the bigger message is an invitation. For generations, wealth-building at home has meant a stand, a car, cattle, or a cross-border hustle. Those are legitimate. But shares let you own a slice of a real business and earn from its growth and its dividends without running it yourself. That is how ordinary families elsewhere have built quiet, patient wealth over decades — not through one clever trade, but through small, regular buying over a long time, through the boring years as well as the exciting ones.
The opportunity in front of us is real. So is the risk of walking in at the top with money you cannot afford to lose. Learn first, then invest — in that order.
If there is appetite, I am happy to make this a series: breaking down individual companies listed back home, how to read their results in plain language, and how to open and run a brokerage account. Let the editor know, and I will write it.
Isaac Jonas is an applied economist and founder of Streetwise Economics, an independent economics research and advisory platform that helps people and businesses make better financial decisions through practical, evidence-based analysis of markets, investing and the economy. This article is for educational and informational purposes only and does not constitute financial, investment or legal advice. Every investment involves risk, and readers should conduct their own research or seek advice from a licensed financial professional before making investment decisions. For more insights, visit www.streetwiseeconomics.com and follow Streetwise Economics on YouTube, Facebook and LinkedIn.
