• VFEX will now calculate the market capitalisation of cross-listed issuers using the company’s full global issued share base
• The rule can materially increase VFEX’s reported market size without an equivalent increase in local liquidity or capital inflows
• The change improves comparability for cross-listed companies

Harare- The Victoria Falls Stock Exchange (VFEX) has changed how it measures the market capitalisation of cross-listed companies, adopting the global equity value of an issuer from 13 August 2026 by multiplying the prevailing VFEX share price by the company’s total issued shares. The rule means a company such as Old Mutual will now be measured on VFEX as the full global company represented by its share price, even though only part of its shareholder register sits in Zimbabwe.

The change lands one day after Old Mutual began trading on VFEX and immediately gives the new methodology material scale.

Old Mutual closed its first VFEX session at US$0.7817, within about 1% of its Johannesburg Stock Exchange reference price after unrestricted opening price discovery. The group had 4.67 billion issued ordinary shares at the end of 2025. Applying the new VFEX methodology to those shares gives Old Mutual an implied global market capitalisation of approximately US$3.65 billion at its first-day VFEX closing price.

That number is almost as large as the entire VFEX market capitalisation before Old Mutual arrived. VFEX had already overtaken the Zimbabwe Stock Exchange in market value during 2026, with its capitalisation reaching about US$3.54 billion against approximately US$3.26 billion for the ZSE by late May. The new cross-listing methodology means one multinational issuer can now add a global equity value equivalent to roughly the size of the whole exchange that existed only a few months ago.

The immediate impact is therefore statistical and strategic at the same time. VFEX will report the economic size of cross-listed companies in a way that is comparable with how international markets commonly view those issuers. A secondary listing represents the same corporate entity trading elsewhere, so measuring only the portion of shares sitting on the Zimbabwe register can materially understate the size of the company represented by the quoted price.

The new rule removes that distortion. Hence, a shareholder buying Old Mutual on VFEX is buying an ordinary share in the same Old Mutual Limited whose primary market is Johannesburg. The economic value attached to that share comes from the full group, not from the number of shares physically registered through the Zimbabwean secondary listing. Measuring market capitalisation using total issued shares therefore aligns the issuer’s reported size with the company investors are actually valuing.

That distinction becomes important because Old Mutual is the first major multinational to return to Zimbabwe’s active public market through VFEX after six years of suspension. Trading began on 12 August with the opening price deliberately left to unrestricted bids and offers before normal VFEX trading limits resumed. The first session closed at US$0.7817 compared with a JSE-equivalent reference of roughly US$0.7876.

The market therefore established a price close to regional parity before VFEX changed the capitalisation methodology, and that sequencing matters. The new rule does not manufacture a higher Old Mutual share price. The market had already priced the stock within 1% of Johannesburg. The rule changes what VFEX reports when that market price is multiplied by the share base.

This is where the distinction between valuation and market capitalisation methodology becomes important. Zimbabwe’s listed companies have spent the past several years complaining about undervaluation, particularly on the ZSE. Econet Wireless stated before its March 2026 delisting that its ZSE market capitalisation represented less than 20% of an intrinsic value estimated above US$3 billion using African telecom valuation benchmarks.

TSL subsequently argued that its ZiG-denominated ZSE valuation did not adequately capture the predominantly US dollar nature of its revenues and asset base. First Mutual Properties and other issuers have also cited low valuation and weak liquidity when considering exits.

The VFEX notice sits inside that wider valuation debate, though it does not solve the same problem. The ZSE complaints concern price discovery.

Companies argue that thin liquidity, weak foreign participation, domestic currency risk and constrained investor demand push their share prices below what management considers their economic value. That is an issue with the price investors are willing or able to pay.

The VFEX notice concerns the number of shares used after that price has already been discovered.

Changing the multiplier cannot correct an undervalued share price as a  company trading at US$0.50 remains priced at US$0.50 whether the exchange multiplies that number by one million locally registered shares or one billion globally issued shares. The reported market capitalisation changes, while the wealth attached to each share does not.

That makes the notice a comparability reform rather than a valuation rescue. Its indirect impact on valuation could still become important.

Market capitalisation is used by investors, index providers, fund managers and analysts when assessing company scale, index weights, investability and relative importance within an exchange. A global company appearing artificially small because only its local secondary register is counted can distort those comparisons.

The new methodology removes that problem for cross-listed issuers. Old Mutual will now appear on VFEX as the multi-billion-dollar company it is globally. That gives international investors a more familiar representation of issuer size and places the exchange’s cross-listed securities on a basis closer to other markets where the same company trades. That matters if VFEX wants to attract additional multinational secondary listings.

A global company considering Victoria Falls needs to know that listing there will not make it appear in market statistics as a tiny local entity simply because only a small fraction of its shares moves through Zimbabwe. The notice directly removes that disincentive.

The change therefore broadens the role VFEX can play. Until Old Mutual, most VFEX growth came from Zimbabwean companies migrating from the ZSE. Innscor, Simbisa, National Foods, Padenga, TSL and other companies moved because their earnings were largely in foreign currency and the US dollar market offered cleaner price discovery. Econet InfraCo entered through a separate transaction at an initial valuation of about US$1 billion.

Old Mutual is structurally different. Its primary listing, principal trading liquidity and largest shareholder base sit outside Zimbabwe. VFEX is a secondary venue for the same global equity. That type of issuer requires different market statistics. The notice effectively recognises that distinction. The implications for VFEX’s headline market size could be dramatic.

At Old Mutual’s first-day closing price, its implied global value is around US$3.65 billion. VFEX itself was worth about US$3.54 billion by late May before subsequent market movements and listings. Adding Old Mutual under the new global methodology therefore has the potential to push reported VFEX market capitalisation substantially higher without an equivalent amount of new capital having entered Zimbabwe.

That requires careful interpretation. Market capitalisation is not money raised. A US$3.65 billion Old Mutual market capitalisation does not mean US$3.65 billion has entered the VFEX, nor does it mean Zimbabwean investors own that amount of Old Mutual equity. It means the VFEX price values all issued Old Mutual shares at approximately that amount.

The distinction will become increasingly important when comparing VFEX with the ZSE. VFEX had already overtaken the ZSE in market capitalisation before this rule change. After recognising the full global capitalisation of cross-listed issuers, the gap could widen sharply for methodological reasons as well as through genuine price appreciation and new domestic listings.

A direct comparison of the two exchange totals will therefore need more qualification. The ZSE predominantly contains companies whose entire issued share capital is represented by the domestic listing. Their market capitalisation is therefore effectively the domestic corporate value.

VFEX can now contain global cross-listed companies whose entire worldwide share base is counted even where Zimbabwe represents only a small fraction of trading volume and ownership. The two exchange totals will remain mathematically valid under their respective issuer structures. They will increasingly describe different things.

For VFEX, this creates a case for publishing two measures. The first should be global issuer market capitalisation, using the methodology announced this week. The second should be a locally attributable or domestic-listed market value measure, showing the value represented by securities actually registered or available through the Zimbabwean market. That would preserve international comparability without allowing one multinational to obscure the scale and liquidity of the underlying domestic market. This distinction is especially necessary because liquidity does not automatically rise with reported market capitalisation.

Old Mutual’s first VFEX session traded 46,402 shares worth about US$36,274. On the JSE, the company traded roughly 19.9 million shares worth R251.8 million during the comparable session. The VFEX price achieved regional parity quickly, while the depth available at that price remained far below Johannesburg.  

A US$3.65 billion quoted company trading only tens of thousands of dollars a day still operates inside a shallow secondary market. The market capitalisation number becomes internationally comparable while liquidity remains locally constrained.

VFEX therefore needs the Old Mutual listing to do more than enlarge the exchange’s headline capitalisation. It needs the stock to attract institutional participation, foreign trading, market making and sustained turnover. That is where the connection to Zimbabwe’s undervaluation problem becomes stronger.

The persistent ZSE valuation discount has repeatedly been linked to weak liquidity and limited foreign investor participation. Econet described both as structural causes of its low valuation before leaving the exchange. VFEX has attracted companies partly because US dollar settlement, lower transaction costs and improved repatriation conditions can widen the pool of investors capable of trading them.

If the new capitalisation methodology helps attract international cross-listings and those listings attract deeper pools of foreign and institutional capital, the reform can indirectly improve price discovery. The mechanism would run through liquidity. More recognised international issuers increase market relevance, and greater market relevance can attract more institutional capital.

More capital increases trading depth, and greater depth reduces the price impact of large transactions. That creates better conditions for shares to trade closer to fundamental value. The methodology itself does none of those things automatically, but it can support the architecture required for them.

A secondary listing of a multinational with billions of shares globally cannot sensibly be represented as though the corporation consisted only of the shares moving through Victoria Falls. The exchange has corrected that presentation immediately after its first major global cross-listing became active.

The timing also gives VFEX a strategic advantage. The exchange has moved from being primarily a migration destination for Zimbabwean exporters to hosting a JSE-primary multinational. Its own market statistics now need to function at that level.

Recognition of global market capitalisation is part of that transition, and the next question is whether other cross-listed companies follow. If another large JSE, LSE or regional issuer chooses VFEX as a secondary venue, the same methodology will allow its global corporate scale to appear correctly in the exchange’s statistics. That could move VFEX rapidly up African exchange rankings by headline capitalisation.

It could also create misleading comparisons if observers interpret that number as domestic capital formation. The quality of the market therefore needs to be measured through more than market capitalisation.

The ZSE faces a different problem. Its companies do not principally need a revised market-capitalisation formula, but a stronger price discovery.

The exchange has already lost Econet and several US dollar earning businesses after years of complaints about valuation, liquidity and currency mismatch. ZSE market capitalisation has fallen by more than 70% from approximately US$12.19 billion at the end of 2021 to around US$3.26 billion by late May 2026.

Changing how the remaining companies’ shares are counted would not restore that lost value. Foreign participation, ZiG convertibility, liquidity, institutional demand and the economics of holding local currency equities remain the binding variables. VFEX increasingly removes some of those constraints through dollar settlement. The notice issued on 13 August therefore widens the structural difference between Zimbabwe’s two exchanges. VFEX is building rules suited to global and cross-border capital, while the ZSE remains the domestic currency market.

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