Online Reporter
Nelson Gahadza
THE impending delisting of Econet Wireless Zimbabwe from the Zimbabwe Stock Exchange (ZSE) marks a defining moment for the local equities market, reshaping portfolio strategies, index dynamics and liquidity flows, analysts have said.
Considering that the company is one of the most actively traded and capitalised counters on the bourse, experts say investors are being forced to reassess where to redeploy capital, while the market itself grapples with the broader implications of losing a solid stock.
Additionally, they note that with Econet exiting the market, a significant portion of passive and active capital currently invested in the counter, particularly by institutional investors, is likely to be reallocated rather than withdrawn entirely.
“For pension funds, asset managers and insurance firms, the delisting does not eliminate the need for equity exposure; instead, it accelerates a rebalancing exercise that will determine which counters emerge as the next focal points on the ZSE,” investment analyst Mr Enock Rukarwa said.
In a recent cautionary announcement, Econet Wireless Zimbabwe said it had commenced engagements with the ZSE with a view to publishing a circular to shareholders regarding the proposed voluntary delisting and planned listing of Econet Infrastructure Company on the Victoria Falls Stock Exchange (VFEX).
This vehicle will hold Econet’s real estate, as well as telecommunications and renewable energy assets.
Mr Rukarwa said the delisting of Econet inevitably creates new areas of investor interest.
“When you look at the migration of Econet to the VFEX from the ZSE, it obviously creates some opportunities for counters like SeedCo Limited, Hippo Valley and even those in the financial services sector such as CBZ Holdings and FBC Holdings,” he said.
He further said these companies, by virtue of their solid fundamentals, consistent earnings and dividend histories, are natural candidates to absorb some of the capital freed up by Econet’s exit.
“Banks such as CBZ and FBC have demonstrated resilience, underpinned by growing performance and compelling business models, while agricultural and agro-industrial counters like SeedCo and Hippo Valley offer exposure to real assets and export-linked revenues,” Mr Rukarwa said.
“However, the biggest challenge with these four counters is that the liquidity, or the free float in terms of tradability, is limited. In contrast to Econet, which routinely dominated daily turnover, these stocks struggle to accommodate large volumes without causing sharp price movements.”
To address this imbalance, he suggested that corporate restructuring may be required to increase the free float.
“This actually calls for corporate restructuring of some sort, where free-float shares are increased, but the weakness of that is it dilutes existing shareholders,” Mr Rukarwa said.
He noted that while such dilution is often resisted, it may be necessary to unlock liquidity and position certain counters as true blue-chip replacements.
“Inasmuch as there are potential counters that can replace Econet, they are not as liquid as Econet and Delta are, which remains the major challenge,” he said.
Beyond individual stocks, Mr Rukarwa said Econet’s exit has significant index-level consequences, such as changes in the composition of the Top 10 Index.
“The overall influence of the Top 10 on the All-Share Index (ASI) may be diminished,” he said.
“The performance of Econet in relation to the ASI may become an issue of concern, as the contribution of that basket to the ASI won’t be as pronounced as it was when Econet was there.”
He added that from a broader perspective, the delisting represents a net negative for the ZSE because it reduces the liquidity that used to benefit investors and other market intermediaries.
“The move removes exposure to a diversified technology and financial ecosystem that will no longer be available to public market investors,” said Mr Rukarwa.
“It is a loss for the investment community and the capital market as a whole because the mobile business, the EcoCash business and various other companies, including insurance firms like Moovah Insurance, will no longer be available in the public arena, but rather in the private space.”
Equity Axis analyst Mr Tinashe Duma said the latest ZSE index constituency shows that Econet is still in the Top 10, but the 11th counter will be absorbed into the Top 10 during the next revision, likely in April.
“This reshuffle could provide short-term support to incoming counters as index-tracking funds adjust their holdings,” he said.
Mr Duma noted that Econet’s move fits within the broader VFEX migration trend.
However, unlike earlier migrations that involved a straight conversion of ZSE prices into US dollar terms using the interbank rate, Econet’s delisting comes at a time of relative forex stability.
“Previous moves did not really address the undervaluation aspect since the migration didn’t translate to a price correction. Rather, it entailed value preservation due to lower volatility,” he said.
Mr Duma added that with prolonged exchange-rate stability, investor sentiment had shifted and price corrections were already underway.
“In future, if this persists, we will not see another ‘valuation-driven’ delisting,” he said.
Importantly, Mr Duma said, the group plans to introduce a new real estate entity for listing, reflecting a broader market trend.
“Everyone is hedging their value in real estate more than in capital markets, and ironically, that is what is driving the capital markets now,” he said.
Investors, he added, are increasingly chasing dollar-driven earnings tied to immovable assets.
In the immediate term, financial analyst Mr Malone Gwadu said, market behaviour suggests that Delta Corporation is emerging as the primary beneficiary of Econet’s exit.
He noted that the correlation between Econet’s exit and Delta’s share price performance points to portfolio rebalancing.
“Delta will be the remaining blue-chip counter for which traders have an appetite once Econet exits,” he said, adding that Delta’s large market capitalisation is now exerting a stronger influence on the ASI.
Supporting this view, FBC Securities highlighted Delta’s robust fundamentals in its latest stock market report.
The document stated that the beverages giant delivered a strong performance in the first half of FY2026, supported by resilient consumer demand, disciplined pricing and sustained brand leadership.
Group revenue rose by 32 percent year on year to US$514 million, while profit before tax nearly doubled to US$104,8 million, although margin expansion was partly offset by the under-recovery of sugar tax, with approximately US$15 million paid during the period.
In this context, FBC said, Delta is increasingly assuming the role of a de facto market anchor stock.
“Its depth of liquidity, strong free float and consistent dividend capacity make it the natural alternative for investors seeking scale and stability,” said the stockbroking firm.
“This shift could translate into improved trading volumes, tighter bid-ask spreads and a valuation re-rating as capital concentrates around the counter.”
Ultimately, FBC noted that Econet’s delisting is both a loss and a catalyst, adding that while it removes a cornerstone of the ZSE, it also forces a long-overdue conversation about liquidity, free float and market depth.
“Where investors turn next will depend not only on fundamentals but also on whether the market can evolve to support the next generation of blue-chip stocks,” the firm concluded.
