• Econet, has launched a formal review of “potential corporate actions” that could lead to delisting from the ZSE, citing “gross undervaluation” of its shares relative to intrinsic asset value
• A full delisting would remove a counter that, together with Delta, represents over 70% of the ZSE’s total market capitalisation and a large share of daily trading volume
• The move highlights deep structural issues on the ZSE, and could accelerate an exodus of remaining blue-chip names

 Harare- Zimbabwe’s largest telecommunications company, Econet Wireless Zimbabwe, has issued a cautionary statement to shareholders announcing that its board is evaluating strategic corporate actions that could materially affect the company’s listing on the Zimbabwe Stock Exchange (ZSE).

In a circular released on Friday, the group said its board had observed that the company’s share price on the ZSE is “grossly undervalued” relative to the intrinsic value of its operations and extensive infrastructure assets.

“In this regard, the Company has commenced the evaluation of potential corporate actions aimed at unlocking shareholder value, improving access to capital, and strengthening the Company’s long-term competitiveness (the ‘Transaction’),” the group said in the circular.

This likely means the company is openly contemplating delisting from the local bourse and potentially merging with or being absorbed by its ultimate parent, Econet Global Limited, or pursuing alternative listing structures such as the US dollar-denominated Victoria Falls Stock Exchange (VFEX).

The admission lays bare a long-simmering crisis of confidence in the ZSE, where chronic currency volatility(currently attracting a premium of 30%), liquidity shortages, and persistent undervaluation have driven multiple blue-chip companies to either delist entirely or migrate offshore.

Econet’s market capitalisation, currently hovering around US$628 million, together with Delta Corporation, accounts for more than three-quarters of the ZSE’s total market value. Its potential exit would therefore not be just another delisting; it would be an existential blow to an exchange already reeling from years of shrinkage.

Liquidity on the ZSE, already among the lowest in sub-Saharan Africa, would collapse further without Econet’s daily trading volumes. The telecoms giant is one of the few counters that still attracts meaningful turnover, often single-handedly propping up the ZSE All-Share Index on quiet days.

Its removal would deepen the illiquidity trap that has deterred institutional investors and made price discovery almost meaningless in most remaining counters. Retail investors, many of whom hold Econet as  one of their largest equity exposure, would be left facing a dramatically thinner market with fewer diversification options and heightened volatility in the stocks that remain.

Investor confidence, fragile at the best of times, would take another severe knock. When a flagship company publicly declares that the local bourse no longer reflects its true worth and is actively looking for the exit, it sends an unmistakable signal to every other listed entity still weighing its options.

The precedent is already well established: Seed Co Zimbabwe, Padenga Holdings, and Bindura Nickel Corporation have all migrated to the VFEX in recent years, while others such as Truworths and Pretoria Portland Cement have delisted outright. An Econet departure would accelerate this exodus, potentially triggering a domino effect among the few remaining heavyweights.

For the ZSE itself, the loss of Econet would shrink its market capitalisation by a figure that could exceed 40% in a single stroke, depending on the final structure of any transaction. Index-tracking funds such as the Old Mutual ZSE Top 10 ETF would be forced into fire sales or major rebalancing, further depressing prices of the surviving constituents.

The exchange’s relevance as a capital-raising platform would be called into question, especially at a time when authorities are trying to encourage new listings and deepen financial markets.

Minority shareholders face an uncertain future. While any delisting is likely to be accompanied by a mandatory offer from the majority shareholder, the valuation methodology and the premium offered will be fiercely debated. Historical buyouts in Zimbabwe have often been criticised for undervaluing minority interests, particularly when local currency distortions are factored in.

On a broader economic level, Econet’s complaint about its inability to raise competitively priced capital on the ZSE highlights a structural failure that extends far beyond one company. Zimbabwe’s telecoms sector requires continual multi-hundred-million-dollar investments in 4G and 5G infrastructure, fibre networks, and data centres.

When the country’s primary stock exchange cannot provide a viable funding conduit for its largest operator, it reflects how detached the capital markets have become from the real economy, which now largely transacts in US dollars.

Market reaction on Monday morning saw Econet shares rise by more than 15% in early trade on the ZSE, reflecting investor expectations of a potential premium in any buyout offer.The ZSE and SECZ have not yet issued public comment on the announcement.

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