Treasury Plans Expansion of VFEX to Include Global ETFs

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HARARE – The Zimbabwean Treasury has unveiled plans to broaden the scope of the Victoria Falls Stock Exchange (VFEX) by introducing trading instruments such as exchange-traded funds (ETFs) of the world’s largest listed stocks.

By Staff Reporter

Finance Minister Mthuli Ncube disclosed that the initiative is geared towards attracting capital and positioning the VFEX as a premier destination for global investment opportunities.

Launched in October 2020, the US dollar-indexed VFEX currently hosts 15 listed counters with a combined market capitalization of approximately US$1.19 billion as of Monday. Minister Ncube outlined the ambitious expansion strategy during a two-day investment summit in South Africa, emphasizing the government’s commitment to fostering a conducive environment for international investors.

“We want to make sure that if you want to buy stocks in China, you do not have to go to the Shanghai Stock Exchange, and we want you to come to the VFEX,” stated Minister Ncube during the summit, which was organized by the South African diaspora in collaboration with the Ministry of Finance, Economic Development, and Investment Promotion.

The Treasury aims to diversify the VFEX’s offerings by incorporating foreign non-domiciled companies, thereby attracting a broader spectrum of market participants. Minister Ncube articulated plans to introduce global ETFs on the VFEX, enabling investors to access international stocks directly from Africa. This move is expected to appeal to pension funds seeking to diversify their portfolios with low-risk, globally diversified investments.

ETFs, categorized as pooled investment securities, offer investors the flexibility to trade a diverse range of assets, from commodities to specific investment strategies. Minister Ncube underscored the potential of ETFs to track renowned global indexes, such as the S&P 500 Index, providing investors with exposure to leading firms listed in the United States.

“We want you to come to Victoria Falls if you want to invest globally,” affirmed Minister Ncube. “There is no reason why you cannot list an Apple ETF, a single stock ETF, so you do not have to buy it in New York. You can buy it in Victoria Falls.”

The Treasury’s vision for the VFEX aligns with its broader agenda to stimulate economic growth and enhance Zimbabwe’s attractiveness as an investment destination.

Minister Ncube also announced plans to establish a commodity exchange shortly, further bolstering the country’s financial infrastructure and expanding opportunities for domestic and international investors alike.