VFEX steadily evolves on the backdrop of growing interest

Zimbabwe’s US dollar-denominated equities market the Victoria Falls Stock Exchange (VFEX) continues to evolve since its launch in October 2020 as the bourse has witnessed growth while interest from potential listings has increased.

VFEX, a subsidiary of the Zimbabwe Stock Exchange (ZSE), was launched as part of efforts to attract global capital and restore foreign investor confidence in Zimbabwe’s capital markets and help companies raise capital in foreign currency.

Since inception, the listed companies on VFEX have grown to four counters, namely SeedCo International, Padenga Holdings, Caledonia Mining Corporation, and Bindura Nickel Corporation.

VFEX chief executive, Justine Bgoni told this publication that the market capitalization of VFEX is now US$252,8 million as of 26 May 2022.

“The total turnover recorded on the VFEX since the date of launch is USD$$8,887,347.10. Of the total VFEX turnover by value, 93 percent, (USD8.8 million) was recorded in the year 2022,” he said.

Mr Bgoni said the total volume of traded shares is 120,203,738 against recorded 751 trades since inception.

“The bourse experienced increased activity in 2022 with 81 percent of the total trades being recorded in 2022,” he said.

He noted that the VFEX All-Share Index which was introduced in July 2021 at a base of 100 and stood at 103,47 as at 26 May 2022.

Kuvimba Mining House recently indicated plans to list two more units on the VFEX while a local start-up technology company Avantis Technologies said it plans to complete the listing process during the second half of the year.

Kuvimba is majority-owned by the government and holds assets such as Bindura Nickel Company (BNC) and Freda Rebecca Mine, the country’s biggest gold mine.

Mr Bgoni said VFEX has generated interest from both local and foreign companies and is excited that engagements together with the favorable incentives applicable on VFEX are beginning to bear fruit.

“We are optimistic that with the increased interest on VFEX, this will lead to increased liquidity and additional listings,” he said.

He said the bourse has a strong pipeline and anticipates getting some listings this year from the mining sector, Financial Services, and Government Institutions.

“We appreciate the efforts being implemented by the Government and the various incentives that have been put in place on VFEX.

“VFEX is working to deepen the market and to establish the commodities exchange,” said Bgoni.

He added, “We will continue to lobby with the Government for tax incentives that will make the bourse more attractive to investors and issuers as we work towards the commodities exchange.

“Once the commodities exchange is established, we then expect to be rolling out the derivatives.”

Seed Co International Limited pioneered trading on the VFEX, followed by crocodile skin and gold producers Padenga Holdings and Caledonia Mining Corporation.

Caledonia Mining ended up issuing more shares in respect of its VFEX listing in order to raise more funds than originally anticipated following an extremely positive Zimbabwe investor response.

BNC also indicated that it has an ambitious capital program that will be sustained through funds raised from the VFEX.

Finance Minister Mthuli Ncube in the 2022 National Budget said that the Treasury will issue US$100 million worth of Government bonds on VFEX in 2022 as part of deficit financing.

Minister Mthuli said the bonds would be issued to reduce the cost of borrowing and deepen the capital markets, with a particular objective of developing the Victoria Falls Offshore Financial Services Centre aimed at attracting foreign capital. – Herald