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Leonard Ncube, [email protected]

FOREIGN companies have expressed interest in listing on the fast-growing Victoria Falls Stock Exchange (VFEX) amid plans to launch the Contract for Differences (CFD) trading and the Minerals and Commodities Exchange next month as the trading platform expands.

The CFD launch is a culmination of partnership between VFEX, a subsidiary of the Zimbabwe Stock Exchange (ZSE) and the Dubai Gold and Commodities Exchange (DGCX), the region’s leading derivatives exchange.

The two signed a Memorandum of Understanding to strengthen bilateral co-operation, as well as exchange knowledge around commodities trading.

As part of the agreement the DGCX was expected to extend technical support, knowledge and skills to VFEX with the aim of establishing an international commodities exchange in Zimbabwe.

ZSE chief executive Mr Justin Bgoni said the VFEX would launch the CFD early next month to enhance protection of investors’ money given the background of loss of savings in the past.

This would be buttressed by the launch of the Minerals and Commodities Exchange and welcoming of more listings, with regional and international counters set to join the VFEX ship soon.

Mr Bgoni was speaking in Victoria Falls following the listing ceremony of Edgars Stores Limited, the 14th counter on the VFEX.

“We are quite excited by what we are seeing. The first thing that is coming to the exchange beginning of May is Contract for Differences. 

“So, we have partnered with a foreign broker from Dubai that is going to launch Contract for Differences in Victoria Falls on the 3rd of May. 

“This is forex trading, so we will be doing that on our exchange. What we have known is that people have lost a lot of money to unscrupulous people that have done Contract of Differences in Zimbabwe,” said Mr Bgoni. 

“Now we want to do it on the Victoria Falls Stock Exchange to protect investors and make sure they don’t lose their money.”

CFDs are contracts between investors and financial institutions in which investors take a position on the future value of an asset. They are contracts to trade based on the entry prices and closing prices.

Mr Bgoni said the launching of CFDs and Minerals and Commodities Exchange are the major projects for VFEX next month.

“We also hope by that time we will also be launching the Minerals and Commodities Exchange. We are waiting for the legislation to be finalised by the Minister of Finance and then get it published by the Attorney General.

“We also got a few companies that want to list. One company from the UK wants to list on the VFEX and another from South Africa. We have got a couple of other companies that want to list, so we are quite happy that our platform is going beyond Zimbabwe and becoming a regional and global platform,” he said.

VFEX was launched in October 2020 to kick start the Offshore Financial Services Centre (OFSC) earmarked for the special economic zone in Victoria Falls as the Government designated the city as an international financial services centre in the last leg of reforms to make the Special Economic Zone attractive to investors.

It is 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.

Located in Matabeleland North, VFEX is the only USD-denominated bourse in the country and region, placing the province at a vantage point to lead in financial technologies investment.

The fast-growing USD-denominated stock exchange has been offering various incentives that include Government’s increase in the retention ratio for exporters listed on the VFEX to 100 percent, which has been an attractive factor for companies.

The platform enables companies in Zimbabwe, the Sadc region and the rest of Africa to raise capital in foreign currency. All international companies invested in Zimbabwe can seek listings on VFEX as Government has committed that it will remain a foreign exchange market in line with Vision 2030, which requires a lot of foreign investment as the country needs a vehicle that will make it attractive to foreign investors hence the VFEX, which has tax benefits. 

VFEX counters include African Sun Limited, Axia Corporation Limited, Bindura Nickel Corporation Limited, Caledonia Mining Corporation, First Capital Bank, Innscor Africa, Karo Mining Holdings, National Foods Limited, Nedbank Group Limited, Padenga Holdings, SeedCo International, and Simbisa Brands Limited and Edgars Stores Limited.