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Sikhulekelani Moyo, Business Reporter

FOOD processing giant, National Foods Holdings Limited, has decided to delist from the Zimbabwe Stock Exchange to be listed at the Victoria Falls Stock Exchange (VFEX), a move the firm says will improve its capitalisation and enhance its marketability.

In a public notice yesterday, the company said its directors have approved the delisting from the Zimbabwe Stock Exchange (ZSE) and immediate listing on the VFEX.

“At the meeting held on Monday 7 November 2022, the board of directors of National Foods considered the termination of National Foods ZSE listing, with the intent to list the company’s shares on the VFEX by way of introduction,” reads part of the abridged circular to shareholders.

The USD-denominated VFEX is a subsidiary of the ZSE launched in 2020 as an off-shore biased financial services centre, 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.

At its inception, VFEX began trading with leading seed producer and distributor, SeedCo International Limited with mining giant Caledonia Mining, skins and meat processor Padenga and Bindura Nickel Corporation coming on board later.

Several firms have recently announced intentions of listing.

Quick restaurants services group Simbisa Brands is expected to migrate from ZSE to VFEX on December 2. Nedbank Zimbabwe has also indicated its intention to shareholders to list next month.

simbisabrands

Financial services group GetBucks has also indicated plans to migrate to the VFEX from the ZSE.

The platform is seen as a gateway for companies in Zimbabwe, Sadc and the rest of Africa to raise capital in foreign currency and also provide investors to trade in the secondary market in hard currency.

All global companies invested in Zimbabwe can seek listing on VFEX.

As such, National Foods said being listed at VFEX will help its shareholders to realise value of their holdings and provide a more accurate benchmark of the stock’s performance and mitigate valuation volatility.

“National Foods will have greater ability to raise capital against a dollarised balance sheet,” it said.

“The VFEX’s potential to become a regional exchange enhances NFHL’s opportunity to attract a diversified investor base, which can assist the company in both its local and in  time potential regional initiatives,” said the firm.

“The company’s migration from ZSE to VFEX would potentially improve the company’s regional profile and commercial standing, strengthening the company’s prospects for further local as well as regional expansion. Additionally, the VFEX would promote the marketability of NFHL investment regionally.”

Given that entities listing on the VFEX are required to report in US$, therefore, National Foods hopes this will result in efficient consolidation of National Foods’ earnings.

The establishment of the VFEX is one of the many initiatives implemented by the Second Republic to stabilise the economy and attract foreign direct investment.

Investors who participate in the VFEX benefit from the ability to move their capital and dividends in and out freely, low transaction costs, tax incentives that include a five percent dividend withholding tax for foreign investors and exemption from capital gains withholding tax for all investors and minimal currency risks. – @SikhulekelaniM1