Oliver Kazunga, Senior Business Reporter
THE Victoria Falls Stock Exchange (VFEX) has achieved significant milestones in line with the thrust of ensuring capital markets play their role in capital raising and economic revival.
In less than six months of starting operations, the VFEX has so far registered four counters namely Seed Co International Limited, Bindura Nickel Corporation, Caledonia Mining Corporation and Padenga Holdings.
VFEX head of markets, Mr Robert Mubaiwa, told delegates during a workshop held virtually on Thursday that these counters were registering good outcomes.
“By the end of the year, we had a total of four counters listed on the VFEX and so far, the market has literary grown by 335 percent. What’s more pertinent about these statistics is the latest issuer who came on board that’s Caledonia managed to raise more than they initially wanted,” he said.
“They wanted to raise about US$3 million but because of oversubscription they ended up raising US$8 million and this money has been raised locally from local investors.
“We believe there is sufficient appetite for good assets in this market and we are proud to say all the trades that we have literally traded from the VFEX managed to settle successfully,” said Mr Mubaiwa.
The bourse, which is a wholly-owned subsidiary of the Zimbabwe Stock Exchange, was issued with a trading licence by regulatory authorities in September 2021 before President Mnangagwa subsequently launched the forex-denominated platform in December.
Mr Mubaiwa said VFEX was established against a background of de-listings that had become rampant than listings on the ZSE.
Such a scenario, he said, raised more questions than answers on whether the ZSE platform was still playing its role to the market as a platform through, which capital could be raised.
“It is important to note that we have been established to exclusively trade in United States dollars and other hard currency as part of the Government’s efforts, which is obviously to kick start the Offshore Financial Centre to attract global investment.
“Therefore, if we look at the things that we are getting so far, we are getting tremendous support from the Government in terms of making sure that VFEX is really successful,” he said.
“You have also realized that the President has been here to officially launch the VFEX and this is the thrust that is there at Government level in terms of support to ensure that we play part in terms of economic revival by raising capital.”
Mr Mubaiwa said there will not be any restrictions when it comes to transactions in the Offshore Financial Services Centre.
“There are no restrictions whatsoever for listed companies that want to participate on VFEX,” he said.
Mr Mubaiwa said the VFEX since it started operating has been attractive to issuers because of the ability for companies to raise capital in US dollar or any other hard currency.
The firms participating on the VFEX have been seeking foreign currency to fund their expansion initiatives or improve capacity utilisation levels.
“The VFEX has been attractive as a capital raising platform also due to the trading, clearing and settlement platform (on or offshore) in US dollars, and also listing requirements are less onerous as compared to the ones on ZSE,” said Mr Mubaiwa.
Given that foreign investors were also required to repatriate foreign currency obtained from their local investments, this was also a contributory factor to the establishment of the VFEX to ensure the domestica capital markets remain relevant.
“In terms of ownership, we are 100 percent owned by the ZSE and Government has 32 percent shares, the balance, which is 68 percent is in the hands of private investors which includes members of the exchange,” he said.