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Harare Bureau

THE recently launched Victoria Falls Stock Exchange (VFEX), is generating interest from potential investors after it officially opened its doors late last month.

VFEX was officially launched on 23 October 2020 by Finance and Economic Development Minister Professor Mthuli Ncube in the resort town of Victoria Falls. The exchange is operated by the Zimbabwe Stock Exchange (ZSE).

Seed Co International is currently the only counter now trading on the exchange but more companies are expected to start flocking into the exchange platform that is a vehicle for raising capital in foreign currency. Mining firms and other export-oriented businesses are tipped to be on the exchange.

ZSE head of business development, Mr Anymore Taruvinga, said following the launch, the exchange has been preparing for trades by ensuring trading and settlement were in sync. He indicated high growth prospects for the exchange.

“The interest has been huge and we look forward to the growth of the exchange. After the launch the VFEX has been preparing for trades through ensuring that the trading and settlement systems are in sync,” he said. “Market participants and investors were also taken through the trading settlement modalities to ensure they fully understand the process.”

The first trade on the exchange was recorded on 06 November with 1 000 shares exchanging at US$0,18 cents a share. By close of trade Wednesday, Seed Co International was flat at US$0,18 cents.

“Currently only Seed Co International has been listed on VFEX. Listing is not a one-day event, generally taking up to nine months to get requisite internal and external approvals for potential issuers,” said Mr Taruvinga.

Experts in the capital markets and mining sector say the exchange has the potential to become a game changer in a country endowed with vast mineral resources. The exchange trades in hard currency. This makes it a good funding mechanism especially for the mining sector, which is seen as an enabler for economic growth. As such various incentives have been put in place to increase its allure among other African exchanges.

For instance, withholding tax for companies that list on the VFEX is less than others at five percent, while those on the ZSE is 10 percent. For non-listed companies, withholding tax is pegged at 15 percent.

The exchange also takes away exchange rate risk as it trades in hard currency with listing rules and regulations that are in line with international best practice.