VFEX edges closer to launching commodities exchange
...Signs MoU with MMCZ ...Finalises rules of the exchange
PHILLIMON MHLANGA
The Victoria Falls Stock Exchange (VFEX) is getting closer to launching the proposed Commodities Exchange after signing a Memorandum of Understanding ( MoU) with the Minerals Marketing Corporation of Zimbabwe (MMCZ) and finalising the exchange’s regulations,Business Times can report.
Robert Mubaiwa, the head of VFEX, a United States dollar denominated exchange, disclosed the development yesterday during the VFEX Masterclass in the capital, Harare.
He said VFEX is targeting to launch the Commodities Exchange in the first quarter (Q1) of 2024, an initiative which will broaden the exchange and the country’s capital markets and expand the mining sector, which is projected to grow into US$12bn this year.
Experts said this could be a game changer in the country endowed with vast mineral resources as it trades in hard currency And therefore a good funding mechanism for the mining sector, which is seen as an enabler for economic growth.
“What we have done so far is that we signed an MoU with MMCZ.We are finalising rules for the Commodities Exchange. We expect to launch it in Q12024,”Mubaiwa said.
Established in 2020, VFEX is a registered exchange that provides a range of financial products and services, including shares, deposit receipts, fixed income instruments, exchange traded funds, exchange traded notes and real estate investments trusts.
It is governed by the Securities Exchange Act 24:25, SI 196 of 2020, Exchange Control Directive RV 177/2020, the Finance Act 23:04 and SI 4 of 2022 Banking which establishes the Victoria Falls Special Economic zone.
The ability for businesses to raise capital in US dollars or any other hard currency has made the stock exchange a desirable venue for capital raising.
Along with many other benefits, listed companies and investors enjoy reduced currency risk, lower transaction costs, lower dividend withholding tax for foreign investors, and no capital gains tax when selling listed securities.
