LIVINGSTONE MARUFU
The market value of Victoria Falls Stock Exchange (VFEX) jumped more than four-folds to US$1.4bn in the 12 months to May from the same period last year, latest data shows as liquidity improves on the dollar-denominated bourse.
In the same period last year, the market value of the bourse was US$256.1m.
VFEX is a subsidiary of the Zimbabwe Stock Exchange (ZSE).
“We anticipate a continued growth trajectory on VFEX as we are likely to witness increased activity on the bourse,” the bourse’s CEO Justin Bgoni said.
The increase in market value comes after several companies ditched the ZSE and migrated to the VFEX, a move that improved the liquidity at the stock market. “The new listings on VFEX in 2023 have improved the liquidity on VFEX, together with the stakeholder engagements we have been conducting and the launch of the online trading platform VFEX Direct has made it easier for investors to access the market thus leading to the increasing activity on VFEX,” he said.
The bourse was established with incentives that have enabled it to attract issuers that want to raise capital in hard currency. These incentives include all the cash inflows raised on VFEX are considered free funds and can be kept in FCA Investments Foreign currency account, allowance to use offshore settlement for trades done, and reduction in currency risk for listed companies and investors.
VFEX also offers tax incentives for shareholders and exemption from capital gains withholding tax for the bourse investors.
Bgoni recently told investors at the Zimbabwe Capital Markets Conference in London that the bourse received enormous support from the government.
The stock exchange has been attractive as a capital raising platform due to the ability for companies to raise capital in US$ or any other hard currency, trading, clearing, and settlement (locally site or offshore) in US$, reduction in currency risk for listed companies and investors and less onerous listing requirements.
The value of stocks traded during the first quarter of this year amounted to US$13 373 114.63.
VFEX average daily value traded stood at US$57 150.06 from January 2022 to March 2023.
VFEX took a leaf from the Mauritius exchange which is one of the preferred bourses globally.
Mauritius is currently the leading treasury and trade finance hub in the region.
The Mauritius International Financial Centre is a core part of the Mauritian economy as it contributes almost US$1bn to Gross Domestic Product (8% of the total) and US$180m in tax revenues (9% of the total), and provides more than 11 000 jobs (4% of skilled labour).
