THE Victoria Falls Stock Exchange (VFEX) which registered a US$5,97 million in turnover in the third quarter has outlined strategies to lure foreign participation on the bourse and is engaging potential issuers with a primary focus on increasing securities listed on the exchange.
From its inception in 2020, VFEX has experienced a positive momentum which has seen 14 listings with some migrating from the Zimbabwe Stock Exchange (ZSE).
Listed entities cut across mining, property, banking and hospitality sectors.
The bourse is a subsidiary of the ZSE established to kick start the Offshore Financial Services Centre (OFSC) earmarked for the special economic zone in Victoria Falls.
It is 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.
In a newsletter, VFEX said it is working on establishing strategic partnerships to attract participation on the exchange.
“The partnerships will entail hosting conferences with stakeholders targeted at foreign investors.”
It added that it is engaging potential issuers with a primary focus to increase securities listed on the exchange.
Commenting on the Bond Market Association, it said the initiative has gathered momentum and it is expected that the inaugural launch will be held before the end of the year.
“The initiative has received support from key stakeholders and we are hopeful that it will enhance the outlook of the fixed income space.”
Turning to its performance in the period under review, it said the year to date turnover stood at USD$19,5 million showing a 115,5 percent increase from the 2022 comparative quarter.
“VFEX recorded a total market turnover of USD$5,97 million in Q3 2023. In comparison to the same period last year (Q3 2022), the market turnover recorded a tremendous 903,75 percent increase from USD$0,595 million.”
VFEX recorded a strong USD$5,97 million in turnover for the period under review.
In comparison to the same period last year (Q3 2022), the market turnover recorded a significant increase of 903,75 percent from USD$595,029.53.
“However, there was a 9,65 percent decrease compared to turnover in the previous quarter (Q2 2023).”
The VFEX market capitalisation for Q3 2023 closed at USD$1,27 billion, representing a slight decline of 0,89 percent from the previous quarter of USD$1,29 billion.
VFEX has become a critical component of Zimbabwe’s ongoing efforts to revitalise its capital markets and attract global investment by providing a platform that caters to foreign investors and offers stability in a hard currency ecosystem, the exchange is stimulating economic growth and fostering a supportive investment environment.
The Government has committed that the VFEX will remain a foreign exchange market in line with Vision 2030, which requires a lot of foreign investment as the country needs a vehicle that will make it attractive to foreign investors hence the VFEX, which has tax benefits.
VFEX offers a number of incentives and trading advantages compared to the ZSE, which has been the pulling factor for listings.
The USD-denominated exchange provides extended options for capital raising, including debt listing in foreign currency.
The USD bourse also offers lower trading costs of 2,12 percent compared to 4,63 percent on the ZSE, which would enable shareholders to retain more value.
VFEX also offers tax incentives for shareholders, which include a five percent withholding tax on dividends and no capital gains tax on share disposal, thus providing enhanced earnings for shareholders compared to the ZSE.
In addition, the USD provides a hedge against the inflation of the Zimbabwe dollar, providing greater investor protection.
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