'VFEX growth exceeds expectation'

FINANCE and Economic Development Minister, Professor Mthuli Ncube, has lauded the rapid growth of the Victoria Falls Stock Exchange (VFEX), which witnessed the listing of the fifth counter, Nedbank Group Limited Zimbabwe, on Friday.

The company joins leading seed producer and distributor, SeedCo International Limited, mining giant Caledonia Mining, skins and meat processor Padenga and Bindura Nickel Corporation, which came on board earlier.

Victoria Falls Stock Exchange

The VFEX is a subsidiary of the Zimbabwe Stock Exchange (ZSE) launched in 2020 as an off-shore biased financial services centre.

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.

Nedbank Group becomes the first financial institution to list on the VFEX while more companies have also expressed interest in listing on the foreign currency-denominated bourse.

Prof Ncube, who was accompanied by his deputy, Clement Chiduwa, described the listing as a momentous occasion coming at a time when prospects towards realisation of economic growth in line with the National Development Strategy 1 are very high.

"I'm happy to be witnessing this rapid growth of the Victoria Falls Stock Exchange, which was established in 2020 as a Special Economic Zone as provided by the Statutory Instrument 196 of 2020," he said.

"Nedbank Group Limited becomes the 5th company to list on the exchange and the listing comes at a time when hopes for the revival of the economy are high. It's a momentous occasion for a young stock exchange, which in my view has exceeded all expectations.

"I'm not aware of this kind of record being demonstrated anywhere in this African continent in terms of the speed of development of capital markets."

The minister said the listing of Nedbank will provide Zimbabweans with the ability to access securities outside on the Johannesburg Stock Exchange in a much free environment, as well as to realise value for it and minimise transaction costs.

He said the listing of a foreign counter on VFEX is significant as it shows that investors stand ready to support Zimbabwe in its quest to attract foreign direct investment.

"The listing of these depository receipts demonstrates confidence in our capital markets and is an important signal to both local and international investors that indeed our economic recovery and growth is well and truly underway," said Prof Ncube.

"A big thank you to the Nedbank Group Limited board and management. As a country aiming for upper middle-income status by 2030, we require strong financial systems capable of mobilising both local and foreign money for investment in our productive sectors.

In 2016 Old Mutual announced its strategy of managed separation as the board believed that the long-term interests of Old Mutual plc shareholders and other stakeholders would be best served by separating the four businesses then owned by the Old Mutual plc group.

This process was completed in 2018, paving way for the listing of the Nedbank Group Limited on the Johannesburg Stock Exchange in South Africa.

In compliance with tax and exchange control requirements in South Africa, shareholders on the Zimbabwe branch register had to receive their shares through a nominee facility that met the legal requirements of South Africa.

The listing on VFEX enables current shareholders and new investors to gain exposure to Nedbank on the VFEX.

Holders of Nedbank Zimbabwe Depository Receipts (ZDRs) will be able to pledge these as security or collateral against local borrowings. Corpserve Registrars chief executive, Mr Collen Tapfumaneyi, said the listing represents the group's big step in financial sector deepening, financial inclusion and unity of purpose among capital market players, regulators and Government.

"As Corpserve Registrars, a wholly owned subsidiary of Escrow Group, we are proud to have played a part in the development and listing of the first ever unsponsored Depository Receipt on the VFEX," he said.

Mr Tapfumaneyi said Corpserve designed a Zimbabwe Depository Receipt structure after the managed separation to widen options for local investors.

He said the company remains committed to playing its part to give citizens access to quality international securities so as to diversify their portfolio as well as preserve and grow value. Several firms have recently announced intentions of listing on VFEX with Simbisa Brands expected next week.