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Zimbabwe's dollar stock exchange surges 45%
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Zimbabwe's dollar-only stock market is riding a wave of gains, powered by gold miners cashing in on a 48% jump in the precious metal this year.
The Victoria Falls Stock Exchange's benchmark index has surged 45%, lifting its market value to $1.8 billion at the end of September.
The VFEX was set up in late 2020 to raise capital, specifically for mining companies, and has 17 listed firms. Chief Executive Officer Justin Bgoni expects it to add five more by the end of the year, in sectors ranging from mining to property, he said Thursday by phone.
The exchange has performed well with valuations now approaching their regional peers, he said.
UK-based Kavango Resources, with mining interests in Filabusi in south-eastern Zimbabwe, became the third gold miner to list on the bourse last month. Others include Caledonia Mining Corp. and Padenga Holdings Ltd., which also has interests in crocodile skins.
Read More: BMWs and Whisky: Gold Rally Brings Riches to Rural Zimbabwe
"Their stocks have become a proxy for gold," said IH Securities research head, Lloyd Mlotshwa. "These companies invested well in time to catch the gold rush and have also ramped up production when the timing is right."
Also boosting the VFEX is a shortage of ZiGs, the local currency, which has shifted investor sentiment away from the main exchange in Harare to the dollar-only bourse, Mlotshwa said. "ZiG liquidity is weak," he added "Investors resort instead to using their dollars."
The Victoria Falls Stock Exchange's benchmark index has surged 45%, lifting its market value to $1.8 billion at the end of September.
The VFEX was set up in late 2020 to raise capital, specifically for mining companies, and has 17 listed firms. Chief Executive Officer Justin Bgoni expects it to add five more by the end of the year, in sectors ranging from mining to property, he said Thursday by phone.
The exchange has performed well with valuations now approaching their regional peers, he said.
Read More: BMWs and Whisky: Gold Rally Brings Riches to Rural Zimbabwe
"Their stocks have become a proxy for gold," said IH Securities research head, Lloyd Mlotshwa. "These companies invested well in time to catch the gold rush and have also ramped up production when the timing is right."
Also boosting the VFEX is a shortage of ZiGs, the local currency, which has shifted investor sentiment away from the main exchange in Harare to the dollar-only bourse, Mlotshwa said. "ZiG liquidity is weak," he added "Investors resort instead to using their dollars."
Source - bloomberg
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