ZIMBABWE officially launches the Victoria Falls Stock Exchange (VFEX) today as it peeps through limitless possibility in its quest to harness offshore investments, which are critical in bringing about meaningful economic transformation.
The establishment of VFEX, a wholly owned subsidiary of the
Zimbabwe Stock Exchange (ZSE), which will trade exclusively in foreign currency
in the resort town of Victoria Falls, is strategic and buttresses the country’s
desire to attain a middle-income economic status by 2030.
Australian mining company, Arcadia Resources, Blanket Mine
parent firm Caledonia, SeedCo International Limited, and a total of about 80
companies have already shown interest to list on the VFEX. This represents a
step in the right direction for the new platform. Government also expressed
desire to raise funds for compensating former white commercial farmers through
issuing bonds worth a total of US$3,5 billion that will be sold on the VFEX.
As the country’s prime destination and home to one of the
Seven Wonders of the World, the allure of Victoria Falls is expected to greatly
aid attraction of global capital, particularly aimed at raising funds for the
mining sector, one of the mainstays of the economy.
Finance and Economic Development Minister Professor Mthuli
Ncube will lead today’s officially proceedings, which mark commencement of
operations on the new bourse with official trading of shares set for Monday.
According to ZSE, already 17 securities firms and 13 sponsors have registered
to participate on the platform.
Government, through the Securities Exchange Commission of
Zimbabwe (SECZ), has already given green light for operationalisation of VFEX
including assigning modalities outlining its operations and a statutory
instrument governing its activities. The Reserve Bank of Zimbabwe has also
signed a Memorandum of Understanding with VFEX guaranteeing smooth trade
settlement with investors, thereby dispelling perceived risk associated with
repatriation of funds.
Potential investors and economic analysts have lauded the
idea of VFEX amidst the need to attract more foreign capital to the economy,
which the ZSE is not specifically designed to do. Prof Ncube has said the
broader vision was to locate VFEX as a Pan-African gate way for offshore
investments for the rest of Africa.
With the Victoria Falls falling under a Special Economic
Zone, Government has dangled special incentives for new traders, which will
encourage business and growth opportunities for the VFEX.
“The aim of the (this) stock exchange is to provide a
platform, which allows easier repatriation of funds with respect to foreign
capital thereby solving the challenges with the traditional Zimbabwe Stock
Exchange where investors were struggling to repatriate their investments to
their parent countries,” political economy analyst, Mr Kevin Tutani, said.
“The possibilities are limitless. How can the new stock
market be utilised for maximum results? A good management of this second stock
market, after the ZSE will likely bring results of successful new enterprise,
job creation and a burgeoning economy. Are we on the cusp of a new era in
Zimbabwean financial markets?”
VFEX operationalisation has also excited the tourism
industry given the wider implications in terms of attracting more tourists and
businesses to set-up shop in the resort town. Tour operators say VFEX is one of
the first visible fruits of the Victoria Falls Special Economic Zone, which has
created opportunities for expansion of the resort town.
Hospitality Association of Zimbabwe (HAZ) chairman for
Victoria Falls chapter, Mr Anand Musonza, expressed the sentiment for the
sector.
“We are excited about new investors that will be coming
into town. We believe the VFEX will attract new investments into the country
and our town in particular to allow new businesses to set shop and create new
offerings for the hospitality industry,” he said.
“This will create job opportunities for our people and
contribute to growth of our industry and town.”
Mr Musonza said Victoria Falls town was hard hit by
Covid-19 as its economy was solely dependent on tourism, which was grounded by
the pandemic due to international travel bans.
Industrialist and United Refineries Limited chief executive
officer, Mr Busisa Moyo, said VFEX launch will torch a scrabble for land
development in the resort town and its surroundings.
“To my local friends and my diaspora kith and kin, the early
bird catches the worm. Also buy land near Victoria Falls, Hwange, Binga and
thank me later. This comes once every 100 years,” he posted on his Twitter
handle.
As VFEX forges ahead, experts have urged administrative and
marketing excellence, which will largely determine the success or failure of
the platform. They said the new stock exchange should make it cheaper and more
efficient for investors to trade and that fees charged and time taken to settle
transactions should be as low and as efficient as possible. The technology used
for operations must also provide for security, speed and transparency in the
settling of transactions.
“The nature of global capital should be understood and also
its market segments if any, so that marketing messages are effective and yield
fruitful results for the stock market,” added Mr Tutani.
“All possible revenue streams should be utilised and
exploited accordingly from the equity market, risk management, post-trade
services and provision of data. Since the VFEX will be a market for attracting
global capital it must be globally competitive. Ambitious yet achievable goals
must be set.
“The VFEX may even aim to be a gateway for investors to
access the Southern African region or even the African continent at large.
There is no room for complacency. Regulatory authorities must responsibly
oversee activities of companies on the VFEX and give regulatory guidance as and
when required.” Chronicle
0 comments:
Post a Comment