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Leonard Ncube in Victoria Falls
PLANS are underway for Zimbabwe to establish a Bond Market Association that will help promote direct investment and participation of locals in the debt securities market.
Two weeks ago, Karo Mining Holdings became the first company to list the first-ever bond instrument on the Victoria Falls Stock Exchange (VFEX).
The move is expected to revive the fixed-income market and contribute towards the development and deepening of capital markets in the country.
VFEX was established as a Special Economic Zone in line with the Statutory Instrument 196 of 2020 and is a subsidiary of the Zimbabwe Stock Exchange (ZSE).
As an off-shore focused financial services centre, the operationalisation of the foreign currency-denominated bourse is part of efforts to attract global capital and restore foreign investor confidence in Zimbabwe’s capital markets by helping companies raise capital in forex.
VFEX deputy chair Mr Bartholomew Mswaka has said the thrust of the bourse is to increase the pool of asset classes on the exchange.
He said management and staff were engaging various stakeholders and potential issuers in order to have a variety of securities on the bourse.
“Following the listing of Karo, VFEX together with other market players will be working to establish the Bond Market Association,” said Mr Mswaka.
“The association’s objective will seek to promote skills development, information dissemination and investor participation in the bond market.”
Globally, he said the bond market provides a significant source of capital for many governments, companies and financial institutions.
Karo Mining issued a US$50 million three-year bond with an annual coupon rate of 9,5 percent, which is paid semi-annually. The listing of a bond by Karo Mining is the first of its kind in Zimbabwe.
Speaking to the media after the listing ceremony, VFEX chief executive Mr Justin Bgoni said the concept of the bond association, was obtained from Botswana where such a market is viable. He said people who are natural issuers of bonds will participate on the bourse.
“So there will be natural issuers like lawyers and accountants and everyone is involved,” he said.
One of Karo Mining top managers Mr Michael Jones said: “The listing of a bond by Karo Mining Holdings gives us great confidence as an exchange and we’re grateful to the Karo management, staff and shareholders for having confidence in our market.”
Karo Mining became the 6th counter on the VFEX after SeedCo International Limited, Bindura Nickel Corporation, Padenga, Caledonia Mining, Nedbank Zimbabwe and Simbisa Brands Limited. — @ncubeleon
Online Reporter