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Enacy Mapakame
THE Victoria Falls Stock Exchange (VFEX) had an eventful half-year period this year, characterised by new listings and a suspension, as the US dollar-denominated exchange registered growth.
By the end of the half-year period, the All-Share Index was 1,19 percent up on a year-to-date basis.
Banking group FCB paced the fastest with an 87 percent jump during the six months, as profit after tax for the financial year 2023 rose by 26 percent to US$15,4 million, from US$12,2 million during the corresponding prior year period.
Caledonia Mining Corporation and Simbisa rose by 11 percent and 10 percent, respectively, while NatFoods put on 6 percent.
Property firm WestProp Holdings remained flat during the period, while Zimplow fell the heaviest with a 55 percent decline, followed by African Sun, which went down by 18 percent.
Seed Co International was also on the downside, easing by 12 percent during the period.
Resources group Bindura was suspended during the period after the company was placed under reconstruction.
Although the reconstruction order was issued against Trojan Mine, the country’s only primary nickel producer, this would have an impact on the entire group, resulting in its suspension, the first one on the exchange.
Overall, total market capitalisation increased by 3,7 percent to US$1,25 billion. The growth was supported by the listing of clothing retailer Edgars after it migrated from the primary bourse, the Zimbabwe Stock Exchange (ZSE).
The clothing retailer joined several other businesses that have transferred to the VFEX, as the companies sought to hedge against the then-volatile domestic currency, unlock shareholder value and reach a wider pool of investors from regional and international markets to raise capital for expansion. Zimbabwe has since replaced the inflation-weary Zimbabwe dollar with ZimGold (ZiG), which is backed by precious minerals, mainly gold, and foreign currency.
For Edgars, the migration to VFEX will be a perfect hedge at a time when the retailer is facing stiff competition from cheap imports flooding the local market.
Experts have also largely guided the VFEX to maintain a growth trajectory that was experienced in 2023, when big cap counters like Innscor, NatFoods and hospitality group African Sun moved to the exchange.
New issuers are also expected to debut on the exchange soon, as they seek hard currency to hedge against potential risks in the future, as well as attract quality investors from the regional and international markets.
During the half-year period, one notable development at the exchange was the collaboration with other market players to establish the Bond Market Association of Zimbabwe (BMAZ), which was launched in Bulawayo during the second quarter period.
The creation of BMAZ is expected to play a key role in fostering market development, advocating industry interests, enhancing market
transparency and integrity, and promoting investor confidence and participation.
“The first half of the year went on positively for VFEX as we continue to experience steady growth as our market is performing well as is shown by the statistics,” the exchange said in a statement in their quarterly review. The VFEX Direct platform, which provides investors with a convenient trading experience, continues to thrive.
Furthermore, the VFEX is in the process of creating a commodities exchange, which will further expand the range of investment options available to investors.
Online Reporter