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Nqobile Bhebhe, Senior Business Reporter
Seed Co Limited has notified its shareholders that it is joining the great trek to the fast-moving Victoria Falls Stock Exchange (VFEX) after the board approved the migration plan, a massive seal of approval of the bourse.
The seed-producing giant is one of the first Zimbabwe Stock Exchange listed entities this year to announce plans to VFEX.
Already, there is a growing list of firms that have notified shareholders on shifting to the United States index bourse.
VFEX is a subsidiary of the Zimbabwe Stock Exchange (ZSE), launched in 2020 as 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.
In a notice to cautionary statement on Wednesday, Company Secretary Tineyi Chatiza said, “Shareholders of Seed Co Limited (“the Company”) and the investing public are advised that the Board has approved the migration of the Company’s listing from the Zimbabwe Stock Exchange to the Victoria Falls Stock Exchange (“the Transaction”).
“Accordingly, Shareholders are advised to exercise caution when dealing in the Company’s securities. Further announcements will be made in accordance with regulatory requirements as and when there are material developments.”
The timelines are yet to be announced.
The announcement comes on the backdrop of VFEX registering an 18-fold jump in trade volumes to close 2022 at US$12 million compared to US$619 000 in the prior year.
The bourse experienced rapid growth in the last quarter of 2022 injecting much-needed confidence and cementing the country as a safe investment destination.
The establishment of the VFEX is one of the many initiatives implemented by the Second Republic to stabilise the economy and attract foreign direct investment.
The VFEX is fast attracting listings as it offers a raft of incentives including tax exemptions on capital gains and the ability to repatriate funds from a country where foreign exchange is in short supply to attract global capital.
Investors who participate in the VFEX benefit from the ability to move their capital and dividends in and out freely, low transaction costs, tax incentives that include a five percent dividend withholding tax for foreign investors and exemption from capital gains withholding tax for all investors and minimal currency risks
It started operating with a single counter- Seed Co International in October 2019.
By December 2022, seven firms were trading while several more were joining the queue after issuing notices to shareholders.
For instance, National Foods Holdings Limited and Axia Corporation Limited boards have approved the migration path.
Financial services group GetBucks has also indicated plans to migrate to the VFEX from the ZSE.
The bourse now boasts of hosting Padenga Holdings Limited, mining giant Caledonia Mining, Bindura Nickel Corporation, Simbisa Brands and Nedbank Zimbabwe, which became the first financial institution to trade.
Platinum miner Karo Mining Holdings, listed in December 2022, becoming the seventh counter.
Online Reporter