Omega Ukama 
ACTIVITY on the Victoria Falls Stock Exchange (VFEX) has continued to gain pace, with turnover increasing by 645 percent in January to US$191 708, compared to US$25 736 in December.
It comes as the budding exchange is expected to add to its four listings this year, amid growing interest from mining companies that are hoping to take advantage of the US$-denominated market’s incentives to meet their capital demands.
VFEX offers an array of incentives particularly for exporting companies, which are allowed to retain 100 percent of their incremental export proceeds in foreign currency, as opposed to a maximum of 80 percent otherwise.
Driving activity on the exchange in January was Padenga Holdings, with trades amounting to US$102 064, compared to US$24 105 in December.
Trades in shares of Seed Co International amounted to US$85 705, up from only US$332 in December.
It has, however, been a slow start for the latest listing, Bindura Nickel Corporation (BNC) and Caledonia Mining Corporation (Caledonia), which have a combined turnover of US$6 337 for December and January.
BNC shares listed on the VFEX December 17 after a migration from the ZWL-denominated Zimbabwe Stock Exchange, with management saying the move would enhance the company’s ability to source capital in an “appropriate currency”.
In addition, analysts have said the move could help with price discovery of its shares.
Kuvimba Mining House – a group owned by the government of Zimbabwe and a consortium of international investors – holds a 74,73 percent stake in BNC, leaving only about 25 percent in the hands of smaller investors, who are more likely to sell.
Equities analyst, Enock Rukarwa, says the slow activity in BNC is down to two things; “the shareholding structure of BNC does not exactly bode well for liquidity, also, the VFEX is still teething and does not have a lot of activity as of yet.”
Zimbabwe-focused mining concern, Caledonia, listed on the exchange early December through depository receipts – certificates that allow investors to hold scrip in an entity listed on a foreign exchange.
Meanwhile, principals of the exchange, which was launched in October 2020, say mining companies are expected to drive new listings on the market in 2022, taking advantage of the bourse’s incentives, to meet their capital demands.
VFEX offers an array of incentives particularly for exporting companies, which are allowed to retain 100 percent of their incremental export proceeds in foreign currency, as opposed to a maximum of 80 percent otherwise.
newsdesk@fingaz.co.zw
