Omega Ukama 
NEDBANK Group (Nedbank) says the conversion of its shares to depository receipts on the Victoria Falls Stock Exchange (VFEX), which individual stockholders can elect to do before November 11, will shorten trade settlement by six days, among other benefits.
The financial services group announced Friday that the option was open to shareholders “who are interested in trading their equity securities in Zimbabwe”.
Old Mutual unbundled Nedbank shares to its shareholders in October 2021 and until now, Zimbabwean stockholders had been trading scrip on the Johannesburg Stock Exchange through a Corpserve Registrars (Corpserve) dealing service.
But starting November 18, those who would have elected to convert their shares will be able to trade them through depository receipts — an instrument representing a foreign company’s publicly traded securities — on the US dollar-denominated VFEX.
“The model will improve the settlement cycle by approximately six days – the envisaged settlement cycle will be a T+3,” Nedbank said in a statement.
“This model will unlock liquidity in Nedbank as participants will have coordinated entry and exit mechanisms.
“Both current shareholders of Nedbank and potential investors will soon find potential avenues to transact in this instrument locally and hence increase convenience and expanded options.
“The model is anchored on a solid system architecture that delivers the required security and credibility,” the statement said, adding that holders of Nedbank depository receipts would be able to use them as security against local borrowings through the VFEX CSD’s pledge functionality.
Currently, Zimbabwean shareholders’ sale proceeds are subject to foreign exchange surrender requirements, but these will be fully exempt on the VFEX.
Shareholders who do not wish to participate in the initiative will continue to have their shares held under Corpserve in South Africa.
The VFEX, introduced in 2022, has three plain vanilla equity listings – Seed Co International, Padenga Holdings and Bindura Nickel Corporation. The exchange has one other listing, New York Stock Exchange-quoted Caledonia Mining Corporation’s depository receipts.
Nedbank is a financial services group offering wholesale and retail banking services, as well as insurance and asset management services.
Through its principal banking subsidiary, Nedbank is one of South Africa’s four largest banks.
Apart from its predominant exposure to the South African market, the business also has subsidiaries in Lesotho, Mozambique, Namibia, Swaziland and Zimbabwe.
