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Confidence in listing on VFEX grows – The Herald

The Herald
Nelson Gahadza Senior Business Reporter
The Government is encouraged by the growing confidence in the Victoria Falls Stock Exchange (VFEX), which has manifested through several new listings, a development expected to stimulate investment into the country and accelerate economic growth.
VFEX, launched in October 202,0 is a subsidiary of the Zimbabwe Stock Exchange (ZSE) established to kick start the Offshore Financial Services Centre (OFSC) earmarked for the special economic zone in Victoria Falls.
The US dollar-denominated stock exchange has been offering various incentives that include Government’s increase in the retention ratio for exporters listed on the VFEX to 100 percent which has been an attractive factor for companies.
Listing on the VFEX also facilitates raising of US dollar capital, which enhances the potential for organic growth and inorganically.
Industry and Commerce Minister Dr Sekai Nzenza said at the VFEX listing ceremony for National Foods Limited last Friday that VFEX will allow companies to mobilise resources to invest in capacity and value chains in line with aspirations of National Development Strategy 1 (NDS1).
“We hope to see more companies coming on board on VFEX. We are encouraged by the increased confidence that continues to grow on the VFEX, it is remarkable to start the year with a new listing,” she said.
Now three years old, VFEX has a total of eight listings and different securities that include equities, Zimbabwe Depository receipts and fixed incomes.
Dr Nzenza said National Foods was among companies investing through the value chain and moving the economy up the value chain.
“We are seeing value addition in the portfolio of basic food commodities. In NDS1, we talk of import substitution, National Foods has been supporting local production, the Buy Zimbabwe initiative and accessibility to basic commodities,” she said.
The industry minister said the company had committed investments across its business portfolios that include the flour mill in Bulawayo, pasture and rice plants in Harare as well as the stockfeeds plant.
“This will result in the production of 190 000 tonnes of cereals per annum, generating revenue in the region of uS$300 million to US$400 million and creating 1 000 direct jobs, in addition to already existing 1500 employees,” said Dr Nzenza.
She noted that National Foods had also embraced technology, which will result in import substitution and contribute to the US$8 billion industry and commercial sector by 2023.
“The company is investing in securing food security through the latest technology which improves production,” she said.
Finance and Economic Development Deputy Minister Clemence Chiduwa said new listings signified the positive developments in the productive sectors of the economy.
He said the Ministry of Finance and Economic Development was always encouraged when the development trajectory of the country is in sync with the NDS1 policy.
“Value addition, moving the economy up the value chain, localising production in line with NDS1. As long as you align with NDS1, that will automatically feed into the Vision 2030,”said.
He noted that the successful implementation of NDS1 rode on improved manufacturing sector through value addition and Natfoods through their investments and product diversification has been doing that.
“If we are to attain growth, it will be private sector led, while the Government focuses on accelerating policy and improving the business environment.”
Mr Chiduwa said Government reaffirms support for VFEX in order to make it a preferred destination for investors and companies.
He said the current rules and regulations on the VFEX go a long way in making the market irresistible to foreign capital and looks forward to more listings on the VFEX this year.
Deputy Minister of Lands, Agriculture, Water, Climate and Rural Resettlement Vangelis Haritatos said National Foods investments are a testament to an enabling environment being ushered by the Second Republic.
He said National Foods is an active player in the agriculture sector through supporting local farmers through contract farming and offtake agreements.
“The country produced record wheat production last year and this was supported by companies such as National Foods and partners. Through the offtake agreements, companies are required to fund 40 percent of their raw material requirements and National Foods is doing that,” he said.
National Food acting chairman Mr Godfrey Gwainda said the group remained positive on the growth and outlook of the economy and continues to make significant investments in different categories.
He said in line with import substitution and NDS1, the company will invest in a new pasture line in Harare, and this will be a first line in Zimbabwe which will offer customer’s wider options.
In addition to that, the company is also investing in the biscuit plant in Harare which will produce a wide range of biscuits, to widen choices Aspindale stock feed plant improve production efficiencies and supply.
“Many of the investments will localise most products that were being imported. The increase in capacity will result in increased support to our local farmers,” he said.
He said the move to list on VFEX will unlock shareholder value and capitalise through easier access to regional opportunities in the long term.
VFEX chairperson Mrs Caroline Sandura said the year 2023 will be one of the best years for VFEX in terms of new listings and product diversification.
She said the bourse continues to receive support from Government and regulator Seczim in ensuring efficient listings.
“As VFEX, we are diversifying products such as real estate investment trusts (REITs), Exchange Traded Funds (ETF) and contract for different (CFD) and companies who seek to raise capital through initial public offering (IPOs) should utilise VFEX,” she said.
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