Bindura Nickel Corporation looks to cement it is delisting from the ZSE and move to the US dollar-denominated Victoria Falls Stock Exchange. In a recent circular to shareholders, the delisting and relisting roadmap were included with plans to delist from the ZSE on the 15th of December and planned to relist just in time for the festive season on the 17th of December. It is a bittersweet moment as the ZSE loses yet another counter but the VFEX gains another counter which could bring the total listings up to 4 if the listing of Caledonia Mining Corporation is a success.

Bindura has for some time hinted that they will pursue a switch to the west of Zimbabwe. The motivations for Bindura as a company and its shareholders are very clear here. In addition to the tax advantage of 0% corporate tax (compared to 25%) the company would receive by listing there they would also be granted 100% foreign currency retention which would prove very important to the exporter. Shareholders would also benefit from the lack of Capital gains Tax and Stamp duty making both buying and selling costs significantly lower.

The Bindura share price has not performed as well as many expected for an exporter however the business hasn’t done much better. One would assume that moving to the VFEX would impact costs by complete foreign currency retention and as Finance minister Professor Mthuli Ncube proffered when proposing the exchange last year, open them up to opportunities to attract more investment.

Proponents of the VFEX will certainly celebrate the switch as it brings to the party the 4th counter. When the VFEX was initially mooted amid the suspension of the Zimbabwe Stock exchange last year the belief was that Old Mutual, SeedCo International and PPC would all join when it opened. However, the exchange opened with only SeedCo International and the other two have resisted listing to date despite ongoing suspension from the ZSE. SeedCo International has eventually joined exporter Padenga holdings. With the listing of Caledonia slated for the 1st of December a successful switch for Bindura on the 17th would make it the fourth counter in the resort town.

What happens to shareholders?

For Bindura shareholders the path ahead need not be a mystery. We have two examples they can follow to get an idea of what comes next. Both SeedCo International (though coming off a suspension) and Padenga have trodden the same path before. For price action, Padenga would provide a better guide as to what to expect.