The much anticipated Victoria Falls Stock Exchange VFEX is set to open on the Friday the 23rd of October with transacting set to start on Monday the 26th of October according to a press statement released by chief executive Justin Bgoni on Monday the 19th of October. That leaves the VFSE with a lot of ground to cover in a few days.  While we expected three companies to participate it seems we will launch with just one counter, believed to be Old Mutual.


The lure of the VFEX from a consumer/investor standpoint is the US dollar denomination of the exchange which many prefer as it is more likely to be stable. The Zimbabwean dollar has found stability but nobody is holding their breath on that stability lasting forever. More sophisticated investors will be looking at the absence of Capital Gains Tax on disposal and the lower dividend withholding tax.  Meanwhile, companies are interested in this exchange because in addition to raising money in foreign currency companies will have tax advantages to boot. The US dollar is enough of a lure but 0% corporate tax as compared to 25% is a big draw.

Jumping ship from ZSE?

Companies are mulling delisting from the ZSE left right centre to capitalise on these advantages and the ZSE is seemingly taking a big hit with the exchange dropping value consistently over the last month or so. This can be down to more than one reason with foreign investors having a way out after being trapped in the ZSE for years. The general belief is that local investors are pulling money out the ZSE and preparing to jump on to the VFEX.

In the early days of VFEX talk Finance Minister Mthuli Ncube made it clear that the VFEX was to lure foreign funds and not meant to cannibalise local investors from the ZSE. Since then the tone has softened on investment of local funds but this is one of those things that has not yet been made crystal clear and would need to be come Monday the 26th. It should also not be overlooked that foreign investors would not be in a hurry to invest in an exchange that whilst being new has the same hands involved in it that were at the helm of the ZSE when it was closed for more than a month on allegations of ZSE counters being involved in foreign currency exchange rate manipulation.

The more things change…

The VFEX also published a list of brokers and custodial services which can be best be described as featuring the usual suspects. Whether through failure or the need to expediency the VFEX will use the Reserve Bank of Zimbabwe as a clearing and settlements partner meaning they will handle all transactions. Zimbabweans are starved of options that preserve value (despite the ZSE outperforming inflation and exchange rate in 2020) and the excitement is understandable though what we have here is a rewind to Zimbabwe circa 2010 to 2014 when shares were traded in US dollars. There’s a lot of murmuring about this that and the next company considering delisting from the ZSE to list on the VFEX but we shall see through action rather than talk how serious these murmurs are.