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Victoria Falls Stock Exchange needs US$3m guarantee fund

THE Zimbabwe Stock Exchange (ZSE) has said close to US$3 million is required to set up the Victoria Falls Stock Exchange (VFEX) settlement guarantee fund meant to instil confidence in investors.

Dubbed the game-changer, VFEX was launched last year in October as part of Government’s efforts to transform the resort city into an off-shore financial services centre. It is eyeing more listings this year and the introduction of new exciting financial products beyond shares.

In an online executive dialogue last week, ZSE chief executive officer Mr Justin Bgoni said they were looking at between US$2 million and US$3 million for the VFEX settlement guarantee fund and it was to be acquired from shareholders and participants.

“We are going to source the Victoria Falls Stock Exchange settlement guarantee fund from our shareholder as well as from our participants. We are looking at around US$2 million to US$3 million to start with because it is a small exchange,” said Mr Bgoni.

He noted that the settlement guarantee fund they were raising will give people a peace of mind to know that when they have sold their shares on the VFEX there will be a pot of money to guarantee their transactions.

“We are talking to a few organisations that are low risk profile so things like this take time because they want to see how we operate, how things are going before they come on board. But this hasn’t stopped us from risk mitigation for people who are coming into the market. Hence, the settlement guarantee fund will help people get a peace of mind that when they invest on our market they can get their money out and we are working on getting that settlement offshore.”

He also noted that they were in the process of talking to people who are interested in listing on the VFEX including companies that are already listed on the ZSE who are thinking of either a partial or full listing on the VFEX. “One of the things people do not understand is that the listing process is long and not a short one.

People started to think about listing on the VFEX after we had launched it and then they have to convince their board, go through advisors and also go through their shareholders so it takes a long period of time for a company to get listed.”

He said they were fully aware that they need to be patient, work on making sure that the exchanges are attractable as much as possible. Mr Bgoni said they were also working on the clearing settlement.

“The clearing settlement is being done through the Reserve Bank of Zimbabwe (RBZ) at the moment and to further enhance this we are looking for partners where we can do clearing settlement offshore. We believe that this will help in laying off the fears that people have on the ability of getting their money out,” added Mr Bgoni.

He also noted that they have been talking with Government to see if they can give policy incentives that can help companies list on the VFEX.

“One of the biggest barriers for people to invest in Zimbabwe is the ability to repatriate their money. Both foreign and local investors talk about this. When you invest you want to be able to easily take your money out, this is one of the things that we have been working on very much on the VFEX with the RBZ. RBZ came out with a circular that states that when you list on the VFEX there is protection around the money you bring in and it makes it very easy as well to take the money out.”

In his presentation, Zimplats Holdings Limited chief executive officer Mr Alexander Mhembere said they had not yet been listed on the VFEX because they needed foreign currency to import most of the equipment that they use for their operations. SundayNews

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