The Victoria Falls Stock Exchange (VFEX) is set to be the top destination for new listings this year, according to forecasts by FBC Securities. Despite a frustrating start in October 2020 marked by a long listing drought, Zimbabwe’s forex-indexed bourse enjoyed a bull run last year with volumes advancing 1,500%. Turnover grew by 1,702% to US$463,855 during the period, from US$25,736 in 2022, as more firms headed to the waterfall.

Market capitalisation increased by 118% to US$566 million from US$259.7 million previously, underpinned by more US dollar liquidity on the market. The VFEX benefited from improved investor sentiment, as compared to its politically motivated establishment. FBC Securities said the outlook was promising and more counters were likely to list this year, joining the eight already trading stocks on the bourse.

FBC had this to say in its report titled “2023 Local Economic Outlook” released Friday (20 January 2023)

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“There has been a notable increase in interest in the VFEX, both from an issuer and investor perspective. Whilst the local currency denominated ZSE (Zimbabwe Stock Exchange) has faced challenges in the last year including high transaction costs and acute regulation, the VFEX has remained largely stable as it is not susceptible to abrupt policy changes and currency volatility.

An report on the VFEX and ZSE released by FBC Securities

The bourse launched in October 2020 after the ruling Zanu PF accused three fungible stocks of abating a gruelling economic crisis marked by steep depreciation of the domestic unit. Old Mutual, PPC and Seed Co International were targeted in the emotionally charged muscle-flexing tirade by the ruling party, which led to the closure of the ZSE in June 2020 and forced the three counters to seek an alternative listing on VFEX, which at the time was only an idea.

Seed International became the first to list on VFEX in October 2020. Last week, its ZSE listed peer, Seed Co Limited, said it would be migrating to the resort city this year after previously encountering a setback on its first attempt in 2021, as regulators turned down the move. Padenga Holdings Limited, Caledonia Mining, Bindura Nickel Corporation, Simbisa Brands, and National Foods Limited are already trading stocks on the VFEX.

“The bourse has experienced rapid growth in recent months and apart from attendant value opportunities, policy arbitrage has also been pivotal in attracting migrations. Activity on the bourse increased notably in 2022. This was a function of more listings on the bourse and increased foreign currency liquidity in the formal market, available for trading purposes.”

In summary, the Victoria Falls Stock Exchange (VFEX) is expected to see a surge in new listings this year, according to FBC Securities. The VFEX has proven to be a stable alternative to the Zimbabwe Stock Exchange (ZSE) and has seen an increase in interest from both issuers and investors. With improved foreign currency generation in sectors such as consumer staples, tourism, agriculture, and mining, we can expect more companies to list on the VFEX in the coming year. The VFEX’s stability and policy arbitrage opportunities have been key factors in attracting migrations from other exchanges. More companies will make the move from the bealugered ZSE to the VFEX. We, here at Zimpricecheck feel at some point in 2023 there will be more companies on the VFEX than the ZSE.