Earlier this week Simbisa brands one of Zimbabwe’s most iconic retail food brands announced that they would be delisting from the Zimbabwe Stock Exchange with plans to list on the Victoria Falls Exchange. We guessed that they were moving because they wanted to be able to better attract foreign investors into their business. It seems we were right as Simbisa Brands’ managing director, Warren Meares confirmed that the move was inspired by their desire to court foreign investors.

We have got investors from all over who are looking to invest in Simbisa.

There has been a lot of interest for years so moving to VFEX will help them to understand the business a lot better.

If you look at Simbisa’s almost 600 outlets, over 300 of that is in foreign countries.

The other eight countries we operate in have almost 250 stores now. These countries are all trading in solid currencies, stable currencies. As a business, we decided that it makes business sense to talk to investors in foreign countries like Kenya and UK (United Kingdom) and show them an income statement in United States dollars and show them projections of where the company is going in forex.

All the other eight countries are significant forex contributors to the income statements of Simbisa. So, our move is to allow our investors to plan better and understand our business better in a stable hard currency.
Warren Meares, Simbisa Brands Managing Director

The Victoria Falls Stock Exchange (VFEX) is a US dollar-denominated exchange that is wholly owned by the Zimbabwe Stock Exchange (ZSE). It was initially formed in a bid to find a home for international companies to list their shares in Zimbabwe. The Zimbabwean authorities were unhappy with fungible shares such as Old Mutual shares which are listed on multiple exchanges. They felt that these shares were being used to cause speculation and cause the Zimbabwean dollar to lose value. The VFEX was therefore initially conceived as a walled garden for such shares but it has since evolved into a platform that allows companies that are interested in getting foreign investors to be listed.

The original ZSE is now only dealing with ZWL-denominated shares but the authorities still claim that most of the activity there is fuelled by malevolent speculators hellbent on destroying the economy. Thanks to high inflation sometimes it is also difficult to determine whether one is making a profit or not on the ZSE. While nominal profits are possible and easy to achieve, inflation rates of over 200% mean that real profits are not easy to attain.