THE recently-launched Victoria Falls Stock Exchange (VFEX) will provide a platform for new frontier products and trading in retail bonds for Government to raise capital needed for the Global Compensation Deed, which seeks to compensate white former farmers for improvements they made on farms repossessed under the land reforms.
Finance and Economic Development Minister Professor Mthuli Ncube on Friday launched the VFEX, which he said was a bold statement by Government showing its desire to walk the talk on the mantra “Zimbabwe is open for business”.
Prof Ncube said the new bourse, which will be denominated in United States dollars, will be a platform for the country, investors and savers to raise foreign direct investment.
A few months ago Government offered US$3,5 billion to white former farmers with both parties set to approach international funders for mobilisation of the funds. Prof Ncube said Government was looking forward to listing some of its bonds in hard currency on the Victoria Falls Stock Exchange to generate capital.
“It’s very important for us to develop fixed income market for short term and medium term market instruments and also long term bonds. We are even thinking of listing a part of the bonds required for raising funding for the Global Compensation Agreement to compensate the former white farmers,” said Prof Ncube. “We are thinking of raising some of those resources through the listing of a bond in United States dollars here on VFEX so we have to make sure we deepen the capital market products.”
He said VFEX will also play a key role in promoting the launch of new unit trusts for retail investors as well as improving liquidity of pension funds. In that regard, the Finance Minister said Government is courting the private sector for close partnerships.
“We have asked the private sector to work closely with us as Government to again promote the launch of new unit trusts for retail investors and also promote relisted investment trusts (RITS), which will also solve another problem and make our property market more liquid because currently it is illiquid and creating challenges for the pension fund sector,” he said.
“So, one way to deal with it is to list RITS, which again can improve liquidity and can allow pension funds to come in and out of the property market. We also want to use the platform to promote other retail products such as exchange traded funds (ETFs), which make it easy for investors and pension funds to invest in and out of the stock exchange.
All these are new and frontier products that we will like to see as Government being listed on the Victoria Falls Stock Exchange,” said Prof Ncube.
The Minister encouraged mining companies operating in the region to approach VFEX for listing as a conduit for raising capital, saying Zimbabwe will benefit in fees and whatever the companies will leave behind.
“We will also become a reference point and that becomes critical,” said Prof Ncube.
He implored “young cutting edge investors” to be more innovative and buy shares on some global ETFs and products on VFEX.
“There is no reason why we cannot bring global stock exchanges into Victoria Falls. We should be able to buy Microsoft, Apple or Google shares from Victoria Falls and the way to do it is by putting together in your portfolio what we call a global index that you can track and these are liquid stocks you can buy in and out,” said Prof Ncube.
“We truly want to create an international platform here in Victoria Falls and we as Government stand shoulder to shoulder with the private sector and our other institutional colleagues to make this happen,” he said.