Govt, banks in talks over new stock exchange
Zimbabwean authorities are in discussions with several international investment banks to support a new stock exchange that will trade exclusively in foreign currency, Finance Minister Mthuli Ncube said.
“The interest has been huge,” Ncube told an analyst briefing.
He declined to give further details. Yvonne Mhango, sub-Saharan Africa economist at Renaissance Capital, told the briefing that uppermost on foreign investors’ minds was the ability to repatriate their capital.
“What they want is a functioning stock exchange,” Mhango said.
The global lenders would handle clearing and settlement of trades, thereby guaranteeing investors’ funds, Zimbabwe Stock Exchange chief executive officer Justin Bgoni said at the event. The companies involved in talks are based in Africa, Asia and Europe, he said.
The exchange, to be known as VFEX and based in the resort town of Victoria Falls, will open in “a couple of weeks,” said Bgoni, who will head the bourse.
Meanwhile Minister Ncube said launch of the Victoria Falls Stock Exchange ( VFEX) is meant to deal with exchange rate risk from portfolio investment into the country.
Calling the establishment of the new exchange a “solution rather than a problem” Minister Ncube said it was part of efforts to deal with the “environment for doing business” in the country.
Apart from being a conduit of portfolio investments and foreign direct investment into Zimbabwe, the long term ambition is to make it a platform of trading securities in Africa in hard currency, according to Minister Ncube.
As part of the global picture, the VFEX is expected to offer pension funds an opportunity to invest in foreign securities.
“As a Government working with the Zimbabwe Stock Exchange ( ZSE), we saw an opportunity to perhaps create that Pan-African if not global platform for the trading of stocks on the African continent.
“We want to do it in a way that it is promotive of foreign investment into Zimbabwe and the region,” Minister Ncube said.
The VFEX, he said, will be a driver of investments into the mining sector and insurance companies that offer services to the mining sector and other sectors that desire insurance products. Business Writer/Bloomberg.