VFEX, Dubai partner to set up commodities exchange
THE Victoria Falls Stock Exchange (VFEX) is engaged in talks with the Dubai Gold and Commodities Exchange (DGCE) with the view of establishing a commodities exchange as part of efforts to expand the new Zimbabwean foreign currency-denominated platform.
VFEX recently signed a strategic Memorandum of Understanding (MoU) with DGCX, which was aimed at strengthening bilateral co-operation as well as the exchange knowledge around commodities trading.
Finance and Economic Development Minister, Professor Mthuli Ncube, revealed this here yesterday during the official opening of the VFEX by President Mnangagwa, which coincided with the official listing ceremony on the bourse by Caledonia Mining Corporation Plc.
“VFEX has followed through on this MoU and last month they held a joint workshop with DGCX to explore the modalities of setting up a commodities exchange as part of expanding the VFEX offerings,” said the minister.
“A commodities exchange will help to provide a market for our minerals and also provide a mechanism for risk management through derivative products such as commodity futures contracts.”
Prof Ncube said the operationalisation of the VFEX buttresses the ideals of the National Development Strategy (NDS1:2021-2025) and vision 2030, which priorities attracting wider investments and driving export led economic growth.
To that end, the minister said the VFEX team has been working closely with the Government to ensure the capital markets also contribute towards the attainment of an upper middle-income economy.
“Revitalising domestic industrial value chains and enhancing more value addition are game changers for Zimbabwe and my ministry is continuously exploring strategies that promote value addition to different sectors of the economy,” he said.
“Capital markets do indeed complement our policy initiatives and become the transmission mechanisms through which we can gauge the vitality of our policies.
“We applaud Caledonia shareholders and management for having confidence in our efforts and making the step to list on VFEX.
“This is definitely not just a sign of confidence in our policies as Government but significant statement signifying that investors are supportive of our aspirations as a country.”
Prof Ncube said public listing was also a way for investors to empower local citizens by providing them an opportunity to invest and therefore participate in the growth of the listed company.
“Our institutional investors also benefit from having a wider pool of securities to invest in,” he said.
Caledonia, a parent company of Blanket Mine in Gwanda, is the third listing on the VFEX within a period of over a year after its launch, joining Padenga Holdings and Seed Co Limited.
“Ordinarily, a listing takes any time from six months to 18 months, and VFEX is only a year old, but the exchange has already witnessed three listings since it was established last year,” said Prof Ncube.
“Such milestones are indeed commendable and this shows the response to the incentives that the Government has put in place to support capital markets.
“The recently introduced incremental export retention scheme has been instrumental in getting the likes of Padenga and Caledonia to consider listing on the VFEX.
“These are win-win scenarios where the Government provides incentives that also result in increased production and foreign currency earnings for the country.”
Prof Ncube urged business entities across sectors to take advantage of the friendly environment created by the Government not only on the VFEX but also in the broader economy, to grow their businesses by utilising the capital markets for capital raising.
“Government is committed to continue to create the supportive environment that has seen the successful launch of VFEX and an equally successful listing of Caledonia on the bourse. We certainly look forward to a bright future of growth by both,” he said.-The Chronicle
