‘New products, listings to spur VFEX activity’
NEW products and listings expected to onboard the Victoria Falls Stock Exchange (VFEX) this will improve trading activity and liquidity, which has been an area of concern, market watchers say.
VFEX, a US dollar-denominated stock exchange, is increasingly becoming the preferred stock exchange as it continues to evolve through new listings and new product development.
Since its inception in October 2020, VFEX has seen listings from various sectors such as mining, financial services, tourism, hospitality, and clothing.
Stockbrokers IH Securities, in its year-to-date (YTD) equities review strategy report, said activity on the VFEX had remained steady, with a slew of new listings expected before the end of this year.
The firm said whilst liquidity on the bourse had been an area of concern since inception, YTD average daily value traded to October 28, 2024, had increased 84 percent to US$0,16 million from US$0,09 million in the comparable period.
“The pipeline of counters migrating to the VFEX remains steady, with the bourse aiming to secure four additional listings by the end of the year, with the most recent announcement of intent to list coming from mineral exploration company Kavango Resources,” IH said.
It added that the exchange was also planning to launch the Commodities Exchange in the fourth quarter 2024 and the rules governing its operation had been finalised.
“The commodities exchange is expected to boost market liquidity in addition to diversifying investment options,” reads the report.
Retailer Edgars migrated its listing from the ZSE to VFEX in the third quarter of 2024, while the offshore financial services centre also welcomed the listing of Invictus Energy depository receipts as the 16th listing on the bourse.
“Additionally, contracts for differences were also launched on the exchange,” said IH Securities.
Year to date, IH said heavyweight Innscor saw shares worth US$12.92 million trade hands, while Simbisa followed at US$8.51 million.
However, Zimplow led in aggregate volumes traded at 94,04 million, while African Sun came in second with 52,98 million shares.
First Capital Bank led in performance at 145 percent growth, while National Foods and Edgars share prices appreciated by 31 percent and 22 percent, respectively. Zimplow was the worst performer, declining 65 percent in the year-to-date period.
In its report, IH said Innscor will see revenue growth of 18,9 percent in the current year to US$955,69 million, supported by volumes.
“We anticipate EBITDA margin to increase by a marginal 1 basis point to 9,5 percent on account of a gradual improvement in efficiencies,” IH said.
IH said in FY24, the group saw positive volume growth across the core segments of the business. In the bakery segment, bakery volumes improved 12 percent, supported by additional capacity and stable flour pricing, amongst other factors.
Net interest charge reduced 31 percent y/y to US$9,24 million on restructuring of borrowings, while earnings from associate companies saw a 190 percent increase to US$4,99 million.
-herald
