VFEX will deal with exchange rate risk

The launch of the Victoria Falls Stock Exchange (VFEX) is meant to deal with exchange rate risk from portfolio investment into the country, Finance and Economic Development Minister Mthuli Ncube has said.

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 also 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 US$ insurance products.-ebsinessweekly