Victoria Falls Stock Exchange Rebases All Share Index

KINGSTONE ZIMUNYA

The Victoria Falls Stock Exchange(VFEX) has rebased the VFEX All Share Index to 100 points, with effect from 1 January 2024. 

Reflection of true value? VFEX rebases All Share Index to 100 points

In statement issued by VFEX Chief Executive Justin Bgoni, the United States Dollar—denominated bourse based in the resort town of Victoria Falls said that the old All Share Index will continue being availed, but it will not published. 

As at close of business on 29 December 2023, the VFEX All Share Index stood at 70.48, a 25.69% year-on-year drop from 29 December 2022. 

The statement continues, "The rebasing has been necessitated by the migrations which occured and there were some distortions on price levels, hence the need to rebase."

Bgoni alluded that the decision to rebase the Index was intended to assist the investing public in giving a better analysis of the performance of the VFEX. 

He also reassured stakeholders that the planned onboarding of additional counters onto the bourse will not distort the performance of the index.

Currently, there are thirteen companies listed on the VFEX, including SeedCo Holdings(which was the first to list), Nedbank, Caledonia Mining Corporation, Simbisa Brands, and WestProp Holdings.

The Victoria Falls Stock Exchange was launched in October 2020, its main objective being to enable companies in Zimbabwe, SADC, and the rest of Sub-Saharan Africa to raise capital in foreign currency. 

The bourse was heralded as part of government's efforts to attract Foreign Direct Investment and cushion international investors against exchange rate volatility. 

To attract companies to list the government offered incentives. These included lower taxes ( 5 percent dividend withholding tax — for foreign investors only — and exemption from capital gains withholding) and reduced exchange control restrictions.

In July 2023, the Victoria Falls Stock Exchange announced that investors could use Innbucks as a payment channel on their VFEX Direct app. 

This was done as part of the bourse's efforts promote financial inclusion and retail investment. 

However, a majority low income population, as well as government's notorious reputation amongst international investors for policy inconsistencies have continued to disrate the VFEX's appeal to potential investors.