Commodities Exchange debut pushed back

PHILLIMON MHLANGA

 

The planned Commodities Exchange launch date has been pushed back   to the second quarter of this year since the country’s capital markets regulator, the Securities and Exchange Commission of Zimbabwe (SecZim) has not yet granted the  Victoria Falls Stock Exchange (VFEX)  clearance, it has been learnt.

The launch was initially scheduled for this quarter .

However, Justin Bgoni, the CEO of the Zimbabwe Stock Exchange (ZSE), the parent company of VFEX revealed that the exchange had sent SecZim  the regulations for the planned exchange. But,  have not yet received SecZim’s approval.

He affirmed that the projected commodities exchange is now probably going to debut in the second quarter.

“We are still awaiting approval (for regulations) from SecZim. We are now likely to launch the exchange (commodities) in the second quarter. Will start with warehouse receipts then features at the end of the end,” Bgoni said.

Efforts to get a comment from SecZim were futile.

Additionally, he mentioned that the exchange will begin handling Chrome.

In order to establish a commodities exchange, the VFEX has partnered with the Minerals Marketing Corporation of Zimbabwe (MMCZ).

According to experts, the Commodities Exchange is expected to expand the mining sector, which is expected to grow into US$12 bn this year, and broaden the VFEX as well as the country’s capital markets.

They said this could be a game changer in the country endowed with vast mineral  resources as it  trades in hard currency and therefore a good funding mechanism for the mining sector, which is seen  as an enabler for economic growth.

Established in 2020, VFEX  is a registered  exchange  that provides a range of financial products  and services, including shares, deposit receipts, fixed income instruments, exchange traded  funds, exchange traded notes and real estate investments trusts.

It is governed by the Securities Exchange Act 24:25, SI 196 of 2020, Exchange Control Directive RV 177/2020, the Finance Act 23:04 and SI 4 of 2022 Banking  which establishes  the  Victoria Falls  Special Economic zone.

The ability for businesses to raise capital in US dollars or any other hard currency has made the stock exchange a desirable venue for capital raising.

Along with many other benefits, listed companies and investors enjoy reduced currency risk, lower transaction costs, lower dividend withholding tax for foreign investors, and no capital gains tax when selling listed securities.

 

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