Zimplow bullish VFEX will drive regional penetration

Enacy Mapakame Business Reporter

Zimplow Holdings Limited expects its planned migration to the Victoria Falls Stock Exchange to position the group for easier penetration of the regional market, as the agriculture and mining equipment supplier targets to expand its export business.

The group’s plans to move to the US-denominated exchange once it secures approval from shareholders and this will be followed by subsequent delisting from the main exchange — the Zimbabwe Stock Exchange (ZSE).

Chief executive officer Vimbayi Nyakudya said the group was close to concluding the transaction, which will enable the group to build a strong international profile. He said while the VFEX was still experiencing low liquidity, the management was upbeat that migration to the VFEX was the best option in line with its long-term plans of becoming the top supplier of agriculture and mining equipment as well as other support services to both the domestic and regional markets.

“We are trying to build a profile for Zimplow, for the future not for now,” he said in an interview on the sidelines of the launch of a new branch for one of its units Tren Tyre in the capital.  

“While others think there is less liquidity on the VFEX, looking ahead this will position us well for what we want to achieve, expansion, and our target audience are both local and foreign.

“Our profiling, as much as we have done a lot of work in Zimbabwe, we want to go into the region so we want to position Zimplow in line with where we want to go in terms of regional expansion,” he said.

A subsidiary of the ZSE, the US dollar-denominated VFEX was launched in 2020 as an off-shore biased financial services center as part of the country’s efforts to attract global capital and restore foreign investor confidence in the capital markets while helping companies to raise capital in foreign currency.

The exchange has continued to gain momentum, as issuers chase broadened capital sources, tax incentives and brand positioning. Market watchers believe more migrations will take place.

First Capital Bank and hotelier African Sun have recently joined the great trek and migrated to the exchange and joined the exchange while West Properties became VFEX’s first IPO.

Liquidity challenges remain a major drawback, limiting pronounced investor participation. However, as the number of quality listings on the VFEX continues to grow, and the flow of US dollar liquidity increases in the formal economy, improved activity on the VFEX in the medium to long term is expected on the exchange according to FBC Securities in their quarterly report.

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