The atmosphere is not conducive for mining companies to list on the ZSE: Bgoni

ZSE chief executive officer, Justin Bgoni
  • Only three mining companies are listed on ZSE
  • It is difficult for companies to convert money raised on ZSE to foreign currency
  • VFEX introduced to attract offshore capital

Harare – Zimbabwe Stock Exchange (ZSE) chief executive officer, Justin Bgoni concedes that the reason why the local bourse has not had more listed entities from the mining sector is because of an absence of a conducive environment, reflective of financial constraints and liquidity on the stock returns of companies listed on the bourse.

Out of more than 60 listed entities, only three (3) mining companies are listed on the ZSE, namely Bindura Nickel Company (BNC), RioZim, and Hwange Colliery.

Another miner, Falgold delisted from the ZSE in November 2020, saying it was no longer benefiting from trading on the local bourse.

Some of the biggest mining companies like Zimplats and Caledonia Mining Corporation (owners of Blanket Mine) are listed on the Australia Stock Exchange and the New York Stock Exchange respectively.

Speaking during the “Victoria Falls Stock Exchange: Investment Portal for Miners and International Firms” virtual meeting hosted by The Financial Gazette on Tuesday, Mr. Bgoni said, “We believe that the reason why we have not had many mining companies on the ZSE is that we have not provided a conducive environment for mining companies to list on ZSE.”

“We know that mining companies when they want to raise money that they can use to start to expand their mining activities, and the required money tends to be foreign currency so it’s very difficult when you raise that money on the ZSE to be able to convert it to foreign currency.”

To address the currency conundrum and attract offshore capital, the government through the Ministry of Finance launched the Victoria Falls Stock Exchange (VFEX) on October 23, 2020.

VFEX so far has one listed company namely SeedCo International, an indication that other companies are still considering prospects of listing on the bourse.

Quizzed on what the VFEX offers to mining companies, Mr. Bgoni said VFEX allows trading in hard currency, and it is much easier for investors to take their money out after making investments compared to the ZSE.

Mining companies need foreign currency to import most equipment that they use for their operations. Zimplats CEO, Alex Mhembere said that listing on the VFEX at this point, they may not be able to access the money required to sustain operations but will be considered as time goes on.

“Hopefully it will grow to be able to attract the necessary foreign currency for companies to list there and be able to generate or to raise capital,” said Mr. Mhembere.

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