- Delisting from VFEX: Considers exiting VFEX after listing in December 2022
- Most Benefits Non-Existent: VFEX's initial benefits are no longer available
- Unclear Motivations: Delisting reasons are unknown, sparking speculation about acquisition plans, merger possibilities, or liquidity concerns
Harare- Largest food producer, National Foods (Nat Foods) Limited, is contemplating a delisting from the Victoria Falls Stock Exchange (VFEX), according to the latest circular from the group.
Nat Foods was listed on the US dollar-denominated bourse on December 23, 2022, following its delisting from the Zimbabwe Stock Exchange (ZSE), where it had been listed since December 18, 1969.
Founded in 1920, the company has a long-standing presence in the market.
When VFEX was established in 2020, it generated significant interest due to its various benefits, including tax breaks such as no capital gains tax on the disposal of securities, a lower withholding tax of 5%, reduced trading fees, and the ability to raise capital in hard currency.
These incentives were particularly attractive to exporters, miners, and manufacturers, promising a 100% increment in value and international recognition due to the US dollar listing.
These advantages were seen as a potential solution to liquidity challenges on the bourse, which stemmed from a scarcity of listed companies affecting the number of shares and daily trading volume.
However, many of these benefits have since been removed, leaving the advantages of trading in USD as the primary draw, albeit with lower liquidity compared to the ZSE.
The rationale behind Nat Foods’ possible delisting remains unclear.
It might be following a trend similar to the delisting of EcoCash, potentially to facilitate a merger with Econet or to pursue acquisition plans while addressing liquidity concerns.
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