Sandton, Johannesburg - Zimbabwe Stock Exchange (ZSE) listed clothing retailer, Edgars Stores Limited, announced through its new secretary that it is considering migrating to Victoria Falls Stock Exchange (VFEX), pending approval from shareholders as well as necessary regulatory authorisations.

According to Chipo Mafunga, the Company Secretary, “The Directors of Edgars Stores Limited (the “Company”) wish to advise all shareholders and the investing public that the Board, subject to shareholder approval and the granting of all necessary regulatory authorisations, has approved the delisting of the Company from the Zimbabwe Stock Exchange, immediately followed by its listing on the Victoria Falls Stock Exchange (the “Transaction”).” Chipo Mafunga became the Company Secretary on the 1st of January, 2024, according to a statement dated 05 February 2024 from the Company CEO.

Edgars Stores Limited sells apparel, footwear, textiles, and accessories in Zimbabwe, operating six business segments that include Edgars Stores Retail, Jet Stores Retail, Manufacturing Carousel, Micro Finance Club Plus, Corporate Head Office, and Financial Services. If successful, Edgars will become the first clothing retailer to list on VFEX, bringing the number of total stock listings to 14 on VFEX. In the prior year, a total of 5 counters migrated from the ZWL denominated bourse, ZSE, to the United States Dollar (US$) denominated market, VFEX. These migrations were argued to result in value preservation for investors and shareholders by virtue of trading in a hard currency.

Meanwhile, in 2023, the ZSE All Share Index garnered a growth of 982%, which translates to a mild 4.6% in US$ terms. This is reflective of the high fragility of the ZSE trading currency, ZWL, hence the highlighted need to ‘preserve investor value’ in a hard currency through a VFEX listing. However, the VFEX All Share Index suffered a staggering -26% decline in 2023 despite the addition of 6 new counters (5 migrations from ZSE and 1 fresh listing through an IPO). Since the beginning of 2024, the ZSE All Share Index is up 165.2% in nominal terms as at the close of trades on the 7th of February. In US$ terms, the ZSE All Share Index has firmed by 43% since the beginning of the year while the VFEX All Share Index is down -0.4% over the corresponding period. While the VFEX may not show signs of a recovery or strong growth, history has shown that the ZSE can reverse a substantial growth overnight owing to the currency fragility.

Despite a potential decline in the All Share Index, by migrating to VFEX Edgars can benefit from the ability to raise capital in the highly sort after foreign currency while investors can benefit from low financial losses risk as well as low transaction costs, tax incentives and exemption from capital gains.

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