INNSCOR Africa and Axia Corporation have experienced their first gloomy days on the Victoria Falls Exchange as they recorded losses on their opening day of trading on the market.
Innscor Africa and Axia Corporation listed on the US dollar-indexed bourse on 24 February 2023 and 3 March 2023 respectively.
The successful listing of Innscor brought the number of securities listed on VFEX to nine, pushing the market capitalisation of the exchange beyond US$1 billion.
On its first day of trading on the VFEX, Innscor Africa shed 9.07% to close at US cents 83.81, having opened the session at US cents 92.17, with 181 shares exchanging hands in three trades.
Also losing on the US dollar market was Axia Corporation, which shed 5.08% of its starting value on its first day of trading with 1 550 shares exchanging hands at 14 US cents each. Trading opened at 14.75 US cents.
On its last day of trading on the Zimbabwe Stock Exchange market, Axia closed its trading at ZW$132.25 with a gain of 1.76%, having traded 1 600 shares.
Most securities listed on VFEX for the past six months to access the US dollar capital available on the bourse. Part of the benefits that are offered on the market include attractive tax incentives for investors, including zero capital gains tax and a 5% withholding tax on dividends for foreign investors, which will enhance shareholder returns; and lower share-trading costs, with fees of 2.12% compared to the 4.63% charged on the ZSE.
An incentive to allow listed firms to retain 100% of their incremental export receipts was included.
However, this incentive was shortlived as in his 2023 monetary policy statement Reserve Bank of Zimbabwe governor John Mangudya removed it. The MPS standardised all export retentions to 75% across all sectors, including firms listed on VFEX. This resulted in Seed Co Limited suspending indefinitely its plans to migrate from ZSE to VFEX, citing uncertain policy issues that are on the foreign currency market on 23 February 2023.
“Shareholders of Seed Co Limited and the investing public are advised that the Board has resolved to suspend indefinitely the proposal to migrate the Company’s listing from the Zimbabwe Stock Exchange to the Victoria Falls Stock Exchange,” said the company.
Regardless, African Sun published the circular of its exit that was approved by the ZSE on Tuesday, confirming that it might complete its listing on VFEX on 14 April this year.
The chairperson of the group, Emmanuel Fundira, said the board approved the migration to ensure longevity of the industry while evaluating strategies to drive growth.
“Generally, listing on the VFEX will allow African Sun to gain access to a favourable exchange control regime that appeals to international investors,” said Fundira.