Zimbabwe’s stock market, which operates exclusively in U.S. dollars, is experiencing strong gains driven by gold mining companies. The 48% rise in the price of the precious metal this year has boosted profits in the sector and energized the Victoria Falls Stock Exchange (VFEX).
The VFEX benchmark index jumped 45%, pushing market capitalization to USD 1.8 billion by the end of September. Established in late 2020 to attract capital—particularly for mining companies—the exchange currently lists 17 companies.
According to CEO Justin Bgoni, five more companies are expected to join the exchange by the end of the year, spanning industries from mining to real estate. “The exchange has been performing well, with valuations now approaching those of its regional peers,” he said.
Last month, Kavango Resources, a UK-based exploration and mining company with interests in Filabusi, southeastern Zimbabwe, became the third gold miner to list on the VFEX. Other listed players include Caledonia Mining Corp., a key gold producer operating the Blanket mine, and Padenga Holdings Ltd., a Zimbabwean company engaged in both gold mining and crocodile skin production.
“Their shares have effectively become a proxy for gold,” explained Lloyd Mlotshwa, head of research at IH Securities, a Zimbabwean financial advisory and brokerage firm. According to him, “these companies invested at the right time to capitalize on the gold rally and also ramped up production at the perfect moment.”
Another factor fueling VFEX’s growth is the scarcity of the local currency, the Zimbabwe Gold (ZiG), which has discouraged investors from the main exchange in Harare and led them to favor the dollar-only VFEX.
“ZiG liquidity is weak,” Mlotshwa added. “Investors are instead turning to their U.S. dollars,” thereby reinforcing VFEX’s appeal as a solid alternative to attract investment and sustain Zimbabwe’s financial market growth.
Source: The Herald
