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Browsing: Victoria Falls Stock Exchange
Fast food giant, Simbisa Brands Ltd., the firm that controls high-profile restaurant chains across African markets, spurred its planned VFEX listing, notifying investors in a comprehensive roadmap that the deal may be through by December 2, 2022.
Simbisa, which has risen from its Zimbabwean roots to establish a formidable African network, executes its strategy through a string of high-end hospitality brands that include the flagship Chicken Inn, Pizza Inn, Creamy Inn and Bakers Inn, one of the country’s biggest bread producers.
It also holds the franchises for quick service restaurant chain; Rocomamas, Nandos and Steers, along with Galito
In a statement that disclosed Simbisa’s rationale to switch from the ZSE, the firm’s board rallied shareholders to give an emphatic nod to the transaction at an extraordinary general meeting scheduled for November 18, 2022.
The ZSE’s 2020 research found that individual Zimbabweans made a meagre amount of contributions to the regional capital market. A few of the obstacles mentioned are a lack of understanding of the investment process and the notion that it is the realm and preservation of the wealthy in society.
According to an article by Mail and Guardian published May 25, 2022, this survey prompted the bourse to launch ZSE Direct, a product that would make access to the market straightforward even for first-time investors.
Since the launch of VFEX in 2020, trading has mainly been dominated by institutional investors, and from the feedback received, retail investors would also like to participate in the VFEX. In the press release, VFEX CEO Justin Bgoni said VFEX Direct was mainly developed with retail investors in mind.
VFEX Direct will be accessible through the web portal and mobile application (Google Play Store and Apple App Store).
Investors wishing to participate through VFEX Direct will be required to hold an FCA (Nostro) account with any Zimbabwean bank.
Broker-controlled accounts deliver lower costs and easier account opening procedures for investors wanting to open a VFEX trading account.
This offers a one-stop-shop facility for the investor, given by opening an account with the custodian and transacting through a securities dealer, the broker-controlled model offers investors all the services under one roof to the convenience of the investor.
The securities dealing firms will perform all the services on behalf of investors and these include, among others, opening accounts for investors, and performing the necessary due diligence exercise including the Know Your Customer (KYC) requirements.
It also includes day-to-day communication with the client, mailing of customer transaction statements at no cost, and transacting on the stock exchange on behalf of the investor.
The pre-listing statement specifies that the VFEX listing is a secondary one and will be done by way of the introduction of depository receipts representing the company’s shares that cannot be directly traded in Zimbabwe as its primary listing is on the respectively.
Investopedia defines a depositary receipt as “a negotiable certificate issued by a bank representing shares in a foreign company traded on a local stock exchange. The depositary receipt gives investors the opportunity to hold shares in the equity of foreign countries and gives them an alternative to trading on an international market.”
A depositary receipt allows investors to hold shares in stocks of companies listed on exchanges in foreign countries. It avoids the need to trade directly with the stock exchange in the foreign market. Instead, investors transact with a major financial institution within their home country, which typically reduces fees and is far more convenient than purchasing stocks directly in foreign markets.
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