Dairibord Holdings plans to voluntarily move its listing from the Zimbabwe Stock Exchange (ZSE) to the Victoria Falls Stock Exchange (VFEX), becoming the latest major company to migrate to the United States dollar-denominated bourse.
In a cautionary statement issued on Thursday, the dairy products manufacturer said its board had approved the proposed delisting, which will see the company exit the ZSE before pursuing a VFEX listing.
“The board has approved the voluntary delisting of the Company from the Zimbabwe Stock Exchange, immediately followed by its listing on the Victoria Falls Stock Exchange,” the company said in a statement.
Dairibord indicated that full details of the transaction will be contained in a circular to shareholders, which is currently being finalised.
The company cautioned investors that the proposed move could materially affect the market price of its shares and advised shareholders to exercise caution when dealing in the stock pending further announcements.
The proposed migration comes as several firms increasingly favour the VFEX, citing its US dollar trading environment, foreign currency settlement framework and access to a broader pool of international investors.
Over the past few years, companies such as National Foods and Simbisa Brands have either listed or cross-listed on the VFEX as businesses sought to preserve shareholder value and align their capital structures with foreign currency-denominated operations.
Market analysts say the VFEX offers several attractions, including lower capital gains tax, reduced withholding tax on dividends for foreign investors and the ability to raise capital in hard currency.
The exchange also allows free movement of capital and dividends, a feature viewed as critical by international investors.
The migration trend has gathered momentum as firms increasingly generate significant portions of their revenues in foreign currency and seek a market that better reflects the currency composition of their earnings.
For Dairibord, whose operations involve imported raw materials, packaging and equipment, a VFEX listing could enhance access to foreign capital while providing a valuation benchmark in US dollars.
The move is also expected to strengthen the company’s visibility among regional and international investors, particularly as Zimbabwe seeks to position the VFEX as a gateway for investment into the economy. – Herald
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