Zimbabwe targets MSCI index listing to draw foreign capital

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Read History Go to My Account Log Out Enhanced by Google Africa Zimbabwe targets MSCI index listing to draw foreign capital Zimbabwe is seeking inclusion in a major global equity index for stocks listed on its US dollar-denominated Victoria Falls Stock

Listen to this article Share Zimbabwe is seeking inclusion in a major global equity index for stocks listed on its US dollar-denominated Victoria Falls Stock Exchange (VFEX), as the country steps up efforts to attract foreign investors and increase trading activity in its capital market.

Justin Bgoni, chief executive officer of VFEX, said the exchange had written to global index provider MSCI several times to request consideration for inclusion in the MSCI Frontier Markets Index.

Bgoni disclosed this in a phone interview from Bulawayo, Zimbabwe’s second-largest city, according to a Bloomberg News report on Wednesday. He did not identify the securities proposed for inclusion, while MSCI had not responded to a request for comment at the time of reporting.

The MSCI Frontier Markets Index tracks large and mid-sized companies across frontier economies. It currently has 246 constituents and covers about 85 percent of the free-float-adjusted market capitalisation in each country, according to MSCI.

Inclusion could give Zimbabwean-listed companies greater visibility among international investors and potentially encourage more foreign capital into the country’s equity market.

Established in 2020, VFEX operates as Zimbabwe’s only US dollar-denominated securities exchange, allowing investors to trade shares in a currency that offers an alternative to the volatility of the local currency.

The exchange has grown rapidly in market value, overtaking Zimbabwe’s main stock exchange in Harare this year. Its market capitalisation reached a reported $8.96 billion, reflecting growing investor interest in dollar-denominated securities.

However, the increase in market value has not translated into equally strong trading activity. Daily turnover on the exchange remains relatively low at about $2.8 million, highlighting the challenge of attracting deeper participation and improving liquidity.

Securing a place in the MSCI Frontier Markets Index could help address some of these challenges by placing VFEX-listed securities on the radar of international fund managers who use the index to assess and track frontier-market investments.

For Zimbabwe, the move forms part of a broader effort to strengthen its capital market, widen access to international financing and position the Victoria Falls exchange as a destination for foreign portfolio investment.

Faith Omoboye is a foreign affairs correspondent with background in History and International relations. Her work focuses on African politics, diplomacy, and global governance.