LONDON, Nov 11 – Zimbabwe is seeking to secure a place in the MSCI Frontier Markets Index for securities listed on its dollar-denominated Victoria Falls Stock Exchange (VFEX), as the country looks to attract international capital and improve liquidity in its equity market.
VFEX Chief Executive Officer Justin Bgoni said the exchange had written to index provider MSCI several times to request consideration for inclusion. He made the comments in a phone interview from Bulawayo, Zimbabwe’s second-largest city, according to a Bloomberg News report on Wednesday.
Bgoni did not identify the securities being proposed for inclusion, while MSCI had not responded to a request for comment at the time of reporting.
The MSCI Frontier Markets Index comprises 246 constituents and tracks large- and mid-cap companies across frontier-market countries. According to MSCI, the index covers approximately 85% of the free-float-adjusted market capitalisation in each country.
Established in 2020, VFEX operates as Zimbabwe’s dollar-only securities exchange. It overtook the country’s main stock exchange in Harare in market value this year, reaching a reported capitalisation of $8.96 billion. However, trading activity remains relatively limited, with daily turnover of approximately $2.8 million.
Zimbabwe has not previously been included in the MSCI Frontier Markets Index, with its equities classified as a standalone market. Shelton Sibanda, chief executive officer of Imara Asset Management, described liquidity as a key consideration in the index admission process.
He also pointed to foreign investors’ ability to access the market efficiently as another important factor.
“Looking at the VFEX at the moment, Innscor Africa, Padenga Holdings, Simbisa Brands and maybe AXIA Corp to a certain extent would clear some of the hurdles,” Sibanda said.
The exchange has attracted several new listings this year, including Old Mutual and Econet InfraCo, Zimbabwe’s largest telecommunications infrastructure company.
Potential inclusion in the MSCI index could increase the visibility of eligible VFEX-listed companies among international investors. However, index admission would depend on MSCI’s assessment of market accessibility, liquidity and other eligibility requirements. The exchange’s existing market capitalisation alone does not establish that its securities meet those criteria.
