Trading on ZSE to resume, international stocks to remain suspended

Trading on the Zimbabwe Stock Exchange (ZSE), which was suspended last month by the government together with mobile-based financial transactions is set to resume next week while three international stocks will remain suspended.

Effecting the suspension on June 26, the government claimed some listed companies had been fingered in illegal foreign currency dealings, contributing to macro-economic instability.

Following that suspension, the government through the Reserve Bank of Zimbabwe’s Financial Intelligence Unit (FIU) conducted an investigation into the goings on the local bourse, whose findings are now out.

“Given the findings on the inquiry, government has taken the decision to allow trading on the ZSE to resume on 3 August 2020,” said Finance and Economic Development Minister Mthuli Ncube, in a statement issued Tuesday.

“However, the three internationally-listed stocks, namely Old Mutual PLC, Seedco International and PPC remain suspended from trading on the local bourse for the time-being, whilst further consultation continue on the best way forward regarding their relisting under suitable rules. The public will be updated periodically on the progress.”

Old Mutual and PPC are also listed on the South African Johannesburg Stock Exchange while Seedco is listed on the Botswana Stock Exchange.
ZANU-PF has recently called for the delisting of Old Mutual, principally a South African company, from ZSE accusing it of being behind Zimbabwe’s ever rising foreign currency exchange rates, a development which has not gone down well with the neighbouring country.

South African ambassador to Zimbabwe Mphakama Mbete, recently discussed the Old Mutual issue with Foreign Affairs and International Trade Minister Sibusiso Moyo in Harare recently, in an a meeting whose outcome was not disclosed.

“Whilst there was no observed evidence of the direct involvement of the listed entities themselves, significant evidence of a strong link between the price behaviour, and transaction patterns on internationally-listed shares, namely, Old Mutual PLC, Seedco International and PPC, and the behaviour of parallel market exchange rate was also established, with varying degrees of casualty,” Ncube explained the FIU’s findings.

“In particular the Old Mutual Implied Rate (OMIR), was observed to be the key driver of parallel market pricing behaviour, with many market players in the real economy using this highly visible rate as a benchmark for forward pricing and costing of goods and services as well as determination of foreign exchange rates in market.”

Ncube added that the government remained committed to restoring order in the country’s financial markets.

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