Old Mutual satisfied with performance of its clients’ empowerment shares on Finsec

Source: Old Mutual satisfied with performance of its clients’ empowerment shares on Finsec – Sunday News March 25, 2018

Dumisani Nsingo, Senior Business Reporter
OLD Mutual Zimbabwe has expressed satisfaction on the performance of its clients’ empowerment shares trading on the Financial Securities (Finsec) Alternative Trading Platform.

As part of the company’s response to the requirements of the indigenisation laws and in terms of an agreement entered into with the Ministry of Youth Development, Indigenisation and Empowerment, Old Mutual agreed to convert 25 percent of its stake to fully paid B Class Shares totalling 83,01 million for the beneficial interest of approved and qualifying indigenous beneficiaries.

In 2013, the company started trading part of the 25 percent shares worth $100 million allocated to various interest groups under the company’s indigenisation plan. The group launched the Over-The-Counter (OTC) Trading Platform to facilitate the trading of the shares.

“Initially those shares were traded on OTC and that does not necessarily facilitate good trading of shares. We then listed the shares on an alternative trading platform where they are listed alternative to the Zimbabwe Stock Exchange,” said Old Mutual Zimbabwe group chief executive officer Mr Jonas Mushosho.

He said performance of the client’s empowerment shares has been satisfactory since they started being traded on Finsec Alternative Trading Platform.

“Since we have done that (trading the empowerment shares on an alternative trading platform), I think we have seen significant improvement in the exchange and trade of shares between various parties, that’s precisely what we sort out to achieve,” said Mr Mushosho.

The company’s clients with shares on the alternative trading platform comprise of Old Mutual Assurance Company Zimbabwe client pensioners, pension funds that are clients of the OMLACZIM, strategic indigenous partners, employees of the Old Mutual Zimbabwe Group, Old Mutual Zimbabwe Group staff pensioners and any other persons or institutions that meet the indigenisation regulations criteria and are approved by the directors of Old Mutual.

Old Mutual is likely to consider reviving its youth fund programme as one of its initiatives to empower youths. In 2011, Old Mutual established the $10 million Kurera-Ukondla Youth Fund as part of its indigenisation agreement with Government, in an effort to improve levels of employment and act as a stimulus for growth in the country. The fund which was being administered by Central African Banking Society was suspended due to a huge default loan repayment rate by beneficiaries.

When the fund was suspended, CABS had disbursed nearly half of the fund at $4 898 773 but had Non-Performing Loans amounting to $3 709 724 which is about 75 percent. Mr Mushosho said it was important to empower the youths so as to enable them to effectively participate in the turn- around of the country’s economy.

“We set up a youth fund to try and support young people and the youth agenda is actual the biggest agenda that we need to pursue. More than 70 percent of Zimbabweans are people under the age of 35. We are producing from our colleges and universities on a yearly basis very brilliant young men but there are no jobs for these people.

“We should never think that our young people are going to be content to sit on the sidelines and be excluded from the economic activity in their country. So everyone needs to make an effort to try and make sure that we create opportunities and support the young people of our country, that’s the spirit behind the youth fund,” he said. -@DNsingo