Enacy Mapakame Business Reporter
The Zimbabwe Stock Exchange (ZSE) says negotiations are still under way for the resumption of trading in Old Mutual and PPC Zimbabwe shares following suspension of the stocks in 2020.
Management at ZSE are upbeat all respective stakeholders will reach a position regards the return of the regional cement maker and financial services group, both major value drivers for the bourse.
The shares of the two companies were suspended from trading in June 2020 together with those for Seed Co International after it was alleged they fuelled run-away inflation through exchange rate manipulation on the illegal parallel market.
As a result, the fungibility of their shares was also suspended which meant that they could not be traded on the other bourses they are listed on.
ZSE chief executive officer Justin Bgoni said the matter was still under discussion at regulator level although the bourse was also making efforts to see the return of the two market giants.
“Old Mutual and PPC are having private discussions with the Government on the matter,” said Mr Bgoni responding to questions by email.
“However, we are optimistic that the situation will be reached for old Mutual and PPC.
“We are in continuous engagements with Old Mutual and PPC and we will assist them find a solution for them to return to the market,” he said.
Old Mutual, PPC and Seed Co International — now listed on the Victoria Falls Stock Exchange (VFEX) — were suspended from trading on ZSE while the bourse was closed from June 26, 2020 until August 03, 2020.
But in March last year, Finance and Economic Development Minister Professor Mthuli Ncube extended the suspension of Old Mutual and PPC’s fungibility by another 12 months to March 22, this year.
A probe by the Reserve Bank of Zimbabwe’s (RBZ) Financial Intelligence Unit sucked various capital markets participants which later resulted in the suspension of the three counters’ fungibility and trading on the ZSE.
Professor Ncube said whilst there was no observed evidence on the direct involvement of the listed entities themselves, significant evidence of a strong link between the price behaviours and transaction patterns on internationally listed shares and parallel market was also established with varying degrees of casualty.
“In particular 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 deterioration of foreign exchange rates in the market,” read part of the Government Gazette.
Initially, indications were that the counters would migrate to the VFEX, but this has not materialised nearly two years later. The market also awaits to see what becomes of the two counters as March 22, 2022 fast approaches.