THE Zimbabwe Stock Exchange (ZSE) has admitted that it is failing to resolve a dispute between the government and two counters — Old Mutual Limited and PPC Limited — over the trading of their shares on the bourse.
Johannesburg Securities Exchange (JSE) listed Old Mutual Limited (OML) and cement maker PPC Limited, were suspended from the ZSE in 2020.
They were suspended along with seed technology outfit, Seed Co International, which agreed to the government's request for them to migrate to Victoria Falls Stock Exchange (VFEX), which began trading in October 2020.
The three fungible counters faced a litany of accusations from the ruling Zanu PF party, which accused them of abating a long running economic crisis through the stock exchange.
But three years on, PPC and OML have not migrated to the waterfall, with ZSE chief executive officer Justin Bgoni telling businessdigest in an interview that OML was pushing for a re-listing, a proposal which the government is disputing.
OML still participates on the ZSE through its exchange traded fund (ETF), which was listed in 2021.
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Their suspension triggered valuation problems, which ended with the Securities and Exchange Commission of Zimbabwe allowing market intermediaries to use closing prices on the JSE at the prevailing official auction exchange rates for valuation purposes.
The share valuation is material to the fees earned by fund managers as well as the asset base of companies holding these stocks.
"We are working closely with the government, securities commission and Old Mutual itself in particular. It is a complex issue and it involves a lot of parties and there is a background story around it on currency stability and that is why it is a difficult issue," Bgoni told businessdigest.
"We know that Old Mutual would like to come back on ZSE. They are not necessarily keen on VFEX now and we know that the government is not keen at the moment because of where the country is at the moment for them to come back on ZSE. It is a difficult one but we hope to find solutions."
Bgoni said the sticking issue was the use of implied rates by OML, which the government blamed for driving currency instability.
"So, if it was driving instability where at the moment the currency is getting stable (but it wasn't for the past two — three months,) I don't think they would want to bring the instability," he said, adding that now that the country was heading towards elections, the timing would be wrong.
"We can't have any timelines especially now as we go towards elections. It will be a wrong time for the government to allow anything that they think will bring instability," he said.
As a result of the suspension, OML shareholders have been prejudiced from the gains of the local bourse’s capitalisation.
Old Mutual Zimbabwe group chief executive officer, Samuel Matsekete last year told our sister paper The Standard that more than 30 000 shareholders had been affected by the suspension of its shares from trading on the local bourse.