FINANCIAL services heavyweight Old Mutual Limited (OM) continues its bid for re-listing on the Zimbabwe Stock Exchange (ZSE) as shareholder frustration mounts over a prolonged suspension, businessdigest can reveal.
OM’s shares, along with those of Pretoria Portland Cement (PPC), have been in limbo since 2019, when the government imposed a suspension amid fears that the companies' dual-listed stocks fuelled the “Old Mutual Implied Rate”, a metric widely used to estimate exchange rates outside of official channels.
Authorities argued that the metric contributed to currency volatility in a market already under strain.
Seed Co International, originally suspended along with OM and PPC, has since resumed trading on the Victoria Falls Stock Exchange (VFEX), which operates exclusively in United States (US) dollars.
Nevertheless, OM remains at the centre of ongoing discussions.
In an interview, Old Mutual Zimbabwe chief executive officer Sam Matsekete confirmed discussions were ongoing.
“This is in respect to the Old Mutual Limited shares. The share remains suspended. I can say that there is progress, ” he said.
“The issues will always be around timing to lift the suspension. The fears will always be (there).
“Would the practices that the market and other players that used to characterise, in this case, what used to be called an Old Mutual Implied Rate, which by the way was not the fault of Old Mutual, still be there?”
According to him, a holistic evaluation requires consideration of all aspects simultaneously.
“But I am very optimistic that we are closer to the solution now than we would have been before. We won't give up and neither are the authorities,” Matsekete said.
“We have 33 000 shareholders on the Zimbabwean register of the OMZ share and they are also looking for a solution sooner rather than later.”
Earlier this year, the government sought assurances that lifting the suspension on OM and PPC from the ZSE would not destabilise exchange rates.
As part of ongoing financial participation, OM operates an Exchange-Traded Fund (ETF) on the ZSE, launched in 2021.
However, with the recent migration of several stocks to VFEX, the company has indicated plans to delist the ETF, citing challenges in meeting its investment objectives.
Capital market stakeholders argue that the prolonged suspension has persisted for too long.
“One of the main challenges that has been facing the industry is the issue of restrictive legislation around the capital markets,” ZSE chief executive officer Justin Bgoni told businessdigest during a capital markets event hosted by the Zimbabwe Independent in June.
“There was an issue of high capital gains withholding tax on the exchange, the trading of shares on the market.
“There was an issue of vesting period where if you sell before 180 days, you will get charged higher taxes.”