Trading of shares on the Zimbabwe Stock Exchange (ZSE) will resume next Monday but without Old Mutual, PPC and Seedco. Last month, the southern African nation suspended trading on ZSE citing unprecedented speculative and destabilizing behavior contributing to broader macro-economic instability.
The central bank’s Financial Intelligence Unit was tasked to look into the matter. Some market players have been found to have acted out of line with the norm of the rules of the ZSE and best trading practice, in the nature of their activities.
Whilst there was no observed evidence of the direct involvement of the listed entities themselves, according to the findings, significant evidence of a strong link between the price behavior and transaction patterns on internationally-listed shares namely Old Mutual Plc, Seedco International and PPC and the behavior of the parallel market exchange rate was also established, with varying degrees of casualty.
The Old Mutual Implied Rate (OMIR) was observed to be the key driver of parallel market pricing behavior 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.
“Given the findings of the inquiry, government has taken the decision to allow trading on the ZSE to resume on 3 August 2020,” Finance Minister Mthuli Ncube said.”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 consultations continue on the best way forward regarding their relisting, under suitable rules.”
Meanwhile, further investigations into market conduct behavior brokers, asset managers and share market investors are being conducted by relevant regulatory and security agencies and the findings thereof will result in suitable actions being taken.