Dual-listed entities suspend trading on ZSE awaiting further government directive

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  • The three are Old Mutual PLC, PPC and Seed Co International
  • No direct involvement in malpractice noted
  • Trading on ZSE resumes on 03 August 2020

Harare- Three listed entities accused of contributing to broader macro-economic instability have suspended trading on the Zimbabwe Stock Exchange as a condition for the resumption of trading on the bourse.

Following the completion of investigations by the Financial Intelligence Unit into the activities on the Zimbabwe Stock Exchange (ZSE), the three companies namely Old Mutual PLC, Seed Co International and PPC which all have dual listings were found to have acted out of line with the norm of the rules of the ZSE and best trading practice and were thus suspended while further consultations continue to determine the way forward.

According to the press statement issued by the Minister of Finance and Economic Development, Professor Mthuli Ncube, there was no observed evidence of the direct involvement of the listed entities themselves but significant evidence shows a strong link between price behavior and transaction patterns on the shares of the three and the behavior of the parallel market exchange rate was also established with varying degrees of casualty.

Statements issued by entities on the ZSE state that in order to comply with the directive issued by the Finance Minister, trading in their shares will be on halt when trading on the ZSE resumes while they continue to engage the authorities to get more clarity on the matter.

Although Seed Co and PPC were found to have no involvement in any malpractice linked to the parallel forex market, 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 visible rate as a benchmark for forward pricing and costing of goods and service as well as to determine foreign exchange rates in the market.

Trading on the ZSE is set to resume on 03 August 2020.

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