ZSE resumes trading on Monday – Finance Minister
Harare, (New Ziana) – The Zimbabwe Stock Exchange (ZSE) resumes trading on Monday over a month after it was suspended on suspicion of illicit trading, including money laundering.
The lifting of the suspension follows findings that most of the listed companies were not involved in illicit foreign currency dealings.
Trading in shares of three firms– Old Mutual, SeedCo and PPC- which are also listed internationally, however remains suspended after they were linked to illegal dealings, Finance and Economic Development Minister, Mthuli Ncube said.
At the end of June, the government singled out the stock exchange and mobile money among platforms speculators were using to sabotage the economy through tinkering with the exchange rate.
“Whilst there was no observed evidence of the direct involvement of the listed entities themselves, significant evidence of a strong link between the price behaviour and transaction patterns of internationally listed shares, namely Old Mutual PLC, Seedco International and PPC, and the behaviour of the parallel market exchange rate was also established, with varying degrees of casualty,” Professor Ncube said.
The investigations were carried out by the Reserve Bank of Zimbabwe’s Financial Intelligence Unit.
Ncube said it was established that the Old Mutual Implied Rate (OMIR) – a gauge of the value of the Zimbabwe dollar which is based on the difference in the value of the firm’s shares in London and Harare – “was a key driver of parallel market pricing behaviour” and was being used for pricing of goods and services in the market.
At its last publication on July 7, the OMIR rate was ZW$122.22 to the greenback while the official rate, at the time was ZW$65.87.
The official rate has since moved to $76.76.
Ncube said trading in the shares of the three firms would remain suspended “whilst further consultations continue on the best way forward regarding re-listing, under suitable rules.”
“Given the findings of the inquiry, government has taken the decision to allow trading on the ZSE to resume on 3 August, 2020,” Ncube said.
Meanwhile, the finance minister said investigations were underway into the conduct of players involved in trading including brokers and asset managers.
“Some market players were found to have acted out of line with the norm of the rules of the ZSE and best trading practise in the nature of their activities,” he said.