Old Mutual says listing troubles near end

Old Mutual says listing troubles near end

Harare, (New Ziana) – Financial services giant, Old Mutual Zimbabwe on Wednesday expressed optimism of finding an “amicable solution very soon” with Zimbabwean authorities after the firm was suspended from trading on the Zimbabwe Stock Exchange (ZSE).

The government suspended trading on the bourse weeks ago, saying some
companies were involved in illicit financial activities, including
money laundering.

But Finance and Economic Development Minister Mthuli Nucube said on
Tuesday the suspension will be lifted next week for all other companies
except Old Mutual and two others.

Authorities in Zimbabwe contend that shares of companies listed locally and on other international exchanges, like Old Mutual, are being used to undermine the local currency and the economy.

The other two companies still suspended are SeedCo International and PPC,
all of which have shares listed elsewhere.

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.”

In the case of Old Mutual, authorities were particularly miffed by the
existence of the Old Mutual Implied Rate (OMIR) – a gauge of the value
of the Zimbabwe dollar based on the difference in the value of the
firm’s shares in London and Harare – which they say was a key driver
for not only the parallel foreign exchange market, but also of
speculative pricing for goods and services.

At its last publication on July 7, the OMIR 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.

But Old Mutual, in its response, disassociated itself from the OMIR,
and said it supported stability and development in economies in which
it operates.

“We have re-affirmed our position that Old Mutual businesses or their
officers do not produce the OMIR and do not actively promote its use,”
the financial services giant said.

“Old Mutual does not condone any use of its shares that creates
challenges in the implementation of policy and the overall development
of the economy.”

The firm said it was supportive of government efforts to restore stability.

“We are working with the authorities to explore ways to handle the listing of OML so that the OMIR does not continue to create the concerns raised in the past,” the company said.

“The engagements have been very progressive, and we are confident that
we will get to an amicable solution very soon.”

Besides being the parent for CABS, Old Mutual, which has operated for more than a century in Zimbabwe, is also well known for its massive property investments and for being one of the largest institutional investors on the ZSE.
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