JOHANNESBURG Stock Exchange (JSE)-listed Old Mutual Limited has remained tight-lipped on the protracted negotiations with the Zimbabwean government over suspension of trade of its shares on the Zimbabwe Stock Exchange (ZSE) in 2020.
This comes after government, through markets regulator Securities and Exchange Commission of Zimbabwe (SECZ), allowed market intermediaries to start valuing the Old Mutual and PPC stocks — both suspended on the ZSE on allegations of fuelling inflation and amid concerns of their fungibility in June last year, based on the closing prices on the JSE at the prevailing official auction exchange rates strictly for valuation purposes.
Old Mutual and PPC were suspended together with Seed Co, which was trading on the Botswana Stock Exchange and given the option to list on the Victoria Falls Stock Exchange, which began trading in October last year.
Over-the-counter trading of the stocks remain banned, sparking outrage from market observers with research firm Econometer Global Capital describing the move as akin to trapping capital and painting Zimbabwe as hostile to capital.
The Zimbabwean government has kept negotiations confidential amid indications the two parties failed to converge on fundamental terms to proposed amicable solutions.
Old Mutual has taken a similar stance.
As previously reported by this publication, highly-placed sources in the government said Old Mutual sought to get exemption from corporate governance procedures to delist from the ZSE and list on the Victoria Falls Stock Exchange (VFEX) where trade is in foreign currency only. But the government declined.
Asked to comment on the fate of the company’s investments in Zimbabwe, Old Mutual refused to divulge any details.
“Engagement with the relevant authorities in Zimbabwe is ongoing and Old Mutual Limited will update its stakeholders once it is in a position to do so,” Old Mutual Limited’s public affairs and corporate communications general manager Tabby Tsengiwe said in emailed responses.
Although the government announced completion of the audit into PPC and Old Mutual shares in connection with the allegations, the findings are yet to be revealed.
Previous reports have linked Old Mutual and PPC to a possible listing on the VFEX, but insiders say Old Mutual no longer wants any Zimbabwean listing. The VFEX had a slow start amid a crisis of confidence in the market with just one counter since its launch in October last year.
Old Mutual once said it remained committed to investments in Zimbabwe into the future.
Developments around the fate of the two stocks have caught the attention of investors in the context of policy inconsistencies.