THE Zimbabwe Stock Exchange (ZSE) has raised alarm over the prolonged suspension of Johannesburg Stock Exchange (JSE)-listed giants Old Mutual and PPC, warning that their absence is undermining key market indicators and weakening liquidity on the bourse.
Old Mutual was delisted from the ZSE in 2020 alongside seed producer Seed Co International, which subsequently became the first counter to list on the Victoria Falls Stock Exchange (VFEX).
JSE-listed cement manufacturer PPC was also caught in the same regulatory dragnet.
“Old Mutual and PPC have been holding private discussions with the government, and we are not privy to the talks being held,” the bourse said in emailed responses to the Zimbabwe Independent this week.
“However, we have been continuously lobbying the government and remain optimistic that a solution will be reached among all parties.”
The exchange highlighted the historical significance of Old Mutual and PPC to market liquidity and investor confidence.
“Old Mutual has consistently recorded an average liquidity ratio of at least 4% per year and has been a heavyweight constituent of both the ZSE All-Share Index and the ZSE Top Ten Index. Additionally, it has served as a headline counter in the ZSE Financial Index,” it said.
“In terms of turnover contribution, Old Mutual and PPC have remained among the top 10 counters on a year-to-year basis.
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“Their absence from the market has adversely affected these key metrics.”
The ZSE reiterated its commitment to transparency and stakeholder engagement.
“Any developments that occur within our market are communicated promptly,” it said.
“We will continue to ensure that all market developments are shared with stakeholders. Once there are updates on the suspension, the ZSE will communicate these accordingly.”
The ZSE said the suspension of any counter not only affects foreign investors but also impacts local ones.
Despite these headwinds, the ZSE said it was implementing reforms to bolster investor confidence.
“Our focus is to promote transparency in our market, which we have achieved through the enforcement of our listing rules, market surveillance, the recent reduction in the settlement cycle, ensuring trades are settled quickly and securely, and the continuous diversification of our products through the addition of ETFs (exchange-traded funds) and REITs (real estate investment trusts),” it said.
Multinational investment firm Cambria Africa revealed in 2022 that it had suffered write-downs stemming from Old Mutual’s suspension. The firm holds 204 047 Old Mutual Limited common shares.
Old Mutual said at the time that it was engaging Zimbabwean authorities over the suspension.
“We are aware of the hardship that the suspension is causing our shareholders,” it said in emailed responses.
“It is a complex environment, and we continue to engage the Zimbabwean government on this matter.”
The suspension, which has triggered valuation challenges for investors in Old Mutual and two other counters forced out of the ZSE, resulted from the government’s suspicion that fungible counters were exacerbating the depreciation of the domestic currency.
Fungible counters traded on more than one bourse.
