Stock market to reopen next week without Old Mutual

By Bloomberg news

THE ZSE will resume operations on Aug. 3, but Finance Minister Mthuli Ncube said Old Mutual, PPC Zimbabwe and Seed Co., which trade on other exchanges in London, Johannesburg and Gaborone, will be excluded “for the time being.”

The government shut the ZSE on June 28 and demanded that Old Mutual, the biggest company by market value, be removed from trading boards because a comparison between its domestic and foreign share prices is used by currency speculators to undermine the nation’s currency. The measure is known as the Old Mutual Implied Rate, or OMIR.

“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 recent past,” Old Mutual said in an emailed statement. “Old Mutual supports the stability and development of the economies where it operates.”

An alternative may include its listing on a proposed second stock exchange in the country that will only deal in foreign currency-denominated shares.

PPC, a unit of South African cement producer PPC Ltd., has been informed by the ZSE about the “possible direction that would be taken for dual-listed companies,” including a possible U.S.-dollar-denominated listing at the new bourse, Anashrin Pillay, the head of investor relations at the company, said in an emailed response to questions.

The resumption of trade on the ZSE follows the Financial Intelligence Unit’s submission of a report to the government that found some “market players” acted “out of line with the norm of the rules of the ZSE and best trading practice in the nature of their activities,” Ncube said.

The security and investigative arms of government are conducting further investigations into brokers, asset managers and market investors. The findings of these investigations may result in unspecified action being taken, Ncube said.

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