Zimbabwe to resume stock trading, Old Mutual unit remains suspended

Zimbabwe to resume stock trading, Old Mutual unit remains suspended
epa07007792 A man holds Zimbabwe bond notes in Harare, Zimbabwe, 09 September 2018. The newly appointed minister of Finance and Economic Development, Professor Mthuli Ncube, in an interview with the local weekly Sunday Mail, was quoted as saying that the current currency approach was not working in that way that the country adopted the US dollar and removed the bond notes in circulation through a demonetisation process. EPA-EFE/AARON UFUMELI

HARARE, July 28 (Reuters) - Zimbabwe's stock market will resume trading next week after a state financial intelligence body concluded an investigation, but three stocks also listed on other exchanges, including Old Mutual, will remain suspended, the finance minister said on Tuesday.

Mthuli Ncube Ncube said investigations revealed that investors used the Old Mutual Ltd share price as a proxy exchange rate implied by its prices on foreign bourses such as the London Stock Exchange.

This had caused the slide in the value of the Zimbabwe dollar, Ncube said.

The government halted trading on the bourse last month, saying it was being used by speculators to undermine the currency.

Old Mutual said in a statement that it was in talks with Zimbabwean authorities so that the insurer’s listing would not continue to create the concerns raised by the government.

The suspension of the stock exchange and some mobile phone-based payments was intended to arrest the currency slide at a time of severe economic crisis but has spooked some investors already skittish about Zimbabwe.

Ncube said an investigation by the Financial Intelligence Unit revealed a link between the movement in prices of three dual-listed stocks and the parallel market rate of the Zimbabwe dollar.

But there was no evidence that Old Mutual, Pretoria Portland Cement and SeedCo International, were involved, Ncube said.

Morgan Nzwere, group CEO of SeedCo, said the company had not committed any offence and would wait for regulators to conclude investigations. PPC did not immediately respond to requests for comment.

Trading on the Zimbabwe Stock Exchange would resume on Aug. 3 but the three stocks would remain suspended “while further consultations continue on the best way forward regarding their re-listing under suitable rules,” Ncube said.

Stock market traders say the government is pushing to de-list the three firms and list them on a yet to be established dollar-denominated exchange in the resort town of Victoria Falls.

President Emmerson Mnangagwa’s ruling ZANU-PF party has recommended the de-listing of Old Mutual. (Reporting by MacDonald Dzirutwe Editing by Promit Mukherjee, Giles Elgood and Lisa Shumaker)


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