Old Mutual, PPC Stocks Fungibility Suspension Further Extended

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By Alois Vinga

FINANCE Minister, Mthuli Ncube has extended the suspension of PPC Limited and Old Mutual shares by a further 12 months.

In a notice published in the latest Government Gazette, the treasury boss renewed the suspension to end of March next year.

“In my capacity as an exchange control authority under Part V (Securities) of the Exchange Control Regulations, 1996 (Statutory Instrument 109 of 1996), hereby order the suspension, for a period of twelve months from the publication of this general notice ending on the 11th March, 2022.

“This includes every authority, directive or order granted by any exchange control authority allowing the fungibility of shares of the following companies listed on the Zimbabwe Stock Exchange, Old Mutual Limited and PPC Limited,” said Ncube.

The order involves all securities dealers; all issuers of dual-listed securities mentioned in subparagraphs, all holders of securities in the companies mentioned in subparagraphs, the Central Securities Depository or other custodians, dealers and all registered securities exchanges.

Minister Ncube said the government was still considering the implications of an audit report.

Recently, the Insurance and Pensions Commission announced that it is seeking a quick resolution for the re-listing of insurance giant, Old Mutual and cement maker Pretoria Portland Cement Co. Ltd (PPC) on the Zimbabwe Stock Exchange (ZSE) and have their fungibility restored.

The regulator has been concerned about the evaluation of assets by pension funds saying it was key to unlocking value for pensioners who have been suffering low benefits in a hyperinflationary environment.

The two companies, alongside Seed-Co, had their shares suspended last year as Government halted trading on the ZSE after investigations revealed that investors used the Old Mutual share price (Old Mutual Implied Rate) as a proxy exchange rate implied by its prices on foreign bourses such as the London Stock Exchange.

While shares of Seed-Co International’s shares are now listed on the Victoria Falls Stock Exchange (VFEX), the Insurance and Pensions Commission (IPEC) said the continued suspension of Old Mutual and PPC needed a quick resolution as several local pension funds have their money tied up in these two stocks.

Market analysts speculate that the reluctance by the two companies to list on VFEX signals a lack of confidence in the new stock.