By Alois Vinga
ZIMBABWE Stock Exchange (ZSE) has formally notified its stakeholders that trading has been suspended as a matter of urgency following a ban order by the central bank after recent allegations of economic sabotage by authorities.
In a statement Sunday, ZSE chief executive, Justin Bgoni said the decision to halt operations was reached following consultations with relevant government departments.
“Following the statement issued by the Secretary for Information, Publicity and Broadcasting Services on 26 June 2020, the ZSE engaged both the Securities and Exchange Commission of Zimbabwe and the Finance Ministry. Whilst we await the guidance from our regulators on the operational modalities going forward, we notify our stakeholders that trading has been suspended until further notice,” he said.
The move has been triggered by the drastic move to suspend the stock exchange by authorities.
Under the new raft of measures which include the suspension of monetary transactions on phone-based mobile money platforms in order to facilitate intrusive investigations leading to the arrest and prosecution of offenders, the ZSE operations were also suspended.
Information permanent secretary Nick Mangwana said last week the government was in possession of impeccable intelligence that the phone-based mobile money systems were conspiring, with the help of the ZSE, either deliberately or inadvertently, in illicit activities that were sabotaging the economy.
However, market watchers have warned that the move to close the stock exchange could have devastating effects in the long term which include waning investor confidence to bring capital into the country.
Experts warn that closing to investigate might not be sensible as it attracts unnecessary attention on the ZSE which may be difficult to restore.
History confirms that the move to close stock exchanges were rarely taken.
The United States once shut down its stock exchange after the assassination of President Abraham Lincoln. Most countries followed suit during the two world wars and under several closures were necessitated by very desperate circumstances.