No value lost due to suspension, says Old Mutual

NO value has been lost as a result of the suspension in trading of the group’s shares on the Zimbabwe Stock Exchange, Old Mutual Zimbabwe has said.
Business Writer

In March 2020, trading of shares of three companies – Old Mutual, PPC and Seed-Co Limited – was halted and were removed from the bourse after they were accused of providing proxy exchange rates (for example, the Old Mutual Implied Rate) implied by their prices on foreign bourses such as the London Stock Exchange.

In an interview with The Sunday Mail Business, Old Mutual Zimbabwe CEO Mr Sam Matsekete said the value of the share price can be easily determined.

“What we are able to do, and what the authorities have allowed us to do is valuing shares that are in those portfolios

“Someone holding those shares is able to understand at what value they are, because there are reference stock exchanges out there where it’s trading.

“So we can actually just take the London Stock Exchange, for example, and know that it’s at this price in pounds or take the Johannesburg Stock Exchange and know the price in rands.”

Mr Matsekete said the biggest issue around the ZSE suspension is the constraints around investors who may want to take short-to-medium term positions.

According to the group, there are over 30 000 shareholders in the company.

“Perhaps the inconvenience is that we need to think about is on people who had taken positions, buy and sell, and everyone involved is acutely aware of the need to remove that restriction,” he said.

“We do know that some people are not in a hurry to trade as it is also an asset that preserves value, but for those who want to trade they should not be inconvenienced.”

Notwithstanding the suspension, the diversified financial services firm is still participating on the ZSE as an investor.

“As investors, we are (buying shares on the ZSE). We do buy into the shares that are listed, to the extent that some of the funds that we manage are actually demanding more shares.

“Some of the funds give us the mandate to hold certain weights in certain assets.

“On our funds, you will probably see that we have the bigger weight of investments in equities, which we have been building over time,” said Mr Matsekete.

The group is also increasing its investments in private equity, which it believes has a “developmental role.”

According to its 2021 annual report, the group invested around US$28 million in unlisted equities.

Meanwhile, Old Mutual said discussions are continuing with authorities to explore lifting the ZSE suspension.-ebusinessweekly