Old Mutual defers ETF EGM after ZSE intervention

HARARE – The Zimbabwe Stock Exchange (ZSE) has stopped Old Mutual Zimbabwe from delisting and terminating its Top Ten Exchange Traded Fund as the company received proposals from the exchange on how they can restructure the fund.

Old Mutual published a notice in May to shareholders disclosing that they are considering delisting and terminating the fund following a change in the composition of the fund after the introduction of the Victoria Falls Stock Exchange and the migration of a significant portion of counters from the ZSE to the VFX.

According to the company, the initial decision to come up with the with fund was heavily influenced by the desire to bring convenience to the investing public by bundling together stocks that have strong fundamentals, high dividend yields, and high liquidity composition of the underlying index. However, the ongoing development on the bourse where some companies within the fund have delisted or migrated has made it difficult to replicate and this increases the tracking error.

Speaking at the scheduled EGM this afternoon, company secretary Hardlife Nharingo said they won’t be able to share the decision with unit holders as intended following a directive from the ZSe. He said the meeting will reconvene within a month.

”Unfortunately members, today’s meeting is unable to continue. Our apologies for that. The reason we are unable to continue is that there are further directives that we have received from the ZSE on how we can go about delisting and terminating the fund. We will further engage with the Stock Exchange on the guidance on how we can best proceed. We got this guidance in the morning and unfortunately, we didn’t have enough time to circulate a postponement notice,” Nharingo said.