Govt restores full Seed Co fungibility
THE Government has restored full fungibility of Seed Co International Limited’s shares with immediate effect following the successful listing of the company on the recently launched Victoria Falls Stock Exchange (VFEX).
Seed Co is also listed on the Botswana Stock Exchange. The lifting of fungibility for the company’s shares entails that investors can apply for removal of shares from a Zimbabwe register on VFEX to Botswana register and vice versa, said Mr Justin Bgoni, the chief executive officer for the Zimbabwe Stock Exchange (ZSE), parent company to VFEX.
On March 15 this year, the Government through General Notice 583 of 2020, ExchangeControl (suspension of fungibility of certain shares) Order, suspended the fungibility of SeedCo, Pretoria Portland Cement and Old Mutual, which were at the time listed on the Zimbabwe Stock Exchange (ZSE).
Seed Co was subsequently delisted from the ZSE and given the option to re-list on the newly formed VFEX. Finance and Economic Development Minister Professor Mthuli Ncube said: “Following full compliance by SeedCo International Limited, and the successful re-listing of the company on VFEX, I hereby announce the lifting of all fungibility restrictions on SeedCo International Limited shares with immediate effect”.
The term “fungibility” basically implies that two things are identical in specification and that individual units of the good or asset can be mutually substituted. The giant seed company became the first counter to list on the VFEX, which is Zimbabwe’s new foreign currency denominated bourse.
Prof Ncube said the Government remains committed to the soundness and stability of the financial markets in order to maintain confidence and deliver long-term value to stock market investors.
A wholly-owned subsidiary of the ZSE, the VFEX officially opened its doors to the investing public at the end of last month. The Government hopes the new market will result in an inflow of hard currency to Zimbabwe. Prof Ncube is on record saying the new exchange would target foreign investors and global capital, especially in the mining sector.
The launch of the new bourse was necessitated by concerns that there was speculative activity on the ZSE, which led to the halting of trade in June as the Government sought to deal with dual-listed companies such as Old Mutual, PPC and SeedCo International. The companies suspected of influencing foreign currency outflows through fungibility will now trade on the VFEX.
Following Government’s intervention to deal with the manipulation of the exchange rate, macro-economic stability has been achieved and now the focus is on growing the economy under-pinned by the first five-year National Development Strategy(2021-2025).
Under the Second Republic led by President Mnangagwa, Zimbabwe Envisages to attain an upper middle-income economy by 2030.-chronicle.co.zw
