Old
Mutual Ltd. is poised to stop trading its shares on the Zimbabwe Stock
Exchange, the latest step in the governments efforts to bring order to
its chaotic foreign-exchange market.To get more news about OlympusFx, you can visit wikifx news official website.
The
insurer agreed to move its listing to a new bourse in the country that
will only deal in foreign currency, three people with direct knowledge
of the matter said. The deal came after talks on Monday between
representatives of Old Mutual, the Treasury, the Securities and Exchange
Commission of Zimbabwe and the ZSE, the people said, asking not to be
identified because negotiations were private.
The
government of President Emmerson Mnangagwa has blamed a plunge in the
local currency on the 175-year-old insurer‘s share price. Companies were
using the so-called Old Mutual Implied Rate to determine the forward
value for the Zimbabwean currency by using differences in the dollar
values of the company’s securities in London, Johannesburg and Harare.
By
eradicating the implied rate, the nation‘s ruling party is seeking to
end a multitude of exchange rates used by Zimbabweans to navigate the
country’s myriad economic challenges. The government last week set new
regulations to compel businesses to use a single exchange rate for
pricing goods and services in a bid to tame inflation of 737% in a
country battling with shortages of everything from food to fuel.
Tabby
Tsengiwe, the Johannesburg-based insurer‘s spokeswoman, didn’t respond
to a call or a text message seeking comment. Finance Minister Mthuli
Ncube didnt respond to calls for comment.
Another meeting is scheduled for next week to resolve administrative issues and discuss the finer details, the people said.
A
surge in Old Mutuals Zimbabwe stock -- which like other shares was
being used as a hedge against inflation -- widened the gap between its
South African and U.K. securities, causing the OMIR to rise to 122. The
Zimbabwe dollar has weakened to 72.1470 per U.S. dollar on a
foreign-currency auction system that was introduced after a currency peg
of 25 was dropped last month.
Terminating
Old Mutual‘s listing paves the way for dealing to resume on the
Harare-based ZSE -- which was abruptly halted on June 28 -- once
Zimbabwe’s Financial Intelligence Unit has completed a probe into
trading on the bourse. It is still unclear when the stock exchange in
the resort town of Victoria Falls will begin operating.
Old
Mutual, which listed on the Zimbabwe Stock Exchange in December 1999,
opened its first office in the country in 1902 and offers life, property
and casualty cover, asset management, property development and banking
services in the country.
By | buzai232 |
Added | Aug 4 '20, 09:23AM |
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