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Zimbabwe: Stock Exchange to Resume Trading

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Trading on the Zimbabwe Stock Exchange (ZSE) resumes next Monday, but without Old Mutual, Seed Co International and PPC, following an inquiry by the Financial Intelligence Unit (FIU) which compiled a number of recommendations to be taken up by relevant security and criminal investigative arms of Government.

Trade on the ZSE was suspended on June 28 following an unprecedented speculative and destabilising behaviour that was in large part contributing to broader macro-economic instability.

Finance and Economic Development Minister Professor Mthuli Ncube yesterday said the investigations were now complete and a detailed report had been submitted to Government.

The FIU had established that some market players were found to have acted out of line with the norm of the rules of the ZSE and best trading practice, in the nature of their activities.

“Whilst there was no observed evidence of the direct involvement of the listed entities themselves, significant evidence of a strong link between the price behaviour and transaction patterns on internationally-listed shares, namely Old Mutual PLC, Seed Co International and PPC and the behaviour of the parallel market exchange rate was also established, with varying degrees of causality,” said Prof Ncube.

“In particular, the Old Mutual Implied Rate (OMIR) was observed to be the key driver of parallel market pricing behaviour, with many market players in the real economy using this highly visible rate as a benchmark for forward pricing and costing of goods and services, as well as determination of foreign exchange rates in market.