Probe on listed firms continues

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INVESTIGATIONS into suspected cases of share price manipulation involving three listed counters are yet to be concluded amid indications that the net could close in on some fund managers, NewsDay Business has learnt.

By Business Reporter

The Securities and Exchange Commission of Zimbabwe (SECZ) last month announced that it was carrying out a probe into the trading of financial services group ABC, insurance group Fidelity and agro-industrial concern Zimplow following a significant jump in shares at year end.

Sources said the capital markets regulator asked the Zimbabwe Stock Exchange (ZSE) to probe the three firms after their share prices gained an average of 20% within a week last December.

SECZ chief executive officer Tafadzwa Chinamo said: “The investigations are still ongoing. We are primarily looking at the year-end movements of share prices.”
An observation of the trend that emerged in December indicates that a handful of ZSE-listed companies recorded remarkable share movements towards the end of the year despite having a lukewarm performance throughout the year.

Turnover on the local bourse for the whole year is normally driven by heavyweight counters such as Delta and Econet.

Market manipulation is described as a deliberate attempt to interfere with the free and fair operation of the market to create artificial, false or misleading appearances with respect to the price of or market for a security, commodity or currency.

Section 96 of the Securities Act, legislation regulating Zimbabwe’s capital markets, outlaws price manipulation, stating that “no person shall, by means of any false statement or fictitious or artificial transaction or device, maintain, inflate or depress, or cause fluctuations, in the price of any securities on a registered securities exchange”.

In 2012, SECZ launched investigations into suspected cases of share price manipulation involving three counters.

The Securities Commission is currently pushing for the automation of the domestic bourse whose trading is currently a call-over system, critics say is fraught with risks.

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