South AFRICA-DOMICILED Old Mutual Limited (OML) is working round the clock to have the shares of its local unit relisted on the Zimbabwe Stock Exchange (ZSE) amid revelations that several proposals have been tabled before the authorities to resolve the impasse.
In June 2020, Old Mutual Zimbabwe was among three companies including PPC and Seed Co International that were suspended from the ZSE due to the fungibility of their shares as these firms were listed on foreign bourses.
Authorities said the fungibility of the shares was being used to fuel the parallel market. The Old Mutual implied rate was used to determine a forex rate that was widely adopted as the market-determined foreign currency exchange rate which was higher than its official counterpart.
Responding to questions from the NewsDay Business at the company’s virtual analyst briefing for the half year ended June 30, 2023, on Wednesday, Old Mutual Zimbabwe CEO Samuel Matsekete said the authorities assured them the suspension would soon be resolved.
“We still have the Old Mutual Limited share suspended and just to remind colleagues this is really the Old Mutual Limited share not the Old Mutual Zimbabwe share which is listed on the Finsec (Financial Securities Exchange (Private) Limited),” he said.
“The engagements with the authorities around the lifting of that suspension have been ongoing. A number of proposals have been under discussion with authorities. These discussions have also involved the principals from Old Mutual Limited who are the primary authority that is listed.
“We have been assured that this matter is going to be concluded soon but that really is the prerogative of authorities and how they view the position around the share and the fears that really triggered the suspension.”
He said the authorities feared that the return of Old Mutual Zimbabwe would see the return of the Old Mutual implied rate and how this would be once again used to determine the forex rate.
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“So, we are still where we were when we last reported. There still has been engagements, however, we are still to get the authorities upon the proposals that have been submitted towards either lifting that suspension or creating alternative ways to allow the 32 000 shareholders on the register to trade in their share,” Matsekete said.
At the time of the suspension, OML had a valuation equivalent to US$91,74 million on ZSE with an average daily value traded of over US$250 000 that week.
As a result, Old Mutual Zimbabwe’s equity strategy is now focused on creating value from its shareholding in listed firms on both ZSE and Victoria Falls Stock Exchange as well as unlisted firms.
Dividend investment and securities income rose to ZWL$30,56 billion during the period under review, a 177,29% increase from a 2022 comparative of ZWL$11,02 billion.
“For some of the securities that we are invested in, we are invested in shareholder funds. For some of them, client funds that are buy-in products, that is, maybe they are underwritten and coming through the life business. And, for others, we are clearly invested on behalf of clients on separate and aggregated mandates,” Matsekete said.
“So, to do a count, in terms of how many we are across (VFEX and ZSE), I don’t have that number. But I can say that, we are playing in a significant number of the counters where one way or the other you will find us present on most of the counters whether it’s on VFEX or Zimbabwe Stock Exchange.”
Old Mutual Zimbabwe’s total equities were valued at ZWL$2,55 trillion at the end of the period under review with 73,96% and 26,035, respectively, being unlisted and listed equities.
Total investment returns rose to ZWL$3,44 trillion during the half year ended June 30, 2023, a significant increase from a 2022 comparative of ZWL$122,26 billion.
The performance was owing to a ZWL$3,28 trillion movement in the total fair value gains and losses recognised in income during the period from the 2022 comparative.
This overturned a net loss of ZWL$103,18 billion in the half year ended June 30, 2022, to help Old Mutual Zimbabwe register a profit after tax of ZWL$628,96 billion at the end of June this year.
Total assets were revalued to ZWL$8,21 trillion during the period under review from a 2022 comparative of ZWL$3,16 trillion.