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Herald Reporter
Zimbabwe and South Africa are cooperating to resolve the issue of multi-listed firm Old Mutual Limited, which is at the centre of suspension of trading of the Zimbabwe Stock Exchange.

Old Mutual is primarily listed on the Johannesburg Stock Exchange (JSE), is also listed on the Zimbabwe Stock Exchange and the London Stock Exchange, as well as on other bourses in the region. The resultant fungibility of its stock has long been exploited by speculators to externalise foreign currency out of Zimbabwe.

And of late, the fungibility issue has created an opportunity for the determination of foreign exchange rate in Zimbabwe — the so-called Old Mutual Implied Rate (OMIR) — which unscrupulous businesses have been using to “forward price” their goods thereby driving up inflation. Even after authorities suspended the stock’s fungibility for a period of 12 months, some economic players continued to use the OMIR to determine prices, prompting Government not only to suspend trading on the ZSE, but to consider moving Old Mutual to a United States dollar-denominated stock exchange. Following an engagement with Foreign Affairs and International Trade Minister Sibusiso Moyo this week, South African Ambassador to Zimbabwe Mphakama Mbete said the two parties had a “good understanding” over the Old Mutual Zimbabwe issue.

“We discussed . . . issues relating to matters that have arisen around Old Mutual, an old South African company that has been operating in Zimbabwe for many years and what to do about that,” he said. “We had a good understanding of measures that are being taken now.” Established in 1845, Old Mutual Limited is headquartered in Cape Town, and engages in the provision of investment, savings, insurance and banking services.

The company’s first office in Zimbabwe was opened in 1902; but the company had been in operation as the first Old Mutual Policy in the country was sold in 1895. Although being a South African company, Old Mutual was primarily listed on the London Stock Exchange, but that changed in June 2018, when it moved its primary listing from London to South Africa and re-listed on the local equities market as a secondary listing. Old Mutual Zimbabwe’s subsidiaries include the Central Africa Building Society (CABS), Old Mutual Life Assurance Zimbabwe, Old Mutual Insurance Company (a short-term insurance company), Old Mutual Securities, Old Mutual Property (Real Estate), Old Mutual Investment Group (into asset management and unit trusts), and Three Anchor Investments Limited.

Locally, Old Mutual Limited has 30 168 shareholders consisting of pension funds, local institutions and individuals. Zimbabwe and South Africa have long had strong economic ties.

And according to Ambassador Mbete, the meeting with the Foreign Affairs Minister was to “strengthen bilateral trade and economic ties between the two countries during this difficult time of Covid-19.”