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Business Writer
Government will allow resumption of trading on the Zimbabwe Stock Exchange only after investigations on allegations that led to suspension of trading are concluded, and this might take a week or two, Finance and Economic Development Minister Mthuli Ncube said yesterday.
Fielding questions at a post Mid-Term Budget Review webinar, Minister Ncube said suspension of the stock exchange, since the 26th of June 2020, was done “to make sure there’s some discipline in our private sector activities”.
“We are waiting for the conclusions of the investigations led by the Financial Intelligence Unit (FIU). They should be able to conclude within the next week or two weeks. Then we will review that and then decide on modalities for reopening.
“It’s just a matter of going through the paces and receiving the reports once the investigation is complete. It should have certain recommendations and we will follow those recommendations so that we are systematic.”
Minister Ncube said as regulators they had intervened the “right way” and there is need to be “positive about the issue”.
The Investment Professionals Association of Zimbabwe (IPAZ), a professional body made up of Chartered Financial Analysts (CFA) Charter holders and Members of the CFA Institute domiciled in Zimbabwe and in the diaspora, however sees suspension of the stock exchange as “a bad precedent and detrimental to the economy in the long-run”.
“The action to close the ZSE and threat to de-list Old Mutual Limited creates an existential threat to the country’s financial, insurance and investment industry,” said IPAZ.
IPAZ also sees the halting trades on the ZSE as an attack on property rights that creates unnecessary panic among investors.
It also “discourages a savings culture which is the bedrock of economic growth for the country”.
IPAZ added that if indeed Old Mutual Limited was being used by certain individuals, syndicates and or corporates to illicitly manipulate the markets and or exchange rate then would it not have been more prudent to gather such evidence and prosecute those entities rather than suspend the market as this sets a bad precedence whilst the collateral damage is excessive.
Online Reporter