Zimpapers Logo

THE amount of nominal value of share held by Old Mutual Zimbabwe’s shareholders on the Zimbabwe Stock Exchange is likely to further dwindle in the outlook as the shareholders move to sell their shares on the giant insurer’s alternative listings. Following the Reserve Bank of Zimbabwe (RBZ)’s approval for the increase in fungibility limits from 40 percent to 49 percent for Old Mutual Plc’s last month, the company has just announced a decline in its shares in issue on the local bourse.

Fungibility basically means that two items are identical in specification, where individual units of the commodity or good can be mutually substituted. Hence in this case, Old Mutual’s Zimbabwean shareholders can trade their shares in all other markets the two counters were registered.

Old Mutual Zimbabwe’s shares issue are now lower at 54,428,297 after 306,507 shares were removed “outwards to Johannesburg Stock Exchange (JSE) register.”

“What is happening in effect is that local investors are moving them to sell them on the Johannesburg Stock Exchange where the price of the equity fetches higher prices.

“In the medium to long term, the issued share capital of Old Mutual Plc will falloff in Zimbabwe and increase in South Africa, or wherever else the company is listed,” an analyst told BH24.

Old Mutual’s share price on the JSE on Friday was at 3,720.00 (ZAR), and 194.90 (GB) on the London Stock Exchange (LSE). And on the local bourse, Old Mutual Zimbabwe’s share price as at the close of trading yesterday was 228,75 (US).

Old Mutual, the only fully fungible counter on the Zimbabwe Stock Exchange, is primarily listed on the London Stock Exchange and has secondary listings on the Johannesburg Stock Exchange and Namibia Stock Exchange.

The RBZ also increased the fungibility limits from 40 percent to 49 percent for PPC Limited, which is also listed on the JSE.—BH24.