Financial services group Old Mutual says it is actively engaging with the Zimbabwe Stock Exchange (ZSE), the Treasury, and key political stakeholders to explore the possibility of resuming trading on the local stock exchange.
This development comes as Old Mutual’s share trading on the ZSE remains suspended, since 2020.
Old Mutual’s suspension was implemented in 2020 due to allegations that fungible stocks had become vehicles for repatriating investments out of the country. This occurred at a time when foreign currency was scarce, fueling currency distortions and a spike in the exchange rate.
The investment, savings, insurance, and banking group was suspended along with Seed Co International and PPC Zimbabwe, which were also listed on other exchanges in addition to the local bourse.
In addition to its local presence, Old Mutual has dual listings on the Johannesburg Stock Exchange (JSE) and the London Stock Exchange (LSE).
Similarly, Seed Co International and PPC have regional listings, with the former trading on the Botswana Stock Exchange (BSE) and the latter on the JSE.
However, Seed Co International is now listed on the Victoria Falls Exchange (VFEX) after delisting from the ZSE, while Old Mutual and PPC shares remain suspended from trading on the ZSE.
The continued suspension of fungibility for these shares prohibits investors from buying shares on the ZSE and selling them on foreign markets, a practice authorities deemed equivalent to illicit foreign currency outflows, which were highly restricted due to severe currency shortages.
“Trading of Old Mutual shares on the Zimbabwe Stock Exchange remains suspended. We have been engaging with both the ZSE, the Finance Ministry, and broader political players in Zimbabwe regarding a potential resumption.
“A number of proposals have been exchanged, but we are yet to resolve the situation.
‘‘I think the Zimbabwean government remains sensitive about the implied exchange rate derived by people comparing the price of Old Mutual shares on the Zimbabwe Stock Exchange to the prices in London and Johannesburg,” said Old Mutual Chief Executive Iain Williamson during the group’s annual analyst briefing for the year ending December 2024.
Old Mutual noted that Zimbabwe underwent two functional currency changes in 2024, resulting in a shift to US dollar reporting.
Consequently, the company discontinued hyperinflation accounting, effective July 1, 2024, in line with the country’s revised monetary framework.
Following the switch from Zimbabwean dollars to US dollars, Old Mutual anticipates that its Zimbabwean operations will no longer generate significant foreign exchange gains.
Subsequently, the company expects reduced transfers to the foreign currency translation reserve going forward.
Old Mutual notes that this change will significantly decrease IFRS profits and headline earnings. However, it will have a minimal effect on net asset value and no impact on adjusted headline earnings, providing a more nuanced view of the company’s financial performance.
Operationally, the group delivered a four percent growth from operations, with a seven percent growth in results from operations per share.
Excluding investments in new growth initiatives, results from operations were up by 10 percent, driven by exceptional underwriting results in Old Mutual Insure and strong contributions from Wealth Management and Old Mutual.
Cash remitted from subsidiaries was R10.5 billion for the year, representing 158 percent of adjusted headline earnings.
The group announced a final dividend of 52 cents per share, bringing the total dividend for the year to 86 cents per share.
According to Old Mutual, the growth in the final dividend from the prior year was due to resilient operational performance and a strong capital and liquidity position.
