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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Old Mutual Limited    OMU   ZAE000255360

OLD MUTUAL LIMITED

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Old Mutual : ZSE to Maintain Dual Listing for Local Companies

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07/12/2019 | 06:06am EDT

Dual listing remains the most viable option for local listed companies and the Zimbabwe Stock Exchange (ZSE) will not dump its plan to collaborate with other offshore bourses despite the 90-day moratorium on fungible stocks which is seen deterring investment, a top official has said.

The ZSE was planning to collaborate other stock exchanges to enable local companies to raise foreign currency through dual listing in the face of deep-seated forex challenges before government introduced Statutory Instrument (SI) 142 which banned the use of the multi-currency system.

Through the instrument, the central bank went on to impose a 90-day moratorium on the disposal of dual listed securities or shares purchased by local and foreign investors on the ZSE to curb speculative tendencies and externalisation.

At the moment, the directive affects counters such as Old Mutual, Hippo, NMB, PPC, Hwange, Seed Co and Meikles.

The local bourse, which says it is not in total agreement with the government's actions, is now courting the authorities to reach common ground.

ZSE CE Justin Bgoni told businessdigest this week that collaboration plans remain in place as the foreign currency situation remains unsolved.

"We understand where the government was coming from in terms of the SI 142. We do not wholly agree with their actions and we continue to engage them to raise our concerns and reach a common position. We will continue with our plans as companies in the country need foreign currency and dual listing still remains a viable option," he said.

Over the last couple of months, the stock market has largely trekked northwards on the back of risk aversion as Zimbabwe's inflation hit new post-dollarisation highs amid a weakening exchange rate with stocks providing a safe haven cushioning investors from a depreciating currency.

Strong investor appetite for Old Mutual and other fungible stocks has in the past aided the recovery of equities as foreigners sought to exit their positions in the local market, but the 90-day vesting period could have consequences.

In the face of the 90-day moratorium, appetite for fungible stocks is seen going down and Bgoni said this adds to the already existing problems on the bourse.

"Our initial thoughts are that this will reduce the appetite for fungible stocks and the attractiveness of the market in general and the trend to date after the introduction has been lower as expected. Part of it is the 90-day vesting period that has just kicked in and the other is the uncertainty brought in by the change," he said.

Bgoni added that the ZSE ultimately wanted the interbank forex market to be the exit mechanism for foreign investors.

Before the introduction of SI 142, participation of foreigners on the bourse had declined in reaction to government's policy inconsistencies, especially in relation to currency reforms.

Copyright Zimbabwe Independent. Distributed by AllAfrica Global Media (allAfrica.com)., source News Service English

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Financials (GBP)
Sales 2019 4 357 M
EBIT 2019 546 M
Net income 2019 630 M
Debt 2019 -
Yield 2019 10,5%
P/E ratio 2019 9,56x
P/E ratio 2020 8,55x
Capi. / Sales2019 24,1x
Capi. / Sales2020 22,3x
Capitalization 105 B
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Number of Analysts 1
Average target price 137,00  GBp
Last Close Price 124,30  GBp
Spread / Highest target 10,2%
Spread / Average Target 10,2%
Spread / Lowest Target 10,2%
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Managers
NameTitle
Mthandazo Peter Moyo Chief Executive Officer & Director
Trevor Andrew Manuel Chairman
Iain G. Williamson Chief Operating Officer
Casper G. Troskie Chief Financial Officer & Director
Paul Cambo Baloyi Independent Non-Executive Director
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