Staff Writer
Unitholders for the Old Mutual Zimbabwe Stock Exchange Top Ten Exchange Traded Fund (OM ZSE TT ETF) have approved the ETF’s delisting and termination of the fund and distribution of all the assets to the current unitholders.
At an Extraordinary General Meeting (EGM) of Unitholders held on December 12, 2024, 20,930,189 shares, representing 99.99 percent of the unit holders, voted in favour of the resolutions, while 1,990 shares, representing 0.01 percent, voted against.
The resolutions were to approve the delisting of OM ZSE TT ETF from the ETF Board of the Zimbabwe Stock Exchange (ZSE) through voluntary termination of the listing in terms of section 11 of the ZSE Listing Requirements.
To approve termination of the fund and distribution of all the assets to the current unitholders of the OM ZSE TT ETF.
On January 13, 2021, Old Mutual listed the Old Mutual ZSE Top Ten ETF (OMTT.ZW), which tracks the ZSE Top 10 Index, comprising the largest ten companies by market capitalisation on the ZSE.
Meanwhile, Old Mutual Zimbabwe (OMZIL) shares remain suspended from trading on the main bourse, the Zimbabwe Stock Exchange (ZSE), despite several commitments and engagements by the government, capital market authorities, and OMZIL.
In June 2020, Old Mutual Zimbabwe, PPC, and Seed Co International were suspended by the government from Zimbabwe’s main bourse due to the fungibility of their shares.
The government argued that the fungibility of the shares was being used to fuel the parallel market as the Old Mutual implied rate (OMIR) was used to determine a forex rate that was widely adopted as the market-determined foreign currency exchange rate—one that was higher than its official counterpart.
In addition, authorities argued, the fungible counters were being used as vehicles of capital flight by investors who would buy a local stock of Old Mutual and then sell off on South Africa’s Johannesburg Stock Exchange.
Shelton Sibanda, chief investment officer at Imara Asset Mgt, recently said the relisting of suspended Old Mutual on the ZSE will create another liquid investment alternative in a blue-chip business with an extensive track record in this country.
“Old Mutual was one of the most actively traded stocks, generating a sizeable portion of revenue for the stockbroking community and also trading income for investors.
“Post the migration of a number of counters to VFEX, trades have been mostly concentrated on a few quality and liquid counters. The (re)listing of OM will add another quality counter and broaden investor options on the ZSE,” he said.
More importantly, he said this will help unlock a lot of ‘dead capital’ tied in the stock that investors could not access and/or redeploy into other avenues.
“The damage done by the OM suspension is huge, both financially and in terms of investor confidence for the country. Its relisting will also help as a signal effect that there is still some value in maintaining a local listing,” said Sibanda.
Zimbabwe was the fifth country in Africa to list an ETF, following South Africa, Nigeria, Kenya, and Egypt.
Post the delisting of Old Mutual, the remaining ETFs will be Morgan & Co Multi-Sector ETF (MCMS.zw), Morgan & Co Made in Zimbabwe ETF (MIZ.zw), Cass Saddle Agriculture ETF (CSAG.zw), and the Datvest Modified Consumer Staples ETF (DMCS.zw).
