Government restores SeedCo’s fungibility

Author Name
Respect Gwenzi
Author
Stock Market 2 weeks ago

Harare – Government on Thursday restored full fungibility of Seed Co International Limited’s shares following 8-months long suspension as the authorities argued that fungibility in an inflationary environment like Zimbabwe allows investors to compare prices across different exchanges and exploit arbitrage opportunities.

The suspension took effect on 15 March 2020 as Government through Exchange Control (Suspension of Fungibility of Certain Shares) Order 2020 – suspended the fungibility of Old Mutual Limited, PPC Limited and Seed Co International Limited shares for a period of 12 months.

Fungibility basically implies that two things are identical in specification; accordingly, individual units of the good or asset can be mutually substituted. In view of this concept, the shares of the three counters (which were suspended) can be said to be fungible in so far as all the three companies’ stock are listed on at least more than one stock exchange.

Seed Co International is also listed on the Botswana Stock Exchange.

Subsequently, the three counters were delisted from the ZSE and given an option to re-list on the newly established Victoria Falls Stock Exchange (VFEX).

The suspension was done in a bid to clamp down on alleged illegal activities that involves participation in the parallel forex market by theses companies as the Zimbabwe dollar mercilessly lost value against the US dollar and other foreign currencies.

In an update on Thursday, Finance and Economic Development Minster, Professor Mthuli Ncube said, ““Following full compliance by Seed Co International Limited, and the successful relisting of the company’s VFEX, I hereby announce the lifting of all fungibility restrictions on SeedCo International Limited shares with immediate effect”.

He added that the government remains committed to ensuring the soundness and stability of finance in order to maintain confidence and deliver long term value to stock market investors.

Seed Co became the first counter to be listed on the VFEX on October 21, 2020 and had its listing on the ZSE permanently terminated with effect from October 23, 2020.

VFEX is a USD denominated stock exchange created out of the need to attract foreign capital and hard currency funding for local entities, mainly those involved in the extractive sectors.

Equity Axis News


Stock Market ● 6 days ago
RioZim withdraws cautionary announcement, agrees payment structure with RBZ

Delays in payments for gold deliveries strained the Company’s working capital Agreement reached with RBZ and Fidelity will help revitalize operations RioZim has an extensive portfolio of resources in gold, base metals, diamonds, coal and chrome HARARE – ZSE listed, gold producer RioZim Limited has withdrawn the cautionary announcements dated 15 June 2020 and 8 July 2020 regarding the impass...


Stock Market ● 1 week ago
ZPI delists from local bourse on ZHL Acquisition

Harare – Real estate holding company, Zimbabwe Property Investments Limited (ZPI) has voluntarily delisted from the Zimbabwe Stock Exchange (ZSE) with effect from the 10th of November 2020. This comes after an offer by ZPI’s parent company Zimre Holdings Limited (ZHL) to minority shareholders to acquire their shares in exchange for newly issued shares in ZHL which led to the parent holding 97,6%...

Stock Market ● 1 week ago
Improved foreign currency supply positively impacts on AfDis operations

Quarterly volumes up 28% Revenue up 15% Operations smoothened by improved accessibly to forex facilitated by the Forex Auction Harare – Liquor manufacturer and distributor African Distillers Limited has posted improved volumes in spirits and ready-to-drink (RTD) operations, as well as a jump in revenue for the third quarter, ended 30 September 2020 on the back of improved foreign currency s...

Stock Market ● 1 week ago
Masimba Holdings’ construction volume increases in third quarter

A number of construction works were completed during the period PAT up 15.7% ahead of prior year Full-year results expected to be ‘significantly’ ahead of the comparative period Harare – Masimba Holdings Limited, a Contracting and Industrial group in Zimbabwe, providing engineering and infrastructure solutions to the agricultural, commercial and corporate sector as well as housing, mini...

Analysis ● 1 week ago
PPC overcomes COVID-19 woes with strong sales recovery

Sales volumes rose by a fifth in October YoY Experienced a muted sales in April and May 2020 due to the COVID-19 Cement volumes for PPC Zimbabwe grew by m approximately 5% Harare – JSE-listed Pretoria Portland Cement (PPC) said sales volumes have bounced back in the three months July to September 2020, showing a recovery of 20% to 25% year-on-year. The Group has operations in Zimbabwe thou...