Government Thursday lifted the ban on trading of SeedCo’s shares following the company’s successful relisting on the Victoria Falls Stock Exchange (VFSE).
In April this year, the Finance Ministry – 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.
In view of the fungibility concept, the shares of Old Mutual Limited, PPC Limited and Seed Co International (which were suspended) could be said to be fungible insofar as all the three companies’ stock are listed on at least more than one stock exchange.
Authorities defended the suspensions saying such practices in an inflationary environment such as Zimbabwe at the moment, can be bought on the ZSE and sold on foreign markets, which would be tantamount to illicit flows of local foreign currency.
But in an update Thursday, Ncube said the ban has since been lifted following the entity’s full compliance.
“Following full compliance by SeedCo 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,” Ncube said.
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.
Market watchers believe that such suspensions may have more long-term negative effects on the country than what the authorities seek to correct.
Instead, they urged authorities to address the underlying causes of the currency weakness rather than attacking financial markets which are simply transmission mechanisms that reflect the underlying views of the various market players.