Mnangagwa's govt suspends fungibility on dual-listed shares

 Mnangagwa's govt suspends fungibility on dual-listed shares
Published: 15 March 2020
Finance and Economic Development Minister Mthuli Ncube has suspended fungibility on dual listed shares for a period of twelve months as part if efforts to stabilise the exchange rate.

This comes as government has for the past months been carefully studying the causative factors and agents of currency volatility and has made the decision to take very wide and carefully aimed swings at all the elements that have been fueling currency instability.

In an extraordinary Gazette, Ncube said that the suspension will apply to Old Mutual, PPC and Seed Co International shares. It will not apply to trades done on March 13, 2020 provided they are settled by March 18, 2020.

The order also follows efforts by the Securities and Exchange Commission to institute an audit on all dual listed share trading conducted from June 1, 2020.

Senior Treasury sources told FinX that government had adopted a strategy where it wants to very quickly flatten or invert the exchange rate projections and want to see the ZWL closer to the rand rate.

"We are determined to control month on month inflation and contain it within a lower single digits levels of and in fact we may wish to see it turn negative in the next month or two and we will therefore sustain the policy momentum."

- finx
Tags: Fungibility,


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