HARARE, June 29 (Xinhua) -- The Zimbabwe Stock Exchange (ZSE) has suspended trading on the local bourse following a government directive.
"Whilst we await the guidance from our regulators on the operational modalities going forward, we notify our stakeholders that trading has been suspended until further notice," ZSE chief executive officer Justin Bgoni said in a notice to stakeholders issued Monday morning.
Following a statement Friday from government spokesperson Nick Mangwana, the ZSE has engaged the country's Securities and Exchange Commission and Ministry of Finance and Economic Development on the matter, the ZSE said.
On Friday, Mangwana announced the suspension of all transactions on phone-based mobile money platforms and trading on the local bourse, saying the move was intended to deal with the foreign exchange black market and rampant increases in prices of basic commodities.
"Concurrently, the measures will also include the suspension of all trading on the Zimbabwe Stock Exchange," he said.
Mangwana said the government has impeccable intelligence that constituted a prima facie case of the Zimbabwe Stock Exchange, either deliberately or inadvertently, in illicit activities that were sabotaging the economy.
These activities included illegal externalization of foreign currency through transfer pricing and engaging in rampant unchecked tax evasion, he said.
On Saturday, the Reserve Bank of Zimbabwe, the central bank, clarified the position on phone-based money transfers, saying that it was only money agents and, to some extent, merchant transactions that had been suspended.
Mangwana also expressed the government's discomfort with the Old Mutual Implied Rate (OMIR), which is believed to have compounded the problem of the foreign exchange black market.
"The impact is exacerbated by the existence of fake counters on the Zimbabwe Stock Exchange, which are epitomized by the so-called Old Mutual Implied Exchange Rate," he said.
OMIR is a proxy or a figure that is used to compute the implied exchange rate for the day based on the Old Mutual share value between Zimbabwe, South Africa and the United Kingdom.
Old Mutual shares trade at the same value on the three stock markets and the exchange rate is derived from comparing the share price of one Old Mutual share in Zimbabwe against another share in South Africa. Enditem
