Old Mutual: Resumes Trading on Zimbabwe’s Dollar-Based VFEX

Old Mutual shares resumed trading in Zimbabwe on August 12 after a 6-year suspension, moving its secondary listing from the Zimbabwe Stock Exchange to the US dollar-based Victoria Falls Stock Exchange (VFEX). This significant development saw the insurer's shares open at $0.76 and close at $0.7817, marking a 2.9% increase in their inaugural VFEX session. The move represents a strategic shift for Old Mutual and a notable event for Zimbabwe's capital markets, particularly given the previous suspension of its fungible shares on the ZSE.

This re-listing on the VFEX carries substantial legal and economic significance for practitioners, businesses, and investors. For Old Mutual, it provides renewed access to the Zimbabwean capital market through a dollar-denominated platform, potentially offering greater stability and attracting foreign investment due to the reduced currency risk. For the broader market, it signals the government's continued efforts to revitalize the financial sector and provide alternative, more attractive investment avenues, especially for international capital. The VFEX's design as an offshore financial centre aims to circumvent local currency volatility, making it a more appealing option for companies seeking stable valuations and for investors looking for dollar-denominated returns.

The legal context for this move involves the regulatory frameworks governing stock exchanges in Zimbabwe, primarily overseen by the Securities and Exchange Commission of Zimbabwe (SECZ). The SECZ is responsible for regulating both the Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange (VFEX), ensuring compliance with securities legislation and listing rules. The establishment of the VFEX itself was a policy initiative to create a robust, dollar-denominated market, distinct from the ZSE which primarily trades in local currency. The previous suspension of Old Mutual's shares on the ZSE in 2020 was a direct consequence of government measures aimed at stabilizing the Zimbabwean dollar, which impacted fungible shares and led to their delisting. The re-listing on VFEX therefore reflects a new regulatory approach and a clear policy direction to attract and retain significant capital market players.

Key parties involved include Old Mutual as the listed entity, the Zimbabwe Stock Exchange (ZSE) from which the listing was moved, and the Victoria Falls Stock Exchange (VFEX) as the new trading platform. The Securities and Exchange Commission of Zimbabwe (SECZ) acts as the overarching regulator. For practitioners, this development underscores the importance of monitoring the VFEX's performance and its evolving regulatory environment. Attorneys advising financial institutions, listed companies, and investors should be well-versed in the listing requirements, tax implications, and foreign exchange regulations specific to the VFEX. Companies previously affected by ZSE suspensions or those considering secondary listings should evaluate the VFEX as a viable and potentially more stable option for capital raising and investor engagement.