Harare - According to market players, investors are using Old Mutual as a way of repatriating their investments outside the country.
This comes as Old Mutual traded at $4.02 at the close of trade on Monday on the Zimbabwe Stock Exchange (ZSE), compared to a JSE price of R34.64 or $2.63 at 15:50.
Tuesday's price is the highest the counter has traded at since dollarisation in 2009.
Analysts said investors have been piling into the equities market in the absence of viable options in the country's capital markets.
“What has been happening is that foreign investors have been buying Old Mutual shares on the ZSE and have them removed from the ZSE share register to either the London Stock Exchange (LSE) or the JSE,” said local analyst Walter Mandeya.
“At the moment, this is the only option to get their funds out,” he said.
Repatriating sale proceeds from the ZSE has been a challenge of late, resulting in foreign investing shunning the equities market.
The Reserve Bank of Zimbabwe (RBZ) has since created a Zimbabwe Portfolio Investment Fund that is meant to facilitate repatriation of sale proceeds and dividends for foreign investors on the ZSE.
Analysts have however said the fund might fail to make an impact unless the RBZ funds the current backlog.
“There is a backlog of more than $75m and the $5m seed money from the RBZ is not enough. If one is to sell now, the sale proceeds will be used to pay for those who are already in the queue so there is no benefit for the new seller,” he said, adding that the RBZ must close the current gap first if the fund is going to work.