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THREAD: OLD MUTUAL 
Thoughts on @OldMutualZW.
1/ First, let’s dispense with @ZSE_ZW listing issue.
•OM has as a business is 175 yrs old, started in 1845 in Cape Town.
•Been in Zim for 118yrs, set up in 1902, started in 1895.
•H/ever, it’s only bn listed for 21 yrs. https://twitter.com/matigary/status/1282612459207983104
Thoughts on @OldMutualZW.
1/ First, let’s dispense with @ZSE_ZW listing issue.
•OM has as a business is 175 yrs old, started in 1845 in Cape Town.
•Been in Zim for 118yrs, set up in 1902, started in 1895.
•H/ever, it’s only bn listed for 21 yrs. https://twitter.com/matigary/status/1282612459207983104
2/ It’s important to make this clear distinction:
•OM as a business (175yrs old)
•OM as a listed entity with shares traded on Stock markets (only 21 years).
•OM’s listed period almost aligns with Zim’s period of sanctions, even tho OM has nothing to do with the sanctions.
•OM as a business (175yrs old)
•OM as a listed entity with shares traded on Stock markets (only 21 years).
•OM’s listed period almost aligns with Zim’s period of sanctions, even tho OM has nothing to do with the sanctions.
3/ Put differently:
•OM’s ability to do its banking, life assurance and insurance in Zimbabwe is unrelated to the listing & trading of its shares by its own shareholders.
•In the event that OM shares were to be delisted, it doesn’t affect the company per se.
•OM’s ability to do its banking, life assurance and insurance in Zimbabwe is unrelated to the listing & trading of its shares by its own shareholders.
•In the event that OM shares were to be delisted, it doesn’t affect the company per se.
4/ Another key point to make is:
•The stock market is used to raise capital through IPOs. After the IPO, the company doesn’t quite use the stock market to raise capital.
•OM never really did an IPO on the @ZSE_ZW. So it never raised capital in that sense.
So what did it do?
•The stock market is used to raise capital through IPOs. After the IPO, the company doesn’t quite use the stock market to raise capital.
•OM never really did an IPO on the @ZSE_ZW. So it never raised capital in that sense.
So what did it do?
5/ OM was a mutual society (much like a club). Money was held for the benefit of members.
•After 150+ yrs of being a members (mutual) club, old decided, for better or worse, to DEMUTUALISE, in 1999.
•As a comparison, another local mutual society, First Mutual did the same.
•After 150+ yrs of being a members (mutual) club, old decided, for better or worse, to DEMUTUALISE, in 1999.
•As a comparison, another local mutual society, First Mutual did the same.
6/ Demutualisation, good or bad had the effect of transferring ownership of all assets held & owned by members of the mutual society to a company called OM.
•This means the members, aka, policyholders of OM no longer owned its assets. The assets now belonged to OM.
•This means the members, aka, policyholders of OM no longer owned its assets. The assets now belonged to OM.
7/. In exchange for relinquishing ownership of the assets, the policyholders got pieces of paper called certificates with an allocation they could keep or sell around, via the stock exchange.
•Each policyholder was given at least 200 shares.
•Each policyholder was given at least 200 shares.
8/ If OM delists today, OM can continue its business.
•However, whoever is holding the shares that were given out in exchange for relinquishing mutual ownership of assets (demutualisation) won’t be able to trade them on @ZSE_ZW
•They can still sell them over the counter.
•However, whoever is holding the shares that were given out in exchange for relinquishing mutual ownership of assets (demutualisation) won’t be able to trade them on @ZSE_ZW
•They can still sell them over the counter.
9/ OM at demutualisation was a big operation in several countries: Zimbabwe, SA, Namibia, Malawi. It also had a holding company in the UK.
•So it was that the shares were simultaneously listed on all those exchanges.
•So it was that the shares were simultaneously listed on all those exchanges.
10/ Listing of OM in Zim came with an arrangement authorized by the government through exchange control regulator, RBZ, to allow the OM shares to be FUNGIBLE.
•FUNGIBILITY means that if you hold shares on @ZSE_ZW, you can get them transferred to SA or UK, and sell them there.
•FUNGIBILITY means that if you hold shares on @ZSE_ZW, you can get them transferred to SA or UK, and sell them there.
11/ This arrangement means it’s possible to take these shares and sell them in UK or SA and earn £ or Rand respectively.
•It therefore can give rise to this thing that has become very controversial called EXTERNALISATION, meaning you can take $ out of Zim & keep it outside.
•It therefore can give rise to this thing that has become very controversial called EXTERNALISATION, meaning you can take $ out of Zim & keep it outside.
12/ To be continued.
