Financial Gazette (Harare)
22 November 2008
Harare — THE Zimbabwe Stock Exchange (ZSE) yesterday switched to a single callover to counter allegations of market manipulation by some brokers, chief executive (CEO) officer Emma-nuel Munyukwi said.
Munyukwi said it had come to the attention of ZSE that some brokers had been buying shares at the first callover and off-loading them at a much higher price in the final callover.
"We took the decision at the ZSE Committee meeting yesterday (Monday), before we learnt of the decision by the RBZ (Reserve Bank of Zimbabwe."
The ZSE chief said he had also been informed that a large number of multi-quadrillion, quintillion and sextillion cheques had bounced.
He added the bourse would continue to monitor the situation and switch back to two callovers should the situation normalise.
The only counter to trade in the first callover on Tuesday, Delta was unchanged at $55 quadrillion while most counters were sellers only.
The ZSE has been slow in responding to the requirements of a fluid economic environment in which speculators are running amok.
On Tuesday the central bank issued a hard-hitting statement on the rampant drawing of bank cheques and false bidding of shares on the ZSE by stockbrokers.
The RBZ said the activities have involved the fraudsters approaching bank employees who would issue unfunded bank cheques, which in turn would be used to purchase shares on the ZSE, foreign exchange and other speculative assets.
RBZ governor Gideon Gono had also fingered the ZSE among the willing accomplices.
He said: "The Zimbabwe Stock Exchange where trades are allowed to take place without watertight rules and regulations that foreclose wild fluctuations in stock prices, as well as deployment of non-existent money balances towards the stampeding of share prices up; and stockbroking firms that bid shares on the ZSE with absolutely no penny in their accounts (is one of the accomplices)."
As part of the new measures instituted by the RBZ, Gono said all trades on the ZSE are to be supported by actual credit balances confirmed by the buyer's bank in writing, signed by the bank's CEO.
"Any counterparty who fails to settle ZSE obligations due to lack of funding will be automatically blacklisted on Zimbabwe's whole banking system, with all accounts being frozen and closed.
"The defaulter will, therefore, not be able to operate a bank account in Zimbabwe," he said.
"Any bank where fraudulent bank cheques are drawn will have its banking licence withdrawn, with the bank's CEO being charged for criminality. Banks are, therefore, being called upon to completely overhaul their risk management systems to avoid this punitive eventuality," he added.
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I have never heard of such a rich stock exchange where sextillions are just like cents.Oh God forbid.