Old Mutual share prices shows that bond notes have devalued by 20-30 percent
The differences in prices of shares of Old Mutual on the Zimbabwe Stock Exchange (ZSE), London Stock Exchange (LSE) and Johannesburg Stock Exchange (JSE) shows that Zimbabwe’s virtual currency has devalued by amounts ranging from 20-30 percent. Officially, Zimbabwe uses United States Dollars and Bond Notes which are supposed to be at par, however, the majority of the money is not backed by real United States dollars as the government has been printing money using the Real Time Gross Settlement (RTGS) system.
On Monday the closing values of Old Mutual shares were as follows:
- ZSE: $4.01
- JSE: $2.61
- LSE: $2.64
Old Mutual shares are trading at a premium, as investors are taking advantage of the fact that Old Mutual shares are fungible. This means that they can be sold at any of the three stock exchanges, allowing investors to to move their money which is stuck in Zimbabwe to either London or Johannesburg where then get the money in pounds or Rands.
During the hyper inflation period, economic agents used the the difference in the price of the Old Mutual shares to come up with Old Mutual Implied Rate as an unofficial exchange rate to show the true value of the Zimbabwean dollar.
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