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Listed companies cleared of share price manipulation

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THREE listed companies have escaped censure by the Securities and Exchange Commission of Zimbabwe (SECZ) after they were cleared of charges of share price manipulation, it has emerged.

Last year SECZ instituted investigations into the trading of financial services group ABC Holdings Limited, insurance group Fidelity and agro-industrial concern Zimplow following a significant jump in their share prices.

Market manipulation is described as a deliberate attempt to interfere with the free and fair operation of the market to create artificial, false or misleading appearances with respect to the price of or market for a security, commodity or currency.

SECZ chief executive officer Tafadzwa Chinamo said in a statement yesterday that after an analysis of trading and settlement statistics provided by the Zimbabwe Stock Exchange it was proved that the companies had no case to answer.

He said interviews were also held with concerned securities dealing firms, fund managers and underlying clients which proved that all trades in the respective companies recorded on December 30 2013, were genuine.

“As a result the commissioner wishes to announce that the investigations have been closed and no further action regarding the matter will be taken,” Chinamo said.

He said from the findings, Fidelity Life Assurance Limited shares as of December 2013 rose by 53,06% due to competitive bidding by three securities dealings firms challenging a book —over by another dealing firm.

Chinamo said all traders involved were buying for different funds and individual clients at a time Fidelity Life Assurance Limited shares were in short supply.

He said an order to buy shares worth $107 000 for more than 800 000 shares placed on December 20 could not be filled until its withdrawal from the market on January 7 this year.

“The prices of Fidelity Life Assurance Limited shares remained firm, trading at levels above 13 cents after December 30 for a period of a week before settling at 12 cents for close to a month. All the bids on the day were supported by genuine orders and all the traders recorded on the day settled successfully,” said Chinamo.

On the case of ABC Holdings and Zimplow, the securities boss said investigations showed that there was no sufficient grounds to suspect irregular trading of stocks on the day.

The SECZ is currently pushing for the automation of the domestic bourse as the absence of an electronic trading platform makes it possible for brokers to manipulate certain prices and short sell.

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