Old Mutual Shares Used as Collateral on JSE for Electricity Payments
What happened
On April 28, 2013, shares of Old Mutual were transferred to the Johannesburg Stock Exchange to be held as collateral. The Reserve Bank of Zimbabwe was reportedly buying these shares on the Zimbabwe Stock Exchange to pay for electricity imports from South Africa’s Eskom.
From insiderzim.com
Why it matters
Old Mutual shares had functioned as a form of currency across Harare, Johannesburg, and London. The transfer of these shares allowed the Reserve Bank of Zimbabwe to use them as collateral to settle payments for South Africa's electricity imports.
From insiderzim.com
Who's involved
- Old MutualThe company whose shares were transferred to the Johannesburg Stock Exchange as collateral.
- Johannesburg Stock ExchangeThe stock exchange where Old Mutual shares were held as collateral.
- Zimbabwe Stock ExchangeThe stock exchange where the Reserve Bank of Zimbabwe was buying Old Mutual shares.
- ZimbabweThe sovereign state whose central bank was buying Old Mutual shares to pay for imports.
- South AfricaThe country whose electricity imports were paid for using the collateralized shares.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Zimbabwe Stock ExchangeSpeculative
Capital or liquidity in the Zimbabwe Stock Exchange could be drawn out as shares are transferred to the Johannesburg Stock Exchange.
- South AfricaSpeculative
The use of Old Mutual shares as collateral could facilitate payments for South Africa's electricity imports.
Keep exploring
The entities involved
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Old Mutual
pan-African investment, savings, insurance, and banking group
Nothing else this week.
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Johannesburg Stock Exchange
stock exchange in Johannesburg, South Africa