Mauritius: Country and Foreign Investment
In 1989 Mauritius set up its own stock exchange under the Stock Exchange Act 1988. The exchange is regulated by the Financial Services Commission. There is an Official List with 38 listings and a 'Development & Enterprise Market' (DEM) with 49 companies listed.
Market capitalization stood at USD5.669bn at end December 2012, compared to USD5.721bn in 2011. Annual turnover in 2012 decreased by 38.64% (when compared with 2011) to just over USD306 million.
A new Securities Act was passed in 2005.
An Automated Trading System (SEMATS) was launched on 29th June 2001. SEMATS put an end to traditional trading patterns which had typified the Stock Exchange of Mauritius since its inception. Trading in securities is conducted through dedicated trading workstations located at stockbroking firms and linked by communication lines to the SEM trading engine.
The Exchange was recently promoted from the status of 'corresponding exchange' to that of Affiliated Securities Market within the Fedration Internationale des Bourses de Valeurs (FIBV). Mauritius is also a member of the African Stock Exchanges Association (ASEA).
The market was opened to foreign investors after the lifting of exchange controls in 1994; foreigners are limited to individual holdings of not more than 15% in sugar companies, but are not otherwise limited unless they attempt to gain legal or management control of a Mauritian company (see Business Environment below). Settlement can be made in foreign currency; there is no capital gains tax and no withholding tax on dividends from companies on the Official List.
In September 2006, the SEM said it planned to launch an Alternative Development Market in early 2006.
The Development & Enterprise Market (DEM) was designed for companies previously quoted on the Over-The-Counter (OTC) Market, Small and Medium-sized Enterprises (SME’s) and newly set-up companies which possess a sound business plan and demonstrate a good growth potential.
It is meant for companies seeking an organised and regulated market to raise capital to fund their future growth, improve liquidity in their shares, obtain an objective market valuation of their shares and enhance their overall corporate image. The rules governing the DEM are less stringent than those of the Official Market, and the market is open to foreign investors.
With the implementation of the DEM, the OTC Market was phased out in January 2007.
In early 2010, the SEM brought some major changes to its Listing Rules to align them with the Collective Investment Schemes Regulations 2008 with a view to positioning the SEM as an attractive venue for the Listing of Global and Specialised Funds. The recent changes to the Listing Rules were designed to attract the listing of Global and Specialised Funds on the Exchange. The Exchange made its Listing Rules more flexible to reflect the specific attributes and characteristics of the Specialised Funds it would like to list on the SEM. The SEM joined the World Federation of Exchanges (WFE) in November, 2005.
In February 2008, the Financial Services Commission (FSC) announced that a licence to operate a Commodity Exchange had been issued to Global Board Trade Ltd (GBOT). GBOT’s main promoter is Financial Technologies (India) Ltd (FTIL), a company listed on both the Bombay Stock Exchange and the National Stock Exchange of India and one of the main promoters of the Multi Commodity Exchange of India (MCX). MCX, India’s largest Commodity Exchange, is partly owned by NYSE Euronext.
GBOT informed the FSC that it proposes to set up the Commodity Exchange as the first phase of a broader Multi Asset Class Exchange. Initially, trading on the Commodity Exchange will be in precious metals, base metals, energy, green contracts and Agri Commodities. The Commodity Exchange should allow different categories of participants - from within Mauritius and abroad - to trade through an electronic platform linking geographically dispersed buyers and sellers in real time.
The promoters of GBOT expect that the Commodity Exchange based in Mauritius will help accelerate the integration of the African sub-continent with the world economy by leveraging the strategic location of Mauritius between the time zones of New York, London, and Tokyo and will boost the image of Mauritius as a globally-integrated, leading financial centre in the region. The Exchange will facilitate links between commodity markets in Africa and global rading hubs, in accordance with principles of price transparency, trade efficiency, risk hedging and structured finance to the interiors of the region.
The Exchange started trading operations on 18 October 2010 and had contracts worth USD12 million traded in its first month of operations.