Stock Exchange of Mauritius plans to boost value of its markets
The exchange is making rules for listing easier, including allowing multiple currencies, as it seeks to attract more and more foreign companies to sell shares on the bourse. (Image: Mashable)
The Stock Exchange of Mauritius plans to boost the value of its markets to match the size of the Indian Ocean Island’s economy by encouraging foreign companies to sell shares on the bourse.
Currently, the SEM owns and manages two markets with a combined capitalization of Rs 276 billion.
“The value may increase to the size of Mauritius’ gross domestic product, which the World Bank put at $11.9 billion (approx Rs 361.28 billion) in 2013, within the next year or so,” said SEM CEO Sunil Benimadhu, in an interview to Bloomberg TV Africa.
“The more international companies we bring to list to our market, the more we would expect our market capitalization to grow.” he said.
Thus, the exchange is making rules for listing easier, including allowing multiple currencies, as it seeks to attract more companies.
Mauritius’ economy is set to expand 3.7% this year and 4% in 2015, according to the International Monetary Fund. However, the latest forecast released by Statistics Mauritius pegs growth lower, at 3.5%.
Benimadhu said they want to get more businesses to choose their markets for main listings in preference to the Johannesburg Stock Exchange (JSE), South Africa’s premier exchange.
“We are seeing more and more of companies applying to Mauritius for a primary listing and a secondary listing on the JSE,” he said.
For example, Rockcastle Global Real Estate Co. and Atlantic Leaf Properties Ltd, both Mauritian, have secondary listings in South Africa
“In the future, we should expect to see more and more of this,” he added.
Furthermore, the 42-member index, the SEMDEX, snapped a six-day rally, falling 0.1 per cent to close at 2,089.96 in Port Louis.
This has extended this year’s decline to 0.3 percent, while the JSE Africa All Share Index has rallied 12 per cent in Johannesburg over the same period.
“The Mauritian bourse is vying for more foreign companies to use the country as a platform for Asia and Africa,” Benimadhu said.
Hence, the new listings would include companies in the mining and agriculture sectors, he said.
“We are very optimistic about the growing role that Mauritius and the Stock Exchange of Mauritius will play as a capital raising, listing, trading and settlement platform for Africa,” he concluded.
Meanwhile, even as the SEM has plans to rope in more firms to look inwards and select Mauritius as a first listing option for their securities, Mauritian firms are increasingly looking to expand their African presence by looking outwards to the continent.
Most recently, Flame Tree Group, a Mauritian manufacturer of water tanks and cosmetics, chose the Nairobi Securities Exchange to list 15 percent of its shares, ahead of a potential rights issue within the next two years.
Edward Burbidge, chief executive officer of Burbidge Capital, and Flame Tree’s adviser, said that the Flame Tree Group intend to list in the final quarter of the year on the Growth Enterprise Market segment of the exchange.
He expects that the application will be submitted at the beginning of the final quarter.
According to Edward Burbidge, the listing by introduction, meaning that the company will not increase capital in the beginning, is intended to build Flame Tree’s profile ahead of a rights offer within 18 to 24 months.
In addition, the company is planning to raise cash to fund expansion in Eastern Africa and eventually into Southern Africa.
It may be noted that Flame Tree Group manufactures and distributes plastic water tanks and skin care, nail polish and hair products. The company has factories in Kenya, Ethiopia, Sudan, Rwanda and Mozambique.