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AfricaMoney | October 18, 2017

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Stock Exchange of Mauritius to start fund tracking biggest South African stocks

Stock Exchange of Mauritius to start fund tracking biggest South African stocks

Besides, in further developments, the exchange will also replace its SEM-7 index with the SEM-10 index in October by adding three extra shares to the measure. (Image: Stetson)

Giving investors a more attractive range of choices, the Stock Exchange of Mauritius (SEM) disclosed plans to start an exchange traded fund (ETF) that will track South Africa’s 40 biggest companies.

The fund, to be called the Erafi-40 ETF, will be set up by SEM with Barclays Plc’s Absa unit by the end of August.

The ETF, the stock exchange’s third, will track the FTSE JSE Africa Top40 (TOP40), said Chief Executive Officer Sunil Benimadhu in an e-mailed copy of a speech sent to Bloomberg yesterday

Besides, in further developments, the exchange will also replace its SEM-7 index with the SEM-10 index in October by adding three extra shares to the measure.

The decision to expand the index was taken after recent listings of actively traded stocks with larger market values.

In a recent development, gaming major Lottotech which runs the National Lottery, listed on the exchange last quarter, with trading in the shares starting in June.

Moreover, the SEM-10 will also have a “reserve list” of five stocks instead of three to give investors the ability to create a “benchmark portfolio of 15 actively traded stocks,” he said.

Earlier this month the SEM CEO said in an interview with Bloomberg TV Africa that the market is making rules for listing easier, including allowing multiple currencies, as it seeks to attract more companies and reach a market value that will match the size of the island’s economy over the next year.

Also, as declared under Budget 2014, the bourse plans to start a sustainability index by the end of November, said the CEO.

Finally, the SEM is also moving to step up regulations to root out companies which fail to meet listing rules, he noted.

Reflecting positive market sentiment, the 42-member benchmark Semdex Index rose 0.3 percent to 2,078.19 at close in Port Louis on Friday. This move up, the highest since July 10, helped to reduce this year’s stock market decline to 0.8 percent.

Meanwhile, Johannesburg’s Top40 gained a robust 12 percent in 2014.

Source: Bloomberg

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