March 16th, 2010 by Tom Minney
Sunil Benimadhu, Chief Executive Officer of the Stock Exchange of Mauritius:
The Mauritius market lost 50% in, as investors worried about the fallout of the global financial crisis, but then they realized our companies were not so badly affected, from March to December we had one of the best rebounds in 20 years, with an 80% gain. We have come back with a vengeance. Our economy was helped by swift reactions from our authorities including easing policies. We have had a volatile time, but it has also meant a shift to much more trading on the SEM.
Our exchange is trying to develop the “3 Ps” of exchanges – products, players and participants. We anticipate the players into African markets will only increase, as they realize that expected returns in the US and Europe are only 1% or 2% and need to get positive alpha. Beyond equity, we are trying to develop an active second market in debt instruments, and we are trying to move up the value chain and introduce derivatives, including an index derivative of the 7 most liquid stocks.
In the past Mauritius has been a base for funds investing into India and China, and we have traditionally been a business gateway between Africa and the East, whether for foreign direct investment or others. We are now changing our listing rules to allow more funds to list, including the global business sector,
We have already changed our rules to allow shorting on the Stock Exchange, including rules for stock borrowing. Institutions are realizing they can make money from their stocks and we are seeing more liquidity as people are able to trade more.
March 16th, 2010 by Tom Minney
Sunil Benimadhu, Chief Executive Officer of the Stock Exchange of Mauritius:
We have had lots of discussion on how to link different markets. Lots of work has been done from a technical standpoint. We will keep national exchanges as they stand and enable their members to reach the members of different exchanges. Technically it is possible, now we need to raise the financing and also to be clear that the investment will need to make sense in terms of flows from increased traffic.
In order to get more liquidity, we need to increase the free float, currently many companies have requirement of 20% free float but even that may not be available for trading, for instance controlling shareholder may still sit on a big shareholding and keep it from trading.
January 8th, 2010 by Tom Minney
An exchange that will be able to trade a basket of commodity and currencies derivatives for trading on its platform and could later add trading in debt and equity products is to start trading in Mauritius in March, according to an interview on Reuters.
The Global Board Of Trade Ltd. exchange (www.gbot.mu) was due to open this month, but is still waiting to build critical mass of brokers, aiming for 25-30.
In an interview, Joseph Bosco, the COO of GBOT, told Reuters that the regulators in Mauritius are processing four broker licences and anticipate another 12 in the pipeline. Trading is electronic and members can be anywhere in the globe, according to the website.
The main promoter is Financial Technologies (www.ftindia.com) company from India, listed on the National and Bombay Stock Exchanges.
Bosco says the market will help African firms and companies investing across Africa to hedge their risks in a continent which has experienced volatility. He says it will be a “multi-asset exchange that will be a gateway for Africa to the rest of the world”> According to the GBOT website, it is “strategically located at the crossroads of Africa and Asia” and “offers an ideal platform for global investors to access many of the world’s fastest growing economies… GBOT endeavours to introduce modern market mechanisms into Africa’s financial market ecosystem and to serve as a platform of choice for the global investing community.”
GBOT is licensed by the Financial Services Commission (FSC), the Regulator for non-bank financial services sector in Mauritius, for derivatives trading in commodities and currencies.
Bosco reportedly told Reuters that they intended to start with six dollar-based currency pairs – including Mauritius rupee, euro, yen and sterling – and are now adding the Kenyan and Ugandan shillings. The report says the exchange will trade in 14 commodities, including precious metals, base metals and agricultural commodities.
It expects to trade futures contracts in zinc, copper, aluminium, nickel, gold, silver, platinum, coffee, sugar and maize as well as crude oil and carbon credits. It looks to add options contracts in future.
Kenya was an example of price volatility in its currency and stock prices, including after disputed elections in 2007. Bosco said: “We are giving them risk containment mechanisms; we are helping them to hedge themselves against uncertainty or unforeseen circumstances”.
July 16th, 2009 by Tom Minney
Futures trading planned for Stock Exchange of Mauritius
The Stock Exchange of Mauritius aims to start trading in futures within six months, according to a report on Reuters newsagency. The step still requires approval by the regulator, the Financial Services Commission (FSC), which previously turned down an application by the Johannesburg Stock Exchange to buy a stake in SEM.
The report quotes the SEM’s chief executive Sunil Benimadhu as saying futures trading would attract new local and foreign investors and increase capitalization. He said the first futures contracts would be on the SEM-7 index and on some of the most liquid stocks traded on the official market. The SEM-7 is made up of the largest companies by market capitalization, including Mauritius Commercial Bank, Naiade Resorts, New Mauritius Hotels, and State Bank of Mauritius.
Reuters reported an enthusiastic welcome from local market players: “There are a lot of sophisticated products on other markets, whereas in Mauritius we only have equities and T-bills,” Roshan Ramoly, Managing Director of Cim Stockbrokers, told Reuters. “The introduction of futures will offer local and international investors possibility of trading a basket of local underlying products in a cost and efficient manner.”
The SEM is one of Africa’s most dynamic stock exchanges, offering a good range of active companies. The website is http://www.stockexchangeofmauritius.com/.