Mauritius Exchange Joins WFE

by Lorys Charalambous, for LawAndTax-News.com, Cyprus

14 November 2005

The Stock Exchange of Mauritius (SEM) announced last week that it has been admitted to membership of the World Federation of Exchanges (WFE) during its November general assembly.

The exchange is only the second bourse in sub-Saharan Africa after Johannesburg to join the group, which sets standards for stock exchanges around the world.

"The affiliation of the SEM to the WFE is an important milestone in our development," said SEM Chairman Jean de Fondaumiere. "It demonstrates...our efforts to create a modern stock exchange which is compliant with the stringent standards and market principles set by the WFE."

Officials said the move was the culmination of a two year process in which the WFE examined the market to verify its conformity with 20 criteria, including technological capability and organisational, regulatory and supervisory infrastructure.

The WFE sent a team on 20th September to investigate the regulatory structure of the Exchange, the second step in the evaluation process being undertaken by the WFE, after a preliminary visit last year headed by the Deputy Secretary-General of the WFE, Peter Clifford, gave a generally favourable report.

The WFE team for this second visit, also headed by Peter Clifford, included Rajnikant Patel, Chief Executive Officer of the Mumbai Stock Exchange, Chitra Ramakrishna, Deputy CEO of the National Stock Exchange of India, and Deputy CEO of the Johannesburg Securities Exchange, Mrs Nicky Newton-King.

"This is a very high level delegation," said Sunil Benimadhu, Chief Executive of the Mauritius Exchange, "which will look to see if the Exchange is well organised. if its operational systems are adequate, and if the regulatory framework is appropriate."

The WFE delegation had working sessions with Rama Sithanen, Deputy Prime Minister and Finance Minister, the directors of the Financial Services Commission, officials of the Exchange, and representatives of listed companies and investment funds.

According to Mr Benimadhu, membership of the WFE would very much assist the Exchange in attracting foreign investors. "Foreign investors have already shown an interest in the Mauritius stock market. Since the beginning of 2005 net foreign investment amounts to more than 820 millions rupees in the stocks listed on the official market", he said.

The SEM plans to launch a marketing campaign targeting foreign institutional investors to attract more investment.

"We will target more particularly countries of the Organisation for Economic Cooperation and Development which are not allowed to invest in exchanges which are not members of the WFE," Benimadhu said.

Created in 1989, the SEM opened up to foreign investors in 1994. The bourse has 41 listed companies with a market capitalisation of 76 billion rupees and which trade on an average multiple of 8.5 times earnings.

The main general index has risen 14 percent since the beginning of the year.

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