Mauritius Launches Junior Stock Market

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

29 August 2006

Mauritius Finance Minister Rama Sithanen officially launched DEM, a second tier stock market, earlier this month, trailing moves to create a market in government bonds and to encourage the listing of Global Business Companies on the exchange.

The Development & Enterprise Market (DEM) was officially launched on Thursday 17th August 2006. Mr Sithanen and Milan Meetarbhan, Chief Executive of the Financial Services Commission both called for further initiatives to boost investment on the stock exchange, making the case for the setting up of a bond market and the listing of Global Business Companies (GBCs) on the Exchange. Discussions about the adoption of listing rules for GBCs have already begun between the Financial Services Commission and the Stock Exchange of Mauritius.

The Minister said: “The characteristics and the flexible regulatory architecture of the DEM are in line with Government’s objective of encouraging the democratisation of our economy by widening access to financial resources to a broader circle of entrepreneurs and nurturing, thereby, the emergence of a new breed of risk takers.”

“A Mauritian listing will not only reinforce substance but will also boost our image as an International Financial Centre,” said Mr Meetarbhan. He added that the creation of the DEM indicates the maturity of the market in moving towards a regulated environment, which promotes greater investor confidence and protection. “Indeed, such a market should instil greater investor confidence and dynamism in the securities market in Mauritius,” he said. He emphasized the growing interest of foreign investors in the stock market. “This augurs well at a time when there is a strong commitment to the opening up of the economy.”

“To increase the share of the financial services sector in our economy, we need to widen the range of financial products available domestically, to have both geographical and product diversification in the global business sector. (…) Our overall objective is to build a financial sector that is robust, resilient, efficient and competitive.” he concluded.

Mr. Sithanen added that the Stock Exchange should also study the possibility of developing futures and commodities markets dealing in precious metals and other regional commodities. The Minister said he had recently met with investors in South Africa during an investment roadshow who had supported the idea of such markets.

“The target is high but we should look at other avenues to make the stock exchange of Mauritius more effective and to alleviate the liquidity problem of our market, given its very size,” he said.

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