Stock Exchange of Mauritius
Encyclopedia
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
of the island country of Mauritius
Mauritius
Mauritius , officially the Republic of Mauritius is an island nation off the southeast coast of the African continent in the southwest Indian Ocean, about east of Madagascar...
. The market is located in Port Louis
Port Louis
-Economy:The economy is dominated by its port, which handles Mauritius' international trade. The port was founded by the French who preferred Port Louis as the City is shielded by the Port Louis/Moka mountain range. It is the largest container handling facility in the Indian Ocean and can...
and was founded in 1988.
The SEM's "Official Market" has three market indices: SEMDEX, SEMTRI and SEM-7. The SEM's "Development and Enterprise Market" has two indices: DEMEX and DEMTRI.
History
The Stock Exchange Act 1988 established a small but thriving exchange which is run by the Stock Exchange of Mauritius Ltd (SEM), a private limited company. The act also established the Stock Exchange Commission (SEC), which controls and supervises stock exchange operations. Two markets operated: the Official List and the Over-The-Counter Market (for unlisted shares). There are around 40 companies listed on the Official List, and around eighty companies quoted in the Over-The-Counter Market. 10 companies are quoted for their debentures. The exchange has classified these companies into seven categories, namely: banks and insurance, industry, investments, sugar, commerce, leisure and hotels and transport. There are also two dual listed funds quoted both on the London Stock ExchangeLondon Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
and the Stock Exchange of Mauritius.
The SEMDEX - the all shares index - reflects capitalisation based on each listed stock which is weighted according to its shares in the total market. In its computation, the current value of SEMDEX is expressed in relation to a base period, which was chosen as of July 5, 1989, with an index value of 100.
Trading takes place five days a week and is conducted through an open outcry
Open outcry
Open outcry is the name of a method of communication between professionals on a stock exchange or futures exchange. It involves shouting and the use of hand signals to transfer information primarily about buy and sell orders...
, order-driven and single-price auction system. Each share (excluding foreign shares) has a maximum +/- 15% price limit per trading session. A 1% brokerage commission is charged by stockbroking companies. There is no tax on dividends or capital gains.
Major developments took place through the establishment of a new electronic clearing and settlement system and the introduction of daily trading (at the end of 1997). Future planned developments include the introduction of a new electronic trading system and the listing of new financial products on the stock market. The SEM was recently promoted from the status of corresponding exchange to that of affiliated securities markets within the Fedération Internationale des Bourses de Valeurs (FIBV) and it is also a founding member of the African Stock Exchange Association (ASEA).
The SEM was opened to foreign investors in 1994 following the abolition of exchange controls. Foreign investors do not need approval to trade shares, unless the investment is for the purpose of legal or management control of a Mauritian company. The only restriction is that foreign investors cannot have an individual holding of more than 15% in a sugar company. There is no control on currency repatriation, and the currencies are fully convertible and market determined. Settlements can be made in a foreign currency and foreign currency account
Foreign currency account
Foreign Currency Account is a transactional account denominated in a currency other than the home currency and can be maintained by a bank in the home country or a bank in another country ....
s can be opened in Mauritius. There are no capital gains taxes and no withholding tax
Withholding tax
Withholding tax, also called retention tax, is a government requirement for the payer of an item of income to withhold or deduct tax from the payment, and pay that tax to the government. In most jurisdictions, withholding tax applies to employment income. Many jurisdictions also require...
on dividends procured from trading in officially listed companies.
A major development of 1998 was the implementation of a central depository system, in which all listed companies are registered. This system allows delivery versus payment (DVP) on a T+3 day rotating basis. The establishment of a clearinghouse, through the Bank of Mauritius
Bank of Mauritius
The Bank of Mauritius is the central bank of the Republic of Mauritius. It was established in September 1967 as the central bank of Mauritius. It was modelled on the Bank of England and was, in effect, set up with the assistance of senior officers of the Bank of England.Amongst its...
, provided for a guarantee fund, which incorporates measures for securities and fund settlement failure. The exchange, in collaboration with international advisers, drafted new listing and reporting rules to ensure greater transparency for investors. These rules came into force during the first half of 1998.
See also
- Economy of MauritiusEconomy of MauritiusThe economy of Mauritius refers to the economic activity of the island nation of Mauritius.-Overview:Since independence in 1968, Mauritius has developed from a low-income, agriculturally based economy to a middle-income diversified economy with growing industrial, financial, and tourist sectors....
- List of African stock exchanges
- ist of stock exchanges]