PORT LOUIS - The Stock Exchange of Mauritius will launch a new index next month dedicated to African firms to attract more issuers from the continent, its chief executive said.
The government of Mauritius, already an established offshore financial centre, is also seeking to broaden its appeal to foreign investors by introducing a derivatives trading platform, with commodities and currency contracts.
The bourse has a market capitalisation of $12 billion, but only 29 of the 156 new listings since 2009, 87 of them international, are from Africa-focused firms, Chief Executive Sunil Benimadhu told a news conference.
Known as the Africa Board, the new market category will require prospective issuers of securities to have half of their assets on the African continent or show they generate half of their annual revenue from operations on the continent.
“It aims at enticing potential African issuers, global companies having an Africa focus, exchange-traded funds holding African (underlying assets), issuers of African depositary receipts and of African debt products to raise capital and list,” he said.
The 29 past Africa-focused issuers on the bourse were attracted by its multi-currency listing, trading and settlement platform. They raised 45 billion Mauritius rupees ($1.31 billion) to fund their activities, Benimadhu said.
Twenty-two of those issuers, with a market value of 54.3 billion rupees, have been earmarked for inclusion on the Africa Board at its launch, he said.
He said the target is to have 60 securities qualifying for listing on the Africa Board within the next five years.
Issuers on the Mauritius bourse can choose to raise funds in Mauritian rupees, U.S. dollars, euros or British pounds.
The bourse plans to launch the SEM Africa Index (SEMAFRIDEX) on Nov. 1 to track the performance of all equity products listed on the Africa Board.
The index will consist of rupee and foreign currency denominated securities that will be traded on the new Africa-focused segment. It will be market-cap weighted.
African capital markets are seeking to introduce new products to cut dependence on local equities, which are susceptible to outflows and volatility driven by factors like a drop in commodity prices.