Assessing African Equity Capital Assessing African Equity Capital Markets:Markets:

The Mauritius Stock MarketThe Mauritius Stock Market

Presented by Presented by Sunil BenimadhuSunil Benimadhu

CEOCEOStock Exchange of MauritiusStock Exchange of Mauritius

Corporate Council on AfricaCorporate Council on Africa(New York, February 26, 2004)(New York, February 26, 2004)

Presentation Outline:Presentation Outline:

Quick overview of the change on the African Quick overview of the change on the African capital markets landscapecapital markets landscape

The Mauritius stock market: characteristics and The Mauritius stock market: characteristics and featuresfeatures

A statistical overview of the performance of the A statistical overview of the performance of the Mauritius BourseMauritius Bourse

Looking at the Mauritius market from a foreign Looking at the Mauritius market from a foreign investors’ perspective.investors’ perspective.

The future outlook for the market.The future outlook for the market.

Statistical Data on African Stock Markets Statistical Data on African Stock Markets (Ex South Africa)(Ex South Africa)

19881988 19971997 20022002

No of Stock ExchangesNo of Stock Exchanges 66 1414 1919

Market Capitalization of Market Capitalization of African Stock Market African Stock Market (US$ Billion)(US$ Billion)

5.55.5 4949 6666

Value traded (US$ Value traded (US$ Billion)Billion)

0.160.16 8.68.6 6.56.5

No of listed companiesNo of listed companies 788788 11801180 17601760

The Mauritius Stock Market:The Mauritius Stock Market:characteristics and featurescharacteristics and features

Stock Exchange set up in 1989Stock Exchange set up in 1989 Stock Exchange has developed into a Stock Exchange has developed into a

reference exchange on the continentreference exchange on the continent Operates in line with standards observable in Operates in line with standards observable in

well-established developed stock exchangeswell-established developed stock exchanges Achieved strong performance over the yearsAchieved strong performance over the years Attractive investment destination for foreign Attractive investment destination for foreign

investors.investors.

The Mauritius Stock Market:The Mauritius Stock Market:characteristics and featurescharacteristics and features

World-class stock exchange infrastructureWorld-class stock exchange infrastructure State-of-the art Automated Trading SystemState-of-the art Automated Trading System Modern CDS which complies with G-30 and CCSS Modern CDS which complies with G-30 and CCSS

StandardsStandards Listing Rules based on JSE Securities Exchange and Listing Rules based on JSE Securities Exchange and

LSE requirementsLSE requirements Demutualised stock exchange structure which Demutualised stock exchange structure which

ensures proper monitoring and regulation of ensures proper monitoring and regulation of members and market participants.members and market participants.

Activities of the SEM is closely monitored by the Activities of the SEM is closely monitored by the Financial Services Commission. Financial Services Commission.

A well developed institutional and retail investor A well developed institutional and retail investor base.base.

The Mauritius Stock Market: The Mauritius Stock Market: Characteristics and FeaturesCharacteristics and Features

19891989 20032003

No of traded securitiesNo of traded securities 66 120120

Market CapitalizationMarket Capitalization

(Rs)(Rs) 1,437,079,336.001,437,079,336.00 51,229,930,441.2551,229,930,441.25

Annual TurnoverAnnual Turnover

(Rs)(Rs) 14,259,850.0014,259,850.00 2,989,174,317.002,989,174,317.00

Market Cap/GDP (%)Market Cap/GDP (%) 4.324.32

32.7832.78

Liquidity ratio (%)Liquidity ratio (%) 3.973.97 23.3423.34

Statistical Overview of Performance of Statistical Overview of Performance of the Mauritian Boursethe Mauritian Bourse

(1989-2003)(1989-2003)

Source: Standard & PoorsSource: Standard & PoorsGlobal Stock Market FactbookGlobal Stock Market Factbook

AnnualizedAnnualized

Return %Return %

S & P 500S & P 500 4.414.41

ASIAASIA - 2.38- 2.38

MAURITIUSMAURITIUS 13.3313.33

EUROPEEUROPE

(1995-2003)(1995-2003) 1313

Middle East & AfricaMiddle East & Africa

(1995-2003)(1995-2003) 1.101.10

Statistical Overview of Performance of the Statistical Overview of Performance of the Mauritian Bourse: TopMauritian Bourse: Top Ten Companies Ten Companies (end 2003)(end 2003)

CompanyCompany Date of Date of ListingListing

Total ReturnTotal Return

($ terms)(%)($ terms)(%)Annualized Total Annualized Total

Return ($ terms) (%)Return ($ terms) (%)

Shell (Mtius) LtdShell (Mtius) Ltd 13.11.9113.11.91 1,0331,033 21.221.2

Mon Trésor Mon Trésor

Mon Désert LtdMon Désert Ltd 05.07.8905.07.89 1,4841,484 20.520.5

Mon Désert Alma Ltd (O)Mon Désert Alma Ltd (O) 17.01.9017.01.90 1,2001,200 19.519.5

Mauritius Commercial BankMauritius Commercial Bank

05.07.8905.07.89 1,2951,295 19.319.3

United Basalt Products LtdUnited Basalt Products Ltd

05.07.8905.07.89 1,0501,050 17.617.6

Mauritius Oil Refineries LtdMauritius Oil Refineries Ltd

21.02.9021.02.90 939939 17.517.5

Rogers LtdRogers Ltd 27.06.9027.06.90 767767 16.316.3

Mauritius Development & Mauritius Development & Investment Trust LtdInvestment Trust Ltd 05.07.8905.07.89 883883 16.216.2

SWAN Insurance Co LtdSWAN Insurance Co Ltd 19.12.9019.12.90 336336 14.314.3

P.O.L.I.C.Y LtdP.O.L.I.C.Y Ltd 08.12.9208.12.92 255255 14.214.2

The Mauritius Bourse from a The Mauritius Bourse from a foreign investors’ perspectiveforeign investors’ perspective

Bourse which operates in line with Bourse which operates in line with international standardsinternational standards

No exchange controlNo exchange control No Capital Gains TaxNo Capital Gains Tax No tax on dividendsNo tax on dividends Attractive returnsAttractive returns Listed Companies with good growth Listed Companies with good growth

potentialpotential Sound macro-economic situation with Sound macro-economic situation with

good growth perspective. good growth perspective.

The Mauritius Bourse from a foreign investors The Mauritius Bourse from a foreign investors perspective: Macro-economic outlookperspective: Macro-economic outlook

Mauritius poised to achieve 5% growth in Mauritius poised to achieve 5% growth in 20042004

Inflation poised to drop from its current Inflation poised to drop from its current 3.9%3.9%

Interest rate environment conducive to Interest rate environment conducive to equity investmentsequity investments

Diversification of economic base well on Diversification of economic base well on target.target.

A reference of political stability and A reference of political stability and democracy among developing countriesdemocracy among developing countries

Future Outlook of Mauritius BourseFuture Outlook of Mauritius Bourse

Market poised to offer strong returns, ceteris paribusMarket poised to offer strong returns, ceteris paribus In spite of record breaking spree, since early 2003, market In spite of record breaking spree, since early 2003, market

still trading at compelling valuation levelsstill trading at compelling valuation levels Private sector confident about growth perspectives.Private sector confident about growth perspectives. Listed bellwether stocks poised to offer double digit returns.Listed bellwether stocks poised to offer double digit returns.

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

P/E Ratio 7.4 8 7 11.6 12 16.5 11.12 14.46 14.06 11.58 8.46 6.41 6.06 5.24 8.91 9.83

Dividend Yield -% 7.2 6.2 6.1 6 4.2 3.32 5.14 3.97 4.36 4.03 5.54 6.84 8.7 9.8 5.74 5.21

*2004: as at 06.02.04

THANK YOUTHANK YOU