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THE STOCK EXCHANGE OF MAURITIUS LTD(Member of the World Federation of Exchanges)

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presented by:

Business

Economics &

Investment

Analysis-SH541

RAMDEEHUL Loobhita

1210334

GOOLAUP Divya

1219797

NUNKOO Yogita

1218506

ARMOOGUM Sandana

1115809

RAMLAUL Mehendi Varsha

1117041

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OUTLINERole of Stock Exchange in MauritiusI. Definition, Overview of the Stock

Exchange II. Equity MarketIII. Role of the Stock ExchangeHas the Financial Crisis affected the Stock Exchange of Mauritius?

I. Financial crisis at a glanceII. Financial crisis and MauritiusIII. Evolution of Local Stock Market IV. Measures of the SEMV. Effects of Financial Crisis on Shares Prices

• CONCLUSION

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What is the role of the Stock Exchange in Mauritius?

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What is Stock Exchange?

a type of market where buyers and sellers of govt stocks, public company shares carry out their necessary exchanges.

is mainly a market for securities that has already been issued

It operates in 2 markets

Primary Market• govt raise capital by pooling savings of investors and make productive ventures

Secondary Market• securities are purchased by investors and maintain liquidity of the system

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An overview of the Stock Exchange of Mauritius(SEM)

On the 30th March 1989,SEM was introduced under the stock exchange Act 1988 as a private limited company

On the 6th Oct 2008, SEM finally became a public company

In September 2012,SEM won the award for

the ‘Most Innovative African Stock Exchange for 2012’

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SEM comprises of 2 Equity Markets

1. The official Market

2. Development & Enterprise Market

(DEM)

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1. The Official Market

• 42 companies listed Represent a market capitalisation US $ 6

Billion as at 31 Jan 2013 Consists of 3 market Indices

1) SEMDEX: index of all listed shares and it is a value weighted index

2) SEMTRI : total return index3) SEM 7 : comprises the 7 largest eligible

shares measured in terms of capital capitalization

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2) Development & Enterprise Market (DEM)

47 companies listed Market capitalisation of US $ 1.5

billion as at 31 Jan 2013 Consists of 2 Market Indices1) DEMEX : price index of DEM= current Market capital of all listed ordinary

shares 100

base market capitalisation of all ordinary shares

2) DEMTRI

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Companies

listed in the Stock Exchange

Banks and InsuranceForeig

nIndustry

Transport

Leisure & Hotels

Commerce

Investment

Sugar

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Role of the Stock Exchange in Mauritius

1. Capital Formation

Provide companies the ability to raise capital to expand their business

This leads to increase economic activity which helps to drive the economy

3. Connecting Traders

SEM also facilitates trading Stakeholders may sell their

interest to other party

2. Accountability

• Promotes good corporate governance

• Encourages good corporate practices such as financial reporting and bookkeeping

4. Govt capital raising for development project

• Borrow money in order to facilitate infrastructures projects

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5. Security SEM designed and

implements law and regulations

Intend to protect investors from unfair advantages

6. Barometer of the Economy

SEM maintains the stock indexes which are general tread of the economy

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The diagram below illustrates the share prices of Rogers and Company Ltd listed on the official market for the period March 2012 to February 2013.

(Source: Stock exchange of Mauritius)

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Has the Financial Crisis affected the Stock Exchange of Mauritius?

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Financial Crisis at a glance

In 2007,the global

market economic

outlook deteriorated as

the financial turmoil

triggered by the crisis in

the US subprime Market

The collapse of the

Lehman Brothers, the 4th

investment bank in Sept

2008 was the direct

cause

• Banks were forced to curtain

lending

•Global economic activity and

world trade fell sharply in the

4th quarter of 2008

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Financial Crisis and Mauritius Mauritius has not been spared from

the wrath of this economic downturn because of

I. dependence on tradeII. foreign investmentIII. remittances to meet economic

growth and social needs

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Impact of Financial crisis in different sectors

Mauritius, a small ,open economy experienced a sharp decline in :

I. Demand for tourismsII. Textiles exportsIII. Contraction of labour- incentive

sectors especially construction

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The following graph illustrate the concept

(Source: Mauritius: an economic success story)

• growth slowed

to 4.2% in 2008

• then 2% in 2009

• unemployment

rises from 7.2% in

2008 to 7.7% in

2009

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Articles of 19th September 2008Since 19.08.08 to

20.08.08,investors started selling their shares

Banks and financial enterprises are affected

On 20.08.08, investors dumped large volumes of shares on the SEM

Shares prices of bank has fallen by 10-15%

• The shares index ,SEMDEX, was at1567.10, its lowest value during 2008• at the beginning of Jan, it was around 1860

• The chief Executive officer of SEM, said that MCB and SBM have solid SOFP and are not exposed to sub-prime crisis

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Measures of the Stock Exchange Market performance MARKET INDICES:

represent an entire stock market and help to observe changes in the market

SEMDEX.SEMTRI and SEM 7 are all higher in 2007 and 2009

However lower in 2008

MARKET INDICES/Rs

YEAR SEMDEX SEM-7 SEMTRI

2006 1204.46 264.41 3060.71

2007 1852.21 477.4 4868.61

2008 1182.74 267.22 3233.74

2009 1660.87 360.75 4712.7

2010 1967.45 373.22 5747.85

(Source: The Stock Exchange of Mauritius, Factbook 2011)

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Market CapitalisationTotal dollar market value of all outstanding sharesMarket value capitalisation= Current market price of 1 share company`s shares outstanding

Market Capitalisation rises from 2000 to 2007

at its peak in 2007(13.26%) and falls to (7.34%) in 2008. And after 2008 it rises again

20002001200220032004200520062007200820092010201120120

2

4

6

8

10

12

14

Percentage/%

Percentage/%

(Source: The Stock Exchange of Mauritius, historical data)

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Market Turnoverindicates inflows and outflows in the

stock Market

YEAR

ANNUAL

TURNOVER/$

CHANGE IN

TURNOVER/$

PERCENTAGE

CHANGE IN

TURNOVER/%

2000 73755753 - -

2001 108750129 34994376 47.45

2002 59030897 -49719232 -45.72

2003 113981861 54950964 93.09

2004 100751410 -13230451 -11.61

2005 150346515 49595105 49.23

2006 181363436 31016921 20.63

2007 412326409 230962973 127.35

2008 348878976 -63447433 -15.39

2009 333557676 -15321300 -4.39

2010 375248286 41690610 12.50

2012 499054221 123805935 32.99

2012 306199054 -192855167 -38.64

TOTAL 3063244623  

• In 2007, the % change in turnover was 127.35% • In 2008 it drops to -15.39%• Decrease in traded shares• But then increase to -4.59% in 2009

(Source: The Stock Exchange of Mauritius, historical data)

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Size of the MarketThe market Capitalisation as a % of

GDP

YEAR

MARKET CAPITALISATION/GDP

(%)

2006 56.96

2007 74.93

2008 41.42

2009 54.59

2010 61.40

• In 2008, the size of the market dropped from 74.93% in 2007 to 41.41%.• However it rises from 54.59% in 2009 to 61.40% in 2010.

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Effects of Financial Crisis on share prices

COMPANIES

SHARE PRICE (Rs) FELL

BY

MCB 9

SBM 3

IBL 8

NMH 10

Sun Resorts 6

• In Nov 2008, the shares prices of the most eligible shares fell considerably

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Companies having the largest share price increase

    Percentage (%)

PRICE (Rs) Change

RANK SECURITIES 2009 2010 in SharePrices

1 HarelMalac Ltd 89.00 215.00 141.57

2 Swan Insurance Co. Ltd 153.00 300.00 96.08

3 Mauritius Leasing Co. Ltd 4.10 8.00 95.12

4 Belle Mare Holding Ltd 114.00 200.00 75.44

5 United BasaltProducts 80.50 128.00 59.01

6 MautitiusOilRefineries Ltd 18.40 27.90 51.63

7 ENL Commercial Ltd 16.50 25.00 51.52

8 MauritiusChemical&FeriliserIndustry 25.20 38.00 50.79

9 Mauritius Union Assurance Co. Ltd 97.50 146.00 49.74

10 Ireland Blyth Ltd 40.50 74.00 82.72

(Source: Stock Exchange of Mauritius, Handbook, 2009)

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Companies having the largest Share price decrease

Percentage (%)

PRICE (Rs) Change

RANK SECURITIES 2009 2010 In SharePrices

1 NaiadeResorts Ltd 36.00 25.50 -29.17

2 Sun Resorts 69.00 56.00 -18.84

3 MauritiusStationaryManufacturers Ltd 21.00 17.10 -18.57

4 AutomaticSystems Ltd 127.00

120.0

0 -5.51

5 New MauritiusHotels Ltd 134.00

110.0

0 -17.91

6 Omnicane Ltd 78.00 74.00 -5.13

7 Rogers & Co. Ltd 300.00

293.0

0 -2.33

(Source: Stock Exchange of Mauritius, Handbook, 2009)

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Impact of the Crisis on the Stock Market performances

Market Evolution September 2008 - December 2009  

Index

15-sept-

08 03-mars-09

Net Charge

(%) 03-mars-09 09 Dec 09

Net Charge

(%)

SEM 1659.06 919.83 (-) 44.56 919.83 1677.19 82.34

SEM-7 402.13 198.24 (-) 51.2 196.24 369.50 88.29

SEMTRI 4436.73 2521.57 (-) 43.17 2521.57 4758.04 88.69

S&P 1192.70 696.33 (-) 41.62 696.33 1095.95 57.39

FTSE-100 5204.20 3512.10 (-) 32.51 3512.10 5203.90 48.17

DOW JONES

10917.5

1 6726.02 (-) 38.14 6726.02 10337.05 53.69

DAX 6064.16 3690.72 (-) 39.14 3690.72 5647.84 53.03

CAC 40 4168.97 2554.55 (-) 38.72 .2554.55 3757.39 47.09

• the SEMDEX boosted from a fall of 44.56% from September 2008 to March 2009 to 82% between March to December 2009• The SEM showed better recovery than other global Stock Market

(Source: Stock Exchange of Mauritius, Handbook, 2009)

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Conclusion

The Mauritius Bourse has come a

long way since 1989

Challenges do present opportunities

and will take the SEM to the next

stage of the development