Offshore 2 Offshore

The Mauritius Stock Market plans to launch an Alternative Development Market in early 2006. Deputy Prime Minister and Finance Minister Rama Sithanen welcomed the news, saying that the exchange needed to play its part in the government's economic strategy.

Said CEO of the Mauritius Stock Exchange (SEM), Sunil Benimadhu: "Mindful of the need to support the spirit of entrepreneurship and risk taking, the Stock Exchange of Mauritius will early next year establish a new market, an Alternative Development Market, geared not only to the needs of current Over the Counter (OTC) companies, but also to medium-sized enterprises and to new business ventures with a sound plan and an exciting growth potential. "

Mr Benimadhu says that the new market will allow the SEM to contribute to the process of empowerment of entrepreneurs and the government's goals for the 'democratisation' of the Mauritian economy.

Mr Sithanen said the SEM "should play a proactive role in economic democratization through the development of a wider share-ownership structure and by making capital available to medium-sized enterprises."

The SEM is also hoping to join the World Federation of Exchanges (WFE), which will send a team on 20th September to investigate the regulatory structure of the Exchange.

This will be the second step in an evaluation process being undertaken by the WFE, after a preliminary visit last year headed by the Deputy Secretary-General of the WFE, Peter Clifford, gave a generally favourable report.

The WFE team for this second visit, also headed by Peter Clifford, will include Rajnikant Patel, Chief Executive Officer of the Mumbai Stock Exchange, Chitra Ramakrishna, Deputy CEO of the National Stock Exchange of India, and Deputy CEO of the Johannesburg Securities Exchange, Mrs Nicky Newton-King.

"This is a very high level delegation," said Sunil Benimadhu, "which will look to see if the Exchange is well organised. if its operational systems are adequate, and if the regulatory framework is appropriate."

The WFE delegation is expected to have working sessions with Rama Sithanen, the directors of the Financial Services Commission, officials of the Exchange, and representatives of listed companies and investment funds.

The WFE sets out 20 principles which a putative member must satisfy, one of them relating to the capitalisation of an exchange as a proportion of GDP. Currently, the Mauritius Exchange has capitalisation equivalent to 41% of GDP, which is apparently considered satisfactory by the WFE.

"The evaluation process will take as long as it takes," said Mr Benimadhu. He said that if the WFE mission was completely satisfied with what it finds, a recommendation in favour of the Exchange's admission could be put to the WFE's next general assembly, in November this year.

According to Mr Benimadhu, membership of the WFE would very much assist the Exchange in attracting foreign investors.