Mauritius Stock Exchange Eyes African Mainland for Expansion

(Bloomberg) -- The Stock Exchange of Mauritius has outgrown the tropical island, better known for its white sands than as a finance center, and is now setting its sights on the African mainland for expansion.

Having rapidly grown since its establishment 30 years ago, when brokers gathered around a blackboard once a week for about 10 minutes to put orders on the five available stocks, the Port Louis-based bourse’s main board now boasts about 150 listed securities including 60 companies on its main board. The total market capitalization for local companies is 256 billion rupees ($7.1 billion) and is heavily weighted toward banks and finance with those making up over 40% of the weighting on the main board. Other listings range from breweries to sugar producers.

Most of the Indian Ocean island’s major companies are listed, with MCB Group Ltd. being the largest with a market value equivalent to $1.9 billion. The exchange last year created an Africa Board, which has 26 traded securities, to attract more international issuers. The latest addition took place this month with $500 million in notes from the Trade & Development Bank, a trade financier with 22 African countries as members. Other pan-African lenders that have listed products are Afreximbank and the African Development Bank.

“All the major players are there,” said Chief Executive Officer Sunil Benimadhu, 59, referring to local companies. “Our strategy is more international. We want to go beyond as this is the only way for us to bring our contribution to position Mauritius as an international finance center.”

The Stock Exchange of Mauritius, which boasts an elaborate nautical compass as its logo, has adopted a strategy that a bigger African rival, the Johannesburg Stock Exchange, tried and failed. The JSE, whose main board has a market value of 13.64 trillion rand ($973 billion), ran an Africa Board from 2009 to 2015 and attracted only three listings including Trustco Group Holdings Ltd. of Namibia and the now suspended Wilderness Holdings Ltd. of Botswana.

Zulu Cannabis

The Mauritian Africa board includes Go Life International Ltd., a healthcare company that’s exploring growing cannabis with the trust of South Africa’s Zulu kingdom, and Africa Clean Energy Solutions Ltd., a clean energy company that focuses on Africa.

“Since 2015 we have declared our intent to position the SEM as an attractive listing platform for African issuers but also for international issuers doing business in Africa,” Benimadhu said in an interview. “We have to extend our reach. Not only within the African continent but also in emerging markets.”

The exchange could consider a partnership to help further its strategy, he said.

“We are open to be partly owned by a foreign partner,” said Benimadhu.

--With assistance from Antony Sguazzin and Adelaide Changole.

To contact the reporters on this story: Pauline Bax in Johannesburg at pbax@bloomberg.net;Kamlesh Bhuckory in Port Louis at kbhuckory1@bloomberg.net

To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net, Antony Sguazzin, John Viljoen

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