Project Summary

Project General Description

This operation concerns a Middle Income Country Technical Assistance Fund (MIC TAF) Grant of UA 430,000 (USD 600,000) to the Stock Exchange of Mauritius Ltd (SEM). Established in July 1989, SEM is a demutualised Exchange and is constituted as a public company. SEM has acted over the years as an important value-creation platform for listed companies. The project is aligned with the applicable Bank strategies, policies and HI5s priorities. The proposed MICTAF grant to support the connectivity between SEM and JSE will tackle persistent capital markets issues facing the development of African Capital Markets stopping it from funding the rising need for adequate funding to SMEs and corporates, and eventually sustainable job creation capacity through agribusiness, services, infrastructure development, and manufacturing. It will address various challenges met, not only by SEM such as (i) limited liquidity levels and insufficient active trading; (ii) lack of registered securities and innovative products to be traded on the exchanges; and (iii) lack of investors. The support to SEM is a continuation of the Bank’s endeavors in promoting inter-connectivity between African Capital Markets. Specifically, the proposed intervention will complement the Bank’s ongoing support to the Committee of the SADC Stock Exchanges (CoSSE) to connect stock exchanges and in building relationship platforms. The project is structured into four components as described below: (i) Capacity Building and Training; (ii) Licensing cost of the new TS software; (iii) Procurement of Hardware and other Equipment; and (iv) Audit. When implemented, it will help in promoting access to long term local currency funding, and improve access to finance for the SMEs, real sector, and investors in Mauritius and Africa as a whole through local capital markets.

Project Objectives

The project‘s goal is to support: (i) the increase of the financial investment on SEM, and (ii) the acceleration of the financial integration with SADC’s stock exchanges. It will help in promoting access to long term local currency funding, and improving access to SMEs, real sector, and investors in Mauritius and Africa through capital markets. It will also improve the capital markets contribution to the intermediation and mobilization of savings (especially consumer savings) for investment to support economic development, especially infrastructure, directly in Mauritius and indirectly in the SADC region. This will be mainly through; (i) enhancing Mauritius readiness and capacity to act as an international/regional financial hub for SMEs and large corporates; and (ii) enhancing SEM’s visibility to regional and international investors for the efficient channeling of resources towards key real sectors in Mauritius that include but not limited to infrastructure and industrialization projects.

Beneficiaries

2 SEM counters (The Official Market and the Development & Enterprise Market (DEM)), listed companies (corporates and SMEs) and investors will be the direct beneficiaries of the project. The SEM has been able to attract, through its Global Business model, various companies to list on its platform. This includes 268 listed corporates and securities on the Official market (excluding 19 private equity funds), 37 SMEs on the DEM with an emphasis on industrialization, services, and agribusiness among others. While the indirect beneficiaries will be (i) the SADC region, specifically companies listed on the JSE, and other SADC stock exchanges; (ii) investors (including institutional investors); and (iii) capital market intermediaries within the region e.g. advisors, brokerage firms/dealers, SME ecosystems, etc. The JSE is already interconnected to the Namibia Stock Exchange and the Botswana Stock Exchange. Other SADC stock exchanges are the members of the Committee of SADC Securities Exchanges (CoSSE) namely; Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe.

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