Posted on Thursday, 20 October 2011 18:51

Mauritius weathers economic crisis through innovation

By Tom Minney

 Hosting one of Africa's most advanced stock exchanges, Mauritius is becoming an investment hub for the region

More than just a charming location, Mauritius is hoping to channel African FDI

In January and February, the hottest months on paradise island, the cyclones sweep in. Mauritians have learned how to minimise disruption and loss.

When economic storms, including the 2008 global financial crisis and the 2010 eurozone crisis, started buffeting world economies, Mauritius's financial sector was ready and responsive, winning the praise of international observers and boosting the island's reputation for stability.

For more than a decade, Mauritius has been building a global finance and technology hub between continents, safe and stable in the deep blue Indian Ocean.

In 2003 the first buildings of the Ebene Cyber City rose from former sugar plantations, linking global businesses there to satellite and undersea fibreoptic cables.

Mauritius scores as a highly-regarded and stable centre for international funds and finance. It has many double tax treaties and is well regulated.

According to the IMF report: "Financial soundness indicators reveal high capital adequacy ratios, few non-performing loans, and sound liquidity positions.

The Mauritian financial system is expected to expand further as the global economy recovers, since Mauritius is well placed to channel investments to other countries in Asia and Africa."

The regulator is the Financial Services Commission which registers and monitors both domestic and offshore "global business" financial services companies.

Mauritius is a centre for Africa-focused and international management companies and collective investment schemes, and a double tax treaty with India led to strong financial sector links.

The banking and insurance sectors are strong, and the island is regarded as one of the world's better regulated "tax havens".

The innovative and vigorous Stock Exchange of Mauritius (SEM) is a key driver of change, which claims to "aspire to emerge as a capital-raising platform for Africa-focused investments routed through the global business sector, to channel investment flows from South Africa/Europe/ Asia into Africa and from USA/ Europe into Asia."

Mauritius is well placed to channel investments to other countries in Asia and Africa

The bourse changed its listing rules to link to FSC regulations.

CEO Sunil Benimadhu said the changes were made "with a view to positioning the SEM as an attractive venue for the listing of global and specialised funds and moving away from an equity-based domestic exchange to a multi-product internationally oriented exchange."

New products that can be listed for trading include instruments for specialized investors and may eventually include international funds, international issuers, specialised debt instruments, Africa-focused exchange-traded funds and other structured products.

The SEM is committed to processing listing applications in two weeks and has a "very competitive" listing fee structure.

The exchange has long been one of the most technically advanced in Africa and real time data is available through several data vendors, including Bloomberg since 2010.

It continues to win international recognition, for example in 2011 from the UK tax authority and in 2010 from the Cayman Islands Monetary Authority.

Trading is possible in rupees, pounds and euros for equities and debt and from June 2011 in US dollars for equities.

Whatever the global storms, Mauritius is making its mark on the map as a safe and well-run global financial haven, well positioned as world economic power shifts east and south.

Last Updated on Thursday, 20 October 2011 19:11

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