Getting ready to invest

Page 1

Getting ready to invest The two types of markets on SEM The securities traded on SEM are Ordinary shares, preference shares, debt securities, collective investment schemes and treasury bills. SEM operates two markets: the Official Market, the Development & Enterprise Market (DEM). The Official Market started its operations in 1989 with five listed companies and a market capitalisation of nearly USD 92 million. There were 38 companies listed on the Official Market representing a market capitalisation of nearly US$ 5,788.01 million as at 30 September 2011. The DEM was launched on 4 August 2006 and 49 companies were listed on this market with a market capitalisation of nearly US$ 1,916.85 million as at 30 September 2011.

Measuring the market: SEM Indices Movements in company share prices reflect investors’ views of that particular company’s future, but by looking at the overall movement of a number of companies’ share prices, it is possible to get a broad picture of the overall market or of specific market sectors. These movements are measured by an index. There are 5 main indices on the SEM namely: SEMDEX, SEM-7, SEMTRI, DEMEX and DEMTRI. The SEMDEX is a capital-weighted price index which tracks the price movements of all the shares listed on the Official Market. The SEM-7 index was introduced in March 1998. Designed to meet international standards and provide an investible benchmark for domestic and foreign market participants. The SEM-7 comprises the seven largest eligible shares of the Official Market, measured in terms of market capitalisation, liquidity and investibility criteria. The Total Return Index, the SEMTRI, was launched in October 2002. Besides capturing the price movements of listed stocks, common to the already published all-share index SEMDEX, the Total Return Index, SEMTRI, incorporates the added feature of providing investors, in general, and long-term investors like pensions funds, in particular, a good measurement of total return which combines both capital gains/losses on listed stocks and gross dividends obtained on these stocks since the inception of the local stock market on 5 July 1989. Gross dividends are assumed to be re-invested in the stocks underlying the capital index, SEMDEX. The DEMEX is a capital-weighted index which tracks the price weights of the shares listed on the DEM. The DEMTRI is a total-return index for the DEM market.


Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.
Getting ready to invest by stock exchange of mauritius - Issuu