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). Back in 1989, the SEM started its operations with the Official Market only with five listed companies atthat time and a market capitalisation of nearly USD 92 million. The size of the market has grown from a market capitalisation to GDP ratio of less than 4% in 1989 to a current market Cap/GDP ratio exceeding 75%, in an economy that has witnessed a 5% average growth rate during the last 25 years. The Stock Exchange of Mauritius operates two markets today: the Official Market, the Development & Enterprise Market (DEM). Currently, there are 42 companies listed on the Official Market representing a market capitalisation of nearly US$ 6.2 billion as at 30 June 2015. The DEM has been launched on 4 August 2006 and there are presently 47 companies listed on this market with a market capitalisation of nearly US$ 1.4 billion as at 30 June 2015. SEM can list, trade and settle equity and debt products in USD, EUR, GBP, ZAR besides the local currency MUR. Local investors account for about 60 % of the daily trading activities, and foreign investors account for the 40 % remaining. 75 % of that local volume is generated by institutions like mutual funds, pension funds and insurance companies.
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 comprised the seven largest eligible shares of the Official Market, measured in terms of market capitalisation, liquidity and investibility criteria. In October 2014, the SEM replaced the SEM-7 Index by the SEM-10 Index. The rationale for the creation of the SEM-10 Index is that the underlying changes in the market environment since 1998 have underscored the need to re-actualize the previous SEM-7 Index, in order to better