General

What benchmark index series exist in relation to the Exchange?

Two main indices track the evolution of prices of securities listed on the Official Market, namely the SEMDEX and the SEM-7.  The SEMDEX, the benchmark index, is an index of prices of all listed stocks where each stock is weighted according to its share in the total market capitalisation. The SEM-7 comprises the seven largest eligible shares in terms of market capitalisation, liquidity, and investibility.

A Total Return Index, SEMTRI, was launched in October 2002 to enable investors capture both capital gains and dividends generated by listed companies.

What is the SEMDEX?

The SEMDEX is an all-share index of prices of all listed shares.  It is a weighted index and each stock is weighted according to its shares in the total market capitalisation.  Thus, changes in the SEMDEX are dominated by changes in the prices of shares with relatively higher market capitalisation.  In its computation, the current value of SEMDEX is expressed in relation to a base period, which is chosen as the 5th July 1989, with an index of 100.

The index formula is as follows:

SEMDEX = Current market value of all listed shares            X 100
                      Base market value of all listed shares

where the market value of any class of shares is equal to the number of shares outstanding times its market price.

The base value of listed shares is adjusted to reflect new listings, rights issues and other capital restructurings.

What is the SEMTRI?

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 July 5, 1989. Gross dividends are assumed to be re-invested in the stocks underlying the capital index, SEMDEX.
SEMTRI provides domestic and foreign market participants an important tool for performance measurement of the local market.

What is a blue chip?

It’s the term for the most highly-regarded shares. 

What is a bonus issue?

The process whereby money from a company’s reserves is converted into issued capital, which is then distributed to shareholders.

What is a rights issue?

It’s an invitation to existing shareholders to purchase additional shares in the company.

What is a brokerage fee?

The fee that an investment dealer may charge clients for dealing on their behalf.  The fee claimed by investment dealers are as follows:

What is a debenture?

A loan raised by a company, paying a fixed rate of interest and secured on the assets of the company.

What is a dividend?

That part of a company’s post-tax profits distributed to shareholders, usually expressed in rupees per share.

What is net asset value?

The value of a company after all debts have been paid, expressed in rupees per share.

What is a price/earnings ratio?

The current share price divided by the last published earnings per share, where earnings per share is net profit divided by the number of ordinary shares.  The P/E ratio is a measure of the level of confidence investors have in a company (rightly or wrongly).  Generally, the higher the figure, the higher the confidence.

What is a yield?

It’s the return earned on an investment taking into account the annual income and its present capital value. There are a number of different types of yield, and in some cases different methods of calculating each type.

Who can invest on the Stock Exchange of Mauritius?

Anyone can invest on the stock exchange.

What are the advantages of investing on the stock exchange?

The main advantages of investing on the exchange are:

• making capital gain
• getting dividends

How to invest on the stock exchange?

Someone who wants to buy shares on the stock exchange has to contact a stock broker and gives a buy or sell order specifying the security in which he wants to invest, the number of shares he wishes to buy and the price he is ready to pay(when buying a security) or get in case he is selling.

What are the criteria which a company has to meet for a listing?

A company applying for listing should have an adequate trading record, with published or filed accounts for the three years preceding the request for listing.

The company must have an expected market capitalisation of not less than Rs 20 Million.

The public must hold at least 25% of the issued shares, with a minimum of 200 shareholders.  The “public” is here defined to exclude directors and substancial shareholders holding more than 5% of issued capital.

What is the Central Depository and Settlement (CDS)?

The Central Depository and Settlement Co Ltd is a private company which has been established to provide centralised depository, clearing and settlement services.  The implementation of the CDS is intended to provide for prompt, efficient clearing and settlement of trades while at the same time reducing some of the inherent risks in the process.  In addition, harmonisation with international standards is a major objective in the operational design of the CDS.