A. Selection Criteria
The SEM-10 consists of the largest 10 companies by market value (subject to Section 2) which qualify under Section 1 as eligible for inclusion in the SEM-10. The SEM-10 includes rupee denominated companies, foreign-currency denominated GBC 1 companies and international companies.
Section 1: Eligible Shares
1.1. To be eligible for inclusion in the SEM-10, the ordinary shares of the company must be listed on the Official Market.
1.2. The shares can either be denominated in Mauritian rupee or foreign currencies.
1.3. Investment Funds (whether companies, trusts, partnerships or other legal structure authorised by the FSC) whose business, in the opinion of the Index Management Committee, is to actively trade in securities are excluded from the SEM-10
1.4. Only ordinary shares are included in the SEM-10.
1.5. Where a company’s ordinary shares are issued partly paid or nil paid and the call dates are already determined and known, the market price, for the purpose of calculating its market capitalisation, is adjusted so as to include all such calls (i.e., the fully paid price).
1.6. Shares must have sufficient liquidity. The following criteria shall be used to ensure that illiquid shares are excluded:
(i) Liquidity in terms of value traded (Rs)
Shares (other than new issues) which did not have an average value traded per session of Rs100,000 over the 3 months prior to the quarterly review are not be eligible for inclusion.
(ii) Liquidity in terms of trading frequency (%)
Shares (other than new issues) which did not trade on at least 50% of the trading sessions during the 3 months prior to the quarterly review are not be eligible for inclusion.
1.7 Subject to Section 2.2.2, the shares of a company listed for less than 3 months are not eligible for inclusion in the SEM-10 and the Reserve List
At least 25% of the ordinary shares in issue must be publicly available for investment and must not be in the hands of a single party or parties acting in concert. The Index Management Committee determines whether this criterion is met.
The Index Management Committee may accept a company with a lower percentage of ordinary shares publicly available, if in the opinion of the Index Management Committee, the company is large enough to be included.
Section 2: Changes to Constituent Companies
2.1. Procedures for Removal and Replacement
2.1.1. If a constituent is delisted, or is subject to a takeover offer which has been declared wholly unconditional as per the provisions of the Securities (Takeover) Rules 2010 or has, in the opinion of the Index Management Committee, ceased to be a viable constituent, it is removed from the list of constituents and replaced by the highest ranking share in the Reserve List (see Part C) as at close of business on the day preceding the inclusion of the replacement share.
2.1.2 The removal and replacement are effected simultaneously, before the start of business the day following the announcement of the removal. Announcements after close of business are normally deemed to be made on the following business day. In the case of a take-over, the qualifying event is an announcement that the offer has been declared wholly unconditional, as defined in 2.1.1.
2.2. Events leading to Removal and Replacement
2.1 Amalgamations (Mergers), Restructuring and Take-overs
188.8.131.52. If an amalgamation (merger) or take-over results in one constituent being absorbed by another constituent, the resulting company shall remain a constituent of the SEM-10, and a vacancy shall be created. This vacancy shall be filled by selecting the highest ranking share in the Reserve List as at close of business on the day preceding the inclusion of the replacement share.
184.108.40.206. If a constituent company is taken over by or absorbed by a non-constituent company, the original constituent shall be removed and replaced by the highest ranking share in the Reserve List. Any eligible company resulting from the takeover or merger shall be eligible to become the replacement if it is ranked higher than any other non-constituent.
2.2.2 New Issues
220.127.116.11 If, in the view of the Index Management Committee, a new issue is so large that the effectiveness of SEM-10 as a market indicator would be significantly and adversely affected by its omission, the Index Management Committee may decide to include the new issue as a constituent of the SEM-10 at the earliest practicable opportunity. In such cases, the Index Management Committee must be reasonably satisfied that the liquidity provisions contained in Sub section 1.6 (i) and (ii) will be met.
18.104.22.168 For the purpose of Rule 22.214.171.124, a company which is reinstated following suspension or is reorganised or renamed or which arises from a demerger or complex reorganization of another company which is not an existing constituent, shall not be considered to be a new issue.
126.96.36.199 If the Index Management Committee decides to include a new issue as a constituent other than at the normal periodic review, this decision must be publicly announced at the earliest practicable time.
2.2.3 Suspension of Dealing
In the event that a constituent is suspended, the constituent may remain in the SEM-10, at the price at which it is suspended, for up to 10 business days. During this time, the Index Management Committee may agree to remove the constituent immediately either at its suspension price or at a value of zero and replace it with the highest ranking share in the Reserve List as per the procedures laid out in section 2.1.
2.2.4. Reinstatement of Suspended Constituents
Where a suspended constituent which has been removed is subsequently reinstated to trading and if upon reinstatement, the suspended constituent is larger than the smallest constituent in SEM-10, it is reinstated at the price at which it is removed and the lowest ranking constituent is removed.