By Shamin A. Sookia, Managing Director, and Darren Chinasamy, Associate Director – Listing & Capital Markets Solutions at Perigeum Capital Ltd
Introduction: The Rise of ETFs Globally
Over the past decades, Exchange Traded Funds (ETFs) have reshaped the global investment landscape. One of their core advantages is the ability to promote market liquidity, as ETFs trade like ordinary shares on the secondary market.
Countries like the United States, UK, and China have seen surging ETF adoption, with thousands of ETFs listed and traded daily. In fact, as of December 2024, the NYSE alone hosted over 1,700 ETFs with an AUM of USD 6.1 trillion.
Why ETFs Matter for Mauritius
ETFs can serve as a catalyst for capital market growth in Mauritius. Listing more ETFs on the Stock Exchange of Mauritius (SEM) would:
- Strengthen the SEM’s international appeal
- Increase liquidity for both local and foreign investors
- Attract diverse investor profiles—from institutional to retail
- Support broader portfolio diversification
ETFs in Mauritius could also cater to thematic strategies, such as renewable energy or pan-African investments, drawing regional interest.
Market Infrastructure and Readiness
Mauritius has taken concrete steps to prepare the market:
- Chapter 18 Part C of SEM Listing Rules covers ETF regulations
- Regulatory frameworks align with international exchange standards
- The SEM has a specialised high growth segment called SEMX to support new listings
Together, these moves build confidence for potential ETF issuers and investors alike.
Unlocking Broader Economic Benefits
By expanding ETF offerings, Mauritius can:
- Increase trading volume and depth
- Attract regional and international capital flows
- Enhance service sophistication within its financial sector
- Reinforce its role as a gateway between Africa and the world
This initiative also boosts fintech innovation, as new services—like AI-driven wealth management and robo-advisory tools—can be layered onto ETF infrastructure.
Overcoming Challenges and Moving Forward
Despite the strong case for ETFs, Mauritius must refine:
- Listing procedures to streamline approvals
- Disclosure requirements for transparency
- Marketing strategies to attract foreign issuers
The goal is to build a robust framework for ETF growth aligned with international best practices.
Conclusion: ETFs Are the Next Logical Step
Mauritius is already a respected International Financial Centre (IFC). Now, developing a thriving ETF market is the logical next step. It supports the SEM’s ambitions to:
- Broaden investor access
- Diversify financial offerings
Solidify its global standing
“ETFs would bring in new categories of investors with different risk profiles and return expectations.” – Darren Chinasamy
With strategic investment in infrastructure, regulation, and awareness, Mauritius can truly become an ETF-friendly hub for Africa and beyond.