Mauritius to Start ETF Tracking Biggest Johannesburg Stocks

The Stock Exchange of Mauritius plans to start an exchange traded fund that will replicate an index of South Africa’s 40 biggest companies.

The bourse will begin the Erafi-40 ETF with Barclays Plc’s Absa unit by the end of August, Chief Executive Officer Sunil Benimadhu said in an e-mailed copy of a speech to be delivered in Port-Louis, the capital, today. The ETF, the stock exchange’s third, will track the FTSE JSE Africa Top40, he said.

The exchange will also replace its SEM-7 index with the SEM-10 index in October by adding three extra shares to the measure. The gauge is being expanded after the recent listings of actively traded stocks with larger market values. It will also have a “reserve list” of five stocks instead of three to give investors the ability to create a “benchmark portfolio of 15 actively traded stocks,” he said.

The market is making rules for listing easier, including allowing multiple currencies, as it seeks to attract more companies and reach a market value that will match the size of the Indian Ocean island’s economy over the next year, Benimadhu said in an interview this month with Bloomberg TV Africa.

The bourse plans to start a sustainability index by the end of November and will also step up regulations to weed out companies not meeting listing rules, the CEO said. The 42-member Semdex Index rose 0.3 percent to 2,078.19 by the close in Port Louis, the highest since July 10, to pare this year’s decline to 0.8 percent. Johannesburg’s Top40 gained 12 percent in 2014.

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