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As mentioned in past issues of our newsletters, ITL is one of the proud promoters of 4 Africa Exchange Proprietary Limited (4AX), a groundbreaking new bourse for which an exchange licence was successfully filed and obtained from the Financial Services Board (FSB) on 1st September 2016.

ITL is excited to inform that 4AX has reached a new milestone as it completed its first two listings on 28th September 2017, and is now open for trade. The new bourse’s first two listings were NWK Limited and NWK Holdings Limited respectively.

The event received much media coverage and below is one of the articles released in this connection, while we also look forward to the realization of more listings which are already in the pipeline.

NWK companies list on 4AX

South Africa’s newest stock exchange 4 Africa Exchange (4AX) officially opened for trade on Thursday, welcoming its first two issuers listings, with about nine more in the pipeline.

With the listings of agricultural businesses NWK Limited and NWK Holdings now under its belt, the journey of 4AX as a “preferred alternative exchange for Africa’s best companies, leaders and innovators”, has started, said 4AX CEO Fay Mukaddam.

The third listing on the cards for the exchange, which is one of only two exchanges in South Africa with a full licence to trade across asset classes, is said to be an undisclosed new renewable-energy venture.

“What excites me about the pipeline, though, is the spectrum of listings, both in terms of sectors and the size of the market cap, and just in terms of the different types of listings,” she told media during the listing event at 4AX’s Bryanston offices.

The pipeline spans sectors such as tourism, hospitality and construction, as well as two inward listings, one in the property development space and the other in engineering.

While the group has a guideline of targeting companies with a market cap of between R100-million and R8-billion, the renewable-energy venture, being a start-up, was valued at below R100-million and one of the inward listings is sitting at R30-billion – the largest incoming listing to date.

The guideline, Mukaddam noted, was just that – a guide to encourage future issuers to consider listing with 4AX, instead of brushing a listing off as something that was perceived out of bounds for a medium-sized company.

Meanwhile, the listing of the NWK companies was not only a significant milestone for 4AX, but for the new agricultural issuers as well.

Prior to listing with 4AX, NWK traded shares in the over-the-counter market under the Security Services Act; however, changes to the Financial Markets Act required the companies to move to the formal exchange market to comply with the necessary regulatory framework.

“Although this is a new concept for us and a new way of expanding our business, we are very excited by the opportunities these listings create to gain exposure for the NWK companies into new markets – and continue to grow the value of NWK shares for our existing and potential investors,” said NWK chairperson Heinrich Krüger.”

Source: http://www.engineeringnews.co.za/article/nwk-companies-lists-on-4ax-2017-09-28

For additional information, please visit the 4AX website at http://www.4ax.co.za/

Japan set up an embassy in Mauritius earlier this year and the country’s first resident ambassador to Mauritius, Mr Yoshiharu Kato, has now taken office in Port Louis.

Mauritius and Japan established diplomatic relations in 1969. Since then, the two countries have shared friendly relations and cooperated in several areas particularly under the umbrella of the Japan International Cooperation Agency (JICA), through which Japan provided technical assistance for disaster risk management, coastal protection and rehabilitation programme, and landslide management.

The twenty-second edition of the Global Financial Centres Index (GFCI) was published on 11th September 2017. This publication ranks Mauritius as best international financial centre in Africa. Mauritius has gained two places compared to the previous exercise, ranking 69th globally out of 108 international financial centres.

It is interesting to note that London retains its position as the leading centre worldwide, despite the ongoing Brexit negotiations. New York follows in the second position. Other well-established centres such as Singapore, Hong Kong and Tokyo remained in the top five worldwide although Hong Kong has just moved ahead of Singapore from fourth to third position, thus Singapore and Tokyo follow in the fourth and fifth positions respectively.

The publication highlighted some other key findings. There was an overall drop in confidence amongst centers at the top of the list, in that 23 of the 25 leading centres receded in the ratings while only 2 improved. At the lower end of the global list, 20 of the 25 centres actually improved their ratings.

The following regional trends were observed:

• Western European financial centres remained generally volatile, those rising in their rankings included Frankfurt, Dublin, Paris and Amsterdam, while others such as Zurich, Geneva and Luxembourg receded. This may be attributed to speculation as to which of these centres may benefit from Brexit.
• In the Asia-Pacific region, all of the top ten centres saw a decline in their ratings, with Singapore, Tokyo and Osaka receding significantly; these are seen as the after-effect of strong gains made in 2015-2016.
• In North America, all centres including New York (as mentioned above), San Francisco, Boston, Chicago and Washington also fell significantly in their ratings.
• In the Middle East and Africa regions the trend was mixed, with Dubai and Casablanca falling slightly while Abu Dhabi, Bahrain and Riyadh showed improvements.
• Latin American and Caribbean centres fared well, with the British Virgin Islands and the Bahamas showing strong rises and others which are already in the main GCFI doing well too.
• It was observed that the British Crown Dependencies of Jersey, Guernsey, and the Isle of Man all performed strongly, being considered as safe havens from the turmoils in the UK and the UE.

The Index is published jointly by the China Development Institute (CDI) in Shenzhen, China, and Z/Yen Partners in London. The GFCI evaluates the competitiveness of financial centres worldwide, based on data from third party organisations such as the World Bank and The Economist Intelligence Unit, the OECD etc. The five key areas covered are business environment, human capital, infrastructure, financial sector development and reputation. The index is compiled twice a year and is widely quoted when ranking financial centres.

The GFCI Report can be downloaded here

Saudi Arabian Airlines (Saudia) started operating flights to Mauritius on 14th September 2017. The three-times-weekly flights operates from Riyadh to Mauritius with a brief one hour stop in Jeddah, taking 9 hours from Riyadh and 7 hours 20 minutes from Jeddah. The carrier, a Boeing 787-9 Dreamliner, comprises 24 fully-flat seats in Business Class and 274 seats in Guest Class.

Based in Jeddah, Saudia is the largest airline company in the Middle East and operates a network covering the Middle East, Africa, Europe and North America.

The Regulatory Sandbox Licence (RSL) is an initiative proceeding from the Mauritius 2016/2017 National Budget. The RSL regulation was promulgated under the Investment Promotion Act in October last year and the relevant guidelines were subsequently put in place.

The RSL is an innovative measure that offers the possibility for an investor to conduct a business activity for which there exists no legal framework, or no adequate provisions under existing legislation in Mauritius. The RSL allows for promising projects to be tested within set parameters, where such ventures were previously unable to start so long as a complete set of regulatory framework was not yet in place. This initiative, which opens the door for creativity to take wings and innovative projects to germinate, has been inspired from highly successful economies.

The RSL is issued by the Board of Investment (BOI) after consultation with the other relevant authorities and ministries and the terms and conditions attached to this particular licence are tailored to the proposed activity. Once the testing period is completed and upon demonstration of applicability, compliance and benefits of the project, the temporary framework may be used as basis for devising/ setting permanent regulations for these new industries.

As at date, the BOI has issued three RSL licences. ITL is proud to have successfully applied for and been issued, on behalf of ITOO Film Services Limited (ITOO), for an RSL pertaining to the introduction of the Completion Guarantee Bond in Mauritius. The Completion Guarantee Bond, although tried and tested in other countries, is a novel concept being introduced by ITOO in Mauritius with the aim of consolidating the foundation for a reliable ecosystem for the film industry. It is an arrangement whereby the Guarantor (ITOO) will ensure the completion and prompt delivery of the film or other audiovisual products in accordance with the script and schedule.

The other two RSL licences issued by the BOI include a licence issued to an online crowdlending platform and for the production of stem cells to be used in medical treatments.

As Mauritius aspires to become a high income economy, the RSL is a bold step taken to embrace innovation as a driving force for the country’s development.

The RSL is a unique opportunity for investors wishing to introduce groundbreaking business concepts in Mauritius, and ITL would be pleased to assist in these endeavours. For more information about the RSL, please liaise with your usual contact person at ITL or write to us on info@intercontinentaltrust.com.

The Bank of Mauritius (BoM) has been conferred ‘Best Central Bank Governance – Indian Ocean 2017’ by the London-based Capital Finance International (CFI.co) magazine.

The judging panel lauded the BoM’s commitment to technological innovation and sustainable development and highlighted the bank’s “determination to stay a few steps ahead of developments and ensure the country’s financial services industry – a mainstay of the local economy – keeps its competitiveness and attractiveness”. The panel also commended the BoM on its efficient monetary policies and its initiatives that have strengthened the country’s regulatory framework. The BoM was also commended on its forward-looking approach to both innovation and supervision.

According to CFI.co, the conferment of this award to the BoM for the entire Indian Ocean region goes through a stringent selection process based on a wide range of criteria. Initial nominations for this award covering the entire Indian Ocean region come from CFI.co readers and subscribers, which include multilateral institutions such as the World Bank, United Nations entities institutions such as the European Central Bank amongst others.

An International Monetary Fund mission led by Amadou Sy, advisor for the development of the African continent, visited Mauritius from 21st July to 31st August 2017. This visit took place on the context of regular consultative meetings held with the IMF’s member countries, as per Article IV of the organisation’s Constitution.

The mission has released its preliminary findings, which will serve as basis for a subsequent report to the IMF’s Executive Board for final discussion and decision. The findings identified challenges facing Mauritius and which will require specific measures. Recommendations were made for the country to strengthen the credibility of its fiscal system and to reinforce its monetary policy.

The mission highlighted the need for the country’s financial services sector to be resilient with regards to changes taking place following new rules issued by the OECD and the European Union on fiscal matters.

Mr Sy also stated that “The Mauritian economy continues to be robust and staff project economic activity for 2017 to remain in line with recent trends”.

The recently released Global Security Index (GCI) 2017 ranks Mauritius 1st in Africa and 6th worldwide. These rankings reconfirm the strong positioning of Mauritius in the area of cyber security and as one of the safest places for doing business.

In the African region, Mauritius leads the way and scored particularly high in the legal (0.85) and technical fields (0.96). Other areas in which the island nation scored high include organizational, capacity building and cooperation. Mauritius is followed by Rwanda and Kenya, which ranked 36th and 45th respectively at the global level.

From a global perspective, Mauritius ranks 6th and has gained 3 places compared to the 2014 index. Member states participating in the survey totaled 193, with Singapore at the top of the list followed by the United States, Malaysia, Oman and Estonia.

The GCI survey is produced by the International Telecommunication Union (ITU) and measures the commitment of member states to cybersecurity with the objective of raising awareness. Participating countries are called to identify areas for improvement and to take action to improve their ranking, with the ultimate aim to raise commitment to cyber security worldwide.

To access the GCI 2017 report, click here

The Bank of Mauritius has released the latest figures on FDI inflows into Mauritius for the first semester of 2017. FDI to the island is estimated at MUR 9.7 billion (approximately USD 278 million), representing an increase of 22.2% compared to the corresponding period last year.

The sector attracting most investments was Property Development, with MUR 5,3 billion (about 55% of the total FDI received), of which the larger share (MUR 3.1 billion) went to projects falling under the Integrated Resort Scheme (IRS), the Real Estate Scheme (RES), the Invest Hotel Scheme (IHS) and the Property Development Scheme(PDS).

The Financial Services Sector saw a significant increase in FDI, recording MUR 3.1 billion against MUR 2 billion for the corresponding period last year. Other sectors on the upward trend include the construction sector (MUR 507 million against MUR 7 million last period) and the Hospitality and Restoration sector (MUR 316 million against MUR 92 million last period). However, the manufacturing sector saw a decrease from MUR 497 million to MUR 101 million.

In terms of source of investment, Luxembourg topped the list with direct investments to Mauritius surging to MUR 3.2 billion from MUR 30 million in the previous period. France came second, with MUR 2.5 billion, a slight increase from last period’s MUR 2.3 billion.

Investments from South Africa remained roughly the same around MUR 1.1 billion. Some countries showed a decline such as China (from MUR 1.9 billion to MUR 576 million), the United Arab Emirates (from 743 million to MUR 386 million) and the United Kingdom (from MUR 392 million to MUR 319 million).

The Bank of Mauritius also gave a summary of FDI received over the past four years. For the period 2016-2017, Mauritius received MUR 15.4 billion of FDI compared to MUR 12.9 billion in 2015-2016, MUR 11 billion in 2014-2015 compared to MUR 12.7 billion in 2013-2014.

The Medine Group launched its Smart City project on 7th September. ‘Unicity’ will be developed on 823 acres of land and will comprise residential, business, leisure and educational components, developed along a Live-Work-Enjoy-Learn approach.

This project is part of Medine’s master plan for the development of the group’s land in the west of the island, in three phases. At the heart of the project is the development of an education cluster. The first phase is already completed and comprises, among others, a shopping mall, a Business Park, a primary and a secondary school and Student Life Residences. The Education Village hosts prestigious universities, including the Middlesex University Mauritius Branch Campus.

A new phase of the Business Park of over 8000 m² will be developed, as well as a sports complex comprising a ten-lane Olympic size swimming pool among other sports infrastructure. The residential development projects comprising villas, townhouses, retirement homes and affordable housing will start in 2018.

The total investment (development costs) for this smart city project is estimated at over MUR 35 billion over 25 years in three phases. MUR 9,273 million will be injected for Phase One (2016-2022), MUR 13,106 million for Phase 2 (2023-2030) and MUR 12,623 million for Phase Three (2030-2040).

The Smart Cities Scheme and other property development schemes in Mauritius have captured the interested of a number of international property developers. For more information about the Smart City Scheme and on how we can assist, please liaise with your usual contact person at ITL or write to us on info@intercontinentaltrust.com