The Behaviour of Foreign Investments in the Stock Exchange of Mauritius

  • Indranarain Ramlall


This chapter addresses the effects of the crisis on foreign investments in SEM, a highly coveted African market. The results show poor interaction between foreign investments and the bank rate, endorsing the predominance of local banks as main bidders. The long-run pre-crisis elasticity coefficients of purchases and sales, to the US dollar, hover around −0.72 and 0.10, respectively, showing a strong desire for local stocks by foreigners. The findings depict only weak evidence of feedback trading, signifying that foreigners intervened by purely reacting to fundamentals in lieu of past returns. No evidence is found in favour of base-broadening or price pressure effects, except in the case of MCB stocks. Nearly all of the hypotheses under investigation call forth the need for specificity of analysis not only in terms of net flows but also in terms of the blue chips.


Foreign Direct Investment Stock Market Foreign Investment Positive Feedback Trading Vector Error Correction Model 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.



I would like to thank Mr Kishen Nadassen for providing the weekly reports (issued by Cim Stockbrokers Limited) in case of missing data to ensure full coverage of the time period under consideration.


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© The Author(s) 2017

Authors and Affiliations

  • Indranarain Ramlall
    • 1
  1. 1.University of MauritiusMokaMauritius

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