Mauritius Ponzi Probe Risks Extending Africa’s Worst Stocks Rout

▤ Summary

A selloff that made Mauritius equities the worst performers in Africa this year risks deepening as a probe into an alleged Ponzi scheme involving one of the Indian Ocean island’s banks and insurers damp investor sentiment. The rupee retreated 12 percent this year against the dollar, the worst performer on the continent after Ghana’s cedi and the Zambian kwacha, as foreign investors sold bank stocks and a weak euro hurt exports to the nation’s key trading partners. The Financial Services Commission declined to comment beyond statements published on their website this month when it suspended licenses and appointed conservators and administrators for BAI Co. and Bramer Asset Management Ltd., companies owned by Bramer parent British American Investment Co. Bank of Mauritius Governor Ramesh Basant Roi was attending International Monetary Fund and World Bank meetings in Washington and couldn’t immediately respond to questions, according to a person who answered the phone in his office on April 17. The rupee’s slide against the dollar, while staying stable against the euro, is weighing on the Mauritian economy, said Hanns Spangenberg, an analyst at NKC Independent Economists in Paarl, South Africa. “Tourism seems to be picking up sharply, especially from Europe, which still contributes the majority of tourists,” Ronak Gadhia, a research analyst at Exotix Partners LLP who covers SBM and MCB, said by phone from London on April 13.

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