The banks & insurance sector also weakened, dragged lower by the decline of MCB (-3.9% to Rs 27.40 and down -0.9% when adjusted for dividends) and MUA (-3.8% to Rs 38.00). Last week, shares of the MCB traded within a Rs 25.00-Rs 28.50. Earlier during the week, the Moody?s Investors Service?s downgrade of MCB?s financial strength from D+ to D triggered some selling. The Moody?s re-rating decision ?reflected the latest developments relating to a Rs 866 million fraud?. In a communiqué, the directors of MCB re-iterated their full commitment to proper risk management and highlighted several initiatives taken to strengthen its internal control systems, risks management structures and corporate governance framework. MCB also announced the recruitment of a Chief Risk Officer. In a separate communiqué, MCB informed its shareholders that it submitted a claim totalling Rs 737m to its insurers. This claim represents the maximum amount claimable under its Bankers? Comprehensive Crime Policy. This news eased the selling pressure as MCB remained stable at Rs 27.40 late during the week.

For the week ended Monday 7th July 2003, the Mauritian bourse slid for the second consecutive week as investors initiated some profit-taking. The decline was also due to several companies, such as MSM, MCB, MBL and MCFI, trading ex-dividend during the week under review. The broad market index, the Semdex, slipped by 0.9% while the blue chip Sem-7 index slipped by 1.2%. The total return index SEMTRI indices dropped only by 0.2%, reflecting the dividend adjustments. Trading activity was marked with the buy-back activity of both listed banks, namely MCB and SBM. The last week of trading of the second quarter was also marked by an increase in trading activity. The average daily trading turnover for the week stood at Rs 29.0m, about one and a half times the daily average recorded during the first half of year 2003.

The performance of the seven economic sectors showed mixed results, with declining sectors outpacing advancers by a margin of 4 to 3. The transport sector, constituted of Air Mauritius Limited, experienced the sharpest decline, down 8.5% on the week, but remains up by 19.1% since the beginning of this year. AML announced that it would resume its twice-weekly flights to the Singapore and Kuala Lumpur by next month.

Leisure and hotels stocks edged 0.9% higher, helped by the progress of both hotel groups Sun Resorts Limited (+1.2%) and New Mauritius Hotels Limited (+0.8%). Analysts expect the operational results of both groups to benefit from the depreciation of the Mauritian rupee. Since 31st March 2003, the euro and British pound rallied by 12% vis-à-vis the Mauritian Rupee.

Contribution by Confident Asset Management Ltd