The latest report from the Central Statistical Office indicated that the growth rate for the year 2003 was revised downwards to 4.4% instead of 4.8% (estimated in June 2003). This downward revision was mostly due to a below-than-expected performance of the sugar and EPZ sectors. The sugar output in 2003 is expected to reach 540,000 tonnes, compared to the June 2003 forecasts of 570,000 tonnes. EPZ were revised to Rs32.5bn from Rs34.0bn, resulting in a growth rate of -4.0% compared to -2.0% in 2003. The sluggish economic recovery in Madagascar and lower-than-expected exports under AGOA II were regarded as the main factors that undermined the EPZ sector. As regards to tourism sector, the CSO expect tourist arrivals and earnings to reach 700,000 and Rs18.1bn respectively. The construction sector is expected to grow by 11.0% compared to 7.6% registered in 2002, helped by continued government spending in the construction of secondary schools, sewerage works, sports infrastructure and cybercity.

Despite the lower growth estimates for 2003, the local bourse rose for the seventh consecutive week, helped by strong performance from blue chip companies. The Sem-7 index, which tracks the performance of the share prices of the seven largest listed companies, climbed by 1.7%, while the Semdex, the broad equity index, gained 1.4% over the week under review. The total return SEMTRI index finished the week up by 1.5% to 1076.

All economic sectors finished the week higher. Sugar and hotels&leisure stocks were the top performers of the week, jumping by 2.8% and 1.9% respectively. The only gainer on the sugar counter was Mon Trésor Mon Désert Limited (MTMD), which rose by 3.8% over the week under review. MTMD shares recorded a 20.3% appreciation since September 2003. Investors seemed to be attracted by the gains from the potential sale of MTMD?s land in the Ebène area. Press reports indicated that MTMD may proceed with the sale of 235 arpents of land earmarked for residential purposes.

Both listed hotels ended the week higher, amid expectations of higher earnings in a strong EUR and GBP environment and improved economic conditions in Europe and South Africa. Shares of New Mauritius Hotels Limited and Sun Resorts Limited climbed by 2.3% (to Rs39.50) and by 1.2% (to Rs42.60) respectively. On the over-the-counter (OTC) market, hotel group Naïade Resorts Limited (NRL) saw its share price jump by 15.4% to Rs15.00 with over 1 million shares traded during the week under review. One favourable piece of news for the hotel sector was Air France?s decision to increase the number of seats by 5.1% on its Mauritius-Paris route during the European winter season.

Contribution by Confident Asset Management