For the week ended Monday 20th October 2003, the local bourse maintained an upward track as investors pushed the total return SEMTRI index to new record high level at 1097 points. The recent rally, which extended over the past two months, was broad-based. Last week, both the Semdex, the broad equity index, and the Sem-7 index, which tracks the performance of share prices of the seven largest listed companies, rose by 1.1%.

The banks & insurance and the transport sectors were the week?s (and this year?s) top performers, appreciating by 2.3% and 1.6% respectively. Last week, MCB and SBM rose by 0.7% and 4.3% respectively. The trading activity during the week under review was also jumped by 170% to Rs114.1m, mostly due to heavy trades (worth Rs77m) on sugar stocks Mon Désert Alma Limited and Savannah Sugar Estates Limited. Shares of the two companies ended the week unchanged at Rs14.30 and Rs68.00 respectively. Shares of Mon Trésor Mon Désert Limited (MTMD) continued to gain ground and recorded a 1.9% rise in its share price.

On the industry counter, both construction concerns United Basalt Products Limited and Gamma- Civic Limited finished the week higher, up by 2.5% (to Rs35.70) and 0.4% (to Rs26.90) respectively. News of strong growth in the construction sector (estimated to grow by 11% in 2003), continued government spending and lower interest rates are viewed as potential ingredients that may boost the profitability of UBP and GCL. Commerce stocks rose by 0.9%, helped by the appreciation of Courts Limited (+9.8%) and Shell Limited (+3.4%).

The hotels & leisure sector was the only area of weakness during the week under review, declining by 0.3%. The share prices of the two listed hotels groups ended the week in opposite direction. New Mauritius Hotels slipped by 1.3% to Rs39.00, while shares of Sun Resorts Limited climbed by 1.2% to Rs43.10.

Naïade Resorts Limited (NRL), the third largest hotel group on the island, hit the news following the change in its shareholding structure.

It is reported that a consortium led by Groupe Mon Loisir have acquired 31m shares (equivalent to a 41.5% stake) in the hotel group. For its year ended 31st December 2003, NRL recorded a turnover of Rs865m and net profits of Rs8.6m. Financial costs (mostly due to debts contracted for the acquisition of Merville Beach and Le Grand Gaube Hotel) as well as renovation and closure costs were considered as the main factors denting its profitability in year 2002.

Projects

The recent decline in interest rates and the appreciation of the EUR versus the MUR in 2003 is expected to improve NRL?s cash flow. NRL plans to expand further its operations in the coming years. Its forthcoming projects include the construction of a 225-room hotel at Bel Ombre, opening a hotel in Rodrigues and securing hotel management contracts in the region. On the over-the-counter market, share of NRL finished the week down 6% to Rs14.10.

Contribution by Confident Asset Mangement