Air Mauritius Limited (AML) was one of the week?s top performer, gaining 4.5% to finish at Rs16.40 on Monday 30 June 2003. This positive price swing was mostly due to the release of AML?s financial year 2003 results, which recorded a 8.1% net profit growth to Euro 20.8m (Rs 605m) and a 3.2% increase in number of passengers carried. This encouraging performance was achieved despite a slowdown in the global airline industry, which suffered from negative impacts on passenger travel amid war in Iraq and SARS virus outbreak. AML saw its passenger load factor (a key performance indicator in the airline industry) drop by 1.8% to 70.3%. Moreover, the airline industry faced higher operational costs due to higher security and insurance costs (following the September 11 events). For its financial year ended 31 March 2003, AML?s gross operating profit dipped by 1.4% to 15.0%. AML recognized a one-time gain of euro 16.9 million arising from the partial swapping of its USD-denominated debts to Euro-denominated ones. For the first three months of AML?s current financial year, analysts are of opinion that the strong euro situation (the euro gained 7% against the USD), a decline in Jet A-1 fuel (down 6% over second quarter of 2003) and an expected pickup in tourist arrivals may favour the airline company. The completion of AML?s new organizational restructuring and business redesign process in the current year is also expected to improve AML operations, which may also positively impact its bottom-line. Last week, the bank & insurance sector slipped by 1.0%. The Mauritius Commercial Bank Limited (MCB), the largest listed stock on the Official List, declined by 2.1% to Rs 28.50. Shares of State Bank of Mauritius (SBM) remained stable at Rs 16.70. Hotel operator Sun Resorts Limited saw its share price drop by 3.8% to Rs 43.10, while shares of New Mauritius Hotels edged up by 0.3% to Rs 37.70. At an analyst meeting held last week, the management of SRL remained cautious as to the outlook for 2003 and considered mounting competition (triggering pressure on room rates) as having a negative impact on its profitability. Industry stocks rose by 1.4%, helped by a 10.3% jump in the shares of Plastic Industries Limited. Last week, industry concerns MOR, MCFI and MSM appreciated by 4.8%, 4.7% and 3.5% respectively. The decline of the large capita-lized stocks (MCB and SRL) dragged the local bourse lower. The broad Semdex and total return index SEMTRI indices dropped by 0.4%, while the blue chip SEM-7 index slipped by 0.9%. The last week of trading of the second quarter was also marked by an increase in trading activity. Trading turnover jumped by 120% to Rs 172.5 million for the period under review. For the first half of 2003, Mauritian equities posted a 25% gain (SEMTRI?s performance), compared to an increase of 11.5% of the MSCI world equity index.

Contribution by Confident Asset Management Ltd