For the week ending Monday 18th August 2003, the local bourse finished the week in negative territory, dragged lower by blue chip stocks. Both the broad market Semdex and the total return (SEMTRI) indices slid by 0.5%. The Sem-7, the index tracking the share price performance of the largest capitalization stocks on the local bourse, dropped by 1.0%. Following a sharp rally during the second quarter of 2003(+12%), Mauritian equities experienced some weakness amid profit taking and unfavourable news on the economic front.

The total trading turnover on the official market for the week slipped by 30.2% to Rs50.5m. Trades on The Mauritius Chemical & Fertilizer Industry Limited (MCFI) accounted for about half of the total trading turnover. MCFI shares recorded the sharpest gain of the week, up by 20.0% to Rs12.00 on heavy trading (12 million shares exchanged last Thursday). The progress of MCFI shares boosted the performance of the industry sector, which rose by 2.6% for the week under review.

In a joint cautionary announcement, Mauritius Breweries Limited (MBL) and Phoenix Camp Minerals Limited (PCM) provided details of their proposed restructuring of the shareholding. According to the proposed scheme of arrangement, PCM would ultimately become a wholly owned subsidiary of MBL. According to the communiqué, the proposed scheme consists of two steps (which are dependent one upon the other). The first step will involve the distribution of PCM?s investment in Phoenix Investment Company Ltd. (PICL) as a dividend in specie in the ratio of 0.738 PICL share for each PCM share. The second step will see the acquisition of PCM by MBL at a share exchange ratio of 1.59 MBL shares for each share of PCM. Last week, shares of MBL closed higher (+0.4%) whereas shares of PCM and PICL remained stable at Rs74.50 and Rs42.00 respectively. Since the beginning of year 2003, MBL, PICL and PCM rallied by 13.4%, 37.7% and 44.7% respectively. United Basalt Products Limited (+1.1%) and MOROIL (+1.8%) figured among the other gainers on the industry counter.

Last week, the majority of economic sectors ended the week lower. Air Mauritius Ltd. (AML) slipped by 0.6% to Rs15.40. Analysts considered that the recent appreciation of the USD versus the Euro and higher oil prices (+15% since June 2003) on world markets may adversely affect AML?s profitability. AML also hit the news with press reports indicating that the airline company as a potential bidder for a 45% stake in Air Botswana, which is to be privatized by end of 2003.

Sugar stocks slid amid profit-taking on The Mount Sugar Estates Co. Ltd. (-4.6%) and Mon Trésor Mon Désert Ltd. (-5.1%). Sugar conglomerate Harel Frères was last week?s only gainer, up by 2.7% to Rs42.60 (its highest close for the year). Both listed hotel operators, New Mauritius Hotels Ltd and Sun Resorts Ltd. edged lower, down by 1.3% and 1.1% respectively. Commerce stocks experienced mixed fortunes. Courts Ltd., Shell (Mauritius) Ltd. and Happy World Foods rose by 4.3%, 3.6% and 0.9% respectively while commerce conglomerate Ireland Blyth Ltd. shed 3.6% to Rs18.60.

Contribution by Confident Asset Management