For the week ended Monday 27th September 2003, the local Bourse remained in its upward momentum, helped by a strong performance of blue chip stocks. Last week, the broad market Semdex and the blue chip barometer, the Sem-7 indices rose by 1.3% and 2.0% respectively. The total return (SEMTRI) index edged 1.5% higher and recorded a 28.3% appreciation since the beginning of 2003. The top performing stock of the week was Air Mauritius Limited, which rallied by 7.9% to Rs17.80. Another strong performer was sugar concern Mon Trésor Mon Désert Limited (MTMD) which gained 5.2% to Rs50.50.

Trade turnover on the official market for the week grew by 15.3% to Rs35.4m. The highest trading activity was recorded on hotel group Sun Resorts Limited (SRL) and on the State Bank of Mauritius Limited (SBM), which shared about 40% of the week?s turnover. The latest weekly ?Official Bulletin? from the Stock Exchange of Mauritius reported that foreign investors were net buyers to the level of Rs9.2m. Last week, shares of NMH and SBM rose by 1.3% (to Rs38.50) and by 2.3% (to Rs17.50) on the back of both local and foreign buying. SRL shares jumped 1.2% higher to Rs43.50, while MCB shares dipped by 0.7% to Rs26.80.

The week was also characterized by a slew of corporate earnings, which showed mixed performance. For its year ended 30th June 2003, commerce concern Happy World Foods Limited saw a drop of 4.3% (to Rs1.55bn) in its turnover and of 54.3% (to Rs42.7m) in its net profits. HWF?s management considered the loss of the distribution rights of the ?Red Cow? and ?Sunny South? brands as the main factors depressing the company?s sales and profitability.

Gross operating profit margin as at 30th June 2003 stood at 19.8%, down from year 2002?s 22.3% level. HWF?s profitability was depressed further by higher operating costs (up by 1.2% to Rs238.4m) and a 17.1% jump in finance costs. The total indebtedness of HWF grew by 30.1% to Rs441.8m during the year under review. The revaluation of the group?s properties helped in boosted HWF?s net asset value per share by 34.0% to Rs25.98.

However, the dividend payout was reduced to Rs1.00 per share, compared to a dividend of Rs1.20 paid in year 2002. In its press communiqué, HWF highlighted the efforts undertaken to recover its market share in the dairy product segment through the introduction of the ?Twin Cow? brand. Moreover, the company maintained its investment programme scheduled for the current financial year, which includes a Rs30m investment in a Mozambique-based poultry operation. Going forward, the coming into operation of HWF?s yogurt factory and rice mill is expected to lift its revenues. Last week, shares of HWF remained flat at Rs14.00, but lost 17.6% since the beginning of 2003.

Profits recorded by construction concerns United Basalt Products Limited (UBP) and Gamma Civic Limited (GCL) in 2003 were below expectations as they dropped by 21.3% (to Rs127.5m) and 57.8%(to Rs45.9m) respectively. Earnings of both companies were boosted in 2002 due to the presence of exceptional profits. Industrial concern MOROIL saw its turnover and net profits jump by 26.4% (to Rs700.5m) and 26.8% (to Rs39.0m) respectively.

The upward price revision during the financial year was regarded as the main factor which boosted the firm?s earnings. In its interim reports for the half-year ended 30th June 2003, Swan Assurance Group saw its net profits drop by 49.0% to Rs11.2m, due to high level of claims, increased reinsurance costs and reduced investment income. However, the company noted a 9.6% increase in net earned premiums to Rs459.6m. Swan and GCL shares remained stable at Rs62.00 and Rs25.00 respectively during the week under review. UBP shares progressed by 0.3% to Rs35.40.

Contribution by Confident Asset Management