For the week ended Monday 15th September 2003, the local bourse rose for the second consecutive week, helped by a strong performance of the two listed banks. Shares of the State Bank of Mauritius Limited (SBM) rose by 12.5% to Rs18.00, buoyed by its share buy-back announcement. The Mauritius Commercial Bank Limited (MCB) saw its shares jump by 2.7% to Rs27.00 ahead of its forthcoming year 2003 financial results. MCB is expected to pursue its share buy-back programme once its results are published.

Brokers reported a strong buy interest for MCB shares from foreign investors. The latest weekly ?Official Bulletin? from the Stock Exchange of Mauritius indicated that foreign investors were net buyers of listed equities to the tune of Rs6.8m. Last week, both the broad market Semdex and the total return (SEMTRI) indices gained 2.6%. The Sem-7, the index tracking the share price performance of the largest capitalization stocks on the local bourse, appreciated by 3.8%. Trade turnover for the week declined by 40% to Rs29.2m. The highest trading activity was recorded on MCB and SBM, which stood at 38.9% and 25.6% respectively of the week?s turnover.

The Bank of Mauritius? (BOM) decision to pursue with its expansionary monetary policy also lifted the broad market. Last Friday, the BOM reduced the Lombard rate by a quarter of percentage point to 10.0% p.a. This is the eighth interest rate cut since May 2001, when the Lombard rate stood at 12.5% p.a. In its communiqué, the BOM maintains that the monetary easing stance ?remained within non-inflationary limits and further scope for bank credit expansion subsists?.

The BOM expects inflation rate to decline to 4% level by the end of 2003. This easing decision, which reduces borrowing costs and supports growth of investment, is viewed as a positive element in stimulating the Mauritian economy. Going forward, high-yielding stocks may provide investors with an alternative source of income.

Last week, the hotel&leisure shares appreciated by 1.6%. Improved economic outlook of G-7 economies are viewed as positive for the local hospitality sector. Shares of Automatic Systems Limited and New Mauritius Hotels Limited climbed by 2.0% and 2.7% respectively. Sun Resorts Limited remained stable at Rs43.00. Air Mauritius Limited also jumped higher, rising by 1.3% to Rs15.80. Commerce stocks finished the week mixed.

The decliners were Happy World Foods Limited (-2.1% to Rs14.00) and Ireland Blyth Limited (-0.5% to Rs18.50). Shell jumped higher by 1.8% to Rs57.50. Last week, Rogers & Co. Limited (RCL) announced that it has entered into a joint venture with French telecommunication concern Outremer Telecom to provide international long distances telecommunication services. RCL closed the week unchanged at Rs90.00. Sugar stocks remained flat for the week.

The latest report from the Mauritius Sugar Industry Research Institute maintains its crop estimate at 540,000 tonnes for 2003.The report also indicated that the best extraction rate was recorded in the Western part of the island.

Contribution by Confident Asset Management