The week under review was marked with the release of interim results of Sun Resorts Limited (SRL). For its half year ended 30 June 2003, SRL saw its turnover grow by 25.8 % to Rs 1.4bn, but its net attributable profits dipped by 4.2 % to Rs 153.9m, when compared to the same period in year 2002. SRL?s operating profits slipped to 22.2 % from 27.8 % level recorded in 2002. The main factor that dragged SRL?s profitability lower was higher finance costs, due to loans contracted for the redevelopment of One&Only Le Touessok hotel. For the first half of 2003, net finance costs grew by 66.4 % to Rs143.4m, nibbling 46.8 % of SRL?s operating profit.

The management also reported that business conditions during the second quarter of 2003 was adversely affected by a ?general slowdown in business arising from the war in Iraq, the outbreak of the SARS epidemic and the depressed economic conditions?. Share of profits from associated companies jumped by more than eight times, helped by the contribution of One&Only (Indian Ocean) Management Limited for the reported period. The management mentioned that a new 18-hole championship course at Ile aux Cerfs is scheduled to open in November 2003 and also expects renovation works at La Pirogue Hotel to be completed by end of the same month. SRL?s management maintained a cautious outlook for the second half of 2003, despite registering a positive booking trend since July 2003.

Last week, shares of SRL remained stable at Rs 43.00, but dipped by 5.5 % since beginning of 2003. Shares of New Mauritius Hotels Limited climbed by 1.4% to Rs37.50 during the week under review. Going ahead, analysts expect improving macroeconomic fundamentals of the Eurozone and UK economies would positively impact on the tourism industry. The latest update from the Central Statistical Office reported a 3.9 % growth in number of tourist arrivals for the first six months of 2003.

Another important piece of news was the acquisition of Compagnie des Grandes Surfaces Ltée (CGSL) by retailer Courts (Mauritius) Limited (CML). CGSL, which operates the retail outlet BUT at the Phoenix commercial center, is a subsidiary of Harel Mallac & Co. Limited (HML). In its communiqué, CML considered this acquisition in line with its strategy of enhancing its position as the leader in the retail of household goods in Mauritius. At HML, this disinvestment step is considered as a rational move to focus on the company?s resources on its core activities. Both CML and HML closed the week unchanged at Rs 3.60 and Rs 42.50 respectively.

During the shortened week (markets were closed on Monday), the local Bourse rebounded. All three equity indices, the broad Semdex, the blue chip Sem-7 and the total return SEMTRI, appreciated by 0.4 %. Most economic sectors jumped higher. The top three performers of the week were the sugar (+3.8 %), transport (+1.3 %) and hotels & leisure (+0.8 %) sectors. The advance of sugar concerns of Mon Trésor and Mon Désert Limited (+5.2 %) and Mon Désert Alma Sugar Estates (+4.0 %) lifted the sugar sector.

News of a jump in number of tourist arrivals buoyed shares of Air Mauritius Limited higher (up by 1.3 % to Rs 15.80). The banks & insurance sector was the only sector that slipped in negative territory. Both listed banks, the MCB and SBM weakened, down by 1.5 % (to Rs 26.30) and 0.7 % (to Rs 14.80) respectively.

Contribution by Confident Asset Management