Rameshsing Jugurnauth (guest)

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Stock Exchange of Mauritius went down by 3.27 % (Weekly Review)

By Rameshsing Jugurnauth (guest)
Published 23rd September, 2008

From Monday 15^th to Friday 19^th September 2008, the all share index, SEMDEX fell by 3.27% or 54.33 pts to close the week at 1, 604.73 pts. The heavy weight index, SEM-7 declined 3.94% or 15.86 pts, ended last week at 386.27pts. Return on the market index, SEMTRI ended Friday at Rs 4310.52, losing 2.84% since Monday.

The weekly sector evolution was as follows: Banking, Insurance & Other Finance ( down3.94% or Rs 2.61 bn ), Commerce ( down 1.05% or Rs 0.18 bn), Industry ( up 1.64% or Rs 0.08bn), Investments ( down 2.89% or Rs 0.39 bn ), Leisure and Hotels ( down 2.83%% or Rs 1.06 bn), Sugar ( down 6.69% or Rs 0.78 bn) and Transport (down 1.15% or Rs 0.78 bn) and Foreign ( unchanged).

Savannah was the weekly top gainer with an increase in share price amounting 7.34% or Rs 13.00. The weekly worst loser was MTMD which saw its share price plunged by 14.12% or Rs 12.00.

SBM recorded the biggest volume with 539, 154 shares interchanged while MCB had the highest value traded (turnover) with Rs 52.8 million.

Evolution of share (Weekly)

Weekly Gainers: Savannah ( 7.34% or Rs 13), PBL ( 3.77% or Rs 4), POLICY( 1.99% or 15 cents), ASL ( 1.92% or Rs 1), SWAN ( 1.09% or Rs 1), MOROIL ( 0.70% or 10 cents), MCFI ( 0.54% or 10 cents) and LIT ( 0.51% or 20 cents).

Weekly Losers: MTMD ( 14.12% or Rs 12.00), Caudan Dev.( 11.76% or Rs 1.70), Fincorp ( 9.34% or Rs 1.70), SBM ( 8.75% or Rs 7.00), NIT ( 8.33% or Rs 2.00), IBL ( 4.27% or Rs 2.50), BMH ( 4.17% or Rs 5.00), Naiade Resort ( 4% or Rs 2.50), NMH ( 2.80% or Rs 4), Sun Resorts ( 2.56% or Rs 2), MDIT( 1.87% or 10 cents), MUA ( 1.69% or Rs 1), MCB ( 1.32% or Rs 2), Air Mauritius ( 1.18% or 20 cents), H.Freres (0.54% or 10 cents), United Docks (0.52% or 50 cents) and UBP (0.23% or 10 cents).

10 Biggest volume Traded: SBM (539, 154 shares or 27.84% of total volume), MCB (357, 400 shares or 18.45% of total volume), Caudan Dev. (208, 300 shares or 10.75% or total volume ), NMH ( 104, 477 shares or 5.39% of total volume), POLICY (94, 600 shares or 4.88% or total volume) and PBL ( 91, 333 shares or 4.72% of total volume ).

10 Highest value traded ( Turnover): MCB (Rs 52.8 million or 38.28 of Market turnover), SBN( Rs 40.9 million or 29.72% of Market turnover), NMH (Rs 14.6 million or 10.56% of Market turnover), PBL ( Rs 9.8 million or 7.07% of Market turnover) and Naiade Resorts (Rs 3.1 million or 2.23% of Market turnover).

Evolution of share price (Monthly)

Monthly Gainers (20 Aug – 19 Sept): MLC ( 16.28% or 70 cents), MEI (14.29% or Rs 8), Savannah (8.57% or Rs 15). Harel Mallac (8.33% or Rs 5), PBL (7.84% or Rs 8), H.Freres (6.36% or Rs 1.10), LIT ( 5.95% or Rs 2.20), ASL ( 3.92% or Rs 2),MCFI( 3.33% or 60 cents), Swan ( 1.09% or Rs 1), SHELL (0.57% or 50 cents) and United Docks ( 0.53% or 50 cents).

Monthly Losers ( 20Aug -19 Sept): Sun Resorts ( 10.59% or Rs 9), SBM ( 10.43% or Rs 8.50), Naiade Resorts ( 9.77% or Rs 6.50), Fincorp ( 9.34% or Rs 1.70), Trinity Financial Group ( 9.09% or 50 cents ), Caudan Dev.( 9.09% or 15 cents), NIT(8.33% or Rs 2), MOROIL ( 7.14% or Rs 1.10), GIDC (6.82% or Rs 1.50), BMH ( 6.5% or Rs 8), MDIT (6.25% or 35 cents), IBL ( 5.88% or Rs 3.5), Gamma Civic ( 5.56% or Rs 5), NMH ( 5.44% or Rs 8), Innodis (5.43% or 70 cents), MCB( 5.06% or Rs 8), POLICY( 4.35% or 35 cents), Rogers ( 4.21% or Rs 16), PAD ( 3.06% or Rs 3 ), MSM ( 2.94% or Rs 1), PIM ( 2.86% or Rs 1.10 ), UBP (2.73% or Rs 1.20), MTMD ( 1.35% or Rs 1) and Air Mauritius ( 1.18% or 20 cents).

This week, Plastic Industry (Mauritius) Ltd published its condensed financial statement for year ended June 2008. Highlights were an increase in turnover by 11.8% to Rs 144 million. In 2008, the operating profit rose by 49% and the bottom line profit increased by 27.4 % to Rs 14.2 million. Earning per share for 2008 stood at Rs 7.11 compared to Rs 5.58 in 2007. Unfavorable aspects of the condensed statement were a decrease in net cash generated cash from operating activities; in 2007, Net cash from operating activities was Rs 17.4 million while this year it was only Rs3.8 million. Last year, the cash flow statement grew by Rs 3.5 but this year, it decreased by Rs 3.5 million. However, it should be noted that in 2008, cash flow at the end of year was still in green with Rs 1.2 million. Return on equity was 20% in 2008, higher than the 17.8% recorded in 2007.

Coming back to the Mauritian Stock Market, the question we ask: were the shares of listed bank affected by the financial crisis in US? Let's study the trend, last week MCB started losing on Tuesday. The highest drop occurred on Thursday when the share price fell from Rs 148 in the morning to settle at Rs 141, lowest of last week. On Friday, MCB shares picked up gaining Rs 9 to close at Rs 151.

SBM which is the other big bank of Mauritius also experienced similar scenario as its rival MCB. SBM also started losing since Tuesday. On Thursday, SBM shares were down to Rs 70, lowest of last week while on Friday it gained Rs 3 to settle at Rs 73.

Indeed, last week, the financial crisis in US helped in a decline of MCB and SBM shares thus affecting the Mauritian Stock Market.

Data: Stock Exchange of Mauritius

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3 Responses to "Stock Exchange of Mauritius went down by 3.27 % (Weekly Review)"

Dev Joymungul

said this on 01 Oct 2008 9:26:53 PM MUT

The latest trends and movements that investors and observers have witnessed on the Stock Exchange of Mauritius lately beginning Monday is more because of the growing fear factor than anything else. The sub-prime crisis in the US is definitely having a negative psychological impact on investors making them sell and sit on cash while waiting for the clouds on the SEM to disperse despite the fact that the Mauritian economic indicators remain strong with an expected economic growth rate of 5.6% for this year.

It should be emphasised that the banking sector in Mauritius is well regulated and well capitalised with reliable risk management systems and that till now no bank has acknowledged the purchasing or the trading of US Sub prime mortgaged backed securities.

The major problem remains uncontrolled inflation and as the repo rate remained constant at 8.25% ,as a precautionary measure the Bank of Mauritius injected Rs 2 billion into the money market to increase liquidity.

This increasing fear fuelled by high inflation reaching 10.2% by the end of the year causing the erosion of the consumer's disposable income and the rejection of the bail out plan of $700 billion by the senate (which would increase the burden of US taxpayers, inflate government borrowing, enlarge fiscal deficit and put a downward presure on the US dollar exchange rate) has automatically triggered a downward spiral and will instigate other investors to follow the trend and drive the market further down. To make matters worst those investors in real need of cash (mostly foreigners who have been investing in emerging markets of which Mauritius is one) will push the share price down as a result of winding up quickly. These are according to me some of the major reasons why the indices have been fluctuating so much. We should not forget that the market remains bearish and is to my point of view an illiquid market. Now that the Mauritius will be part of the Dow Jones Wilshire Global Index family as from 1st October 2008, the question remains what would be the impacts and how would it be faring???Would investor confidence be more volatile???

The sectors which normally would be affectd by the US financial crisis which is slowly spreading to Europe would undoubtedly be the Textile industry, the Hotel Sector and companies exporting to the US and Europe because the purchasing power of people over there would be lowered, so consumption will go down. One of the challenges awaiting Mauritius ahead is the need to find alternative markets It would be wise to note here that Europe has no comprehensive plans to rescue its financial system in the case of widespread banking failures.

The good news however remains that fuel price has fallen from a record high and will ease pressure on inflation. Since this financial crisis one thing is for sure capitalism will never be what it was before as the regulatory role of government would be perhaps inevitable. Mauritius on the other hand will have to re-invent itself to adapt to the new world order, there are new niches and markets to conquer.