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AfricaMoney | June 27, 2017

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Axys Stockbroking says Mauritius Budget positive in theory but reeks of ‘déjà-vu’

Axys Stockbroking says Mauritius Budget positive in theory but reeks of ‘déjà-vu’

Axys Stockbroking released a post budget analysis that gives an idea about the companies and sectors which will corner the benefits of the budgetary announcements, as well as those less favoured. (Image: Facebook)

Axys Stockbroking released a post budget analysis to highlight the impact of budgetary measures on listed companies on the Stock Exchange of Mauritius.

It gives an idea about the companies and sectors which will corner the benefits of the budgetary announcements, as well as those less favoured.

As for the capital market in Mauritius, the need was for incentives for quality listings to attain a sophisticated market together with better enforcement. Also, no update was provided regarding the listing of SICOM which was eagerly awaited by the brokerage house and also on a new gold fund in spite of the metal being already traded on the Stock Exchange of Mauritius.

Moving to the financial sector, Axys highlighted that prudent directives of the Bank of Mauritius might hinder lending for “smart-cities” & “technopoles” while this project will drive growth for property insurance in medium and long term.

Accordingly, as per the projection of the brokerage house, listed banks such as SBM Holdings, MCB Group, and Bramer Banking Corporation Ltd shall do better under the new budgetary measures. However, it will not be so for CIM Financial Ltd, in particular due to reduction in hire purchase rates.

This budget shall bring benefits to the hospitality segment with the revamp of the Mauritius Tourism Promotion Agency (MTPA) together with an increase in funding that will enhance Mauritius’ visibility. Besides, increased flight connectivity will boost arrivals and thus likely trigger improvement in both occupancy and room rates. Thus it is worth noting that listed hotels such as New Mauritius Hotels Ltd, Sun Resorts Ltd and Lux Island Resorts Ltd will capture benefits with improved measures for the tourism industry.

Outlook for big conglomerates is uncertain, given new policies governing the Integrated Resort Scheme with sugar companies to participate in the smart cities development together with solar panels incentives. This might neutralize potential development of sugar companies such as Alteo Ltd Omnicane Ltd and Medine Ltd. On the other side Ireland Blyth Ltd and Rogers Ltd will benefit from future port developments mainly in the seafood and the logistics segments.

Axys Stockbroking does not view major changes in store for consumer goods segments such as Phoenix Beverages Limited, Quality Beverages Limited, Vital Ltd, Moroil and others. Even if these companies were spared by the increase of taxes they risk to suffer from the depreciation of the rupee in front of US dollar that may leads to contracted margins and dropped in demand.

Finally, the gaming sector, with listed firms such as Lottotech and ASL, is likely to suffer as the government has announced adverse measures such as a total ban on advertising and issue of license for a period of 5 years (except for new casinos), a ban on scratch card games and relocation of all gaming house outside city centres.

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