Mauritius’ stock exchange indices dip as financial scam of over Rs 25 bn erupts
Both the broad equity index, the Semdex, and the blue-chip index, the SEM-10, declined by 0.5% and 0.6% each to 1,962.30 points and 372.20 points respectively for the trading week ended 10 April 2015, as Mauritius was hit by a financial scandal creating panic and uncertainty in the island economy. (Image: 123rf.com)
The Stock Exchange of Mauritius closed the week of April 10, 2015 with both the broad equity index, the Semdex, and the blue-chip index, the SEM-10, declining by 0.5% and 0.6% each to 1,962.30 points and 372.20 points respectively for the trading week ended 10 April 2015, as Mauritius was hit by a financial scandal creating panic and uncertainty in the island economy.
The total market turnover on the Official Market reached Rs 197.7 million on Friday 10 April 2015 showing a rebound over the market-low trading value of Rs 9.3 million the week before on 03 April 2015, the first trading day following the revocation of Bramer Bank’s licence by the central bank, which also saw the SEM place a freeze on the bank shares.
Financial services major MCB Group Limited, one of the main market players, continues to maintain a positive trend for the last 4 four weeks to close at Rs 199.00 (0.8%),while for the second dominant stock on the SEM, SBM Holdings limited, there was a fluctuation in the performance over the week upon first, the announcement that the latter was considering taking over Bramer Banking Corporation Ltd (BBCL) and after that, yet again when the bank did not go ahead with the deal. The share reached a value of Rs 1.00 on Monday, 06 April 2015, following the announcement of the deal, and then, after cancellation of the deal, the share price dipped to close at Rs 0.96 on Friday, 10 April 2015.
Other components of the SEM-10 index posted a negative performance with investment stocks, Terra Mauricia Ltd decreasing by 3.1%, CIEL Limited dipped by 2.3%, Alteo Ltd declined by 2.0%, ENL Land Ltd depressed by 1.0% and finally Rogers Co Ltd depreciated by 0.5%.
Hotels stocks, namely Lux Island Resorts Limited and New Mauritius Hotels Ltd, went down by 2.5% and 1.6% each respectively while Ireland Blyth Ltd posted a flat performance to end the week at Rs 115.00.
The low performers of the week were Terra Mauricia Ltd followed by Lottotech Ltd which contracted by 6.2% given that investors are reluctant to invest in gaming players following dampening announcements for the gaming sector in Budget 2015, and a sharp drop was also noted for realty player Bluelife Ltd by 6.0%.
On the other hand, the top three performers of the week were Go Life International PCC (USD), which climbed up by 25.0% , Rockcastle Global Real Estate Company Ltd (USD), which inched up by 7.7%, and Promotion and Development Ltd (PAD), which climbed up by 5.0%, showing that investors are prone to invest in USD denominated stock upon dollar appreciation.
The Development and Enterprise Market (DEM) also posted a downward performance with the Demex declining by 0.1% to end the week at 204.8 points on a turnover of Rs 5.5 million, dominated by the drop in the share price of DEM market major Medine Ltd by 0.4% followed by Excelsior United Development Companies Ltd and Hotelest, which declined by 3.9% and 8.6% respectively.
In conclusion, with the full-fledged eruption of the unprecedentedly huge financial scandal in Mauritius — being in excess of Rs 25 billion, and affecting over 23,000 customers and placing over 160,000 policyholders at risk — investors are reluctant to commit funds and confidence in the markets is at an all-time low.