Mauritius stock market recovers as investor confidence rises on Budget 2015
The Mauritian bourse saw a rebound in performance after the business-friendly budget which was welcomed positively by retail investors and fund managers in general, enabling investors to have a clear vision of future developments in different sectors of the economy. (Image:warsawstockjournal.com)
After the continuous decline in the stock market since the start of the year, the Mauritian bourse ended in positive territory with its main market indices, the Semdex, Sem-10 and Demex gaining 1.45%, 2.49% and 1.44% respectively for the last week ending 27 March 2015.
The Mauritian bourse saw a rebound in performance after the business-friendly budget which was welcomed positively by retail investors and fund managers in general, enabling investors to have a clear vision of future developments in different sectors of the economy.
The upward performance of the stock market was mainly driven by bluechip stocks as highlighted by the 2.49% gain of the Sem-10, upon remarkable performance of hotel stocks such as Lux Island Resorts Ltd and New Mauritius Hotels Ltd which inched up by 10.09% and 13.08% during last week to close at Rs 60.00 and Rs 67.00 each respectively.
Other components of the bluechip index which posted an upward performance were ENL land Ltd, gaining 2.0%, Terra Mauricia Ltd, increasing by 2.31%. On the banking side, both MCB Group Limited and SBM Holding Limited climbed by 1.79% and 1.03% each.
Moving to the commerce cluster, among the components of the SEM-10, Ireland Blyth Ltd inched up 0.87% and the investment segment posted mixed performance as Terra Mauricia Ltd rose by 2.31% while CIEL Limited dipped by 0.87% and Alteo Ltd reported a flat performance.
The top performers of the week were Bluelife Ltd with an increase of 24.75%, New Mauritius Hotels Ltd with a gain of 13.08% and finally, United Basalt Product Ltd (UBP), which climbed by 11.25%.
The stock market recovered largely on the back of hotel stocks which rebounded strongly further to the weakening of the MUR versus the EUR and the GBP and also due to positive budget announcements as regards improved air access and increased marketing budgets. Moreover, the creation of “Smart Cities” and favourable conditions for housing market also boosted shares of real estate developers Blue Life Ltd and UBP, given the infrastructure projects that are in the pipeline.
However, the gaming sector found itself in the loser’s corner, suffering due to negative budget measures announced for this industry, which led to sharp decline of shares of Lottotech by 25.52% and Automatic System Ltd by 38.36%.
To recapitulate, the government declared that regulations for the gaming industry included a total ban on advertising and issue of license for a period of 5 years (except for new casinos) making it difficult for new entrants. Existing players will also be impacted by an increase in license and fees together with limitation on range of games given a ban on scratch card games and relocation of all gaming house outside city centres.
Moving to CIM Financial Ltd, the 9.29% drop in share prices was mainly due to perceived repercussions on the CIM Finance unit from budget measures which will lead to lower interest rates charged for hire purchase transactions.
Finally market capitalisation at the closing session of last week stood at Rs 220.7 billion and an increase in trading activities was noted, with volume and value traded amounted to 16.0 million and Rs 169.0 million each.