Mauritius Stock Market Commentary – Week Ending November 18, 2011

The week saw the Mauritian Semdex end 0.2% lower on turnover that was almost half of normal levels (MUR 121.8m, USD 4.2m). This week was a big one for company results.

Mauritius Commercial Bank ended the week 0.6% higher at MUR 170 per share after posting a 1Q11 EPS rise of 12.3% to MUR 4.47. Management said the profit rise was due to loan growth, up more than 15% to MUR 125.8bn. This helped boost net interest income, which rose 12% to MUR 1.6bn MCB declared a dividend of MUR 2.6 per share.

Two hotel operators reported 3Q11 results. Sun Resorts ended the week 1.6% lower after revealing its nine month pre-tax loss of MUR 168.6m, 87.5% worse y/y. Management noted the European debt crisis and high airfares have weighed on the industry. The loss per share came in at MUR 1.24, from a loss of MUR 0.58 a year ago. Management also cited aggressive promotional discounting in the industry as a factor depressing revenue.

Naiade Resorts was flat for the week managed to reign in its loss to MUR 120.4m from MUR 188.9m a year ago. The loss per share improved 51.8% to MUR 1.06. Management noted the period is the seasonal low and despite that the group’s occupancy improved 9% to 71%. In terms of the outlook management had similar comments to Sun Resorts but commented that reservations have improved y/y. Management highlighted the improvement at its Reunion and Maldives operations.

Linked to the tourism industry is Air Mauritius which ended the week 6.9% lower after posting a 1H11 pre-tax loss of EUR 18.3m versus a EUR 6.3m loss a year earlier. Management attributed the result to heavy fuel costs and exchange rate volatility. One positive note was a 3.8% growth in passenger numbers, although the CEO admitted the growth was obtained at the expense of yield. A highlight of the period was the start of direct flights to China, an important target for growth.

Staying with the tourism industry, tourist arrivals grew 3.8% y/y in October to 90,616. Comparing ytd numbers y/y growth has slowed to 4.2% after 6.5% in 2010, however the total number of tourist for the period January to October is the highest since before 2007.

The weeks’ top five traders were MCB, Harel Freres (+2.6%), New Mauritius Hotels (-1.3%), United Basalt Products (-0.8%), and State Bank Mauritius (-0.6%). The top five significant gainers over the week were Mauritius Union Assurance (+5.8%), POLICY (+3.3%), Harel Freres, Gamma Civic (+2.3%), and Promotion & Development (+1.1%).

Source: African Alliance