Sub-Saharan Africa Stock Markets 2010 Review & 2011 ... - Imara

Market Review for 2010
The Stock Exchange of Mauritius started the year with the
finalisation of the merger of sugar producers, Mon Desert
Alma and Savannah Sugar Estates. The merged company
(Savannah) rebranded itself and is currently known as ENL
Land. British American Investment on the other hand
delisted from the official market, following the
acquisition of all its shares by Seaton Investment Limited.
ENL Land raised MUR 933.6m through the issue of
preference shares. Naiade Resorts issued new shares and
a convertible loan and raised MUR 1.0bn, to finance its
MUR 1.5bn restructuring. The remaining MUR 0.5bn will
be raised through the sale of assets.
There was increased activity on the Stock Exchange of
Mauritius, with volume up 47.8% to 334.5m shares and
turnover up 12.2% to MUR 11.69bn.
The SEMDEX gained 18.5% y-o-y in local currency terms
and due to the slight depreciation of the rupee against
the US dollar, the index gained 16.2% y-o-y in USD terms.
The SEM-7 on the other hand gained 3.5% in local
currency and 1.5% in USD terms. Harel Freres and ENL
Land are now SEM-7 constituents, replacing Naiade
Resorts and Omnicane.
Foreign investors were net sellers of MUR 1.54bn worth of
transactions, compared to 2009 when they were net
sellers of MUR 184.91m worth of shares.
10 Most Active Stocks by Volume
Company
Volume (m) % of total
Mauritius Development Inv. Trust 102.15 30.3%
British American Investment 48.33 14.3%
Caudan Development 45.58 13.5%
Mauritius Commercial Bank 22.00 6.5%
State Bank of Mauritius 13.41 4.0%
New Mauritius Hotels 12.13 3.6%
Naiade Resorts 9.86 2.9%
Sun Resorts 8.65 2.6%
Harel Freres 8.06 2.4%
P.O.L.I.C.Y. 7.32 2.2%
10 Most Active Stocks by Value
Company
Val. (USDm) % of total
Mauritius Commercial Bank 100.97 26.2%
New Mauritius Hotels 46.36 12.0%
State Bank of Mauritius 36.56 9.5%
Mauritius Union Assurance 29.10 7.6%
British American Investment 25.50 6.6%
Sun Resorts 18.20 4.7%
Mauritius Development Inv. Trust 17.22 4.5%
Rogers and Co. 10.35 2.7%
United Basalt Products 10.00 2.6%
Naiade Resorts 9.60 2.5%
Market Outlook for 2011
In the 2011 budget speech, the Finance Minister proposed
that the Bank of Mauritius and Financial Services
Commission merge into a single regulatory institution.
The BoM would be empowered to issue a larger variety of
instruments, extend advances from 3 months to 6
months, broaden the list of collateral and develop the
forex and derivatives market, amongst others. As a
result, we expect increased liquidity in the Mauritian
market.
Mauritius is seeking to tap into the USD 1tn Islamic
finance industry. The central bank will offer Shariacompliant
short-term liquidity tools, and according to the
governor, the first Islamic bank will be operational by the
end of Q1 2011. Given that a sixth of Mauritius’
population is Muslim, we anticipate that this development
will be highly successful.
The CSO forecasts that Mauritius will grow by around 4.2%
in 2011, with growth mainly driven by the business
activities, financial institutions, and transport, storage
and communications sectors.
The SEMDEX has gained 8.73% y-t-d in USD terms, mainly
driven by the banks, MCB and State Bank. We expect the
banks and hotels to drive the market in 2011, given the
recovery of the overall market and tourist arrivals.
Top picks for 2011
Mauritius Commercial Bank – Mauritius’ largest bank
with the highest market share of loans and deposits,
diversified product range, engaged in other non-vanilla
banking activities such as leasing, factoring, credit
cards, investment management, stock broking and
registry services, income from foreign sources at
around 40% of the Group’s net results, global business
desk to help foreign institutional clients take
advantage of the double taxation treaties, falling
impairment charges.
Naiade Resorts – The Group has returned to making
profits, diversified hotel base – Mauritius, Maldives and
Reunion Island; improved occupancies in all markets,
revenue set to further increase when average room
rates recover, plans to increase stake in White Sands
Resort and Spa.
Air Mauritius – Tourist arrivals forecast to continue
rising, MTPA continues to promote Mauritius in the
Asian market, fuel hedge losses realised, increased
revenue in recent results as a result of increases in
both passenger and cargo volumes.
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