Mauritius’s stocks retreated for a fourth day, extending its weekly decline to the most in almost three months after Europe, its main trading partner, forecast a contraction this year in the euro region economy.
The 38-member SEMDEX index fell 0.5 percent to 1,800.98 at the close in Port Louis, the lowest since October 2010, widening its five-day drop to 1.2 percent, the most since the week through Dec. 2.
The European commission forecast yesterday a 0.3 percent contraction for 2012 in the euro area, Mauritius’s biggest trading partner for tourism and manufactured goods. Mauritius, an Indian Ocean island nation with a population of 1.3 million people, saw its exports contract for a third consecutive month, Statistics Mauritius said today, with the trade gap widening 36 percent to 8.15 billion rupees. Tourism arrivals declined in December and January, two months of the peak tourism season.
“We are caught in a downward spiral,” said Raj Tapesar, managing director of MCB Stockbrokers Ltd, in a phone interview from the city. “We are witnessing an accumulation of bad news, with no silver lining in the short term, prompting investors to hold cash rather than stocks.”
Mauritius Commercial Bank (MCB), the country’s biggest lender by market value, said Feb. 14 second-quarter profit through December dropped 8.3 percent to 944.65 million rupees ($32.63 million) from a year earlier, warning the European debt crisis will damp credit demand. New Mauritius Hotels said net income retreated 3.4 percent to 548.9 million rupees for the quarter ending Dec. 31, according to a statement published on the exchange’s website Feb. 10.
The economy in Mauritius will probably expand less than the initial 4 percent forecast, according to a Jan. 25 report of the International Monetary Fund.
Mauritius Commercial Bank led the drop in the index today. It declined 0.6 percent to 164 rupees, its lowest level since Dec. 27. New Mauritius Hotels (NMH), the largest leisure operator, dropped by 2.1 percent to 71.50 rupees, its lowest price since March 2009, extending its decline this year to 12.3 percent. Air Mauritius Ltd. (AML), sub-Saharan Africa’s fourth-biggest airline, fell 7 percent to 12 rupees, bringing its losses this year to 25 percent.
“Our resilience is now being stretched,” Tapesar said, citing latest data. “It’s a sellers’ market, creating opportunities for investors willing to buy for the long term”.
Foreign investors were net buyers of Mauritian stocks of 14.4 million rupees in January, according to a Feb. 21 bulletin of the Bank of Mauritius, down from 355.1 million rupees a year ago.
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