The performance of the Semtri, the total return index established in 1989, reached 9,255.55 points during the stock market session on Friday, March 29, prompting officials at the Stock Exchange of Mauritius (SEM) to describe it as a “record performance.”
The last time the Semtri index caused a stir was during the stock market session on May 4, 2022, when it stood at 9,182.32 points.
This performance was overshadowed when the index rose by 73.23 points on Friday, March 29.
This surge in the total return index is great news for individuals who have invested in securities of companies listed on the Mauritian stock market and chosen to reinvest all generated income back into the same company.
The index is an essential tool for tracking the stock market’s performance, allowing shareholders to measure the potential return on their investments.
In addition to the total return index, the Semdex, which tracks the performance of securities in the official market of the Stock Exchange of Mauritius, and the SEM-10, which monitors the top ten companies in terms of market capitalization, liquidity, and investment criteria, have also reported positive results.
The Semdex has seen a return of 5.57% since the beginning of 2024, while the SEM-10 ended the first quarter with a gain of 8.19%.
The strong performance of the MCB Group and SBM Holdings Ltd, the two leading institutions in the Mauritian banking sector, has contributed to the impressive performance of these three stock market indices.
Since the beginning of the year, the MCB Group and SBM Holdings have achieved returns of 15.74% and 14.29% respectively.
Other top performers include Blue Chips such as Vivo Energy Mauritius (+5.90%), Sun Limited (+5.13%), and Ciel Limited (+4.94%).
Sunil Benimadhu, Chief Executive of the SEM, attributes the recent record-breaking performance of the Stock Exchange of Mauritius on Friday, March 29, to the strong earnings growth of several key stocks in the past few quarters.
Transactions are currently taking place at attractive valuation levels, with the market’s average price-earnings ratio at 6.8% and average dividend yield at 4.02%.
Neeraj Umanee, Director of Swan Securities Ltd, a major player in the Mauritian financial services sector, believes that the recent performance of MCB Group’s securities has had a significant impact on the market.
Since the beginning of 2024, there has been a 17% increase, reaching a performance level of Rs 380 never before seen.
“The dynamism caused by the positive evolution of MCB Group’s stock value,” he said, “has been reinforced by the increasing interest in these securities shown by foreign investors, especially in March.
There has been a veritable hunt for MCB Group’s securities with firm purchase offers totaling Rs 93 million coming from abroad.
We believe that there is evidently a resurgence of interest in securities listed on the Mauritius stock exchange platform, in a context where economies are revealing their resilience potential.
This is evident in the recurring positive earnings, as well as the profitability potential of companies whose securities are listed on the stock exchange platform in general, but more specifically in relation to the results recorded by conglomerates at these different performance levels.”
Explaining the performance of the stock market indices, Sanjay Goolab, Managing Director of the Investment Solutions segment at Axys Investment Partner of the Axys Group, who through Axys Stock-broking Ltd, a broker duly authorized by the SEM, believes that this phenomenon has been mainly caused by the performance of MCB Group’s securities and those of SBM Holdings Ltd. However, he gives the MCB Group a slight edge.
“The record set during the session on March 29, 2024,” he emphasized, “is the result of the performance of securities from both banking institutions, MCB Group and SBM.
At MCB Group, we noticed a particular interest from foreign investors in these securities. This is a phenomenon we haven’t seen in a long time.
This could be due to the difficulty for our rupee to resist depreciation risks. The financial fundamentals of MCB Group have been impressive year after year.
Its return potential resulted in a dividend distribution of 5.35%, a very rare phenomenon in the Mauritian stock market.
Meanwhile, SBM Group reported record financial results the day before, on March 28. The decision to distribute dividends is an extremely positive factor. SBM Group doubled its dividends compared to the previous year.
The current dividend yield is 8.16%. During the session on March 29, the value of SBM Group’s securities recorded a 16.6% increase in a single day.
The element that undoubtedly contributed to this renewed interest in its securities is the commitment made by its management not to neglect the main objective of its shareholders who have trusted in the potential of the group’s securities, that is, to receive more than deserved returns on their investments.”
Source: L’Express
