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Cédric Béguier, Head of Investment Strategy chez AXYS

Investment Outlook 2024

AXYS envisions two alternative scenarios for 2024

AXYS, one of the first portfolio management companies in Mauritius, released its investment outlook for the year 2024 this week, emphasizing cautious optimism and a point of transition towards a new economic balance

2023 was a year marked by significant fluctuations, with challenges in the banking sector and resurgence in the artificial intelligence sector. These developments led to notable increases in the NASDAQ and S&P 500 indices. In response to these changes, AXYS shares a focused vision and strategic keys to navigate the financial markets in 2024.

Cédric Béguier, Head of Investment Strategy at AXYS, discusses the growing importance of geopolitics in investment decisions: “In a context of paradigm shift and multipolarity in the world, geopolitical events and the study of the geostrategy of states will play a crucial role and are likely to be the determining factors that will make a difference in 2024.

For 2024, AXYS anticipates moderate GDP growth in developed economies and momentum in emerging markets. The expected decline in inflation could create a more stable economic environment conducive to growth and innovation. However, the increasing geopolitical fragmentation represents a significant risk to economic prospects, especially due to the numerous upcoming global elections.

AXYS’s report emphasizes the analysis of macroeconomic cycles, microeconomic data, government debts, energy prices, and capital flows towards decarbonisation. The company also plans to intensify its analysis of emerging markets, particularly in local currency bonds and small to medium-cap stocks.

In this context, AXYS envisions two alternative scenarios for 2024. On the one hand, a hard landing triggered by a previously made political mistake or persistent inflation requiring additional monetary tightening. On the other hand, a soft landing marked by the end of a mid-cycle slowdown and the beginning of a new super cycle in the first half of 2024. These scenarios will influence AXYS’s investment decisions, especially in the discretionary consumption and emerging markets sectors.

AXYS shared the following perspectives in the Investment Outlook.

Biggest spending of the Central Government

With 2024 General Elections, we expect a continued deficit spending, potentially driven by higher social security spending. Social Benefits is now the biggest spending of the Central Government and has grown by almost 3-fold since 2016.

Interest rates

With the Fed signalling 3 rate cuts in 2024, AXYS expects the BoM to remain less accommodative and to restore the historical “premium” of the Key Rate over the Fed Funds Rate.

Labour force & employment

There were 556,100 Mauritians employed in Q3 2023, up from 553,200 in Q2 2023. This has driven down unemployment rate to 6.3%, a multi-year low. Youth unemployment remains high at 17.8%, but improved slightly from 18.1% in Q2 23.

Lack of skilled labour remains a major concern for employers, and our labour force and number of employed remain below pre-pandemic levels. Migration of skilled workers to other countries is often cited as a major reason towards the decline in our labour force.


With Mauritius reaffirming its investment grade status (Moody’s: Baa3 with stable outlook), AXYS expects a continued rise in the number of newly licensed Global Business companies, which would, in turn, drive up GBC deposits. Banks should continue to benefit from the spread between high government bond yields and cheap deposits. MCBG and SBMH are both trading at P/BV of 0.89x and 0.37x, below historical average of 1.28x and 0.7x respectively. On the back of the attractive valuation, better credit quality and commendable loan growth, AXYS therefore maintains a bullish stance for Mauritian banks.

Lower spending per tourist

Europe remains our main tourism market, and as a result, the bulk of tourism spending is effectuated in EUR. With the BoM regular interventions to stabilize the Rupee, the EUR has depreciated by around 6.6% since July 2023. On the back of FX interventions and anticipated recession in Europe, we do not expect further rise in per capita tourism spending.


Inflation remains the greatest enemy of insurance as contracts are usually written a year in advance, while claims are incurred at real time inflated prices. Therefore, premium increases are only accounted as revenue a year later. As inflation has stabilized, AXYS expects Mauritian insurers to post positive underwriting profitability on the back of higher premium prices. After 4 consecutive loss-making quarters, MUA’s General Insurance division has swung back to profitability. We expect other Mauritian General insurers to follow through the same trend and post positive underwriting profits.


How small businesses are making bigger bucks

Global shockwaves linked to the ongoing conflicts around the world, as well as cyclones such as Belal and Candice, have worsened the supply chain and access to imports supporting the local island economy in Mauritius, thus putting a damper on business confidence.

However, despite the doom and gloom, many local small businesses are keeping their chin up, and indeed thriving through these tough times.

So says Joshua Shimkin, Head of SME Growth & Marketing at Peach Payments, a payment gateway working with scores of successful local SMEs.

In our experience of working with SMEs, we’ve seen how making simple changes or taking new approaches can make a huge difference to their profitability,” he says.

Shimkin highlights some approaches that successful SMEs use:

Optimise floor space

Floor space costs money, with rental, utilities and other costs to consider. Shimkin says SMEs that limit costly space immediately boost profits. “For example, we have a merchant based in a 2m x 2m kiosk selling instant vouchers and processing his payments via a QR code. His costs are small compared to his peers, and his profits are impressive,” he says.

Limit inventory

Keeping a wide range of products is not always viable, unless choice is the business’s drawcard. Shimkin says SME retailers can reduce costs and optimise space by knowing what sells best in their markets and focusing on those products.

By buying more from selected suppliers, the retailer can also maximise their buying power and negotiate discounts,” he says.

Remarket to existing customers

The cost of acquiring new customers is higher than the cost of retaining existing customers. Existing customers are also more likely to spend more than new ones, largely because they trust the merchant. Shimkin says SMEs should use the data they have to understand existing customers better and overcome sticking points like abandoned shopping carts.

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