Interview: Karim Hajji

How do you assess the development programmes that the CSE offers to Moroccan small and medium-sized enterprises (SMEs)?

KARIM HAJJI: As of right now, the CSE has only 76 listed companies. However, the Elite programme is proving to be a way to attract more businesses to the CSE, especially SMEs. We have conceptualised an innovative approach, which includes a training programme, a coaching period supported by mentors and direct access to the financial community through a dedicated platform.

Step one of the Elite programme, “Get Ready”, takes place over one year and helps SMEs optimise their growth strategy, work on new governance practices; develop a business plan; explore different avenues of financing; determine proper valuation; and prepare a presentation plan for potential investors. The second step, “Get Fit”, helps enterprises transition to a new phase of growth and allows them to reach the strategic objectives they have outlined in the previous module. The third step, “Get Value”, then enables them to finance their growth by placing them in the ecosystem, which includes meetings with some of our 21 partners and six investors. So far, we have had 92 participants, 20 of which are actually SMEs from West Africa. This regional participation really speaks to both the quality and potential of the programme, which is further reflected in a recent survey that reported a 95% satisfaction rate among participants.

What does the future of capital markets look like?

HAJJI: The CSE recently rolled out a modernisation plan dubbed Ambition 2021, which is designed to inject a new dynamic into the exchange and transform it into an even more attractive financial centre. This echoes the strategic direction of Morocco, as laid out by King Mohammed VI. The final goal is to reshape the CSE into an integrated African financial hub that facilitates access to capital, while also meeting the needs of all international issuers and investors. To achieve this, we have created a blueprint and outlined three key vectors for change. First, we are creating a clearing house and a derivative exchange structure, as well as constructing efficient infrastructure by deploying a multi-product technology platform and strong integrated risk management framework. Second, we are planning to more effectively contribute to available financing in the economy by increasing paper demand in the equity and bond markets; enhancing its attractiveness to local and international investors; and accelerating development of market liquidity. Third, we promote the CSE by listing foreign securities; increasing connectivity with international financial markets; creating a 100% Africa fund; and increasing deployment of the Elite programme in West Africa and Central Africa.

What other measures could further boost the CSE?

HAJJI: Without fully privatising state-owned enterprises (SOEs), the government could introduce ownership stakes from some SOEs onto the CSE. Making 10-20% of enterprises available to investors would have a mutually beneficial effect. On the one hand, the state has responsibilities in regards to its budget, the public and its debt, but often lacks the necessary flexibility for success. Their coffers cannot act as an endless supply of capital for enterprises in need of additional funding. Opening up SOEs to financing through the capital markets could help them gain more autonomy and – more importantly – fund their development projects, while also relieving the burden on the state to contribute. On the other hand, the CSE and the economy at large would benefit from increased liquidity and arbitrage. We have seen it before in Europe in the 80s, when state-owned companies played a huge role in the development of the UK and French stock markets. Such a move also happened here with Maroc Telecom, and it boosted their competitiveness. When a company has private investors and annual figures to reach, it pushes them to increase their efficiency, output and transparency.