Capital Markets
From The Report: Morocco 2018
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One of the largest capital markets in Africa, Morocco’s bourse, the Casablanca Stock Exchange, has been slow to develop in recent years, with relatively few new listings, limited liquidity and a mixed performance. While initial public offers have been relatively few and far between since 2012, a wide range of recent reforms and more legislation in the pipeline appear could help boost investor interest. These changes should provide a range of new products and allow investors to make a profit during times of both rising and falling share prices. Relaxing listing conditions for smaller firms, which are often in greatest need of capital, will also provide a welcome change for the sector. The market’s strong performance in 2016 and 2017, the continuing development of Casablanca Finance City and efforts to make Morocco a regional financial centre more generally will add further momentum, cementing the kingdom’s status as one of Africa’s most important capital markets.

This chapter contains an interview with Hassan Laaziri, Chairman, Association of Moroccan Capital Investors and CEO, CDG Capital Private Equity.

Articles from this Chapter

Overview

Fast track: Major reforms and legislative changes provide a broader range of products and trading operations
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Home to one of the largest capital markets in Africa, Morocco’s bourse, the Casablanca Stock Exchange (CSE), has been slow to develop in recent years, with relatively few new listings, limited liquidity and a mixed performance. However, 2016 saw both the strongest stock market returns and the largest initial public offering (IPO) in years. In the same year a long-awaited new stock exchange law was approved that opened the way for the creation of an alternative market orientated towards…

Interview

Promoting development: Hassan Laaziri, Chairman, Association of Moroccan Capital Investors; and CEO, CDG Capital Private Equity, on supporting innovative businesses
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Interview:Hassan Laaziri How would you describe the current state of the private equity market in Morocco? HASSAN LAAZIRI: In the early 1990s the European Investment Bank spearheaded the development of the private equity industry in Morocco through Moussahama. The other funds did not come into existence until 2000, when the Association of Moroccan Capital Investors was created, bringing together the majority of private equity players. Private equity then started to establish itself in Morocco.…

Analysis

Slow and steady: Gradual adoption of a more flexible exchange rate expected to boost exports and preserve low inflation
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The country is preparing to transition from a pegged exchange rate controlled by Bank Al Maghrib (BAM), the central bank, to a more flexible system. Under this new monetary policy framework, the exchange rate would be allowed to fluctuate within a regulated band set by BAM, with the central bank gradually widening the fluctuation window over the long term. As a net importer that depends heavily on international markets for fossil fuels and other primary goods, Morocco is vulnerable to sudden…

Analysis

Virtuous cycle: Improved fiscal health coupled with eurozone recovery to support sustained growth
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As was expected, in 2016 the domestic economy registered one of its worst performances in several years against a backdrop of sharply contracting agricultural value added coupled with moderate growth in non-agricultural activity. In 2016 agricultural value added was heavily impacted by a severe shortage of rainfall, registering a contraction of almost 11%. The cereal harvest was only 33.5m quintals, versus 115m quintals in 2015, with a quintal being roughly equal to 100 kg. Growth of the…

Analysis

Open window: Updated regulations, normalised taxes and the establishment of a supervisory body facilitate the expansion of Islamic banking
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With demand for sharia-compliant banking growing, Morocco has become the latest Muslim country to authorise Islamic banks. According to industry experts, these types of financial services could represent as much as 10% of the market. For a long time the country has been reluctant to privilege the development of the Islamic finance segment despite the overall resilience and maturity of the conventional banking system. RESTRICTIONS: The first attempt to develop Islamic banking came in 2007,…

Analysis

Bricks and mortar: New law improves the real estate investment trust framework, as rising consumer demand and infrastructure drive growth
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Real estate investment trusts (REITs) are a capital markets instrument used to finance commercial real estate. It is estimated that the average turnover of commercial real estate in Morocco is 3% per annum versus 4% per week for mutual funds. In the kingdom, commercial real estate assets sitting on company balance sheets represent about 15% of GDP, according to industry experts. REITs serve as a means to liquefy these assets, while offering pension and insurance investors an asset class secured…