In 2010 the Casablanca bourse’s two benchmark indexes, the MADEX and the MASI, grew 22.1% and 20.6% year-on-year, respectively. However despite further rises in January, 2011 has so far been a slower year for the market. As of mid-July, the MADEX index was down 9.01% since the start of the year having fallen back to September 2010 levels of around 9400 points. The MASI Index was down a similar 9.07%, to 11,475, with the two more or less unchanged from where they stood at the end of the first half of the year on June 30. In 2011 thus far the two indexes have underperformed emerging market stock exchanges, as measured by the performance of the MSCI Emerging Markets bench, which in mid-July was down 2.5% from its level at the end of 2010.
Banking and real estate stocks, which together account for six of the top 10 companies listed on the Casablanca bourse in terms of capitalisation value, were the main drag on the market for the first half of the year. In the end of June, banks were down 13.4% from the beginning of the year. Shares in Attijarawafa Bank, the biggest bank and the second-largest firm by capitalisation value, fell by 13.4% in the first six months of 2011. The second-largest bank and third-largest company by capitalisation, BMCE Bank, was the worst performer in the sector, with its shares down 23.4%.
In the real estate sector, shares in Addoha, the largest listed property developer and the fourth-largest listed company, lost 5.8% in value in the first half of the year. This was in spite of a significant increase in profits in 2010 and the publication of an analysis in May by local broker BMCE Capital Bourse that suggested the company was undervalued, giving a target share price of Dh154 (€13.45) (at the time of writing Addoha shares were valued at Dh97 (€8.47). At the end of June shares in the second-largest listed developer and seventh-largest listed firm, Compagnie Générale Immobilère (CGI), were down by 26% from the start of the year.
However despite the overall fall in the market, some sectors have continued to post large gains in 2011 so far. Buoyed by rising international commodity prices, the mining sector has continued to perform strongly, following solid performance in 2010, when sector stocks increased in value by 128%. In the first six months of this year they added another 31.3%, led by Société Métallurgique d’Imiter (SMI), which was up 50.5% in the first half of the year, and Managem, which increased in value by 32%. Maroc Telecom, the largest company by capitalisation listed on the bourse, has also seen gains and in mid-July was up 3.4% for the year to date. The firm also was the most active listing in terms of transaction volume in the first half of the year at 17.3% of the total volume, followed by Attijarawafa Bank at 14.2% and real estate developer Addoha at 13.1%.
A number of deals SET to take place in the short term should stimulate market activity in the second half of 2011 and into 2012. For example, Banque Centrale Populaire plans to increase its capital by 10% through a public offering on the Casablanca exchange before the end of the year. Morocco’s largest conglomerate, Société Nationale d’Investissements (SNI), is also planning a number of public offerings as part of ongoing restructuring aimed at transforming it from an actively managed conglomerate into a holding firm, which will see it reduce its stakes in a number of subsidiaries.
The first company to be taken to market will be cooking oil and soap producer Lesieur Cristal. SNI plans to divest its entire 76% stake in the firm and began the process of selling the company in January this year. Of the firm’s capitalisation, 35% will be sold to institutional investors via a public offering in a two-stage transaction. Shares in the company (a 19% stake in the company already floats on the bourse) were suspended on 12 July to allow the first phase of transaction to go ahead. Local press in March reported that Lesieur would be followed by sugar refiner Cosumar in October this year and dairy firm Centrale Laitière in March 2012. Further down the line SNI also plans to sell stakes in Attijarawafa Bank, mining firm Managem, supermarket chain Marjane and mobile phone opera.
