The MASI, the Casablanca Stock Exchange’s main index, is down 16.1% since the start of the year. This decrease appears as a small resistance considering that listed companies’ net profit fell 56% in the 1st half of 2020.
With the exception of a few sector indices, the various performance indices of companies listed on the Casablanca Stock Exchange have shown negative trends since the beginning of the year.
According to the updated data,;
The Moroccan All Shares Index (MASI), that brings together all the companies present in the equity compartment of the Moroccan financial market, is down 16.15% since the beginning of the year to 9 October 2020. Although high, this decline in MASI’s performance presents itself as resistance compared to companies’ actual achievements.
In basic financial logic, listed companies’ value represents the prospects for future profits that investors expect. The occurrence of downside risks is, therefore, often followed by a drop in stock market values.
However, we are witnessing a slightly different situation in Morocco today. For the first half of 2020, the net profit of the 67 listed companies that published their financial results for the period is down 56%.
But certain elements allow us to understand a less pronounced collapse in stock market valuations in Morocco. The first is the caution of investors who expect an impact of the magnitude of that caused by the covid-19 pandemic that will not be repeated.
Attijari Global Research provided another part of the indicators. This subsidiary of the leading banking group in Morocco estimates that profits excluding the effects of covid-19 will be down 15.8% for Moroccan listed companies at the end of 2020. We will see a rebound of nearly 12% in 2021.
Companies will soon enter the phase of publishing financial performance on behalf of the third quarter of 2020. We will have a better idea of how they have handled the recovery and, above all, whether the losses of the second quarter of 2020 will be overcome. The most pessimistic analyzes foresee a final decline in the MASI to -20% by the end of the year.
