Calm Trading Week: MASI Seeks New Momentum

Dear readers, ?

Welcome to the latest edition of "Eye on the Markets," your weekly newsletter where we provide you with a concise summary of key developments in the financial markets over the past week. ?

Calm Trading Week: MASI Seeks New Momentum

If the Casablanca Stock Exchange had a barometer this week, it would have been stuck on "neutral". With a modest gain of 0.72%, the MASI closed at 14,181.53 points, in a calm, almost apathetic atmosphere. Trading volumes totaled 905 million dirhams, consistent with previous weeks. In short, it was an uneventful week, reflecting investors' cautious stance as they wait for a new catalyst to reignite the market.

Volatility, meanwhile, fell to one of its lowest levels in months, indicating that traders preferred to stay on the sidelines. Rather than taking risks, they opted for occasional, opportunistic trades, keeping a close eye on potential reversals. But despite these isolated movements, the market struggled to find strong bullish drivers to revive its momentum, especially after having fully benefited from the positive "news flow" of recent months.

September's inflation figure of +0.8% passed by quietly. Once a major concern, inflation has become an old story. Today, fears have subsided, and investors seem less focused on these figures, reassured by the idea that inflation is under control. On the earnings front, the quarterly results season has just begun with reports from Maroc Telecom and Ennakl, but so far, nothing significant enough to move the needle.

The Jet Contractors,?Still Leading the Pack

If anything stood out this week, it was (once again) the Jet Contractors phenomenon. The stock continued to eclipse the rest, trading 120 million dirhams alone, accounting for over 13% of total volumes. With a 25% gain over the week and a staggering 471% year-to-date increase, the stock continues to surprise and dominate investor interest. Clearly, Jet Contractors is one to watch, in a market that otherwise remains quietly on the sidelines.

In the absence of new bullish drivers, the market appears set to move sideways in the coming weeks. Investors are now looking forward to upcoming quarterly results, which may or may not provide more clarity on the market's direction. In the meantime, the MASI continues its journey without urgency, still searching for new reasons to rally.

Market?Overview

• Stock Market: The Casablanca Stock Exchange closed the week from October 21 to 25 with a modest gain, as the main MASI index increased by 0.72% to 14,181.53 points. The MASI.20, which reflects the performance of the 20 most liquid companies, and the MASI.ESG, an index of companies with the highest ESG scores, rose by 0.78% to 1,141.80 points and 0.37% to 1,016.59 points, respectively.
• Bond Market: In the Treasury auction on October 22, 2024, the Treasury accepted 1 billion dirhams out of a total offer of 3.2 billion. Subscriptions included 200 million dirhams for 13-week bonds at a rate of 2.39% and 800 million for 2-year bonds at a rate of 2.78%. Taking into account a repayment of 300 million during the period from October 24 to 30, the outstanding Treasury bonds will stand at 721.8 billion dirhams by October 30.
• Exchange Market: Between October 17 and 23, 2024, the dirham appreciated by 0.47% against the euro and depreciated by 0.54% against the U.S. dollar. During this period, no foreign exchange auctions were conducted. As of October 18, 2024, official reserve assets stood at 364.2 billion dirhams, up 0.8% from the previous week and 2.2% year-on-year.

Key Highlights

• BMCE Capital Global Research (BKGR) forecasts a 5.1% improvement in earnings capacity to 30.8 billion dirhams in 2024, marking its highest level in the past decade.?More details.
• In its 2023 annual report on financial market infrastructure, payment systems, their oversight, and financial inclusion, Bank Al-Maghrib highlighted the concept of "financial health," an innovative notion gaining attention among policymakers and financial sector experts worldwide.?Details.

Macroeconomic Indicators

• Economic Growth: +2.8% in 2024 (IMF projection).
• Inflation: +0.8% in September.

Company Spotlight

• As part of a public offering launched this week, the Holmarcom Group is offering 1,229,577 shares (representing 11.3% of the capital) to the public and eligible employees of Crédit du Maroc, its subsidiary. The shares are priced at 850 dirhams each, totaling 1 billion dirhams. Should you subscribe to this offering? Here’s what BMCE Capital Global Research analysts have to say.?Details.

Trading Portfolio

No transactions recorded this week.

Historical Operations Table ?

Investor Portfolio

Launched on December 15th, 2023, the Boursenews Investor Portfolio achieved a performance of 54% as of October?11, 2024. This virtual portfolio aims to capture the stock market's performance over several months. With an initial capital of MAD 1,000,000, it consists of carefully selected stocks, reflecting a judicious balance between earnings growth potential and a robust growth strategy. ?

Technical Review

The MASI shows signs of short-term consolidation, but bullish continuation signals are visible on daily and weekly charts. Key resistance levels to watch are 14,150/70 and then 14,450 points for a potential upward breakout, with support at 14,000 points. If these resistance levels are breached, the market could aim for new highs, with 14,924 points in sight.

Stay updated by checking our News Feed to not miss any market developments.

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That's all for this week's recap. Stay tuned for more analyses and information on the financial markets. If you have any questions or would like to discuss specific topics in more detail, please don't hesitate to contact us.

Thank you for subscribing to Eye on the Markets, and have a profitable week!

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