The MASI Defies Gravity

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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. ?

The MASI Defies Gravity

Just when it seemed there was nothing left to write, the Casablanca Stock Exchange surprises us once again. Last week, we spoke of a “stock market rocket in orbit,” but now the MASI is forcing us to dig deep for new superlatives. The start of this year is shaping up to be one of the most spectacular in the exchange’s history. Fueled by euphoric momentum, the index continues to shatter records, with some wondering if we’re witnessing the beginnings of “market irrationality.”

The week of January 6–10 closed with a 2.32% gain for the MASI, which ended at 15,875.76 points. More impressively, last Thursday, the index briefly crossed the symbolic 16,000-point mark—long deemed an elusive milestone. While profit-taking slightly pulled it back, the rally remains impressive, with a 7.46% gain year-to-date. Meanwhile, the stock market's capitalization passed the historic 800 billion MAD threshold, reaching 808.5 billion. Over the past year alone, the market has added 160 billion MAD in value.

Trading volumes also stood out, exceeding 4.02 billion MAD, mostly concentrated in the central market. Attijariwafa Bank led activity, capturing 10.59% of volumes, followed by the recently listed CMGP Group with 9.88% and Marsa Maroc at 7.6%.

Familiar Drivers Powering the Market

The drivers of this rally remain unchanged, yet their effectiveness is undeniable. Equity and diversified mutual funds continue to attract strong inflows, while individual investors, buoyed by a stellar 2024 and the overwhelming success of the latest IPO, are confidently increasing their positions. The bond market, offering stability to rate-sensitive investors, complements this optimistic climate. This potent mix of liquidity and enthusiasm is fueling vigorous sector rotation, with numerous stocks revisiting levels not seen in years—or even hitting new all-time highs.

How Far Can the MASI Go?

For now, there seems to be no stopping this ascent. Records are falling, investor enthusiasm is palpable, and the market continues to climb higher. At this pace, we might soon run out of superlatives—or the oxygen needed at such dizzying heights. Beware of the risks that come with altitude!

Market?Overview

• Stock Market: The Casablanca Stock Exchange closed the week of January 6–10 on a strong note, with the MASI index gaining 2.32% to end at 15,875.76 points. The MASI.20, which tracks the performance of the 20 most liquid companies, rose by 2.39% to 1,287.92 points, while the MASI.ESG, reflecting companies with the best ESG scores as rated by Moody’s ESG Solutions, advanced by 1.96% to 1,644.07 points.
• Bond Market: uring the January 7, 2025, auction, the Treasury secured 3 billion MAD out of a total 6.4 billion MAD in bids, focusing exclusively on two-year maturities at a rate of 2.61%. After accounting for a repayment of 309 million MAD between January 9 and 15, the Treasury's outstanding bond stock is expected to reach 734.4 billion MAD by January 15.
• Exchange Market: rom January 2 to 8, the dirham appreciated by 1.4% against the euro and 0.6% against the US dollar. No foreign exchange auctions were conducted during this period. As of January 3, 2025, official reserve assets stood at 373.2 billion MAD, down 0.6% from the previous week but up 4.9% year-on-year.

Key Highlights

• Since 2023, Morocco has elevated public investment to new heights. In the absence of sustained growth, taxation and public-private partnerships (PPPs) are poised to become key sources of state financing. Details.
• Moroccan banks are expected to deliver record-breaking results between 2024 and 2026. Analysts at Attijari Global Research predict the sector’s market capitalization could grow by 13% over the next 12 months. Details.

Macroeconomic Indicators

• Tourism: A record-breaking 17.4 million visitors in 2024.
• Tax Amnesty: Over 127 billion MAD declared.
• Automotive Sales: Up 9.22% in 2024.

Company Spotlight

• Maroc Telecom has faced challenges since the pandemic, grappling with a complex regulatory and competitive environment. However, the historic operator is steadily recovering. Details.

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Investor Portfolio

After achieving an impressive performance of +84% in 2024, we are pleased to introduce the Boursenews Investor Portfolio for 2025. This portfolio has been crafted using a fundamental analysis approach combined with simple and transparent valuation criteria. With an initial capital of MAD 1,000,000, it comprises a selection of carefully chosen stocks, offering a balanced mix of profit growth potential and ambitious strategies. ?

Technical Review

This week, the MASI flirted with unprecedented heights near the 16,000-point mark before slightly retreating due to profit-taking. The key support level of 15,000 points remains a critical threshold. As long as the index stays above this level, the momentum remains positive, with potential for a rebound beyond 16,000 points, aiming for 16,200. However, if the index falls below 15,000, a more pronounced correction could unfold. The underlying bullish trend remains strong.

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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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