Positive Quarterly Performance and End of Earnings Season

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. ?

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Positive Quarterly Performance and End of Earnings Season ?

As the curtain falls on the earnings season, it undoubtedly takes center stage in this week's market narrative. Investors and analysts alike are now poring over the last set of financial reports from listed companies, drawing initial impressions that are decidedly optimistic.

The results have been a mixed bag, but there are notable bright spots. Some companies have posted historic earnings figures, marking a significant milestone in their financial journeys. Overall, there's been a robust growth in profitability, with a cumulative increase of over 15%, and a noteworthy return to shareholder dividends by several firms. These signs bode well for investor confidence and market stability.

Despite a relatively calm trading week, with volatility at a modest +0.23%, market activity remained brisk, with transaction volumes exceeding MAD 940 million. The end-of-quarter rush typically prompts savvy investors to fine-tune their portfolios, contributing to the sustained trading momentum.

Interestingly, mid-cap stocks took the spotlight this week, commanding significant trading volumes. Addoha led the pack with a trading volume of MAD 101 million, closely followed by CDM with MAD 100 million. TGCC and Alliances also saw substantial trading activity, with volumes reaching MAD 65 million and MAD 56 million, respectively.

In terms of price movements, standout performers included SNEP (+15.18%), Jet Contractors (+13.64%), Disty (+11.31%), and Aluminium du Maroc. Conversely, some stocks experienced declines, notably Minière Touissit (-10.89%), Résidences Dar Saada (-9.59%), Réalisations Mécaniques (-8.17%), and Stroc Industrie (-4.43%).

Overall, the first quarter ended on a positive note for the stock market, with the MASI posting a solid 7.58% gain to reach 13,009 points. With trading volumes surpassing MAD 11 billion, the market demonstrated resilience across most sectors, signaling a robust start to the year.

As the earnings season wraps up and the market closes a strong first quarter, investors are poised to enter the second quarter with renewed optimism, buoyed by encouraging results and promising outlooks.

Market?Overview

• Stock Market: The Casablanca Stock Exchange moved into positive territory during the week of March 25 to 29, with its main index, the MASI, gaining 0.23% to 13,009.23 points.
• Bond Market: The primary bond market recorded an issuance of MAD 2.4 billion on lines of 26 weeks, 2 years, 10 years, 20 years, and 30 years, with respective limit rates of 2.85%, 2.2395%, 3.7652%, 4.2298%, and 4.8804%, resulting in respective declines of 2 bps, 0.7 bps, 0.3 bps, 0.7 bps, and 25.5 bps in the primary rates of these maturities.
• Exchange Market: The Dollar appreciated this week to 10.09 against 10.05 the previous week, a change of +0.36%. This evolution is mainly due to a positive basket effect of +0.39% following the appreciation of the Dollar. The market effect, meanwhile, is slightly negative at -0.03% in favor of the Dirham, according to AGR.

Key Highlights

• The American rating agency Standard & Poor's (S&P) maintained Morocco's sovereign debt rating at BB+/B, upgrading the outlook from "stable" to "positive," thanks in part to improvements in socio-economic and budgetary reforms. Details.
• Following the launch of the Capital Investment component for SMEs and, more recently, the mezzanine debt product CapAcess, the Mohammed VI Fund for Investment is preparing to unveil funds dedicated to start-ups. Details.

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Macroeconomic Indicators

• Industries: A decline in producer prices in February
• Mutual Funds: A 1.6% increase in net assets under management in February

• Banks: A 2.5% increase in bank credit in February

Company Spotlight

• Several growth drivers are expected to support both sales volumes and margins for Sonasid from this year onwards, according to its top management. Details.

Trading Portfolio

No operations this week.

Historical Operations Table ?

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Investor Portfolio ?

Launched on December 15, 2023, the Boursenews Investor Portfolio achieves a performance of 20% as of March 30,?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 profit growth potential and a robust growth strategy.

Technical Review

No significant changes on the graphical front; the MASI continues to evolve within its upward channel with an intermediate resistance at 13,100 points.

Find here the complete technical analysis.

Analysts' Recommendation

BMCE Capital Global Research (BKGR) has recommended accumulating shares of Disway in portfolios, setting a target price of 807 dirhams (DH). This target represents an upside of 10.6% compared to the closing price of 730 DH on March 27, 2024. Further details. ?

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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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