A Promising Autumn Ahead for the Stock Market After a Calm Summer

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. ?

A Promising Autumn Ahead for the Stock Market After a Calm Summer ?

After a summer marked by relative calm, the Casablanca Stock Exchange seems poised to extend its upward trend in the coming weeks. Although the week of September 2 to 6 ended on a slightly negative note, with the Masi index down by 0.15%, the overall atmosphere remains largely optimistic. This slight dip does not shake investors' confidence, who view the index's proximity to annual highs as a strong signal of stability.

It must be said that the summer was relatively quiet, aside from "Black Monday" on August 5, when the market briefly slumped following unfavorable global economic news. Since then, the Casablanca Stock Exchange has shown resilience, recovering almost all of the losses from that day. This rebound illustrates the robustness of the market and the support of investors who are betting on strong fundamentals. Moreover, the end of the earnings season revealed generally positive results for listed companies, with aggregate revenues rising by 4%.

The downward trend in bond rates also fuels this optimism. Such a drop is often seen as a catalyst for the stock market, making equity investments more attractive compared to bonds.Analysts anticipate that this momentum will continue through the second half of the year.

Investors' attention is now turning to the upcoming monetary policy meeting of Bank Al-Maghrib, scheduled for around twenty days from now. Any indication of a continued accommodative policy could give new life to the current momentum and potentially push the index to new historical highs, surpassing 14,000 points.

In the end, the stability and performance of the market during the summer months suggest a potential "Indian summer," characterized by a continued rally, and possibly even reaching new historic highs.

Market?Overview

• Stock Market: The Casablanca Stock Exchange ended the week of September 2 to 6 with a slight decline, with its main index, the MASI, losing 0.15% to 13,911.01 points. The MASI.20, which reflects the performance of the 20 most liquid companies, fell by 0.22% to 1,128.8 points, while the MASI.ESG, an index of companies with the best ESG ratings as published by Moody's ESG Solutions, dropped by 0.88% to 1,004 points.
• Bond Market: During the auction on September 3, 2024, the Treasury retained 2.2 billion dirhams out of a total of 4.1 billion offered. Subscriptions included 450 million on the 13-week maturity at a rate of 2.48%, 200 million on the 52-week maturity at a rate of 2.71%, and 1.5 billion on the 2-year maturity at a rate of 2.80%. Taking into account a repayment of 600 million dirhams during the period from September 5 to 11, 2024, the outstanding Treasury bonds are expected to reach 722.3 billion dirhams by September 11.
• Exchange Market: Between August 29 and September 4, 2024, Bank Al-Maghrib’s interventions averaged 148.7 billion dirhams daily. These were split between 7-day advances amounting to 65 billion, long-term repurchase agreements totaling 48.4 billion, and guaranteed loans for 35.2 billion. On the interbank market, the average daily trading volume stood at 2 billion, with the interbank rate averaging 2.75%.

Key Highlights

• As part of its subscription to the capital increase of CIH Bank, RCAR strengthened its stake in the bank. Following this operation, RCAR declared holding 1,639,980 CIH Bank shares, representing 5.21% of the bank's capital after the increase.?Details.
• On September 4, 2024, Veolia completed the sale of its entire stake in Lydec to the Société Régionale Multiservices (SRM) Casablanca-Settat. As a result, SRM became the principal shareholder of Lydec. Details.

Macroeconomic Indicators

• Automotive: Sales increased by the end of August 2024.
• Cement: Sales rose by 7.24% by the end of August 2024.
• Bank Credit: +2.8% at the end of July 2024.

Company Spotlight

• Adil Douiri, founding president of Mutandis, discusses the group’s achievements in the first half of the year and its short- and medium-term prospects. The conversation also touched on the growth strategy and the company’s relationship with small investors.?Details.

Trading Portfolio

No transactions recorded this week.

Historical Operations Table ?

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Investor Portfolio

Launched on December 15th, 2023, the Boursenews Investor Portfolio achieved a performance of 44% as of September?6, 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

Technically, the MASI chart has remained unchanged for at least three weeks. Lacking catalysts, the index is moving laterally, not far from its annual highs. A dip below the 20-day moving average and the 13,500 support level would signal a new phase of decline.

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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.

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