The year 2022 is to be quickly forgotten for the Casablanca Stock Exchange as the disappointment was great. Over the last twelve months, the Moroccan All Shares Index (MASI) has plunged by 19.75%, thus marking a marked break with the post-covid recovery initiated in 2021 (+18.35%). Indeed, nearly 129.61 billion dirhams (MMDH) of capitalization went up in smoke.
However, the stock market year got off to a flying start. The MASI had even reached a historic high of 13,991.47 points on February 10, representing an annual performance of 4.74%. However, the troubles began from the second half of the same month, with the outbreak of the Russian-Ukrainian crisis and soaring inflation and energy costs internationally. The initial optimism has thus given way to fear and uncertainty.
The Casablanca Stock Exchange, which subsequently attempted a slight rebound, in the wake of the publication of encouraging annual results in mid-March, quickly resumed the path of decline, due to lack of visibility in a macro-economic context. national and international economic uncertainty. The downward trend was further accentuated, notably under the effect of the announcements of the raising of the key rate by Bank Al Maghrib (BAM).
“Investors are certainly in a hurry to turn the page on 2022, which was a bad year on the stock market both in Morocco and internationally,” Farid Mezouar, Executive Director of FLMarkets, told MAP.
On the Casablanca Stock Exchange, investors who were influenced by international stock market news also reacted to the 100 bp rise in BAM rates, explains Mr. Mezouar, noting, in this sense, that the MSCI Emerging Markets suffered in 2022 a correction of around 22% due to inflationary pressures, the war in Ukraine and monetary tightening by the main central banks.
Also, explains the expert, Moroccan investors seemed to fear the impact of the rise in BAM rates on economic activity and bank profits, citing the example of the result of market activities.
Winners and losers of the year
According to Mezouar, efficient stock-picking at the level of the stock market might have made it possible to outperform the MASI.
“Indeed, several titles ended the year in the green with Managem as the best example. Similarly, several sectors achieved a good growth in 2022, benefiting in particular from the post-Covid recovery and the good performance of the dollar,” he specifies.
Thus, in detail, 4 indices were able to hold their own. At their head, the mining sector which soared by 32.73%, boosted mainly by Managem (+61.15%) and, in a to a lesser extent, by Rebab Company (+3.23%) and SMI (+1.40%).
Driven by its sole title, Med Paper, the forestry and paper sector ended the year with an increase of 25.35%, the second best performance of the year, followed by electricity, represented by Taqa Morocco (+4 .57%) and the leisure and hotel sector (RISMA with +3.87%).
On the losing side, the majority of sectors ended the year with double-digit underperformance. The building and building materials index, which is suffering from a delicate economic situation marked in particular by the consequences of inflation on margins and volumes, plunged by 34.98%. Thus on an individual level, LafargeHolcim Morocco fell by 38.64%, Ciments du Maroc lost 32.63%, TGCC lost 26.64%, Sonasid -15.45%, Colorado – 10.80% and Jet Contractors – 10.43%
The telecommunications sector fell by 31.88%, and that of real estate participation and development dropped 27.15%.
At the bottom of the table are also the sectors of holding companies-Holdings (-27.11%), transport services (-22.83%), agribusiness/production (-19.32%), oil and gas (-16.4%), chemicals (-16.1%), banks (-17.19%) and insurance (-16.89%).
Best performance in 2023?
On the question of the stock market outlook, the Executive Director of FLMarkets believes that at the theoretical level, 2023 should be profitable for the markets “because apart from a new Black swan, all the bad news is known. Thus, investors should gradually soak up the good news”.
Indeed, in Morocco, the annual results of 2022, communicated in March 2023, should stimulate prices because investors seemed to ignore the increase in the income of listed companies (+14% at the end of September) and their profits (+15, 8% at the end of June 2022), notes Mr. Mezouar, recalling, moreover, the forecasts of BAM which show a forecast growth of 3% in 2023, once morest 1.1% in 2022.
He also mentioned the impact of the Finance Law for the year 2023, adding that taxation will be toughened for large companies even if the increase in the IS rate will be gradual over 4 years.
“This is certainly a negative figure, but companies that have pricing power (banks for example) will always be able to share part of these tax burdens with their customers”, he said.
For Valoris Securities, which expects average growth in aggregate pre-tax income of 3.2% per year between 2022 and 2025, the minimum impact of the LF-2023 on aggregate earnings capacity is estimated at 1.4 billion dirhams on the period studied, of which more than 40% of this impact would be borne by the financial sector (Banking & Insurance), in addition to the telecom sector (25% of the impact).
The brokerage firm thus anticipates a strengthening in the years to come of investments within industrial companies and services of moderate size at the expense of investments in the banking and insurance sector.
