The Casablanca Stock Exchange (BVC) has strengthened significantly over the past two years, argues CEO Tarik Senhaji. The total market capitalisation of companies listed on the bourse stood at $92.5bn at the end of March, a 43% surge from $64.6bn at the end of 2023. Stock trading volumes have more than doubled in the past year and several companies have capitalised on the bullish mood to raise equity capital on the exchange, he says.
“Last year was the best on record in 15 years in terms of volumes traded, participation of institutional and retail investors, price performance, and the capital raises we facilitated,” says Senhaji. He tells African Business that this momentum has carried on into 2025, with trading volumes remaining elevated in the first quarter.
Senhaji attributes the surge in stock market activity to an acceleration in capital flows in the Moroccan economy, arguing that investor confidence has risen in recent years on account of the kingdom’s improved economic prospects.
“We are witnessing quite a turning point in terms of the development of the Bourse de Casablanca. There is a lot of confidence in the business community and the exchange is here to translate that into transactions,” he says, citing the 2030 World Cup as one of the major drivers of increased capital flows into the Moroccan economy.
World Cup galvanises infrastructure
Since the international football federation FIFA announced in October 2023 that Morocco would host the World Cup alongside Spain and Portugal, there has been a new wave of public and private investments in sectors of the economy to aid the kingdom’s preparations for the games. Infrastructure development has emerged as a particularly strong driver of new investments, Senhaji reveals.
“We not only have the World Cup in 2030. We also have the high-speed rail from Tangier, which was launched by His Majesty the King, and connects through Rabat to Casablanca.
“It is now being extended all the way down to Agadir. That means more investment, more opportunities for companies, and more flows into the economy.”
“That investment velocity and that turnover of cash is very important. We finance professionals are interested in the velocity of money rather than the mass of money. If you have a big mass of money but it’s not moving, it’s not producing wealth. The good thing about Morocco is that there is a lot of velocity in terms of investment flowing into the economy,” he says. He argues that investor confidence has also been bolstered by a shift in macroeconomic policy. “We beat inflation and that gave the central bank room to cut rates earlier this year.
“Lower interest rates mean corporations can borrow cheaply and invest, so that’s conducive to more investment. That augurs well for the exchange.”
Companies cash in
Senhaji argues that the attractive fundamentals of listed companies have helped support stronger valuations in the market. Elevated share prices have in turn encouraged more companies to consider raising capital on the stock market.
“The good results of listed companies last year drove interest in the bourse. Listed companies saw their earnings increase on average between 7% and 10%. Companies are reaping the rewards of their investments, so they are soliciting our market more,” he says.
“In our primary markets, we had a good year in 2024, with more than 7bn Moroccan dirham ($766m) raised. This includes one IPO [initial public offering] but also many capital increases for companies who want to invest in their businesses and they go to the market to raise more funds through equity,” he adds.
Among the Moroccan companies that have listed is CMGP, a pan-African agri-tech company operating across five countries in North and West Africa. The company’s IPO, which was completed in December 2024, was oversubscribed 37 times, with investors offering 40.6bn dirham ($4.47bn) against the 1.1bn dirham ($120m) that the company was seeking.
“That company [CMGP] was supported by three private equity companies, among them DPI [Development Partners International]. It is not a company which by definition is very well known by the public. However, that changed after the IPO,” he explains, adding that of the roughly 33,000 investors who participated in the IPO, 32,000 were retail investors.
Expanding the product pool
Discussing what will drive the exchange’s future growth, Senhaji highlights that a major focus is expanding the product pool to offer more sophisticated products besides stocks and government bonds.
In this regard, the exchange in May launched a futures instrument covering the MASI 20, the index tracking the market’s 20 most liquid stocks. This move aims to enhance liquidity, expand the investor base, and allow for long and short positions.
The exchange has indicated that future derivative offerings will include interest rate futures, single-stock futures, and equity options. It hopes these products will attract a deeper pool of institutional investors as
the nation prepares to finance massive infrastructure spending.
Senhaji says the exchange is currently preparing to launch real estate investment trusts (REITs) and exchange traded funds (ETFs).
A cog in the real economy
Senhaji readily admits that the role of the stock market in any economy is often not sufficiently known or understood by the general public. This is, however, shifting and more Moroccans outside the wealth and asset management industry are taking an interest in the stock market, he says.
“There is growing interest in the exchange – from policymakers to university kids who are dabbling in the exchange or fascinated by everything to do with stock markets. This wasn’t always the case and is a sign that the capital markets are beginning to take their rightful place in the economy,” he says.
“We are seeing an uptick in new investors. Retail participation last year was 22%, an improvement from the 10% that we had at the beginning of the decade,” he says.
“The primary market is also popular. Companies have now started to look very seriously at the exchange as a source of capital. That could translate into a new wave of IPOs,” he adds.
Although Morocco’s stock market is riding a wave of optimism, several risks remain. Firstly, sophisticated products like futures, REITs and ETFs have a mixed track record in Africa. They don’t always attract institutional investors and enhance liquidity.
Derivatives often face low adoption in emerging markets due to limited investor education and high transaction costs. For example, Nigeria’s derivatives market was launched in 2018, but has seen minimal trading volumes since. Kenya’s REIT market has struggled to attract fresh listings. ILAM Fahari I-REIT, the only REIT that was actively traded on the Nairobi Securities Exchange (NSE), was delisted in February 2024.
Secondly, securing new IPOs may prove challenging amid a strained global economy. With bourses worldwide struggling to attract fresh listings, Morocco’s track record – only six IPOs since 2020 – suggests it will be an uphill battle to get more companies to go public. The market also faces concentration risks. Morocco’s banking and real estate sectors account for over 60% of BVC’s capitalisation and drove much of the earnings growth in 2024, while smaller sectors such as agriculture and manufacturing lagged due to drought and weak global demand. This concentration makes the market vulnerable to sector-specific shocks such as real estate slowdowns or banking stress.
Downside risks
Indeed, real estate markets in emerging economies often face boom-bust cycles. If demand for properties weakens post-World Cup, overvalued real estate firms could drag down the wider market. Over-optimism tied to events like the 2030 World Cup may inflate valuations beyond fundamentals, risking a correction if expectations are unmet.
Finally, while infrastructure spending tends to boost growth in the near term, it can carry longer-term risks. This is because infrastructure spending tends to benefit large corporations and urban areas. Large scale projects like sporting facilities can also lead to fiscal strain and the inefficient use of public assets, as seen in South Africa, where some stadiums remain significantly underutilised years after the 2010 World Cup.
