MASI Index: Is Profit Taking Threatening Market Dynamics?

The MASI continues to surprise by crossing the 16,000 point mark, driven by robust fundamentals and investment prospects linked to the 2030 World Cup. But will the expected profit-taking caused by the strong presence of individual investors compromise the upward momentum?

The MASI reached a historic milestone a few days ago, by exceeding the 16,000 point threshold for the first time

This summit, of great symbolic significance, has aroused both admiration and a certain caution among investors.

“The valuation of MASI is supported by several fundamental elements including the anticipation of strong growth in the beneficiary base, the improvement of financing conditions and the reduction of the risk premium in a favourable macroeconomic context, notably thanks to disinflation and public and private investments linked to the preparation of the 2030 World Cup”, explains a local analyst.

Investors are already factoring in these prospects, boosted by an economic horizon that seems most promising. However, the ambient optimism remains somewhat measured. The market is experiencing profit-taking movements, encouraged by massive participation from individual investors.

“The increased participation of individuals, whose transactions include IPOs, poses a risk of profit-taking movements in the short term,” teh expert emphasized.

This category of investors, who represent nearly 30% of volumes, played a decisive role in recent capital increase operations as well as in the latest IPO operation of CMGP Groupe.

A phenomenon likely to continue, reinforced by the integration into the financial circuit of 127 billion dirhams from the tax amnesty. The sharp rise in the index nevertheless raises some questions. Some observers fear a subtle overvaluation which, for the time being, does not seem to constitute a real speculative risk.

“Approached by PE levels, market valuation may show signs of high prices in certain sectors. This is offset by the growth profile of certain stocks. Overall, PE levels are not exceptionally high compared to historical averages. There is no clear signal of a speculative bubble. The evolution of the MASI anticipates the future creation of wealth in the real economy,” specifies this market expert.

While this reading is intended to be reassuring for a good portion of investors, some analysts do not hesitate to express some reservations regarding an appreciation sometimes considered “a little too fast.” That said, the current evolution of the MASI does not suggest the formation of a speculative bubble. Price-earnings ratios remain within historical ranges, although some sectors display a high valuation.

“The real economy continues to justify the current levels of the MASI, driven by sectors with high growth potential,” added the analyst.

Banks, for example, still offer attractive opportunities, with their valuations remaining below their real potential. The medium-term outlook remains favourable.

“For the medium term, the upward trend is intact and should be confirmed with the publication of the annual financial results for 2024. It could also spread to other sectors, particularly banks which display relatively low valuation levels. The continuation of monetary easing should continue to support the dynamics of the MASI,” anticipates a market analyst.

Since the beginning of 2025, the MASI index has already recorded a remarkable performance of 8.09%, confirming investors’ confidence in the country’s economic trajectory. However, a correction cannot be ruled out on certain stocks that have reached excessively high valuation levels ahead of the publication of the next annual results. High-growth stocks with solid fundamentals remain the recommended choice for navigating this booming market.

“The recommended strategy is to target high-growth sectors, favoring the strongest stocks, in order to reconcile performance and resilience,” concludes the analyst.

The occasional corrections, although expected, do not call into question the solidity of a market which remains, for the time being, in line with economic realities and the aspirations of its players.

MASI: towards an acceleration of the increase in 2025?

Driven by a new bullish momentum observed in December 2024, the MASI seems to be on a sustainable upward trajectory. BMCE Capital’s analysis highlights the emergence of a new technical channel, reinforced by significantly increasing trading volumes and the absence of bearish signals on the main indicators.

In the short term, the index could reach the thresholds of 16,500 to 17,000 points, in a context of marked investor optimism. In the medium term, the upward momentum remains conditional on remaining above the key support of 14,600 points. The expected consolidation phases, far from constituting a brake, could offer strategic purchasing opportunities, thus reinforcing the growth potential for the coming year.

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(Featured image by Jason Briscoe via Unsplash)

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First published in LES ECO.ma. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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