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Moroccan Capital Market: Foreign Investment almost Unchanged in 2020

Foreign investment in mutual fund securities remained almost identical to that of 2019, with an amount of $326,000 (2.9 MMDH) at the end of 2020. The report also points out that the contribution of foreign investors to the transactional volume amounted to $944,000 (8.4 MMDH), or 17% of the overall transactional volume on both markets, central and block.

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The share of market capitalization held by foreigners in Morocco amounted to 31.85% at the end of 2020, for an amount of 186 MMDH, almost at the same level as 2019 (31.94%), according to the AMMC report on foreign investment in financial instruments for the year 2020.

In its latest report on foreign investment in financial instruments, the Moroccan Capital Market Authority (AMMC) indicates that foreign capital has decreased by 6.9% from $22.5 billion (200 billion dinars) in 2019 to $21 billion (186.34 billion dinars) in 2020, said the AMMC. A decrease that would be due to the depreciation of prices of listed shares comprising the portfolios of foreign investors, the Masi index fell by 7.27%. Foreign investment in listed shares was mainly strategic holdings which accounted for 92.4% of the total amount in 2020. The floating share of foreign capital invested in the Casablanca Stock Exchange amounted to 2.4% of the total market capitalization and to 9.4% of the floating capitalization. By type of investor, the share of investments of non-resident foreign legal entities remained above the 99% mark. It represented, at the end of the year 2020, 99.07% of the total foreign investment in listed shares, i.e. an amount of $20.7 million (184.6 MMDH).

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By origin, investors from Europe and the Middle East represented 96% of the overall investment of foreigners, which is equivalent to more than 30% of the market capitalization

The value of their investments amounted to $20.1 million (179 MMDH) at the end of the past year, down 5.97% compared to 2019, or $21.35 million (190 MMDH). This decrease is correlative to that recorded by the MASI index during the year 2020. The share of investments from the Middle East and Europe in the market capitalization remained at the same level as the year 2019 with respectively 17.07% and 13.5% in 2020. However, the share in the overall foreign investment has experienced a slight increase for the Middle East from 52.08% in 2019 to 53.60% in 2020, against an almost identical level for European investors around 42% As for debt securities, the outstanding amount held by foreigners amounted to nearly $471 million (4.19 billion dirhams), 91% of which belonged to non-resident foreign legal persons.

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In addition, foreign investment in mutual fund securities remained almost identical to that of 2019, with an amount of $326,000 (2.9 MMDH) at the end of 2020. The report also points out that the contribution of foreign investors to the transactional volume amounted to $944,000 (8.4 MMDH), or 17% of the overall transactional volume on both markets, central and block. The legal entities remain preponderant since they have realized 95% of this volume. In terms of geographical origin, European investors are the most active, with 51% of the volume made by foreign investors, followed by African investors up to 19%. As for the sectoral distribution of volumes exchanged by foreigners, it is characterized by its concentration on five major sectors with a cumulative weight of 83%. The sector “Banks” shows the highest share (32%), followed by the sectors “Telecommunications” (21%) and “Distributors” (18%).

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(Featured image by nattanan23 via Pixabay)

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First published in LesEco.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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Michael Jermaine Cards is a business executive and a financial journalist, with a focus on IT, innovation and transportation, as well as crypto and AI. He writes about robotics, automation, deep learning, multimodal transit, among others. He updates his readers on the latest market developments, tech and CBD stocks, and even the commodities industry. He does management consulting parallel to his writing, and has been based in Singapore for the past 15 years.