The MASI Index Bounces Back, Surpassing Previous Losses
This past week, the Moroccan All Shares Index (MASI) demonstrated a remarkable recovery, quickly erasing its losses from earlier in the year. Starting at a low of 17,876 points on Monday, the MASI climbed to 18,864 points by the week's end, marking a significant increase after five consecutive days of gains. Over the week, the index recorded a notable rise of 5.72%, its most impressive weekly performance since April, pushing its year-to-date performance slightly into positive territory at +0.09%. The momentum of this rebound was especially pronounced starting Tuesday with daily increases of 1.05%, 1.48%, 0.82%, and culminating in a substantial 2.08% gain on Friday. Trading volumes also surged towards the end of the week, rising from 157 million dirhams on Wednesday to 560 million dirhams by Friday on the central market.
Key Contributors and Market Outlook
The resurgence in the MASI was largely fueled by Managem, which emerged as a key player in this upward trend. The company’s stock surged by 9.92% on Tuesday, followed by another impressive gain of 9.95% on Wednesday, continuing its upward trajectory as the week progressed. This rally followed the release of a semi-annual revenue figure of 11.76 billion dirhams, representing a staggering 166% increase, largely driven by successful operations in the Tizert and Boto mines, alongside favorable conditions in the metals market. However, the growth was not confined to the mining sector alone. On Friday, other major players such as Maroc Telecom, Attijariwafa Bank, Alliances, and SGTM also posted gains of 2.03%, 2.68%, 5.26%, and 4.86%, respectively. Consequently, the total market capitalization rebounded to 1.104 trillion dirhams. This week’s developments are crucial as the initial gains, once concentrated in a few stocks, began to extend to larger capitalized companies.
As the MASI closed at 18,864 points, it now hovers just below the psychological barrier of 19,000 points, making this level a critical test for the market's ongoing rebound. Following a near 6% increase within a week, a sustained movement beyond this threshold would signify a confirmed shift in market dynamics observed since the beginning of the month. Conversely, a temporary pullback after such a strong performance would not necessarily negate the rebound, as long as the levels achieved during the week are maintained. The upcoming trading sessions will likely focus on the consolidation of these gains rather than the speed of the rise, considering that the market has almost fully recovered ground lost since the beginning of the year.
Looking ahead, the half-yearly financial results are set to take center stage. Following a period dominated by various financial maneuvers, including the IPO of T2S and capital restructuring at Managem, fundamental factors are expected to gradually regain prominence in market discussions. Initial activity indicators for the second quarter have already started to emerge. For instance, Mutandis reported a 7% increase in its first-half revenue, while Disway showcased a 14.4% rise. Yet, the real test will come with the release of semi-annual accounts, which will provide insights into profitability, margins, debt levels, and cash generation. According to BMCE Capital Global Research, these reports are anticipated to be the main catalysts for market activity in the upcoming period, fostering greater selectivity among stocks.
Furthermore, external factors, particularly developments in the Gulf region, continue to pose risks to the recovery scenario. The situation remains fluid, as Iran recently announced that negotiations with Oman regarding new navigation routes in the Strait of Hormuz are in the final stages. However, a complete reopening of this passage is contingent upon several concessions from the U.S. government, leaving a durable resolution to the conflict uncertain. This issue extends beyond regional implications, as the Strait of Hormuz is a crucial artery for global oil flows. Recent hopes for its reopening have already caused significant fluctuations in oil prices. Additionally, tensions have spread to the Red Sea, with Iranian-backed Houthis claiming attacks on Saudi tankers, further affecting maritime traffic in the region.
For the markets, the dual risks of rising oil prices and increased risk aversion are apparent. In the United States, the average gas price remains above $4 per gallon just months ahead of mid-term elections, intensifying pressure on the administration to pursue de-escalation. A new surge in crude oil prices could reignite inflation concerns and impact Morocco's macroeconomic stability, given its status as a net energy importer. Conversely, sustained easing around the Strait of Hormuz could provide additional support for the Casablanca market, which has recently regained favorable momentum.
As we move forward, attention must also be given to summer liquidity and technical flows. Upcoming weeks will be unique due to the trading calendar, with the stock exchange closing for the Oued Eddahab allegiance celebration on August 14, followed by closures on August 20 and 21. Additionally, the Eid Al Mawlid Annabaoui celebration will result in further closures on August 25 and 26, determined by the lunar calendar. As a result, the upcoming weeks may see shorter trading sessions, potentially leading to reduced trading volumes and increased significance of specific movements in certain stocks. A technical adjustment is also expected on CIH Bank starting August 12, following its capital increase, with the Casablanca Stock Exchange adjusting the floating factor of the stock from 25% to 35%.
As reported by boursenews.ma.
