A new index highlighting mid and small caps was launched by the Casablanca Stock Exchange on Tuesday 24 January, with the aim of strengthening the liquidity of the sector and supporting the launch of the alternative market. A harmonization of index names was also carried out under the Masi signature.
On 24 January, the Casablanca Stock Exchange organized a conference on the new Masi indices. In fact, it has grouped all its indices under the Masi signature, and has announced the arrival of a new index that brings together the “Mid and Small Caps”.
In fact, all the indices will be standardized in terms of denominations and will therefore be called Masi., Masi.20, Masi.esg and Masi.mid small cap.
Promote medium-sized enterprises
Through the launch of this new stock index called “Masi.mid small cap“, presented by Ayoub Youssefi, Senior Manager Market Data at the Casablanca Stock Exchange, the exchange seeks to encourage the SME segment. “The goal is to promote small and medium-sized enterprises listed on the Casablanca Stock Exchange e strengthen the liquidity of this sector. You also need to know that historically it is this segment that generally offers higher returns than the rest of the market,” Ayoub Youssefi points out.
The second objective of this new index is support the launch of the alternative marketin the context of its new general regulation adopted in September 2019. From now on, the “Masi.mid small cap” index will collect a series of 30 stocks for investors interested in this segment. The market capitalizations of the groups included in the index are between 561 MDH and 5.6 billion MAD. “This 30-stock index gives fund managers more flexibility to comply with the prudential provisions proposed by the AMMC,” notes Ayoub Youssefi.
This index brings together stocks from all types of sectors, led by the Hardware, Software and IT Services sector which accounts for 15.2% of the index weight, then Real Estate Investment Companies at 13.5% and Construction & Building Materials construction with 11.3%. The three largest capitalizations are HPS, Aradei Capital and Mutandis, which represent 29.2% of the total small cap of Masi.mid.
The conference was also the occasion to announce the expansion of the index formerly known as Casablanca ESG 10. It will now be called Masi.esg and will consist of 15 stocks.
Five further groups listed in the Masi.esg index
The initial index was launched in 2018 with the aim of becoming an environmental, social and governance (ESG) benchmark. “We have noticed, with great satisfaction, that the score of listed companies in this index has significantly increased. We have therefore evaluated the possibility of expanding it to respond favorably to the request of issuers to integrate the index, but also to towards very clear ESG strategies” , explains Ayoub Youssefi. Indeed, Moroccan companies hold an overall score of 31/100 in 2021, while the ESG scores of companies in the index reach 56.2/100 in the same year.
From now on, the Masi.esg index will be extended by five values. Taqa Morocco, Cosumar, Marsa Maroc, TotalEnergies Marketing Maroc and Salafin enter. “This expansion also offers the index user, and therefore the fund manager, the possibility to benefit from greater flexibility to comply with the prudential provisions of the AMMC, to diversify their portfolios and offer their clients a somewhat ‘ richer” , continues the Senior Manager Market Data at the Casablanca Stock Exchange. Almost 43% of the weight of this index is led by Maroc Telecom, Attijariwafa bank and Bank of Africa.
In addition to the presentation of this renaming of the indices and the launch of the one specialized in mid and small caps, the conference was also an opportunity for the president of the Professional Association of Brokerage Firms (APSB), Younes Sekkat, to draw some perspectives expected in 2023 from a stock market point of view.
A potentially disrupted year 2023 on the stock market
After a very disturbed year 2022, mainly by the war in Ukraine, the resulting high inflation and the increase in the reference rate, it is still very difficult to have a clear reading of the trend for the year 2023.
For Younes Sekkat, “this year we will have inflation corrections due to monetary tightening. The bad news is that a number of economies will be in recession and a return to growth,” he explains.
In his presentation, the APSB chairman particularly stressed that the most important factors to monitor will be the observations that Bank Al-Maghrib will collect to make its key rate decisions. This first quarter will generally set the tone and show whether the monetary tightening implemented by BAM has had an effect on prices and corporate creditworthiness.
It should be noted that on January 23, Christine Lagarde, president of the European Central Bank, announced that the ECB would “continuously” continue its key rate hike to curb inflation, which is still too high in the eurozone.