Frontier Stock Exchanges: A quick guide to the Casablanca Bourse

Casablanca is Morocco’s financial and industrial capital so naturally is host to the North African nation’s stock exchange. The Casablanca bourse is Africa’s third largest after Lagos and Johannesburg and also the third oldest. The good news for foreign investors is that there are no restrictions on foreign ownership of shares, which is in line with Morocco’s relatively open economy. However the market is relatively small and illiquid, as is to be expected in a frontier market with less than 50 traded stocks.

The CFG index comprises of the 25 biggest names on the market which provide around 84% of the market capitalisation (which currently stands at USD 57 billion – not bad for a frontier market). The big hitters in the market include Maroc telecom – no surprise to see a telecoms company doing well this also features in the all-important MCSI frontier market index which is the key global indicator for frontier markets. Cosumar, as major sugar producer are the next biggest company on the market, closely followed by three banks Attijariwafa Bank, Banque Marocaine du Commerce Exterieur and Banque Centrale Populaire. Financial stocks are fairly prominent in emerging/frontier economies as access capital is of course essential for further growth.

The Moroccan bourse has the advantage of being in a relatively stable country with strong ties to Europe and a reasonable record of growth, albeit with the major problem of youth unemployment hanging over its society like so many other Arab nations. Investing in the Moroccan bourse is worth considering if you want to invest in frontier markets, in particular the medium sized stocks may offer good value as the government try and boost smaller companies. If you have or are considering a frontier market fund, it will most likely already certainly contain some exposure to Moroccan stocks.

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