Privatized in 1993, the Casablanca Stock Exchange today is Africa’s third largest bourse and witnessing spectacular expansion

AMINE BENABDESSLEM Former Chairman of the Managing Board of the CSE

ast year alone the Casablanca Stock Exchange surged 70 percent, hot on the heels of strong showings in 2003 (33 percent rise in growth), 2004 (14 percent rise) and 2005 (22 percent). This is growth that former Chairman of the Managing Board Amine Benabdesslem sees continuing owing to the fact that it has been based on strong foundations.

“This is a business where you can have fatal growth,” he commented in June, “which has happened to a number of our counterparts like Saudi Arabia, Kuwait and Jordan. Some stock exchanges believe they can function in a way that is disconnected from their economy. These markets had enormous growth, mainly due to repatriations of capital, but the real economy didn’t match. With the Casablanca Stock Exchange, it is not like that.”

Speaking about the growth of the bourse, Mr. Benabdesslem divided its progress into three stages: a rise between 1995-1998, which was followed by a slow correction between 1998 and 2004, and a return to a train of growth starting again in 2003. “The market is in a fourth year of consecutive rise,” he concluded. “Optimism has come from a firm belief that the growth is permanent and recurring as it relies on a certain number of fundamentals.”

These fundamentals include the country’s solid economic growth over the past few years and the subsequent confidence this has instilled in investors. “Moroccans have confidence in the development of their country,” he remarked, adding that this mentality encourages both consumption and investment as people want to contribute to this development. Furthermore, when people have confidence in the future, they are more willing to invest in placements that can appear risky, creating what Mr. Benabdesslem referred to as a virtuous circle. A company recruits, makes profits, and then needs financing for larger projects. It finds this in the stock exchange. These larger projects are launched, providing new employment, which eventually leads to new savings that can be invested once again.

“The exchange has a capitalization that comes very close to $60 billion. Just three years ago, the CSE weighed $15 billion, or four times less, which is significant growth that is not in any way disconnected from its fundamentals,” he concluded.

Morocco’s companies are not oblivious to this optimism either, resulting in a growing number of listings. Increased privatizations have also boosted growth. Last year, the exchange registered ten new listings – a record in its history, bringing the total to 65 companies. This year, it expects to see roughly the same number of IPOs.

“The 2005 and 2006 listings were purely private,” the former chairman pointed out.

“This is an indicator of the market’s maturity, and proves that we still have enormous potential because of all the companies in the country that are still private. There are many family groups here that have up until now been financing themselves. There are a number of things that say to us that, at least locally, Casablanca Stock Exchange still has beautiful prospects.”