The quotation on the stock exchange of the national loan which is being prepared will make it possible to widen the categories of investors who can participate and will favor the secondary market. A vice-president of a local merchant bank explains the technical aspects of this listing and its advantages.
The expected large national loan is scheduled for the last quadrimester, after the elections to be held on September 8.
Remember that this loan aims to mobilize the savings of individuals in order to finance the state effort to face the Covid-19 crisis
This loan will be listed on the stock exchange, as revealed by the Minister of the Economy and Finance to Médias24. What does this rating imply?
Solicited by LeBoursier, a vice-president of a local investment bank explains: “When we talk about the stock market, we generally refer to everything that is Equity, that is to say Shares. The listed bond market mainly concerns financial institutions that have called on public savings. The purpose of a listed loan is to allow certain types of investors to invest in it. These investors have regulations and standards specific to their industry which means that they can only invest in listed assets, especially insurance companies because they have to discount the value of the asset at a certain time. specific ”.
“If the asset is unlisted, there is no mark to market (real daily value on the market, editor’s note) which will be carried over to the level of the company’s balance sheet, ”he adds.
And to continue: “This operation is aimed at the general public, but it will not maintain a performance at this level. He will buy the bond and then sell it at a premium. The fact that this loan is listed on the stock exchange is to have a more interesting secondary market. It is the institutional investors who will buy these bonds from the public ”.
Thus, “the stock market listing is supposed to allow a type of financial institution, especially insurance companies, to participate in this operation and thus stimulate the secondary market. The most important in this process is the secondary market ”, insists our interlocutor.
The secondary bond market is an important factor in the success of this loan. “If there is no secondary market, people will not be really interested in participating in this operation. The stock market listing will motivate individuals who will be interested in the yield of this bond and in the profit generated at the time of the sale. But, they have to maintain it for maybe 1 or 2 years to benefit from it, ”he emphasizes.
“This rating will therefore strengthen the pool investor and the secondary market, like that the bond will be better treated ”, adds our source.
“Historically, the unit cost of a bond is a minimum of 100,000 DH, so as not to allow the general public to stock market with it. With this loan, it will be the first bond which will be between 100 to 1000 DH. Logically, this is supposed to allow another type of investor, including insurance, to participate in this loan, and not to allow people to stock market “, explains our interlocutor.
And to add: “You make a private placement, you are limited. If you opt for a bond issue by public offering without a listed tranche, the operation remains limited. Now, with this loan which will be listed on the stock exchange, we are sure to reach all types of investors : individuals and legal entities, institutional investors with UCITS, pension funds and insurance ”.
This listing will therefore encourage the bond’s liquidity as well. “The bond’s listing will also allow investors to sell their stake directly.”
“For the State, opting for Treasury bills will be cheaper. But with this loan, the State wants to unite the nation and propose a development project. Moreover, this loan is not concocted to finance a deficit, it is rather to finance an investment, ”concludes our interlocutor.