Stock market: the electoral adrenaline revives the headlines

The stock market reacted positively to the election results. The Masi thus posted an increase of 1.81%, to almost 13,000 points. An unprecedented scenario on the Casablanca Stock Exchange. Analysts explain the underside of this positive reaction.

The stock market session of September 9 was, quite simply, a day that we rarely attend at the Casablanca Stock Exchange. In their own way, investors have, in fact, welcomed the results of the 2021 legislative elections, with an increase in the Masi by 1.81%, to almost 13,000 points. Moreover, business volumes exceeded 469 million dirhams on the central market exclusively, a situation that the market no longer experiences every day.

Several sectors benefited from this increase, in particular banking, industry, real estate and cement. Attijariwafa Bank represented the first volume of the session with 100 MDH, gaining 2.54%, to 484 DH. Real estate also benefited from the euphoria of the session, the three subfunds each taking 4% out of significant volumes. Other large caps have also increased, such as Maroc Telecom (+ 2.11%) and Marsa Maroc (+ 1.12%).

Positive reaction
Market analysts are, in fact, unanimous as to the reason for this effervescence. “The market reaction is due, exclusively, to the victory of the RNI, coupled with the heavy defeat of the PJD”, they affirmed. Analysts also note that “the market was betting on the victory of the RNI, but the most important thing for investors was that the specter of the PJD faded! And this has finally come true ”.

This means that financial market professionals do not hide their joy over the election results, which are strongly favorable to the “business world”. “The legislative elections had a positive and very apparent impact on the dung beetle market. Especially since the RNI is perceived as being a pro-economic and pro-business party. With representatives recognized as being fine connoisseurs of entrepreneurship, economics and the world of finance ”. And to add, “it must also be said that the support and the promotion of the financial market hardly figured among the priorities of the PJD”.

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It should be remembered that the current did not pass between this party and the business world, in particular the financial market. Observers often singled out the outgoing government, criticizing it for delaying reforms and neglecting the importance of financial innovation. Moreover, it was not until the arrival of Mohamed Benchaâboun (RNIste) at the helm of the Ministry of Finance, for the reform of the law on securities lending to pass (pending publication). “We believe that the increases recorded during the September 9 meeting are also fueled by investor expectations regarding the adoption of new incentives from the new government. The objective being, precisely, to promote strategic sectors of the economy and the financial market in particular, ”adds an analyst, preferring to remain anonymous.

…. And after ?
In any case, market analysts are confident about the positive development of the stock market over the medium term. One of them affirms that “this dynamism will continue, but with, probably, to a lesser extent. There may even be a slight market correction. However, in the short / medium term, the positive sentiment will continue to prevail ”. According to another analyst, “the market reacted well, but not enough. In principle, following the announcement of the RNI’s victory, we expected a much greater stock market reaction, but we believe that the market was awaiting the appointment of the Head of Government ”.

This is now done, since last Friday the King appointed Aziz Akhannouch, president of the National Rally of Independents (RNI), who emerged victorious in the elections, as head of the new government, and called on him to form his team. In any case, the constitution of the next government should be completed much more quickly than usual, given the structure of the results of the votes and the acceleration of certain reforms already initiated under the supervision of RNI ministries. Important and positive signals that will continue to energize the national stock market.

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The financial market, still expensive

The reaction of the Casablanca financial market would have been much more apparent and significant if it were not so “expensive”, according to the observations of analysts in the place. Indeed, currently, the market is trading at P / E (price-to-earnings) levels of around 25%, given the half-year results for 2021. This therefore means that even the potential of existing investors is being held back! According to analysts, operators are awaiting the formation of the new government to intervene more actively in the Casablanca financial market.

Sanae Raqui / ECO Inspirations

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