It is now an unmissable event for the community of local investors, led by the managers of UCITS from several Moroccan investment banks and foreign investors, including pension funds and fund managers of several nationalities, fond of fresh information and comments from the leaders of listed companies gathered at this conference.
The concept
In the space of two days, One-on-One meetings or small groups are organized by CFG Bank between, on the one hand, Moroccan and international investors, and on the other hand, listed companies or those wishing to appeal public offering invited to the event. There were also 23 companies this year, including new recruits, as Bachir Tazi, director of CFG Marchés, told us: “The s’agit de Sothema, Sonasid, Auto Hall, Maghrebail, TGCC et Aradei Capital“, he says with satisfaction, specifying that this event allows the companies which participate in it to improve their learning curve in terms of information sought by the market, which in the long term makes it possible to have better financial communication, more focused and relevant.
For Souad Benbachir, administrator of the bank, the objective each time through this conference is to present investors with new interesting stories with growth potential. She does not fail to recall that among the new issuers invited, we find some of the latest IPOs of the Casablanca Stock Exchange which, it should be remembered, were accompanied for the most part by CFG Bank, such as Aradei Capital and TGCC in particular.
What investors are looking for
According to the CFG Bank teams, investors are much more attentive to Equity stories, growth prospects and the quality of management in the troubled context we are going through. Valuation issues are relegated to a secondary position, particularly for foreign investors. Moreover, Bachir Tazi explains that this category of operators has the particularity of having a global vision, which allows them to compare several elements between different markets: stability (macro, political, regulatory, monetary, etc.), size of the market, its liquidity, in particular to ensure the exit. According to him, the rise in rates observed today internationally means that these investors favor “the size of the company, its defensive nature, the quality of financial communication and the performance of the title”.
Casablanca Stock Exchange: A resilient market
The short-term volatility of the equity market does not seem to worry foreign investors unduly, on which CFG Bank claims 40% of the volumes traded on the Casablanca market. These foreigners clung to their positions during the Covid decline and only just adjusted their exposure downwards with the rise in international rates by reducing their exposure to all frontier markets and therefore Morocco. But this global adjustment does not affect the Kingdom more strongly than other countries in the same category. This is not a specific reduction in the Casablanca market. On a more micro level, Maha Karrakchou, director of research at CFG Bank, says that she expects a stable profit mass of around 30 billion dirhams this year despite the difficult context, which testifies to the resilience of the market which is preserving its profitability despite inflation. Currently, the market is trading at around 21x 2022 earnings, very close to its historical average of 20x. But there remains the variable rate which can impact the market, itself dependent on inflation, the deficit and the level of foreign exchange reserves, etc…
For his part, Younes Benjelloun, Managing Director of CFG, cites three elements capable of taking a step forward for the Moroccan market at the macro and institutional level: Getting out of the gray zone of the FATF, regaining the Investment grade of the sovereign rating lost following the pandemic and find the MSCI Emerging Market index to be even more visible in the radards of foreign investors.
5 values with high potential
CFG Bank’s research focuses on 5 stocks with significant growth prospects as well as solid fundamentals. These stocks on which the bank has strong convictions are HPS, Sonasid, Mutandis, Marsa Maroc and Risma. These shares are valued by CFG Marchés at 8,752 DH, 964 DH, 295 DH, 324 DH, 155 DH respectively.
Besides these strong convictions, CFG Bank is buying other stocks such as Cosumar (target at 266 DH), Aradei Capital (522 DH), Auto Hall (92 DH) and CIH Bank (375 DH).