Where to Invest in the Moroccan Economy
Although 2009 was a difficult year for those looking to place their money in Moroccan general investment and in equities in particular, 2010 may not bring immediate relief either, but opportunities could be up for grabs.
Companies and businesses active in the North Africa country have had their own share of troubles and many see continued difficulties this year. But despite the downturn, or perhaps because of it, there are opportunities to grab here and there.
Analysts of CFG say that investors looking to acquire equities through stocks in the Casablanca Stock Exchange should adopt a stock-picking approach, favoring stocks with solid fundamentals and a good visibility on earnings over the next few years. Some cyclical stocks can also prove to be worthy investments.
The recommended strategy for these stocks is to acquire shares when the economy is on a descending cycle as these stocks have proven throughout history to anticipate economic revival. But trouble still looms. The same analysts estimate that a glance at banks’ 2009 interim financial statements foreshadows how that sector, for example, will evolve in the short run. The banking sector is facing a slowdown in its traditional business activities along a tightening in interest margins. Banks are encountering deterioration in risk levels which may lead to a surge in their cost of risk. This report looks at what investors should expect as the new year begins.