Avoiding Risk and Finding Opportunities on the Casablanca Stock Exchange in 2009

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The North Africa Journal: The Casablanca Stock Exchange (CSE) started the year 2009 on a volatile path and with no clear orientation. In this context, analysts recommend investors to adopt a selective strategy offering low risk in an uncertain market.

This strategy is based on the arbitration in favor of yield and non-cyclical sectors, which are recommended in reversal phases because of their defensive characteristics. For the stocks belonging to the cyclical sectors, the Casablanca Finance Group (CFG) recommends higher selectivity. These stocks were historically favored during periods of strong growth, but they are the first to encounter cycle reversal.

CFG analysts find that the last five years were profitable for cyclical stocks, since they were correlated to the economic context, therefore benefiting from the growth of the economy during those last years. The top achievers outperformed the CFG25 index. In the real estate sector, for instance, the Addoha Company achieved a cumulated performance of more than 700% since its initial public offering (IPO), when the share price reached its highest at MAD 232.5. Also, banks recorded performances over 400% between 2002 and 2008, compared to a 316% progression for the CFG25 index. This report looks at CFG’s proposed investment strategy for the year 2009, starting with a review of 2008. Continue here.