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94 – Morocco
Morocco
2006 At a Glance
Population (mn)
31.94
Population Growth (annual %)
1.5
Official Language
Arabic
Currency
Dirham (MAD)
GDP (Current US$ bn)
64.91
GDP Growth (annual %)
7.3
GDP Per Capita (US$)
2,032
FDI, net inflows (US$ mn) (2005)
2,933
External Debt (US$ mn)
15,000
External Debt/GDP (%)
23.1
CPI Inflation (annual %)
3.3
Exports of goods and services (% of GDP)
32.7
Gross Official Reserves (bn US$)
18.57
Gross Official Reserves (In months of imports)
9.4
UNDP HDI Ranking
123
Sovereign Ratings
Long
Term
Local
Currency
Foreign
Currency
S&P
BBB
BB+
Fitch
BBB
BB+
Source: AfDB, IMF, UNCTAD, UNDP, UN Population Division
1.Overview of Financial System
M
European firms. By law, commercial banks and
Morocco has a relatively well-developed financial
financial institutions must be at least 51% Moroccan-
system and has been implementing reforms to
owned. The specialized banks are all state-owned
liberalize the system. There are 17 commercial banks,
and they control approximately 43% of the banking
44 financing companies including 5 government-
sector’s assets. An important non-bank financial
owned specialized financial institutions, 30 credit
institution is the public CDG-Caisse des Dépôts et
agencies, 17 insurance companies, and 12 leasing
de Gestion (Deposit and Management Fund), which
companies. The Moroccan financial system has a stock
accounts for over 6% of the financial sector. This
exchange, the Casablanca Stock Exchange (CSE),
Fund manages the assets of various institutions in the
with a modern infrastructure. It is regulated by the
country, such as the National Social Security Fund
“Le Conseil Déontologique des Valeurs Mobilières”,
and the National Savings Bank. Given its status as a
while the Association Professionelle des Societés
Fund rather than a bank, the CDG is not supervised
de Bourse formulates the rules and procedures for
by any government agency, but is audited by the
trading. There are also 2 offshore banks and 11 micro-
National Audit Office.
finance institutions in Tangier. The Ministry of Finance
The insurance market has expanded rapidly since
approves the licenses of commercial banks after assent
the late nineties with premiums of about 3% of GDP,
by the Credit Institutions Committee. Bank al-Maghrib,
well below the 8% world average. The assets of
the central bank, supervises credit institutions, while
the insurance companies represent about 17% of
the CSE is the stock market watchdog; the insurance
GDP. As is the case in most developing economies,
sector is supervised by the Ministry of Finance.
the sector is mainly engaged in non-life activities,
although life insurance is growing rapidly with the
Bank and Non-Bank Financial Sector
development of policy issuance through associations
Most commercial banks are partially owned by
between banks and insurance.
Morocco – 95
Capital Market
The CSE listings include 65 corporations and 67 bonds.
The capital market of Morocco is centred on the
The CSE is served by 14 brokerage firms, namely: Attijari
Casablanca Stock Exchange (CSE), which was founded
Intermediation, BMCE-Capital, BMCI Bourse, CFG
in 1929 and is among the three oldest exchanges in
Marches, Credit Du Maroc, Eurobourse, Finergy, ICF
Africa. In recent years, the CSE has benefited from the
Al Wassit, Maroc Service Intermediation, Safabourse,
modernization of its infrastructure: an electronic quotation
Sogebourse, Upline Securities, Wafa Bourse, and APSB.
system has been introduced, as well as settlement through
These brokerage firms provide the following key services:
a central depository and clearing house, and new market
execution of securities transactions, discretionary portfolio
guarantees. Furthermore, conditions for the listing of
management, customer advisory services, placement of
shares and the security of transactions were strengthened.
securities issued by corporate entities, etc.
2. Fixed Income Markets
Government Securities
Morocco’s debt market was introduced in the mid-nineties and is relatively young, compared to the country’s stock
market. It is, however, developing quite impressively. Treasury bills and treasury bonds are auctioned weekly with
13-, 26-, and 52-week maturities, while the T-bonds are issued with maturities of 2, 5, 10, 15, 20, and 30 years. In
the fourth quarter of 2006, the outstanding stock of public issues amounted to MAD 257 bn, representing around
55% of GDP. Public sector bond issuance accounts approximately for 95% of total outstanding debt.
The distribution of Government securities’ holdings, as at the end of 2006, was as follows: Local banks held
28% of total debt while insurance companies and mutual funds held 27% and 23%, respectively. Caisse de
Depot et de Gestion (Deposit and Fund Management Fund) accounted for over 11%.
Yield (%)
Moroccan Treasury Yield Curve (As at April 17th, 2007)
4
3
2
13-wks 26-wks 52-wks
2-yr
3-yr
5-yr
10-yr
15-yr
20-y
30-yr
Source: Reuters
Non-Central Government Issuance
also improving at MAD 4,500 due to an active Repo
Corporate securities are issued in the Moroccan fixed
market. The Moroccan debt market is quite developed
income market, but the non-government securities
as it exhibits an incremental setting of maturity buckets
account for less than 5% of total debt outstanding
and a yield curve that extends up to 30 years.
at MAD 10.7 bn in the fourth quarter of 2006, mainly
consisting of Commercial Paper predominantly
3. Foreign Exchange
issued by non-financial companies, Certificates of
The Moroccan Dirham (MAD) is pegged to the value
Deposits issued by local municipalities and “Bills of
of an undisclosed basket of currencies, reflecting
Financing Companies” which are issued by leasing
the currencies of key trading partners. The Euro
companies.
and the USD, with weights of almost 75% and 20%
respectively, are the main components.
Secondary Market
Since 2001, the MAD has been on an appreciating
The Moroccan debt’s secondary market is relatively
trend, up from MAD 11.95 / 1 USD in May 2001 to
liquid and operationally efficient. Trading volume is
MAD 8.44 / 1 USD at the end of 2006.
96 – Morocco
The central bank intervenes in the market to keep
market. The IFC issued a MAD 1 bn 7-year bond,
rates within a band around the central rate. When
paying a fixed coupon of 4.54%. Controls are in
conducting FX transactions with their customers,
place regarding sale and purchase by non-residents
Moroccan banks may not exceed the rate limits set by the
of bonds and other debt securities, with similar
central bank. There is a levy tax of 0.2% on local banks
controls in place for collective investment securities
FX transactions with customers. Morocco liberalised its
and money market instruments.
current account transactions in 1993 in adherence with
Article VIII of the IMF Articles of Agreement.
6. Clearing and Settlement
In 1997, the provisions of Law no. 35-96 established
MAD Per Unit of USD (Year End)
Maroclear, a central securities depository. Its key
12
functions include those of custodian of securities,
10
delivery and payment system of securities. The day count
8
convention used for Treasury securities is actual / 360.
2000 2001 2002
2003 2004 2005 2006
Source: Bloomberg
7.Investment Taxation
Interest, royalties, income and service fees are subject
4.Derivatives
to corporate income tax at the rate of 36%. Dividends
received by corporate shareholders from taxable
Forward exchange contracts and cross-currency
entities incorporated in Morocco are not taxable. This
forwards are available for commercial and financial
exemption does not apply, however, to income from
operations for periods up to 12 months. Commercial
foreign investment, which is taxed after deducting
banks are allowed to transact FX options as a hedge
foreign withholding taxes.
against exchange rate risk. Currently, however, only
EUR or USD European options with a maximum
8. Key Contacts
maturity of one year are allowed. For hedging against
• Bourse de Casablanca
interest rate risk, resident borrowers are allowed to
contract the following: (i) Forward Rate Agreements
M
Angle Avenue des Forces Armées Royales et
Rue Arrachid Mohamed, Casablanca, Morocco
(FRAs) with a maximum tenor of 6x12 maximum1, (ii)
Tel: +212-22-452626/27
Swaps of up to a maturity of 2 years, and (iii) Caps.
Fax: +212-22-452625
E-mail: [email protected]
5. Participation of Foreign
Investors and Issuers
Web: www.casablanca-bourse.com
• Central Bank of Morocco
Mutual funds, local banks and insurance companies
277, Avenue Mohammed V, Rabat – Morocco
are the principal investors of the public sector bond
Tel: +212-37-702626
issuance, which represents around 95% of the
Fax:+212-37-707838
total debt market. In addition, Morocco’s CSE is
E-mail: [email protected]
considered as one of the few regional bourses where
Web: www.bkam.ma
foreign investors face no restrictions, although foreign
• Le Conseil Déontologique des Valeurs Mobilières
participation accounts for only about 10% of total of
6, rue Jbel Moussa, Agdal Rabat
market capitalization of over MAD 252 bn in 2005.
Tel: +212-37-688900/01/02
In February 2005, Morocco became the first
Fax: +212-37-688946
country in the Middle East and North Africa Region
E-mail: [email protected]
to allow a supranational bond issue in its domestic
Web: www.cdvm.gov.ma
1
6-month forward on a 12-month loan.