Casablanca Stock Exchange
The Casablanca Stock Exchange is one of the oldest bourses on the African continent, having been founded in 1929 under the French Protectorate as "Office de Compensation des Valeurs Mobilières" (Office for Clearing of Transferable Securities). Since then it has gone through major reorganizations and modernizations, notably in 1986, 1993, 1997, and 2000.
Today, it stands out as one of the largest bourse on the African continent. Karim Hajji, CEO of the CSE, offers the following brief introduction to the CSE:
"Morocco is the third largest capital market in Africa after South Africa and Egypt and we have been growing steadily since 1993 when we underwent major reforms driven by the Ministry of Finance for capital markets. This created a new limited company where the shareholders were stockbrokers and also a central depository, and the CDVM as the market authority. In 2001 we multiplied our market capitalization by six with major IPOs with one of the largest telecom company in Africa that accounts for 20% of market capitalization and another with Groupe Addoha - largest real estate developer in Morocco. Morocco has many large companies that are followed by many managers worldwide."
For 2011 I think the market will see a 15% rise after a 22% rise in 2010.
More formally, the CSE is a joint stock company ("société anonyme") jointly owned by 17 brokerage firms, whose purpose is to provide a market, under the regulation of the Ministry of Economy and Finance, where transferable securities are publicly traded.
It comprises a central market, where buy and sell orders are matched for each security listed; and a block-trade market where listed securities are traded over-the-counter for a size equal to or greater than the minimum block size under price conditions derived from the central market.
The CSE sees its mission as ensuring the running, growth and promotion of the Moroccan stock market by:
Monitoring and managing trading sessions;
Publishing and disseminating market information;
Providing assistance to issuers in the listing of their securities and in the execution of their financial transactions;
Intervening to ensure successful transaction completion between the various parties;
Guaranteeing that transactions are cleared in the event of default by some intermediary.
According to Hajji, the CSE faces two major challenges of perception and awareness. The first challenge is internal and domestic: convincing Moroccans to utilize the legal and financial devices that are made available to entrepreneurs and investors by trading on the stock market.
The second challenge is in attracting international funds and investors into the Moroccan market. In one respect, the problem is simple, says Hajji: "Today, we don't have enough investors."
In approaching the first challenge, Hajji and the CSE believe that the market they offering for stock can be a great help to a lot of Moroccan entrepreneurs in achieving the financial support they need to start or grow their enterprises; and further, that the CSE can play a much greater role in Morocco's plans for economic growth.
But, in order to convince them of the advantages of stock offerings, certain resistances and problems of perception must be overcome. Hajji explains this problem this way:
"Traditionally Morocco has a been a market where banks insure most of the long-term financing for companies so our challenge is to show them how capital markets (like the stock market) can help finance their investment needs. … Some entrepreneurs fear that by being listed they may lose control over their companies and they don't want to share their figures with competitors. Our goal is to convince them that by entering the market they won't lose control."
This has led the CSE to engage in substantial educational efforts to raise local awareness. According to Hajji:
"We feel like we have a social responsibility to raise awareness about financial issues because many Moroccans do not understand the language of money and that this is crucial for success. This spans from educating people on the market, setting family budgets, purchasing a home, or investing in the market- it covers all areas. Only one out of two Moroccans has a bank account and the Central Bank is currently keen on improving access to banking to more people in Morocco. I think this will contribute positively to the financial education of our citizens."
As a result, the CSE is conducting conferences, workshops, and seminars for business people and students to inform them and raise interest in the market.