A number of initial public offerings (IPOs) of shares scheduled for 2006 will add force to the Casablanca Stock Exchange’s slowly gathering momentum. Risma, a subsidiary of French hotel group Accor, is expected to list in the first half of 2006 and will be the first IPO of the year.

Insurance giant RMA Watanya, telecoms firm Meditel and state-owned Regie des Tabacs are also expected to enter the market, diversifying its offering and raising trading volumes, which touched 370 million shares on 10 January.

The average price/earnings (PE) ratio dropped from 19.1 in 2004 to 16.8 in 2005. ‘This is likely to change,’ says Amine Bentaleb, analyst at Upline Securities. ‘Listed companies have achieved an average of 15 per cent net income growth.’ The index jumped by more than 8 per cent in the first 10 days of 2006 and by more than 30 per cent year-to-date.

The drivers of the bourse continue to be banking and cement stocks. The entry of Maroc Telecom in 2004 kick-started the market’s resurgence and is one of the most liquid stocks, with trading volumes of 68 million in the second week of January and the largest market capitalisation at MD 98,000 million ($10,819 million).

The telecoms company combined with the banking and cement sectors make up 80 per cent of the total market capitalisation of MD 267,000 million ($29,493 million). And it is a stock to watch, according to Bentaleb. ‘The stock has drawn in retail investors who didn’t invest at the local level. It attracted foreign investors who follow the market now and are interested in new IPOs.’ He is also optimistic for the telecoms sector overall. ‘Telecom operators show good growth prospects. The fixed-line sector is expected to follow the same scenario as the mobile sector. More operators will start activities in 2006, creating competition and causing the market and operator earnings to grow.’

With a market capitalisation of MD 53,600 million ($5,920 million), the banking sector accounts for a considerable chunk of the bourse. And investment in this sector is expected to continue, backed by net income increases of more than 12 per cent. ‘The prospects for growth in the banking sector are robust. Banks are expanding their branch networks and the growth potential is huge. Only 20 per cent of Moroccans have access to banking. If you rely on the sector’s internal potential alone, there will be growth,’ says Bentaleb.

Attijari Wafabank, which was formed out of a merger of Banque Commerciale du Maroc (BCM) and Wafa Bank, makes up almost half the sector with a market capitalisation of MD 23,000 million ($2,540 million), an increase of 27.4 per cent from January 2005. The stock closed trading on 9 January at MD 1,220 ($134). ‘Attijari is very undervalued,’ says Bentaleb. ‘The bank will perform very well when the merger is completed. There will be a correction.’ The bank is also acquiring a majoritystake in Tunisia’s Banque du Sud in a consortium with Banco Santander Central Hispano.

Holding company ONA is another market mover, trading 137 million shares on 9 January, and recently revealed plans with Dubai-based Emaar Properties to build a $1,200 million golfing community in Bahia Bay. The group’s market capitalisation increased by 16.4 per cent and it is undergoing a restructuring. But listed cement companies will have to wait their turn for a number of large infrastructure projects to get under way. ‘Cement has not yet reached fast growth as large projects have just started. Market capitalisation will increase in the next two-three years,’ says Bentaleb.

‘Growth is backed by financials,’ he says. ‘Fifty-five stocks are listed on the exchange and are well diversified. All sectors performed well in 2005. I expect trading [in the secondary market] to continue to be strong despite the IPOs. The banking sector is overly liquid and the money could be invested in the market. Investor