so far. The Casablanca Stock Exchange’s Moroccan All-Share Index is up by more than 45 per cent year to date, underpinned by sound fundamentals and high liquidity.On average in 2005, listed companies posted income growth of 15 per cent. Listed companies show average 2005 price/earnings (PE) ratios of 21.8 and average price-to-book ratios of 3.5 with dividend yields of 4.5 per cent. Market pillar Maroc Telecom, which accounts for 25 per cent of trades and 33 per cent of market capitalisation, has a 2005 PE of 20.9, which drops slightly for expected 2006 earnings. Telecommunications, cement and banking stocks continue to dominate the bourse, accounting for more than 70 per cent of total market capitalisation. But initial public offerings (IPOs) of shares will introduce new sectors, such as tourism, and add depth to others, like real estate, both areas where the government is investing. A $24 million IPO of new shares in Risma, a subsidiary of French hotel group Accor, closed on 15 May 24.5 times oversubscribed. The stock is the first in the tourism sector to be listed and demand was high. The stock listed at MD 240 ($27.90) on 15 May and was up to MD 319 ($36.70) on its third day of trading. But the IPO had no effect on market liquidity. ‘Risma did not drain liquidity,’ says Upline Securities’ analyst Amine Bentelab. ‘The market can bear IPOs of $50 million-100 million without any impact. The rise will slow down prior to an IPO, but [the market] will return to an upward trend.’ Real estate company Addoha Group is expected to offer 30 per cent of its shares, worth about $250 million, in June. Chemical company Societe Nationale d’Electroclyse et de Petrochimie (SNEP) is expected to stage a $20 million-25 million IPO by the end of the year. The majority of investors are local institutions, but foreign investors account for 30 per cent of the market. ‘The number of institutional investors is growing. Fund managers in London, the US and recently the GCC have noticed Morocco,’ he says. Many local funds are prohibited from investing abroad. ‘There’s MD 100,000 million [$11,583 million] stuck in the market,’ says Bentelab. The upward trend is expected to last until the end of the year. ‘The market is on a steady climb. There is local and foreign demand, a positive economic environment, IPOs are expected to stimulate the market and Moroccan companies are attractive and liquidity is plentiful,’ says Bentelab.