The causes of the MASI’s recent correction

The MASI recorded a sharp -12% correction between February 20th and March 3rd, 2026, despite the acceleration in revenue growth of listed companies to +12.2% in Q4-25, in a particular context marked by the escalation of military tensions in the Middle East. This MASI correction represents one of the most significant underperformances among African and European stock markets.

Based on our own analysis, we highlight four key takeaways:

  • The MASI correction can’t be explained solely by geopolitical tensions, but also by purely domestic factors. On the one hand, the increasing weight of “Individual” investors is now contributing to amplifying downward phases in the market. On the other hand, the multiplication of the State’s financing operations through REITs (OPCIs) appears to have weakened the institutional investors’ buying stance toward equities;
  • Two key insights emerge from this correction. The first highlights the vulnerability of “overvalued” stocks during market downturns. The second suggests that this correction is primarily driven by flow dynamics rather than by a negative investor reaction to listed companies’ results;
  • Market experience shows that corrections triggered by geopolitical tensions are generally temporary in nature. Indeed, investors tend, sooner or later, to refocus on economic fundamentals and the outlook of listed companies, once the first signs of geopolitical easing begin to emerge;
  • The stock market’s correction may offer tactical repositioning opportunities, particularly across five sectors: Banking, Building Materials, Healthcare, Cement and Ports. These sectors have recorded significant declines in their valuation multiples (P/E) without showing any deterioration in their MT growth prospects.

Understanding the MASI correction: beyond geopolitical factors

The MASI correction can’t be explained solely by Middle East tensions

During the period marked by the escalation of military tensions in the Middle East, from February 20th to March 3rd 2026, the Moroccan stock market recorded one of the sharpest corrections among African and European indices. Over the same period, the MASI posted a stronger decline than the Egyptian market, falling by -12% against -8% respectively. Yet, Egypt remains more exposed to the economic consequences of this geopolitical conflict.

This sharp correction in the Moroccan market can’t be attributed solely to the geopolitical environment, which naturally affects investor risk aversion, but also to purely domestic factors. In our view, these factors have further amplified the magnitude of the MASI’s decline.

The reconfiguration of market structure through the growing weight of “retail” investors…

Over the past two years, has undergone a profound reconfiguration. This has been marked by the strong comeback of individual investors, whose share in trading volumes has more than doubled, rising from an average of 12% during the 2019–2023 period to 28% as of 2025.

Beyond , which has historically been the main driver of individual investors’ participation in the stock market, we note the emergence of around fifteen discretionary portfolio management operators, primarily dedicated to this segment. These players currently manage nearly MAD 80 Bn of which around 15% is allocated to equities. Facing strong competition in terms of fundraising and performance, these operators tend to adopt high portfolio turnover strategies. Based on our discussions with various market participants, the annual turnover of equity portfolios managed under discretionary mandates is estimated between [3x and 6x], compared with an average level of around 0.5x for traditional equity UCITS.

…coupled with the Treasury’s increasing reliance on innovative financing mechanisms…

As part of its strategy aimed at diversifying its funding sources and containing pressure on its fiscal balances, the Treasury has accelerated its reliance on innovative financing mechanisms, through the valuation and active management of the State’s real estate assets. Since 2022, these mechanisms have mobilized more than MAD 115 Bn, of which 35% was executed in 2025, representing an execution rate exceeding 110% compared with the targets set in the 2025 Finance Law. In our view, this issuance momentum is expected to continue in 2026, with a target volume of around MAD 20 Bn.

Designed primarily for institutional investors, these REIT-structured products offer highly attractive annual returns of around 6.0%, a level roughly twice the yield of 10-year and the average D/Y of the stock market. It is therefore natural that the growing use of innovative financing instruments would capture part of institutional savings at the expense of equities. From a proactive portfolio management perspective, institutional investors are likely to regularly conduct arbitrage operations in the stock market in order to generate the liquidity required to participate in such transactions.

…structurally fuel the volatility in the Moroccan stock market

Under this new market configuration, the Moroccan stock market appears to be experiencing a shift in its volatility regime. Indeed, our “AGR 1M Volatility Index” has risen from an average of 8.7% during the 2010–2019 period to 14.6% over 2025–2026. In other words, the Moroccan stock market now appears more prone to amplifying the short-term impact of exogenous shocks, due to the combined effect of two factors:

  • The growing weight of individual investors, whose investment horizon typically remains short-term and is associated with relatively high portfolio turnover; 
  • The weakening of institutional investors’ buying support, particularly during periods marked by strong momentum in the State’s REIT operations.

Listed companies' results: strong revenue acceleration in Q4-25

In Q4-25, reported an acceleration in revenue growth to +12.2%, compared with an average of +7.2% during the first three quarters of the year. The aggregate revenue of listed companies thus reached MAD 98.4 Bn, representing an increase of MAD 10.7 Bn. This performance was mainly driven by the Mining and Building Materials sectors, which together accounted for more than 60% of the increase in aggregate revenues of listed companies (MAD +6.7 Bn). More specifically, we highlight the following observations:

  • Mining sector’ revenue was multiplied by 2.6x from MAD 2.7 Bn in Q4-24 to MAD 7.0 Bn in Q4-25, mainly driven by the increase in Gold and Silver prices by +52.4% and + 67.8% respectively during the same period. The Building Materials sector posted a +21.6% increase in its revenue (MAD + 2.3 Bn), supported by Morocco’s investment momentum and TGCC’s external growth operation; 
  • The Energy sector was the only sector to record a decline in revenue, i.e. MAD -517 Mn in Q4-25 (-5.7%), mainly reflecting the drop in international energy prices. It should be noted that revenue fluctuations among energy distributors do not directly affect their profitability levels, such as .

Sector performance of the equity market in 2025

In the FY 2025, the aggregate revenue of listed companies posted a strong growth of +10.1%, representing twice the annual growth rate recorded over the 2023–2024 period. On a pro forma basis, revenue growth stood at +8.9%. By sector, we highlight the following trends:

  • 14 listed sectors, representing 84% of total market capitalization, displayed an improvement in their annual revenue: Mining (+52%), Healthcare (+45%), Building Materials (+30%), Automotive (+28%), Ports (+15.5%), IT (+14.8%), Cement (+14.4%), Industry & Services (+13.9%), Retail (+12.9%), Financial Services (+9.3%), Insurance (+8.7%), Real Estate (+8.3%), Banks (+5.3%) and Agri-business (+3.7%);
  • The Telecoms sector recorded almost stable revenue, while the Energy sector saw its cumulative revenue decline by -4.5% in 2025. The latter accounts for more than 7% of total market capitalization

Confirmation of our 2025 growth scenario

It is reassuring to note that the 2025 results of our coverage universe (AGR-30) are broadly in line with our forecasts. Indeed, the aggregate revenue of the AGR-30 recorded a growth of +8.6% in 2025, compared with an estimate of +8.2%, implying an average achievement rate close to 100%.

By sector, achievement rates range between 92% and 133%, as illustrated in the table below:

  • The Mining, Real Estate, IT, Building Materials, Automotive and Cement sectors reported revenue slightly above our latest forecasts;
  • Revenue of the Agri-business and Ports sectors are broadly in line with our estimates;
  • Revenue in the Banking, Telecoms, Energy, Retail and Healthcare sectors came in slightly below our expectations.

The most significant gaps which drew our attention are as follows:

  • The Mining sector reported aggregate revenue of MAD 15,951 Mn, compared with an AGR estimate of MAD 12,019 Mn, implying a high achievement rate of 133%. This gap mainly reflects the exceptional performance of Managem, driven by a double price/volume effect which exceeded our conservative forecasts;
  • The Energy sector posted an achievement rate of 92%, with revenue reaching MAD 25,765 Mn in 2025, compared with AGR forecasts of MAD 27,998 Mn. This gap mainly stems from TotalEnergies Maroc, whose revenue remain influenced by international gasoline and diesel purchase prices. It should be noted that these fluctuations don’t affect the operator’s distribution margin.

How to capitalize on the recent market correction?

Two key takeaways from the recent stock market correction

  • Message 1 : Relatively overvalued stocks tend to remain the most vulnerable during market correction phases. Over the period from February 20th to March 3rd 2026, stocks with a P/E 26E above 30x recorded the largest underperformance (-15%), compared with -9% for stocks with a P/E below 20x.

    The dispersion of the Moroccan stock market scatter plot highlights the relatively high sensitivity of “overvalued” stocks during correction phases, confirming the multiple compression phenomenon typically observed during periods of market stress.
     

  • Message 2 : The market correction appears to be driven more by flow dynamics aimed at generating liquidity, rather than by a negative investor reaction to the quarterly results of listed companies. Two indicators support this view :

    - During the period under review, Large-Cap stocks, which offer higher liquidity levels, recorded the sharpest correction (-13%), compared with -10% for Small-Caps and -9% for Mid-Caps; 

    - Yet, Q4-25 results for Large-caps remain positive, with revenue growth of +14%, compared with +10% for Mid-Caps and +12% for Small-Caps.

Market Correction: A tactical repositioning opportunities across five sectors

Historically, episodes of geopolitical tensions tend to trigger periods of heightened volatility in financial markets, resulting in downward movements in equities amid rising risk aversion. However, market experience shows that corrections driven by geopolitical tensions are generally temporary in nature. Indeed, investors tend to quickly refocus on economic fundamentals and companies’ earnings growth prospects once the first signs of easing geopolitical tensions emerge.

In this context, we believe that the recent correction in the Moroccan stock market may offer tactical repositioning opportunities, particularly in sectors where the decline in valuation levels does not necessarily reflect a deterioration in their medium-term growth prospects.

By combining the following factors : (1) The magnitude of the decline in the P/E 26E , (2) Earnings growth forecasts for 2026E and (3) The resilience of the medium-term growth model, five sectors stand out :

  • Banks: The P/E 26E declined by -12% compared with March 2025, falling from 13.5x to a historically low level of 11.9x. At the same time, earnings growth remains resilient at around +7% over the medium term;
  • Cement: The P/E 26E decreased by -29% compared with March 2025, dropping from 23.7x to 16.9x, while earnings growth is expected to reach +12.8% in 2026;
  • Building Materials: The P/E 26E stands at 28x compared with 41x in March 2025, representing a -31% decline. This level appears attractive given the strong earnings growth outlook of +35% in 2026;
  • Healthcare: The P/E 26E recorded a significant decline of -41%, falling from 35x in March 2025 to below 21x after the correction, while profit growth remains robust at above +30% in 2026E;
  • Ports: The P/E 26E stands now at 30x against 36x, down -17%. Taking into account the sector’s solid growth prospects on the medium-term, its valuation levels remain attractive.
View document

Did you like this page? Share it !