EXECUTIVE SUMMARY
The financial results of listed companies in 2020 stand out without major surprises for investors. As proof, the low levels of liquidity and volatility which marked the period of the annual release. As a reminder, during the Q1-2021, the market posted a modest average daily volume of MAD 97 Mn combined with a stock market performance ranging from -0.6% and 4.1%.
The release of the 2020 annual results is a real opportunity for us, on the one hand, to assess the operational performance of the listed sectors, and on the other hand, to revise the growth forecasts for our portfolio during the period 2021E-2022E.
At the end of this exercise, we come out with 5 key points :
- The earning power of the market shows a significant decline in 2020 of -34.4% to MAD 17.4 Bn. Beyond the repercussions of the health crisis, this under-performance is also justified by the solidarity effort of listed companies which have mobilized more than MAD 6.6 Bn for the benefit of the special Covid-19 fund. By restating the grant component and the exceptional fine of IAM in 2019 of MAD 3.3 Bn, the recurring profit growth of the market would settle at -29.0% ;
- The Financial and Real Estate sectors are the main contributors to the fall in recurring market profits due to a historic provisioning effort for the former and the sharp drop in Demand for the second. In contrast, the Mining sector is taking full advantage of the metals super cycle ;
- In a sustainable context of low interest rates, listed companies have made a considerable effort to remunerate investors on the stock market. This is an expected dividend of MAD 16.7 Bn in the FY 2020, equivalent to a historic payout rate of 96%. To this end, the D/Y offered by the market in 2020 remains 90 PBS higher than the 5-year T-Bonds, i.e. 2.9% versus 2.0% respectively ;
- The update of the growth forecasts for our investment universe, which represents 87% of the market capitalization, shows a recovery in recurring profits of +14.2% in 2021 and +15.0% in 2022. This scenario takes into account the normalization of the cost of risk within the financial sector in an improving economic context. For its part, the dividends show an increase of +24.5% in 2021 due to the return of several sectors to a normative distribution ;
- In our opinion, four sectors will generate great interest over the 2021E-2022E period, in terms of growth or D/Y. These are: Financials, Energy, Mining and Distribution.
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