EXECUTIVE SUMMARY
The first half of 2023 was marked by a visible deceleration in the inflation level both internationally and nationally. In fact, the inflation rate in Morocco declined from a high of 10.1% in February to 5.5% in June 2023. At the same time, Bank Al-Maghrib marked a pause in its monetary policy by maintaining its key rate unchanged at 3.0%, after an increase of +50 BPS in March of the same year.
At the end of this first half, 71 listed companies published their operational and financial achievements. This represents a recurring profit growth of +2.4% (excluding allowance by Maroc Telecom for a fine of MAD 2.45 Bn in H1-22). A development in line with investors expectations, 62% of whom forecasted ordinary and/or mitigated results (Cf. AGR Confidence Index Q2-23). This is evidenced by the correction of the MASI index by -3.4% since early August 2023, a scenario presented in our last edition of the AGR House View (Cf. AGR House View August 23).
Analyzing the aggregate earning power of the Equity market during this first half, we emerge with the following conclusions:
- Excluding the banking sector, the market's recurring operating margin fell from 17.7% in H1-22 to 16.6% in H1-23, i.e. a decline of -1.1 pts. Upon the analysis of listed companies’ press releases, we note several factors behind this decrease, namely: (1) The fall in sales prices of certain products, (2) The persistence of inflationary pressures on some inputs and finally (3) The proactive inventory reduction policy;
- The banking sector represents the first contributor to the evolution of the market’s aggregated recurring profits, through an increase of MAD +1,478 Mn in its profits compared to an increase of only MAD +408 Mn for all listed companies. Excluding Banks, recurring profit growth is negative, i.e. a drop of -10.5%;
- The mining sector weighed heavily on the evolution of the market’s recurring earning power. Indeed, the sector's profits fell by MAD -874 Mn given the achievements of Managem Group.
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