EXECUTIVE SUMMARY - MAY 2021
The results of the various methods computed in this 18th edition are as follows :
- The historical risk premium posted a significant increase of 1.9 pts, from 3.9% in September 2020 to 5.8% in May 2021. This level is justified by the rise of the market’s gross return over the last 15 years period, from 8.7% to 10.5%.
At the same time, the average yield of Treasury Bills settles at 4.7% against 4.8% in September 2020 ;
- The prospective risk premium reached 5.9% in May 2021, down 0.6 pt compared to September 2020. This result takes into account the upward revision of listed companies’ earnings growth forecasts over the period 2021E-2023E.
According to our estimates, the AAGR of recurring profits of listed companies would settle at 10.9% over this period.
Beyond this period, and by 2031E, the target growth rate is around 4.0% per year. This is equivalent to the long-term GDP growth level of the Moroccan economy ;
- The risk premium by the survey method showed a decline of 0.5 pt, from 6.1% in September 2020 to 5.6% in May 2021.
We note that the annual Investors' required return toward the Equity market settled at 8.5% for a 5 year investment.