Executive summary
The results of the various methods computed in this 16th edition are as follows :
- The historical risk premium posted a decrease of 2.2 points, from 6.8% in December 2019 to 4.6% in April 2020. This level is justified by the decline of the market’s gross return over the last 15 years period, from 11.6% to 9.4%. At the same time, the average yield of Treasury Bills settled at 4.8% during the same period;
- The prospective risk premium reached 7.6% in April 2020, up 1.1 pts compared to December 2019. This result takes into account a 7.0% decline of listed companies’ earnings in 2020E before recovering by +5.0% in 2021E and +7.0% in 2022E. Beyond this period, and by 2030E, the target growth rate is around 4.0% per year. This is equivalent to the longterm GDP growth level of the Moroccan economy;
- The risk premium by the survey method showed an increase of 0.9 pt, from 5.8% in December 2019 to 6.7% in April 2020. We note that Investors' required return toward the Equity market settled at 9.4%.
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