Stock market results : The first effects of the COVID-19

Executive summary

The Q1-20 was marked by the worldwide spread of the Covid-19 pandemic. An unprecedented health crisis which has led Morocco, as many countries, to opt for a strict lockdown of population and shutdown of several economic activities.
Despite the fact that lockdown started only by the end of the quarter, i.e. on March 20th 2020, its impacts were nevertheless visible on listed companies both activity and dividend policy.
Upon our analysis of the quarterly listed companies’ press releases, we come out with four key messages :

• The stability of the market’s aggregate revenues in the Q1-20 conceals a sectoral disparity. The first activities negatively impacted by the Covid-19 are those related to Building Materials and Cement. Conversely, lockdown particularly benefited to Telecoms and Insurance ;
• The market’s debt level appears to be under control at the end of March. In fact, 32 companies announced a decrease in their net debt against only 13 which announced an increase ;
• Faced with a climate of uncertainty caused by the health crisis, several listed companies have reviewed their dividend for the FY 2019. As of June 5th 2020, 29 companies lowered or even waived their dividend. In the end, the 2019 dividend stood at MAD 13.6 Bn, down -37.6% com-pared to 2018 ;
• Local investors are particularly sensitive to the dividend yield offered by the stock market. Listed companies which maintained attractive D/Y levels reported high market performances. However, those which waived the dividend generally show under-performances.