Morocco’s Stock Market

There are only certain economic sectors that still remain within the hands of the Moroccan Government. Most of Morocco’s fairly stable economy is based on the principle of ‘supply and demand’ and the country thus enjoys a liberal economy.

France has played a major part in Morocco’s economy since it was the country’s first foreign investor, creditor and most importantly the first trade partner. Many agreements have since taken place with other countries, the latest two being the ‘US-Morocco Free Trade Agreement’ with the USA, which came into being on 1 January 2006, and the ‘free exchange’ with Turkey. Over the last 50 years Morocco has continued to grow, with its GDP per capita rising to 47% in the 60s and, just ten years later, peaking to a massive 274%. Unfortunately a massive change in trend caused it to recess to just 8.9% by the nineties. Morocco’s economy, like so many other developing countries, faces many setbacks with trying to reduce the constraints on private activity, restraining government spending, foreign trade and sustainable economic growth. Morocco is also one of the few Arab countries that cannot rely on a substantial reserve of oil and gas.

It is of great interest, however, that Morocco is considered one of the world’s major producers and exporters of cannabis, providing most of Northern Morocco’s economic base as the primary source of stable currency. Cannabis is classically processed into hashish making up 0.57% of Morocco’s GDP. However, legislation was passed in 1992 with its new strategy against drugs being formulated by the ‘National Committee on Narcotics’, which saw the decrease in Cannabis resin by 10% in 2004. Morocco is an exporter of inorganic chemicals, clothing, fish, transistors, fertilizers, crude minerals, petroleum products, vegetables and fruits while importing textile fabric, crude petroleum, telecommunications equipment, gas and electricity, wheat and plastic imports to mention a few.

Morocco’s stock exchange in Casablanca is the third oldest in Africa being established in 1929. There is only one index and this is known as the ‘the index de la Bourse des Valeurs de Casablanca’. It currently has fourteen members with below fifty listed securities. In 1993 the stock exchange saw a major reformation that has lead to the installation of a modern electronic trading system with the future hope of implementing a central scrip depository. There are no restrictions when it comes to foreign investment or foreign ownership of companies on the stock exchange. However local and foreign investors receive a 10% tax implication on dividends but no capital gains tax. Casablanca and the Tunis stock markets are covered by a quarterly report that includes individual indexes for each market on the Arab stock exchange which was established by the Arab Monetary fund based in Abu Dhabi.

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