Innovative Financing: How OPCIs Drain Liquidity from the Capital Market

In recent days, institutional investors, who are key players in the capital market, have begun withdrawing a portion of their investments from mutual funds to redirect them towards newly launched OPCIs. Fund managers report that these withdrawals affect all types of mutual funds, particularly bond funds, which had accumulated significant positions on the Casablanca Stock Exchange in recent months to capitalize on the prevailing market enthusiasm. As a result, a wave of redemptions has spread across the equity market, leading to a decline in stock prices and exacerbating the climate of uncertainty. These tensions have coincided with fears related to the "GenZ212" movement, which have intensified selling and weakened overall market liquidity. In the bond market, this reallocation of capital towards OPCIs is expected to weaken demand for Treasury bonds and limit the potential of the bond market in the final months of the year, despite its positive trajectory since Bank Al-Maghrib began its accommodative monetary cycle. For many professionals, this phenomenon resembles an eviction effect, where liquidity flows that previously supported equity and bond markets are now directed towards public real estate vehicles, attracted by the implicit sovereign guarantee and the visibility of rental yields. This cash shift contributes to market nervousness, which could be further heightened following President Trump's announcement on Truth Social regarding an additional 100% tariff on Chinese imports starting November 1, "on top of what they currently pay." Sensitive American software exports would also be blocked from that date unless Beijing reverses its new restrictions on rare earth exports. The prospect of a renewed trade war, similar to the situation in April, has pushed global stock markets into the red at Friday's close. During the previous trade war episode in April, the Casablanca Stock Exchange dropped nearly 10% before rebounding when Washington and Beijing called a truce. Since the onset of the current correction in early September, the MASI has already lost over 12% from its peak to its lowest point. The Moroccan government has budgeted nearly 35 billion dirhams for innovative financing in 2025. These operations are recorded as revenue, allowing the Treasury to temporarily relieve its balances and finance investments without resorting directly to debt. According to estimates from the Wali of Bank Al-Maghrib, the state has already paid nearly 7 billion dirhams in rents this year for previously launched OPCIs. However, this burden is expected to increase starting in 2026, as rental payments on transferred assets accumulate, even as the pace of launching new innovative financing is expected to slow in the coming years. "We will see what the next finance law holds, but likely, in the 2026-2028 triennial programming, this amount will need to decrease," he indicated during the September Council press conference. "We should have regulated it," he added, emphasizing that these arrangements, accepted by the IMF and useful for addressing the health crisis, the earthquake, and years of drought, have proven their utility. As of the end of August, national accounting shows that other non-tax revenues—which partially include amounts raised through OPCIs—have reached 24.2 billion dirhams. Thus, approximately 10 billion dirhams remain to be mobilized, with operators expecting the state to exceed the budgeted amount this year. What is an OPCI? The Collective Real Estate Investment Organizations (OPCIs) are investment vehicles that hold real estate assets (offices, hospitals, administrative buildings, clinics, bank branches, etc.) in the form of shares. When a public entity sells an asset to an OPCI, it immediately receives the asset's value and continues to occupy the premises through an annual rent. For investors, these products offer a regular return backed by real assets and a sovereign tenant—a combination favored by pension funds and insurers. Understanding "innovative financing" These operations involve the state monetizing its real estate or other non-financial assets through arrangements (OPCIs, securitization, PPPs, etc.). They temporarily improve public cash flow by deferring certain expenses over time in the form of rents or royalties. The goal is to smooth the budgetary effort and finance investment, providing immediate resources without additional explicit debt. The Wali of Bank Al-Maghrib emphasized the need for regulation of these practices; while useful in times of crisis, they must remain proportionate and clearly monitored in multi-year programming.