Market Valuation Improvements
The valuation level of the market saw significant enhancement in 2025, with the overall Price Earnings Ratio (PER) declining from 35.3x in 2024 to an estimated 22.9x in 2025. This shift is attributed to a robust increase in the earnings of listed companies, followed by a further decrease to 21.04x projected for 2026.
This trend is largely a recovery from the exceptional circumstances that characterized 2024. On an international scale, the Casablanca Stock Exchange remains more highly valued than frontier and emerging markets, while slightly lagging behind major developed indices.
Earnings Projections for 2025-2026
Annual earnings reports, expected by the end of March, are anticipated to confirm a breakthrough year for 2025. According to estimates from BMCE Capital Global Research, the aggregated net profit attributable to the group (RNPG) for the market is projected to reach 41.2 billion dirhams in 2025, reflecting a 30.8% increase from 2024.
For 2026, growth is expected to continue at a more normalized pace, with the RNPG anticipated to rise to 44.4 billion dirhams, a 7.7% increase. Revenue is forecasted to hit 323.9 billion dirhams, up 8.2%, while operating income is expected to reach 91.3 billion dirhams, marking an 8.3% increase.
According to BKGR, this earnings trajectory is likely to result in a gradual easing of multiples, with the aggregated PER projected at approximately 21.3x for 2025 and 19.8x for 2026, all else being equal.
Monetary Policy Outlook
From a monetary perspective, the environment remains favorable. Bank Al-Maghrib still has room to further ease its monetary policy. With inflation expected to remain controlled around 1% in 2026, a continuation of rate reductions is anticipated, targeting a benchmark rate of approximately 2% during the year, according to analysts.
Interest Rates and Equity Markets
The interest rate environment is another crucial indicator as the year begins. Following the peak observed in 2022-2023, sovereign yields have gradually stabilized, remaining significant at longer maturities. The yield on 10-year Treasury bonds is currently around 3%, having exceeded 4% in 2022.
Simultaneously, the dividend yield in the equity market has contracted due to the substantial rise in stock prices recorded in 2025, now standing at approximately 2.9% for 2025, compared to levels above 3.5% during the 2016-2019 period.
For 2026, the market's dividend yield is expected to hover around 3%, while the Treasury bond yield is projected at 2.8%. This narrowing gap between dividend yields and risk-free rates indicates a less pronounced arbitrage between equities and bonds than in previous years.
Innovative Financing as a Liquidity Factor
The government's increased reliance on innovative financing methods, particularly through OPCIs, is a liquidity parameter to monitor. In 2025, these operations led to a reallocation of flows from institutional investors, impacting both equity and bond markets.
Approximately 35 billion dirhams were budgeted for innovative financing in 2025, compared to 20 billion dirhams planned for 2026. The pace of these operations will remain a critical indicator for assessing capital market liquidity.
Additional Market Considerations
Several ongoing issues continue to shape the market landscape. The potential inclusion of the Moroccan market in the MSCI Emerging Markets index, which was not confirmed during the last review in June, remains on investors' radar. The gradual improvement in liquidity and market structure continues to fuel interest in this matter, although it is not expected to serve as a short-term catalyst.
The recent momentum in Initial Public Offerings (IPOs) is expected to persist, contributing to an expanded range of securities, diversifying investment opportunities, and invigorating the market, particularly among retail investors.
The gradual operationalization of the futures market, starting with a product based on the MASI.20 index, represents a structural evolution. As these instruments gain traction, they could enhance hedging tools and ultimately improve market depth and liquidity.
Technical Indicators to Watch
Technically, the MASI index has recently exhibited bullish behavior following a consolidation phase. The index has re-entered the 19,000-point zone, surpassing the 20, 50, and 100-day moving averages.
Additionally, the 200-day moving average remains on an upward trajectory. Key levels to monitor include: Intermediate support at 19,000 - 19,100 points, major support at 18,200 - 18,100 points, and resistance levels at 19,500 points, followed by 19,900 - 20,000 points.