In the sovereign debt segment, Treasury raisings amounted to 235 billion dirhams (MMDH) at the end of last October, indicates the AMMC in the 9th issue of its Capital Market Review.
For their part, the issues concern 35% on short maturities, 34% on medium maturities and the remaining 31% on long maturities, with rates between 2.9% and 5.5%, specifies the same source.
In terms of the bond market, issues stand at MAD 6.3 billion since the start of the year, the publication reports, adding that the outstanding bond amount amounts to almost MAD 169 billion at the end of October 2023, recording a slight decrease of 1.1% compared to the same period a year earlier.
Regarding the market for negotiable debt securities, the AMMC underlines that issues reach 62.8 billion dirhams during the first ten months of 2023, 70% of which was drained by bank raisings.
This 9th issue of the Capital Market Review takes stock of the Authority’s activities carried out during the 2nd half of 2023, both nationally and internationally through the consolidation of its engagement in international regulatory bodies and strengthening bilateral cooperation actions.
The key figures recorded by the different market segments are included in the usual sections.
A focus is also proposed on the approval process for collaborative financing companies in the “investment” category, introduced by Circular No. 01/23.
Interview: Insights on Sovereign Debt and Bond Markets with Dr. Amina Lahlou, Financial Analyst
Editor (Time.news): Welcome, Dr. Lahlou! We appreciate your time today. Let’s delve into the recent report by the AMMC regarding sovereign debt. Can you provide us with an overview of the key findings?
Dr. Amina Lahlou: Thank you for having me. The AMMC report highlights that at the end of October 2023, Treasury raisings reached 235 billion dirhams (MMDH). This indicates a substantial engagement in sovereign debt, particularly given the ongoing economic landscape.
Editor: Those are significant figures. How did these raisings break down in terms of maturities?
Dr. Lahlou: The distribution is quite interesting. We see 35% of the issues focusing on short maturities, 34% on medium maturities, and 31% directed towards long maturities. The interest rates on these issuances range from 2.9% to 5.5%, which provides a diverse offerings to investors.
Editor: Speaking of the bond market, the report mentions an issuance of MAD 6.3 billion since the start of the year. How does this figure compare with previous years?
Dr. Lahlou: Indeed, the bond market is currently at an outstanding amount of almost MAD 169 billion, which reflects a slight decrease of 1.1% compared to the previous year. This can be indicative of market sentiments where investors are either becoming cautious or reassessing their positions amidst fluctuating economic conditions.
Editor: With the market for negotiable debt securities showing 62.8 billion dirhams in issues, of which 70% was drained by bank raisings, what does this suggest about banks’ roles in the current financial environment?
Dr. Lahlou: This suggests that banks are significantly leveraging their position in financing, which can be both a risk and an opportunity. The strong reliance on banks for issuing negotiable debt securities highlights their central role in stimulating liquidity and funding within the economy, but it also raises questions about their exposure to potential risks if economic conditions do not improve.
Editor: The report also mentions the AMMC’s activities in reinforcing international regulations and cooperative actions. Why is this important for the Moroccan financial landscape?
Dr. Lahlou: Strengthening international cooperation and regulatory alignment is crucial. It not only enhances the credibility of Morocco’s financial framework but also improves investor confidence. In a globalized market, having robust international ties enables local entities to better respond to global financial challenges and opportunities.
Editor: Lastly, could you elaborate on the recently introduced process for collaborative financing companies in the investment category?
Dr. Lahlou: Certainly! Circular No. 01/23 has introduced a structured framework for collaborative financing companies. This could potentially open new avenues for investment and financing, aligning with sustainable development goals. It’s a positive step toward diversifying the investment landscape, which could attract more investors and enhance economic growth.
Editor: Thank you, Dr. Lahlou. Your insights into the sovereign debt and bond market are invaluable for our readers.
Dr. Lahlou: It was my pleasure. Understanding these dynamics is crucial for anyone engaged in investment and finance in Morocco. Thank you for the discussion!