Morocco's stock exchange introduces new mechanisms to improve liquidity

Apr 11, 2014

The Casablanca Stock Exchange (BVC) will introduce changes to improve the level of liquidity, CEO Karim Hajji has announced.

The Casablanca Stock Exchange (BVC) will introduce changes to improve the level of liquidity, CEO Karim Hajji has announced.

He explained in an interview with the newspaper "L'Usine Nouvelle" that the BVC is working with the Moroccan government to create a legal framework for the creation of new mechanisms, such as pre-borrowing, which should go live by the end of the year.

Pre-borrowing allows an institutional investor to lend or borrow shares or bonds, and to sell them immediately on the market. Mr Hajji expects this mechanism to increase the level of liquidity.

He said: "The law on pre-borrowing transactions and the implementing decree have been adopted. There is one amendment under discussion to make it more attractive to investors."

This announcement comes just weeks after the publication of a report by consulting firm Cejefic, which stated that the BVC narrowly avoided a crash.

This study, commissioned by the BVC, says that volumes fell by nearly 70 per cent on the Casablanca Stock Exchange between 2007 and 2013.

These low volumes have resulted in a lack of liquidity on the market, which impacts prices and prevents investors from diversifying their strategies, concludes the report.ADNFCR-2976-ID-801711776-ADNFCR