BMCE Capital Global Research has just released its latest “Fixed Income Weekly” report, providing an in-depth look at current trends in Morocco’s bond and money markets. This detailed analysis sheds light on financial fluctuations and key economic challenges, giving investors valuable insights to navigate market developments with greater confidence.
Here’s a breakdown of the key points from their latest market review.
In the past week, Morocco’s banking sector experienced a noticeable improvement in liquidity. The average banking deficit contracted by 2.51%, settling at -136.1 billion dirhams. This was accompanied by an increase in the central bank’s weekly advances, which rose by 4.61 billion dirhams to reach 59.7 billion.
Meanwhile, Treasury deposits saw a decline, with the daily maximum balance dropping to 12.2 billion dirhams from 17.3 billion the previous week. These shifts reflect dynamic market conditions and efforts to balance liquidity needs.
The Moroccan Treasury raised a total of 3.665 billion dirhams this past week, covering 76% of the amount it had initially proposed. The debt issuances were concentrated on maturities of 13 weeks, 52 weeks, and 2 years.
Primary rates registered a noticeable uptick, climbing by 10 basis points for short-term maturities and 5 basis points for medium-term debt. This rise in borrowing costs is expected to continue due to ongoing fiscal pressures and uncertainty regarding future access to international funding markets.
The secondary bond market reflected a generally upward trend, although performance across different maturities varied. The most significant drop occurred in the 13-week maturity, where yields fell by 12.84 basis points. In contrast, yields on the 26-week, 5-year, and 52-week bonds edged higher by 4.75, 3.25, and 2.03 basis points, respectively. Long-term rates, however, remained stable.
To address rising liquidity demand, the central bank plans to raise the volume of its 7-day advances to 64.4 billion dirhams. This strategic move reflects anticipation of heightened financial needs in the banking sector.
On the bond front, a continued upward correction, particularly for short-term rates, is projected as market conditions adjust to ongoing fiscal and monetary pressures.
BMCE Capital Global Research’s report underscores a period of both challenges and opportunities for investors. The tightening liquidity situation, coupled with rising rates, signals the importance of staying alert to further developments. As fiscal and monetary strategies evolve, market participants will need to adapt their investment strategies to seize emerging opportunities in a complex environment.
