Stock Market: A History of Shocks… and Rebounds

The stock market is reacting sharply to geopolitical tensions in the Middle East. Two consecutive sessions of declines of -4.2% and -5.6% were followed by a slight rebound in the next two sessions of 1.6% and 4.2%. As of March 11, the MASI has recorded an underperformance of 12% since the beginning of the year.

It is not that the Moroccan economy is directly exposed to the conflict involving Iran, Israel, and the United States, but investors are mainly concerned about its long-term consequences. This is an immediate reaction, typical of periods of market stress.

Although domestic fundamentals remain strong—with public finances holding up well, economic growth estimated at 4.2% in the first quarter according to the HCP, and a remarkable 10% increase in the activity of listed companies by the end of 2025, reaching a turnover of 360.4 billion dirhams—Morocco is not immune to the indirect effects of this conflict.

Concerns persist regarding the evolution of commodity prices, particularly oil and gas, potential disruptions in supply chains, possible imported inflation, and more broadly, the potential reduction in household purchasing power, investment, and consequently economic growth.

It should be noted that these declines are part of a correction movement that began at the start of the year, following a strong rise in the equity market in 2025. According to Attijari Global Research in its latest report: “The correction of the MASI is not explained solely by geopolitical tensions, but also by purely domestic factors.

On the one hand, the growing weight of retail investors now contributes to amplifying market downturns. On the other hand, the multiplication of state financing operations via OPCIs has weakened the buying position of institutional investors toward equities.”

Déjà vu!

This episode recalls several shocks—particularly external ones—that the Casablanca Stock Exchange has experienced, sometimes triggering sharp reactions, sometimes more contained. The most recent was in 2022, during the outbreak of the crisis between Ukraine and Russia.

At that time, the MASI suffered a loss of 19.75%, the worst in its recent history, and market capitalization dropped by 127 billion dirhams. Monetary tightening, with successive increases in the key rate from 1.5% to 3% in 2023, along with international macroeconomic tensions, did not help matters.

The trend was quickly reversed a year later. The market posted an annual performance of 12.8% in 2023 and entered a bullish cycle, with gains of 22% in 2024 and 27.6% in 2025.

Earlier still, the Covid pandemic shock had devastated the stock market as soon as it was announced in Morocco. During the first three months of 2020, the MASI dropped 26%, but quickly recovered in the following months to end the year with a limited decline of 7.3%, despite a 35.5% drop in total profits to 17.4 billion dirhams.

Several measures were taken to limit losses, such as reducing the regulatory price fluctuation limits for listed companies from 10% to 4%, both upward and downward, and at the macro level, gradually lowering the key rate from 2.25% to 1.5%.

In 2021, there was a remarkable recovery: the MASI rose by 18.3%, bringing market capitalization to nearly 700 billion dirhams, gaining 106 billion dirhams in a single year.

The unforgettable 2008

Going further back, during the global crisis of 2007–2008, the MASI recorded losses of 13.5% due to the turbulent international environment, but also because of certain scandals (GSI case), leaks of order books, insider trading, and more.

The year 2009 extended the adjustment phase of the Moroccan market with a 5% decline. Once again, these successive drops followed a period of strong market euphoria, with performance reaching 34% in 2007. While there was a climate of mistrust among investors, profit-taking was also at play.

However, as each shock must be seen in its context, this year’s Middle Eastern tensions are occurring at a time when Morocco is experiencing one of its most favorable economic environments.

“History has taught us that a strong recovery follows these shockwaves, and as long as the prices of certain overvalued companies fall, this represents a good opportunity to take positions if one has a long-term perspective,” explains an analyst.

In the same vein, AGR believes that “market experience shows that corrections linked to geopolitical tensions are generally temporary in nature. Investors eventually refocus on economic fundamentals and the prospects of listed companies, as soon as the first signs of easing geopolitical tensions emerge.”

A market in transformation

Regardless of the shock, over the past decade the Casablanca Stock Exchange has profoundly changed. Long characterized by a lack of dynamism and limited liquidity, it has gradually transformed, driven by macroeconomic improvements and stronger corporate earnings.

The MASI has gained 8,000 points, listed companies have generated an additional 10 billion dirhams in profits, market capitalization has increased by nearly 400 billion dirhams, and trading volumes have almost doubled.

This progress has been supported notably by several IPOs, as well as other financial operations, including capital increases by already listed companies.

Even the investor profile has changed, with a growing presence of retail investors—not only as speculators during IPOs but also as long-term investors. In fact, individuals account for about 30% of trading volume.

After the correction: five sectors to watch

The strong correction phases experienced by the Casablanca market have not only reflected episodes of risk aversion; they have also helped readjust valuation levels. This is the case at the beginning of this year.

For some investors with a medium- to long-term approach, these pullbacks represent opportunities to reposition themselves in solid companies at more reasonable price levels.

Moreover, the 2026 P/E ratio has become attractive at 18.3x, and the dividend yield is currently estimated at 3.2%. In this context, five sectors stand out in particular: banking, construction and public works (BTP), cement, and port activities.