Plan

Introduction

Chapter 1: Presentation of Casablanca Stock Exchange

Section 1: Evolution

section 2: The bodies of the stock market

section 3: The roles of the stock market

Chapter 2: The functioning of Casablanca Stock Exchange

section 1: Market structure

section 2: stock market indices

section 3: The stock market operations

Conclusion
 Introduction

The stock market is a public place where assemble at certain hours

traders, dealers and stockbrokers to transact business. So it is a
particular area where determined equity products. There are as follows:
- Commodity exchanges where is negotiated commodities and raw
materials .
- The stock exchange, it processes transactions of currency
conversion.
- A stock exchange is an organized market or exchange securities. It
further identifies the capital market in the long term.

Indeed, the Moroccan financial market experienced a major

modernization movement in order to pass the Morocco of a debt
economy to a financial market and therefore achieve a state of optimal
allocation of resources. In this context, the Moroccan authorities have
undertaken several reforms through different stages. Specially The stock
exchange of Casablanca which is an institution established in Morocco in
1929 under the name of the Office of Compensation Securities, the
development of the securities market and the introduction of exchange
controls in 1948 led the government to be interested and to regulate its
organization and operation.
In this work we chose to treat the subject in two parts, the first is a
presentation of the Casablanca Stock Exchange, the second part
contains an explanation of the operation of the stock exchange.
 Chapter 1: Presentation of Casablanca Stock
Exchange

Section 1: Evolution of Casablanca Stock

Exchange

The Casablanca Stock Exchange was founded at 7 November

1929, under the name of the Clearing Office of Securities; it has
experienced three successive reforms, the first in 1967, second in 1986
and third in 1993. The Casablanca Stock Exchange is the first in the
Maghreb and West Africa and the second in Africa after Johannesburg. It
has a market capitalization of 57 billion euros. The Casablanca Stock
Exchange has 81 listed companies and 19 companies stock exchange.
Today, the Casablanca Stock Exchange is set to new technologies
and quotations are no longer in the auction, but electronically. The new
system began in 1997. In early 2008, the Casablanca Stock Exchange
rose in the scoring system, the same system used by Euronext.
As the indicator of the Casablanca Stock Exchange, it is named
Moroccan All Shares Index "MASI" and is measured in points and
percentage. In fact, this index was a simple arithmetic average does not
take into consideration the weights or weight cap companies in the
overall capitalization. After the market authorities have decided to
innovate by changing the indices and adopting the concept of floating.
The Casablanca Stock Exchange operates as a company since
the Management Control Managers themselves managing various parts
of the organization: finance, general business, marketing, market,
organization and the organizational systems. As a business, it offers
various services to investors, issuers, but also to the general public
because it provides training for people wishing to learn the intricacies of
running quotes and everything that revolves around it.
So even if it is less known, we should know that it exists and that
the stock panorama is not limited to large well-known places. Today we
see the emergence of a few stock exchanges like the Casablanca Stock
Exchange just waiting to make their way in the world of finance and
follow the movement of development began in 1997 and still continues
today.
In 2008, the Casablanca Stock Exchange has become the second
largest financial center in Africa after Johannesburg and before that of
Cairo. The average daily trading volume exceeds 100 million euros and
capitalization of mid-July 2008 to over 67 billion euros.

Section 2 : The bodies of Casablanca stock

exchange market

 Brokerage firms:
Approved by the Ministry of Finance, they were created in 1995 by the
"Dahir" (Royal Decree) establishing Law Number 1-93-211 of 21
September 1993. They enjoy a monopoly in terms of stock market
brokerage. They have as primary purpose; executing transactions in
securities, ensuring the safekeeping of securities, manage portfolios of
securities pursuant to a warrant and conduct market securities listed.
They are remunerated by a brokerage commissions and custody.
In the case of initial public offerings, brokerage firms also assist
corporate entities making public share offerings by preparing
documentary information for the public as well as collecting
subscriptions.
Furthermore the brokerage firms can:
Advise and solicit clients. Constitute deposits. Contract an insurance
covering the risk of loss, theft or destruction of capital values in their
care. Establish a guarantee fund designed to compensate customers of
companies in liquidation.
Actually, 12 companies are operational trading on the Moroccan market,
namely: ( Alma finance group, Art bourse, Attijari intermediation, BMCE
capital bourse, BMCI bourse, Capital trust securities, CDG capital
bourse, CFG marchés, Crédit du maroc capital, EURO bourse, ATLAS
capital bourse, ICF al wassit, Integra bourse, Maroc service
intermediation, Sogecapital bourse, UPLINE securities, WAFA bourse ).

 The supervisory authority (CDVM):

The Moroccan Financial markets Authority, is a public institution wich
has its own legal status and is financially independent. It is administered
by a Board of Directors which includes, in addition to the president:
- Two representatives of the administration.
- A representative of Bank Al-Maghrib.
- Three personalities chosen for their expertise in the financial field
and appointed by the Board for a term of four years renewable
once. These personalities may not be directors or managers of
corporations under public law.

This operator has for responsibilities:

- To ensure the improvement of the quality of information provided
by listed companies, through audits and investigations from the
companies concerned.
 - To assure the proper functioning of the market by controlling the
operation of the SBVC, price changes and supporting the
government to regulate markets.
- To guarantee the protection of savings invested in transferable
securities or other investments resulting in a public offering
(UCITSV).
- To ensure compliance with the reporting procedure the crossing of
thresholds by the shareholders of listed companies.

 Central depository (MAROCLEAR):

The securities represented by a physically printed that identifies its origin
and the rights it represents. The existence in the form of paper contained
some risks, so it was replaced by computerized registration current
accounts.
Maroclear is Morocco’s central securities depositary it was created in
1997, its missions consist in enhancing the security of transactions and
optimize the settlement and delivery of the Securities Exchange. The
differents stakeholders in its share capital are:
- The Moroccan Federation of Insurance and Reinsurance (15%)
- The CDG (10%)
- BAM (20%)
- The GPBM (20%)
- The Treasury (25%)
- The SBVC (5%)
- Others (5%)

 Mutual funds:
Mutual funds are investment funds that allow investors to invest
collectively in different transferable securities and holding shares or
representative shares of investment they achieved.
We can find four major categories of funds; the choice between them
depends on the requirements of the investor in terms of profitability and
risk:
 - Equity funds: 60% invested in equities, they are very sensitive to
market fluctuations. The expected return is high, but the risk is
greater.
- Diversified funds: Invest in both stocks and bonds to the manager's
discretion. The risk / profit is linked to the arbitration conducted by
the manager.
- Bond funds: 90% invested in bonds. The performance of this
category of funds is related to changes in interest rates. The risk is
low but the profit is lower than other categories.
- Money market funds: initially intended to pay short-term cash
institutional investors, returns are regular and the risk is negligible.

 The professional association of stockbrokers (PASB):

Founded in 1995, the PASB is an organization that brings together all the
intermediaries operating on the Casablanca Stock Exchange, it aims to
express the views of professionals on the development of the financial
market trades and defend the collective and individual interests of its
members.
Its mission is to inform its members of the various changes affecting the
business and its environment and help them to appreciate the
consequences through the organization of seminars and conferences. It
therefore ensures that the information of its members on all issues that
interest them.

Section 3: the role of the stock market

 The financing of the economy

 It is the role of the primary market to ensure direct contact
between new investors and economic agents (companies, governments,
public bodies) seeking funds. The financial market fulfills its function
when it comes to attracting new savings. The financial market thus
facilitates the development of enterprises.
Indeed, it is the "institutional investors" that play an important role
in this market because of their financial strength. Also called "institutional
investors", they are made by insurance companies, pension funds, the
deposit and consignment office and mutual funds created by all financial
and banking institutions. They can also intervene massively in the
secondary market to regulate prices.

 Financial mutations business

The stock market (secondary market) facilitates changes in the

financial structure of large listed companies that is to say in the allocation
of their capital between the different shareholders. The Exchange allows
alliances, restructuring, mergers and takeovers.
The bid is a financial transaction that allows a company to take
control of another publicly offer to the shareholders of the latter to
redeem their shares at a higher price than the current market price.
The bids are severely restricted, especially as raiders appeared. These
launch bids on companies weakened not to take control and manage but
to make financial gains.

 Actors Exchange
 Brokerage firms are the basic actors of the Exchange. These are
financial institutions, often subsidiaries of major banking institutions,
responsible for negotiating and trading securities. So these are legal
persons who succeeded in 1988, to an individual, the stockbroker.
Broker as before judicial officers that were stockbrokers, have a
monopoly of trade on the exchange.

Chapter 2: The functioning of Casablanca stock

exchange

Section 1: Market structure:

The stock exchange market called the financial market is the market for
long-term capital, the meeting place of economic agents with surplus and
those who have a need for funding. This market offers diversified
products (stocks, bonds ...) to attract capital and hence finance the
economy:
Shares: are equity interests in a corporation that gives its owner a
shareholder and gives it a proportionate interest in the management of
the company on the profits and corporate assets.
Bonds: represent a claim on the issuer which entitles the holder to
payment of interest and repayment of principal. The bond has no political
right (it does not participate in meetings), except in cases of change in
the structure of society.
The Stock Exchange comprises a central market, where buying and
selling the orders are matched for each security listed on the Stock
Exchange, and a block-trade market where listed securities are traded
over-the-counter for a size equal to or greater than the minimum block
size underprice conditions derived from the central market.
 Central market

The central market plays a crucial role in the functioning of the stock
market, to the extent that the share price is determined on the central
market following the confrontation of purchase and sale orders.
Indeed, market orders are centralized in a single order book which allows
comparison of supply and demand and to establish an equilibrium price.
To summarize, the Casablanca Stock Exchange market is a centralized
order-driven versus market prices. The large orders from institutional
investors may have a significant impact on the current passing through
the block market. The operations on the block market must respect,
except in very special cases, the following conditions:
Involve a number of shares equal to at least the minimum block size
(TMB), defined by the Casablanca Stock Exchange.
Be entered into a course included in the price range issue from the
central market.
 The electronic system:

The stock exchange of Casablanca has an electronic trading system

since 1997. The values of the auction have gone to the electronic system
gradually from 18 May to 28 June 1998. The electronic system is a
network for connecting between stations installed in trading companies
of stock exchanges or other places approved by the company managing.
The order entry can be satisfied only as negotiators on behalf of the
brokerage firm.

Section 2: stock market indices

The indices are used to track the evolution of a stock exchange as well
as the profitability of the portfolio of listed securities, at Morocco different
indices exist;
 The General Index Fellow:
The first index created by Casablanca stock exchange called "general
market index". It was created in 1986, it was the official index. It
measured the evolution of the market capitalization of all listed over a
record date to 31 December 1979 titles and 100 based on this same
date. It keeps track of all trading days, the evolution of the aggregate
value of these securities compared to the basis used.
The GIF at time t is obtained by the following formula:
With Cap t: capitalization at time t and CBA t: capitalization adjusted
base at time t.

 Index of Casablanca finance group CFG 25:

The index was created in order to provide the Moroccan market of a
representative indicator of market trends and reflects the structure of the
different sectors of the market rating. CFG25 the index is based on the
25 most active market value, in terms of liquidity (trading volume) and
market capitalization. It is configured so that the sectorial distribution of
25 selected titles or a representative sample of the shares listed on the
Official List. The composition of the index is modified periodically to
reflect changes in economic conditions and the growth of certain
industries.
 The new indices:
In order to develop instruments to measure performance and in order to
provide tools for a dynamic approach to collective management, the
Casablanca Stock Exchange has developed a consistent range of
capitalization indices: The MASI (Moroccan all Shares index) and
MADEX (Moroccan Most Active Share Index), broadcast since 1 January
2002.

Moroccan all shares index (MASI):

This index contains all values of type shares listed optimally, the
development of all listed securities consist to have a long-term visibility
for portfolio management.
Moroccan most active shares index (MADEX):
Created also in January 2002, this index is composed of continuously
quoted securities, which changes are correlated with the whole market,
MADEX serves as a reference to the indexation of shares, it is expected
to become the main benchmark, this change in indices of Casablanca
Stock Exchange has the objective of improving the visibility values for
market participants. It should be noted that the new indices are based on
the same methodology as the major index conceptions in the world.

Section 3: The stock market operations

Distribution of funds raised by type of operations

( In millions of MAD )

2006 2007 2008 2009 2010 2011 2012

introductions 3606 6825 3851 - 837 416 27
capital 1854 224 2883 2508 6010 6747 7225
increases
bond issues - 4770 10050 8150 11446 10624 9450
total 5457 11819 16784 10658 18293 17787 16702

While the year 2012 has not been brillant for the Casablanca
stock market where all market indicators declined. However, it is clear
that despite a difficult economic environment, the Casablanca Stock
Exchange has continued to play its role as a corporate finance the
national economy. Thus, the year past, instead recorded 16 capital
transactions which resulted in a cumulative lift of 16.7 billion dirhams.
This amount is certainly in decline compared to 17.78 and 18.29 billion
dirhams recorded respectively in 2011 and 2010, it remains that in this
volume shows the value of listed recourse to the capital market for
companies raise the capital needed for their development.
 Moreover, by taking a dispatching volume recorded in 2012, there
was a balance of debt issuance transactions and capital increases and a
sharp decline in IPOs. In fact, one small operation in initial public
offerings was recorded in 2012 Affric Industries has raised 27 million
dirhams. However, like the last four years, the bond market is a craze
from the listed companies. Therefore, six bond issues were recorded for
an amount up to 9.45 billion dirhams. It is a method of financing
increasingly used by companies, for various reasons. First, in an
environment marked by tightening bank liquidity environment, the capital
market is a source of alternative financing deal with the conditions of
more selective credit banks. Then, bond yields are generally relatively
low compared to the rates offered by banks. Thus, by way of example,
the CIH is out on the market for 1000 MDH with a maximum rate of
5.30% risk premium included.

Finally, the enthusiasm of banks to the bond market, particularly

for subordinated bonds can be explained by the fact that the funds raised
through these subordinated bonds are treated as quasi-equity. Therefore,
in recent years, almost all local banks have used this financing
instrument to further strengthen their capital. In 2012, BMCE Bank
launched a subordinate of 1000 MDH.

Conclusion
The Casablanca Stock Exchange was established to complete our
financial system that has long been confined to the single banking
system, managed system, that is to say non-competitive.
The organization of the stock market must satisfy a number of
requirements related mainly to security, transparency and market
liquidity. In practical terms, this has resulted in the establishment of
different actors with different but complementary roles.
The Moroccan securities market, which was created November 14, 1967
has certainly seen undeniable progress since its reform in 1993, but the
emergence of the stock market as a whole, therefore, remains a goal not
achieved, and progress towards the market economy a goal far from
being realized. beyond a refined architecture regulations, it will take more
initiative and imagination to permanently reform.