Tuesday, 21 April 2009

Silk Invest investment tour - Morocco

The Silk Invest Maghreb team spent a very constructive day visiting existing and potential investment in Cassablanca. The whole economy is still growing strongly and optimism is in start contrast to developed markets. The purchasing power of the lage farming sector has been boosted by record rains and hence crop yiels. Morocco's production of soft wheat, durum wheat and barley has doubled.

At the same time, Morocco is still seeing direct investment from Gulf countries and asset sales by the government. Indeed, the whole Silk route theme is very strong. Firms like Maroc Telekom and Attijariwafa bank, the two largest companies, are expanding into Africa. For example, Maroc Telekom owns majority stakes in Gabon Telekom and Burkina Faso's Onatel.

We did witness some weaknesses. These include the high unemployment, rapid growth in banking loan books and the 'informal' sector of the economy. That said, valuations were attractive and more importantly underpinned by strong earnings growth. Delta (infrastructure) is expected to grow earnings by 64% and consrvative Attijariwafa Bank by 26%.

No comments: