Investing in the stock market: what you need to know for a profitable strategy

Stay organized, track country market and macroeconomic indicators, track global prices and create dashboards grouping various industry indicators and listed companies. These are conditions for effective management of investments on the stock market. If getting started seems difficult, the task becomes easier when good habits are established.

Investments in the stock market are available to everyone. Provided certain rules and discipline are observed. This was the general conclusion of the participants of a webinar organized on Wednesday by the Casablanca Stock Exchange in partnership with the Professional Association of Brokerage Companies (APSB) on the topic “How to properly manage your investments on the stock exchange?” This discipline begins with drawing up a plan of action that must be clearly followed.

The stock market position is presented as very simple. According to Abdelaziz Lahlou, director of economics at Attijari Global Research, you should keep a close eye on economic releases, be selective in your stock selection and, for short-term trades, stay in touch with the market. It’s also helpful to build a data-driven dashboard to help make decisions. Important information common to all sectors is the annual profit, dividends and the forecast for the next year. To this can be added the investment program and the debt of the registered company. In addition, information such as the key rate, interest rates and daily trading volumes in the market can be a key indicator when making a decision.

When you want to invest in the banking sector, for example, bad loans are an excellent indicator of performance. In industry and construction, oil prices and state investment platforms will be closely monitored. For the food industry, the dashboard should allow monitoring of commodity prices and inflation in Morocco. On the other hand, when telecom companies are selected for stock market investments, more attention will need to be paid to allocation policies and market shares. Finally, supply chain continuity is an important metric when it comes to distribution investments. Other ratios can be closely monitored and are provided by the trade press, stock brokerage firms, and are available on the website of the Casablanca Stock Exchange.

Diversification to reduce risk

Experts will never say it enough. Diversifying your stock portfolio helps reduce risk. It is also recommended to keep 12 to 15 lines (shares of registered companies) per portfolio. Below that, the risk is too great. Furthermore, diversification no longer helps reduce risk. Obviously, you need to practice enough before taking the plunge.
How much do stock exchange transactions cost and how do you carry them out? To open a securities account, you must first register with a brokerage firm or bank. It is these entities that will execute orders for the purchase/sale of securities. Costs are divided into two parts. The first concerns transaction fees. This category is characterized by three expenses: “brokerage commission retained by the brokerage company from the transaction amount (0.6% excluding maximum tax), stock market commission retained by the Casablanca Stock Exchange from the transaction amount (0.10% excluding tax) and fees for settlement/delivery deducted by the account holder from the transaction amount (maximum 0.20% excluding tax),” recalls Maid Gebbas, CEO of BMCE Capital Bourse. It should be noted that the VAT applicable to these commissions is 10%. The second part of trading costs refers to the storage of securities. This is a periodic custody fee charged on the outstanding amount of the securities portfolio by the account holder on a sliding scale basis. In addition, there is a capital gains tax withholding tax (TPCVM) of 15%. The same rate applies to income from listed shares (dividends).
For the Equity Savings Plan, which is limited to investments of AED 2 million, withdrawal of shares from the portfolio in whole or in part is tax-free if made after a minimum holding period of 5 years.

Events you can’t miss this year to stay in touch with the market:
• Quarterly results of listed companies, including banking institutions, Maroc Telecom, Ennakl and Taqa.
• Bank Al-Maghrib’s key rate, the next announcement of which is scheduled for March 22.
• Annual results and dividends at the end of March across the market.
• Quarterly results, the publication of which begins in mid-May.
• Bank Al-Maghrib key rate to be announced on June 21.
• Quarterly results are scheduled for mid-August.
• Bank Al-Maghrib key rate to be announced on September 27.
• Results of the first half of the year, end of September.
• Results of listed companies in the third quarter, mid-November.
• Bank Al-Maghrib key rate to be announced on December 20.