Spring 2013

ASSOCIATION COLUMN: Dormant wealth

Amine-AmorIn Morocco, the asset management sector is large and cosmopolitan, certainly one of the biggest and most sophisticated in the Middle East. It has a sophisticated investor base, a strong and resilient economy, a world class regulatory environment, and an innovative, multilingual, skilled workforce.

In Morocco, there are more than 300 funds and 18 asset managers. Of the 18, seven are linked to banking groups and the rest are independent. Those asset managers that have links to banks have a market share of about 80%, while the top three of the 18 asset managers have a market share of about 60%.

The country’s assets under management are approximately $30 billion. Fixed income funds make up 58% of this total, money market funds 27%, equity funds 10% and balanced funds around 4%.

The local asset managers offer a wide variety of products and vehicles across all asset classes, including contractual clauses relating to capital guarantees and/or coupled to additional capped income.

The Moroccan asset management industry serves retail investors and institutional clients, such as insurance companies and pension funds. The Moroccan industry also manages financial reserves held by non-financial companies, government, local authorities and others. Many of these clients invest through a combination of investment funds and discretionary mandates.

Institutional investors represent the largest client category of the Moroccan asset management industry, accounting for 66% of total assets under management compared
with 22% for corporate clients and 10% for professional investors.

The future of wealth management will depend on whether lawmakers and bankers can develop dormant wealth and enhance stock market liquidity. A lot of money is sleeping under mattresses because many people don’t like conventional products and would prefer the option to put their money in sharia-compliant funds.

Regulatory authorities are preparing for the Islamic segment, and the Casablanca stock exchange is looking into liquidity issues.

Finally, the financial system is regulated by different government agencies. The relationships among participants, the trading mechanism and the overall flow of funds are managed, supervised and controlled by these statutory agencies.

In Morocco, two agencies regulate the financial market: the Bank Al-Maghrib, which is Morocco’s central bank, and the Conseil Déontologique des Valeurs Mobilières (CDVM), the Moroccan Securities and Exchange Council.

The Bank Al-Maghrib has the primary responsibility of maintaining liquidity in the money market, while the CDVM has a primary responsibility to regulate and supervise the capital market. The CDVM has issued a number of guidelines and rules for the control and supervision of the capital market and investors’ protection.

The investment management association supports and promotes a commercially successful and growing Moroccan investment management industry.

Amine Amor is president of the Association des Sociétés de Gestion et Fonds d’Investissement Marocains

©2013 funds global MENA

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