Trump Tariffs/Casablanca Stock Exchange: «Remain selective and favor companies with strong balance sheets»
The Casablanca Stock Exchange bounced back during the Tuesday, April 8 session, following the shock of the previous day. The MASI index closed up by 1.35% at 16,479 points, partially recovering from the plunge on April 7. To recall, the Casablanca market ended that session with a sharp decline, with the MASI dropping 5.64% its steepest fall since March 2020 dragged down by turmoil in global markets.
The trigger: Donald Trump’s confirmation of his intention to raise tariffs on a number of imported goods—a decision that reignited fears of a global trade war.
Shockwave
The question arises: why would an index as localized as the MASI be so heavily impacted by a U.S. trade policy decision? The answer lies in institutional investors’ arbitrage behavior and market psychology. The contagion effect is now amplified by the globalization of information and the algorithmic sensitivity of trading platforms.
«One must not underestimate the psychological impact of U.S. decisions-even on peripheral markets like Morocco,» warn financial analysts. While the Casablanca market is only modestly exposed to the United States in direct trade terms, «it is indirectly affected by international capital flows and the overall risk-averse climate.»
Should Moroccan investors be alarmed by this drop? According to some experts, it is primarily a “technical adjustment” rather than a worrying structural signal. “The fundamentals of listed companies remain strong.
We’re even seeing some resilience in defensive sectors like retail and telecoms. Panic is not warranted,” reassures a portfolio manager. Still, he acknowledges that “if global volatility continues, the MASI could experience further short-term shocks.”
The future remains uncertain.
An Overreaction?
The MASI could rebound quickly if tensions between Washington and the rest of the world ease especially as negotiations are reportedly underway, notably with the European Union. However, if trade tensions persist, volatility will likely remain elevated. «Investors should stay selective and focus on companies with solid balance sheets, low debt, and strong, recurring cash flow generation,» brokers advise. This is sound advice not only for Casablanca but for all markets going through turbulent times. Long perceived as somewhat insulated from global shocks, the Casablanca Stock Exchange has proven otherwise.
The message from investors is clear: in an interconnected world, no financial market is truly immune. The question now is whether this setback was merely a temporary scare-or the opening act of a longer correction cycle.
F.T
