Credit qualms cause property stocks in Morocco to fall

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CREDIT QUALMS CAUSE PROPERTY STOCKS IN MOROCCO TO FALL

Wednesday, 24 Sep 2008

The shares for property in Morocco dropped to the extent of 6% recently. The sizable drop in percentage is due to qualms regarding the international credit crisis, and could result in a drop in the number of foreign investors in Morocco, the United Arab Emirates’ most quickly growing sector for property.

Various analysts say that the stock market in Morocco has been declining for a few months now, because investors feel that the price of the shares was too much when taking expectations for earnings into account, especially where the stocks for Morocco property are concerned. One analyst from Casablanca who prefers to remain anonymous says, “It’s been a long while that analysts have said the market is overvalued and a correction would be healthy.”

The analyst went on to say that the stocks for property in Morocco are seen as being more overvalued than any other property market, and are causing even more concerns to arise now due to the recent international credit crisis. He says further, “Morocco is not at all exposed to the same products such as subprime."

The same analyst also says, “People see there is a morose climate in real estate and they know these stocks are exposed to international markets that increasingly lack liquidity.” Real estate companies have empowered the stock market in Casablanca in a big way in the last few years, made easy by the fact that so many investors wanted to gain from the building boom for property in Morocco.

A portion of the future profits for companies buying and selling accommodation in Morocco and other property in Morocco is dependent on the demand for large new coastal properties that are geared towards European buyers looking for second homes in a good holiday destination.