Morocco's Treasury Auction Exceeds Expectations with $700 Million Bond Sale

Sunday 05 January 2025 - 07:50

By: Dakir Madiha

Morocco's Treasury Auction Exceeds Expectations with $700 Million Bond Sale

Morocco's Treasury demonstrated remarkable market strength in its first auction of 2025, successfully raising over 700 million USD (MAD 7 billion), marking the most substantial issuance since February 2024. The January auction exceeded expectations, drawing more than 1.2 billion USD in total demand and achieving a five-month record in market interest.

The auction witnessed notable yield movements across various maturities, with decreases of 5, 4, and 22 basis points observed in the 10, 20, and 30-year bonds respectively. Despite these downward trends in primary yields, the secondary market curve showed an upward shift across all segments, highlighting the dynamic nature of market demand for long-term debt instruments.

The robust demand is particularly significant given the absence of an official financing requirement for January. The Treasury's strong position is further reinforced by existing cash surpluses exceeding 1.2 billion USD, reflecting effective public finance management. Attijari Global Research (AGR) analysts project continued stable financing conditions through the first quarter of 2025.

This successful issuance occurs against a backdrop of solid macroeconomic fundamentals. Morocco's public finances remain resilient, with 2024's budget deficit estimated at approximately 4% of GDP. The country's banking sector has shown remarkable performance, recording a 17.3% increase in aggregate net profit during the first half of 2024, according to the Systemic Risk Coordination and Surveillance Committee (CCSRS).

Looking ahead, Bank Al-Maghrib forecasts GDP growth to moderate from 3.4% in 2023 to 2.6% in 2024, before accelerating to 3.9% in subsequent years. Notably, inflation is expected to decrease significantly from 6.1% in 2023 to 1% in 2024, creating a more favorable environment for investment.

The successful bond auction, combined with these strong economic indicators, reinforces Morocco's growing appeal to international investors and strengthens its position in global financial markets.