It has become a formality for Maroc Telecom. The incumbent operator will launch for the 12th consecutive year a share buyback program. Today, it is the only listed company on the Casablanca Stock Exchange to dispose of it. It is also the issuer of the most active market in terms of price regulation. It does not go through a month without buying or selling its own shares as part of the share buyback program.
This is indeed a stock market technique that allows the listed company to reduce excessive fluctuations in the share price. The program intervenes mainly when the volatility of the security deviates significantly from its historical volatility which prevents the normal formation of the market price. It can also be used in case of high liquidity of the security.
With the scheduled expiry date of November 8, 2019 of its current program, Itissalat Al-Maghrib is preparing to relaunch a new one. The company has, after approval of the shareholders on April 23, acquire up to 1.5 million shares, or 0.17% of its own capital. The price range has been set at a maximum purchase of MAD 189 and a minimum of MAD 98.
IAM, which can only acquire its own shares in the central market, can not exceed MAD 283.5 million, which is considered the maximum level it can commit. More generally, the value of all the treasury shares that can be held by the company can not be greater than the amount of these reserves evaluated at the end of 2018 to 3.5 billion dirhams.
Spread over a period of 18 months, this program will have to start from May 8, 2019 and end on November 6, 2020. It will be financed through IAM’s own resources. Indeed, the operator generates a lot of cash since at the end of 2018 it posted nearly 398 million dirhams of available cash.
At the same time, IAM is backing its buyback program set up on the Casablanca Stock Exchange to a liquidity contract on the Paris Stock Exchange. It covers a maximum of 300,000 shares, or 20% of the total number of shares covered by the buyback program.
Rothschild Martin Maurel has been mandated (since 2017 already) by Maroc Telecom for the management of this purchasing program in Paris which subcontracts to MSIN the regulation service on the Casablanca Stock Exchange. In the meantime, the approval of this new program, the value of the stock IAM on the stock market behaves positively on the whole.
At the time of going to press, the stock price was up nearly 4% from the beginning of the year to MAD 145.50 (opening price Monday, April 8).