– Le Matin: What role has the WFE played in supporting stock exchanges like the Casablanca Stock Exchange in the launch of new products such as the derivatives market?
– Nandini Sukumar: The WFE first plays a role of technical expertise, supporting our members in the planning, strategy and implementation of projects aimed at developing their markets.
Second, we provide capacity building. For the Casablanca Stock Exchange Derivatives Market Symposium, organized on October 16, 2024, we mobilized our management team, who explained the importance of the derivatives project and placed it in an international context. We have also created and delivered workshops for local participants, regulators and government officials, covering key areas to consider when launching a new derivatives market.
Third, we can mobilize our global network which includes WFE members such as Deutsche Börse’s CME Group and Eurex, as well as other industry players. This allows the exchange to benefit from cutting-edge knowledge and in-depth experience. For the Casablanca Stock Exchange symposium, we invited other WFE members to share their perspectives on best practices for managing a derivatives market.
Fourth, we provide ongoing support to the Casablanca Stock Exchange to help them address challenges, overcome obstacles and seize opportunities that arise as their derivatives market develops. We provide resources so that the Fellowship can leverage our research and events, as well as feedback from other WFE members at our quarterly working group meetings. As a member of the WFE, the Casablanca Stock Exchange can capitalize on the shared knowledge, best practices and collective experience of stock exchanges around the world to build a market that is resilient, transparent and geared towards long-term success. For example, each year WFE hosts a one-day technical assistance program as part of its WFEClear conference. As a member of the WFE, the Casablanca Stock Exchange can benefit its market by accessing the teaching of market practitioners.
– What are, in your opinion, the main challenges faced by the Casablanca Stock Exchange in the implementation of its derivatives market?
– Launching a new market is a considerable challenge for any exchange, and the official launch of derivatives by the Casablanca Stock Exchange this Monday, November 11 is a remarkable accomplishment, especially since there is currently only one derivatives market. this type on the African continent.
Building and maintaining a liquid market always constitutes the major challenge in ensuring the smooth functioning of any derivatives market. It is essential to attract a broad base of participants, including investors, institutional investors, and foreign investors, to ensure the depth and liquidity of the market. Investor education will be crucial in this regard, and the exchange will consider how to broaden investor awareness and understanding of how derivatives help manage financial risks, facilitate investment strategies and, ultimately contributing to the liquidity and stability of financial markets.
Buy-in from stakeholders, including participants, regulators and government, is also a challenge. However, the Casablanca Stock Exchange is succeeding, as evidenced by the success of the Symposium, which made it possible to strengthen the coordination of the main players in the Moroccan market. It is particularly notable to highlight the collaborative manner in which the Moroccan Capital Market Authority (AMMC), led by Madame Nezha Hayat, works in support of the stock market. It is an informed approach, essential for the success of the project. Only collaboration between the regulator, the government and the market with the stock exchange can guarantee real success. The current approach paves the way for creating a healthy and transparent regulatory environment, crucial for market confidence.
The market will also depend on the market infrastructure that ensures the smooth running of clearing, settlement and risk management operations, the cornerstone of all exchanges. With these fundamental requirements in place, the Casablanca Stock Exchange derivatives market will be poised for success, playing a key role in our financial system and meeting the growing needs of participants who seek tools to hedge their risks and improve their returns.
– How does the WFE assess the prospects for success of the derivatives market in Casablanca, particularly with regard to its integration with other regional and international markets?
– The futures market will benefit from a gradual rollout, starting with MASI20 index futures. The signing of the protocols during the meeting of the Capital Market Committee (CMC) with the Ministry of Economy and Finance, Bank Al-Maghrib and the Moroccan Capital Market Authority was a milestone, as was the Symposium which brought together key players in the Moroccan financial ecosystem. The futures market is now a concrete reality for the Casablanca Stock Exchange, and benefits from the support and commitment of all stakeholders.
The launch of this market represents a transformative moment for the Casablanca Stock Exchange, for the Moroccan financial center and for the African continent. This is not just a technical step, but an important milestone in Morocco’s broader ambition to position itself as a financial hub, a leader in Africa, and an increasingly influential player in international financial markets.
For the WFE, which brings together more than 250 market infrastructure providers worldwide, the futures market has proven to be a catalyst for growth and innovation, paving the way for financial sectors to better manage risk and to deepen the liquidity of the underlying markets. The futures market has also promoted the internationalization of an economy, attracting foreign investment and providing domestic investors with the opportunity to trade international assets in a reliable and secure environment.
The launch of a futures market is not just about adding a product line to the exchange, but about creating new opportunities for economic growth, diversification and risk management, giving Moroccan companies, financial institutions and investors the ability to take advantage of opportunities in both domestic and global markets.
– What lessons has the WFE learned from other derivatives markets launched by exchanges in emerging economies, and how could these experiences be applied to the Moroccan context?
– Our members are at the forefront of creating vibrant derivatives markets. Their experience shows the importance of adapting derivative products to the specific needs and particular characteristics of the local economy. For example, the Johannesburg Stock Exchange (JSE) has developed agricultural futures contracts to provide South African producers with essential hedging tools and help them manage price volatility on key crops such as maize and wheat. Similarly, B3 in Brazil introduced interest rate futures, an essential tool in an economy highly exposed to macroeconomic fluctuations.
The experiences of these exchanges highlight the importance of establishing markets that meet immediate economic needs, while building the infrastructure and regulatory frameworks necessary for sustainable growth and to attract international investors – a model that the Exchange of Casablanca can follow in the development of the futures market in Morocco.
On the African continent, more and more stock exchanges are becoming aware of the potential of futures markets and are making progress in the introduction of products adapted to local economic needs, as is the case in Nigeria and Kenya, particularly in the sectors of raw materials and currencies.
By drawing inspiration from the successes and challenges of other markets and by connecting and collaborating with other exchanges, the Casablanca Stock Exchange will establish a futures market that will promote economic development, meet the needs of domestic and international investors , and will strengthen liquidity as well as the supply of “investable” securities. The leadership role of the Casablanca Stock Exchange is crucial in positioning Morocco as a gateway for investors seeking access to larger markets in the region.
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