We last in case of liquidation of the

We call financial instruments securities that can be
traded in financial markets.

The Moroccan Authority of Capital Markets classifies
financial instruments into several distinct catergories. The most prominent
ones include the following items:

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1.     Stocks

It’s a security that represents a portion of ownership
of the company. Whenever the company decides to redistribute a part of its
revenues to investors, as opposed to reinvesting them in the company, the
shareholders will receive dividends. However it’s not systematic. Other
benefits of the shareholders include having the right to vote (specific to
majority shareholders). In case of bankruptcy, the shareholders receive what is
left, if any, of the assets after having repaid the debts and collaterals. They
also have the right to information, as mentions the AMMC website. The
shareholders have the right to know how the company is performing by consulting
its financial statements.

2.     Bonds

Bonds are securities that allow the company to raise
capital for its new projects. They have a predetermined maturity, yield to
maturity, and coupon.  The AMMC defines
six types of bonds:

Ø  Subordinated
Obligations, also known as subordinated debt is a debt that is paid last in
case of liquidation of the company. It’s still considered as debt and therefore
is subordinated bond holders are paid before shareholders.

Ø  Convertible Bonds:
the creditor has the right to convert the bond into company shares if he/she
feels it would be more profitable.

Ø  Mandatory Convertible
Bonds:  at the maturity, the bond will be
converted into stocks.

Ø  Zero Coupon Bonds:
Bonds that pays no interest (i.e no coupons); the present value is therefore
relatively low and the interest rate high.

Ø  Fixed Rate Bonds:
bonds where the interest rate in predefined and fixed.

Ø  Floating-rate
Bonds:  the coupon rate is changing
depending on a variable rate.  According
to the AMMC, these bonds in Morocco are called revisable-rate bonds
(obligations à taux revisable).

Mutual Funds (OPCVM):

One of
the most popular financial instruments in Morocco is mutual funds because of
the low transaction costs. They’re run by managers who invest the money pooled
by the fund investors into various sectors of the industry in order to produce
capital gains (Investopedia, n.d).

The “Organismes de Placement Collectif en Valeurs
Mobilières” OPCVM, (UCITS in english) are mutual funds that allow Moroccan
investors to build optimal portfolios. There are many types of OPCVM operating
in Morocco:

Ø  OPCVM Stocks: mainly
composed of companied listed on the Casablanca Stock Exchange.

Ø  OPCVM Bonds: composed
of long-term and short-term bonds, low risk, can’t contain more than 10% of stocks.

Ø  OPCVM Monetary:
contains securities of the money market such as treasury bills and federal

Ø  OPVCM Contractual:
the expected outcome/performance is agreed upon and mentioned in a contract.

Ø  OPCVM Diversified:
composed of both stocks and bonds and don’t belong to any of the above

As mentioned in the AMMC website, there are two legal
forms of OPCVMs; SICAV and FCP.

SICAV, Société d’Investissement à Capital Variable, is
a company where the investors are stockholders and have the right to weight-in
on management decisions and strategies. FCP, Fonds Communs de Placement, is a
type of mutual fund where the investors have joint ownership of the securities.
It’s managed by an independent institution that acts on behalf of the

Securitization Funds (FPCT):

As cited on the AMMC website, the FPCT (Fonds de
Placement Collectifs en Titrisation), are a type of financial instruments that
help companies build debt portfolios and issue bonds in order to raise capital.

Venture Capital

Venture Capitals, Organismes de Placement en
Capital-risque (OPCR), are investment funds that specialize in funding start-up
companies. They’re considered high-risk high-return investments. In Morocco, there
are two legal types of venture capitals: “le Fond Commun de Placement à Risque”
(FCPR) and “la Société de Capital-risque” (SCR).




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