The share value of Maroc Telecom, known as Itissalat Al Maghrib (IAM), fell 7.52% on Monday February 3, 2020. It was the biggest daily drop for this company, first capitalization of the Casablanca Stock Exchange, since July 23, 2013, when its share had declined by 9.3%, according to data collected by the Ecofin Agency.
In the process, nearly a million securities were sold, a record for a single day of transactions, since July 2019. But unlike, it is the first time that such a transaction volume is associated with a record drop in the company’s market value. This debacle finds its justification in the decision taken by the telecommunications regulator in Morocco, to impose on the operator a fine of 3.3 billion dirhams, or about 310 million euros.
The group’s main shareholder with 53% of the shares is the Société de Participations dans les Télécommunications, an entity which belonged to the French group Vivendi which sold it in 2014 to Etisalat, the UAE telecommunications giant. The latter does not seem to have been jostled by this news, the value of its share has only fallen slightly (+ 0.37%) on the Abu Dhabi Stock Exchange.
The National Telecommunications Regulatory Agency (ANRT) indicates that it has ruled on the referral filed against IAM for ” anti-competitive practices ” concerning the implementation of unbundling. It emphasizes that after deliberations, these behaviors were deemed ” constituting abuse of a dominant position “. Even if the government is present in the capital of Maroc Telecom up to 30%, investors will remain attentive to the capacity of the complainant to succeed in this case.
The latter is the telecommunications operator Wana, one of the subsidiaries of Al Mada, the investment holding company of the royal institution in Morocco. If the sanction were to be maintained, it would be a significant blow for Maroc Telecom and its shareholders because the fine imposed represents nearly 50% of the estimated net profit of the company in 2020 and approximately 10% of its forecast turnover .
For Etisalat, on the other hand, the problem can be contained. At the end of the day on February 3, the value of its stake in the Moroccan company was close to 67 billion Moroccan dirhams, or about $ 7 billion. This still represents a potential capital gain of $ 2.4 billion out of the 5.6 billion that had been paid to Vivendi. Especially since Maroc Telecom has always had a rather generous dividend policy. This, over the past three years (2016 to 2018), has resulted in an average return of 4.5% on the price of each share.