P.E.R as an Indicator of Stock Market Attractiveness: An Econometric Analysis of Listed Moroccan Banks

Le P.E.R comme indicateur d'attractivité boursière: Une analyse économétrique des banques cotées au Maroc

Rachid Maghniwi () and Mustapha Oukassi ()
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Rachid Maghniwi: UM5 - Université mohamed 5, Rabat
Mustapha Oukassi: University Mohamed V, Rabat

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Abstract: This research examines the relationship between the Price Earning Ratio (PER) and stock market attractiveness of banks listed on the Casablanca Stock Exchange over the period 2014- 2023. In a context where the Moroccan banking sector represents more than 30% of total market capitalization, understanding the determinants of stock market attractiveness becomes crucial for investors and regulators. Through an econometric analysis of panel data covering eight listed banks (320 observations over the period 2014-2023), our study demonstrates that the P/E ratio is a significant indicator of the stock market attractiveness of Moroccan banking securities. Empirical results reveal that a one-point increase in PER is associated with an average increase of 1.2% in trading volume and 0.8% in market value. This relationship is modulated by complementary factors such as bank size, profitability, and solvency level. The study also highlights the existence of an optimal PER threshold beyond which the effect on stock market attractiveness becomes decreasing. These findings contribute to a better understanding of valuation dynamics in the Moroccan banking sector and provide practical implications for investment strategies.

Keywords: Stock market attractiveness; Moroccan banks; Econometric analysis; Stock market; PER Attractivité boursière Banques marocaines Analyse économétrique Marché boursier PER Stock market attractiveness Moroccan banks Econometric analysis Stock market; PER; Attractivité boursière; Banques marocaines; Analyse économétrique; Marché boursier PER (search for similar items in EconPapers)
Date: 2025-01-31
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Published in Revue du Contrôle de la Comptabilité et de l’Audit, 2025, 8 (4), pp.157. ⟨10.5281/zenodo.14574647⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04862231

DOI: 10.5281/zenodo.14574647

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