Moroccan Sugar and Mining Giants Poised to Profit from Global Commodity Price Surge

Mid-cap companies should particularly benefit from this surge in commodity prices, notes La Vie Eco, noting that for example the average price of white sugar has increased by 23% at the end of May 2021. This trend should lead to an increase in Cosumar’s turnover. The sugar production company should experience an increase in exports due to a positive price effect and its sales volumes could remain stable according to the assumptions made in the analysis.

In terms of dividends, Attijari Global Research projects two options. Either the company maintains a DPA of 8 dirhams, or it returns to a DPA of 10 dirhams, including 3 dirhams exceptional. In the second case, the stock will have consumed its potential and can be considered as a yield value, the study estimates.

For its part, the Société Métallurgique d’Imiter (SMI) should benefit from the 60% increase in the average price of Silver at the end of May 2021, with a target price of $24/Oz in the second quarter of 2021 against $27/Oz spot. And according to the weekly, the mining company will be able to record positive growth in results which will be temporarily limited in 2021 by a double volume/hedging effect. As for the dividend, it will continue to grow, supported both by the clear improvement in results in 2021 and the prospects for 2022.

Other large-cap companies such as CMT, Cimar, Total Maroc, SNEP will also benefit from this price increase caused by the exit from the Covid-19 crisis, the decline of the dollar and the bad weather, notes La Vie Eco, explaining that it is also a time lag between the recovery in demand and supply that is still not keeping up. These same prices had experienced a global drop in 2020 before starting to rise again since the beginning of 2021.