RABAT, March 30 (Reuters) - Morocco's Casablanca stock exchange is introducing new financial instruments, offering incentives to smaller companies to list and holding promotional events for foreign investors to strengthen an equities market that has lagged in recent years.
Stock market chairman Mohammed Kamal Mokdad told Reuters in an interview he expects at least three companies to list by the end of next year and said "we see lots of expressions of interest".
Total market capitalisation rose 18% last year to 691 billion dirhams ($71.5 billion), but the bourse has had few new listing in recent years in an economy that is still dominated by bank funding.
Morocco last year announced economic targets for 2035 that include doubling per capita GDP and raising stock market capitalisation to represent 70% of GDP from about 50%.
It also aims to increase the number of listed companies to 300 from 76 and boost the share of foreign investors in total transactions to 25% from 10%.
The stock market is offering simplified procedures and reduced listing costs to small and medium businesses, Mokdad said.
Analysts say low interest rates and a reluctance to abide by requirements of transparency and communication have made many smaller companies opt more for bank loans to raise capital rather than listing.
The two initial public offerings that took place in the last two years where oversubscribed. The latest listing by construction company TGCC saw demand for shares exceeding offer by 22 times.
"The deep issue is not demand. It is rather offer," he said.
The bourse is now holding a promotional event in Dubai after an increase in the share of Emirati investors in total transactions in Casablanca over the last two years, Mokdad said.
This year it will also introduce new financial instruments including Exchange Traded Funds (ETFs) and derivatives, he said. (Reporting by Ahmed Eljechtimi; Editing by Angus McDowall, William Maclean)
