MARRAKESH, Morocco, Nov 20 (Reuters) - The Casablanca Stock Exchange will set up a new board for the shares of small and medium-sized enterprises to make it easier for them to raise money, the exchange's chief executive Karim Hajji said.
Limited access to finance for small firms is hurting Morocco's efforts to create more jobs. At the same time, authorities want to cut companies' heavy dependence on bank loans, which can make it hard for the central bank to tighten liquidity without starving the corporate sector of finance.
One solution is to increase equity financing through a new board that would attract small firms with less onerous listing and reporting requirements than the main board.
The exchange is discussing the plan for the new board with government agencies; regulations permitting it should be ready by April and the board may be launched by the end of next year, Hajji said in an interview.
Government institutions, the exchange and brokers would work with companies to prepare them for injections of financing, which could involve initial public offers of shares, private equity investments or bank loans, Hajji said.
"It could be a three-year process - companies would be helped to get ready and get fit for fund injections."
The London Stock Exchange (LSE) will help to design the new board under a cooperation agreement signed with the Casablanca exchange in June, Hajji said.
Under the June deal, the LSE is to provide Casablanca with trading and market surveillance technology, and help it attract business from companies elsewhere in Africa. Last month the LSE agreed to provide Maroclear, the Moroccan central securities depository, with access to European securities settlement infrastructure, allowing Maroclear clients to settle cross-border trades in Europe.
Casablanca's tie-up with the LSE may help big, state-run Moroccan companies, which are too large to list their shares solely at home, to conduct dual listings in Morocco and London, Hajji said; he declined to say which firms might take that step.
He said the Casablanca exchange also aimed eventually to introduce derivatives such as stock exchange futures, although this would take at least two years.
The stock market, with a current capitalisation of $57 billion, was hit hard by the global financial crisis in 2008 and IPOs almost dried up; there was just one last year and one is expected this year. But Hajji said at least three IPOs were in the pipeline for next year as the market and the economy recovered. (Reporting by Andrew Torchia; Editing by Olzhas Auyezov)