Moroccan property stocks tumble on credit fears

RABAT, Sept 17 Wed Sep 17, 2008 10:06am EDT

RABAT, Sept 17 (Reuters) - Moroccan real estate shares fell as much as 6 percent on Wednesday on concern the global credit crisis could dampen foreign interest in the north African country's fast-growing property sector.

Analysts said the Moroccan stock market had been stagnating for several months as investors felt share prices had outpaced earnings expectations, especially for property stocks.

Shares in real estate firm Addoha (ADH.CS) were suspended after tumbling 6 percent to 162.05 dirhams. The stock has lost 45 percent of its value this year.

Cie. Generale Immobiliere (CGI.CS), a property unit of state investment vehicle CDG, slid 6 percent to 1,587 dirhams.

Alliances Developpement Immobilier (ADI.CS), listed in July at 685 dirhams, slid 5.9 percent to 799 dirhams. The stock had reached a high of 1,310 dirhams in the weeks after the IPO.

The benchmark MASI index .MASI was down 0.58 percent at 12,231.14 points at 1334 GMT. The main gauge of the biggest Maghreb stock market is down 2.5 percent since the start of January after soaring 33 percent in 2007.

"It's been a long while that analysts have said the market is overvalued and a correction would be healthy," said a Casablanca analyst who asked not to be named.

He said property stocks were seen as among the most overvalued, but that they were also a source of particular concern given the global credit crisis.

"People see there is a morose climate in real estate and they know these stocks are exposed to international markets that increasingly lack liquidity," the analyst said.

Real estate firms have powered the Casablanca stock market to records in recent years as investors sought to benefit from a Moroccan building boom.

Growth has been driven by strong demand as falling lending rates fuel consumer spending and money pours into the kingdom from foreign investors, tourists and Moroccans living abroad.

A chunk of the property firms' future profits hinges on demand for big new coastal developments aimed at Europeans seeking second homes in the sun. But the Casablanca analyst played down the possibility of a credit crisis like in the United States.

"Morocco is not at all exposed to the same products such as subprime," he said. (Reporting by Tom Pfeiffer; Editing by Jason Neely)

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