Abstract
Institutional investors normally define the market segments that present more opportunities for profitability based on their commitments, their financial and accounting situations and the regulations that govern the structure of their investments in equities, bonds, real estate and infrastructure. Their investment strategies consist of defining the allocation of their assets after having fixed the proportion to be invested in each segment. We will try through this work to estimate and optimize the parts of assets invested in shares of pension funds, insurance companies and UCITS (Undertakings for Collective Investments in Transferable Securities), according to their degree of integration into the Moroccan economy, weight of their assets in market capitalization and by the heterogeneity that characterizes their investment decisions on the capital market. Panel data are well suited to our analysis in the sense that they allow us to measure the impact of several actions (stimuli), alone or simultaneously, and the synergies (interactions) of data, which are numerous on investors and on market indicators on the financial market. The results obtained illustrate that the weight of equity investments in portfolios under management of institutional investors are impacted by the share of investors' equity portfolio in market capitalization and by the total assets of this category of investors compared to Morocco's GDP (Gross domestic product).
Highlights
The investment strategies of institutional investors differ considerably from a country to another
The behavior observed among institutional investors suggests that their trades have an upstream impact on prices when selecting their trading strategy (Chan and Lakonishok), and on the development of the financial market as a whole with regard to the realization of the objectives assigned to this matter at the start [3]
Based on the theory of institutional investor management styles, and after analyzing data on the yield curve, market capitalization, GDP, (Moroccan All Shares Index), float, deposit rates, turnover rate and the liquidity rate of the stock market, we have retained two variables whose fluctuations are correlated with the weight of the equities in the portfolio of each institutional investor [11]
Summary
The investment strategies of institutional investors differ considerably from a country to another. In the United Kingdom and the United States, where institutional investors are much more present than in most European countries, historically had less restrictive regulations. They helped set up liquid and sophisticated stock markets [2]. Their deep and stable reserves of capital have reduced market volatility. The accounting and regulatory constraints to which they are subjected to, affect their ability to have convenient long-term vision which leads some of them to liquidate parts of their assets
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