In short
- A share is a part of a company’s capital.
- It can earn money in two ways: a dividend and a capital gain.
- Its price can also fall: a gain is never guaranteed.
A part of a company, not just a number
Imagine a company divided into 1,000 equal parts. If you buy 10, you own 1% of that company. That is exactly what a share is. For listed companies, these parts trade between investors on the Casablanca Stock Exchange, through a brokerage firm.
When you buy a share on the market, the money usually goes to the investor selling it, not to the company. The company only receives money when it issues new shares, for example during an IPO.
What a share gives you
- A right to a part of distributed profits, if the general meeting votes a dividend.
- A right to vote at the general meeting, according to the company’s rules.
- A right to information: a listed company must publish its results and important events.
How a share can earn money
Here is a made-up example. You buy a share for 100 dirhams. One year later, it is worth 110 dirhams and the company has paid a dividend of 3 dirhams per share.
| Item | Amount | What it is |
|---|---|---|
| Capital gain | 10 MAD | The difference between the selling price and the buying price, if you sell. |
| Dividend | 3 MAD | The part of the profit paid to the shareholder, before tax. |
Both gains are taxed, and brokerage fees also apply: see our guide to stock market tax in Morocco.
What you can lose
The price can also fall to 80 dirhams. As long as you do not sell, this loss is “unrealised”, but your share is worth much less than when you bought it. If the company goes bankrupt, a shareholder can lose the whole amount invested. Without borrowing, the loss does not go beyond that amount.
Why the price changes every day
The price comes from buyers and sellers meeting. It reacts to the company’s results, the economy, interest rates and the mood of the market. It can move even if nothing has changed in the company’s business that day.
Frequently asked questions
What is the difference between a share and a bond?
A share is a part of ownership. A bond is a loan to an issuer. See our guide to bonds.
Does a share always pay a dividend?
No. A dividend depends on the general meeting’s decision and on the company’s situation.
This article is for information and educational purposes only. It is not investment advice or a recommendation to buy or sell any security. Investing in shares involves a risk of capital loss. Check figures against official sources (Casablanca Stock Exchange, AMMC) and consult a licensed professional. Read the full disclaimer.
