The worst of the year is over for corporate earnings; recovery will begin in 2H2020 -Pharos: Corporate earnings in Egypt are expected to see a “relative recovery” in corporate earnings during the back half of the year, even if full-year earnings come under pressure because of the hit to 2Q2020 results, Pharos Holding said in a research note yesterday. The improvement in corporate earnings is also expected to spur EGX performance and help drive up stock prices, according to the research note. EFG Hermes had also said earlier this month that, despite an anticipated 22% fall in 1Q2020 earnings, Egypt’s corporates would overall have a better quarter than most of their MENA peers.

Telecom, tech, consumer staples, and pharma companies have weathered the storm the best, proving to be “the most resilient to the current shock,” Pharos says. Banks are seeing a bit of a slowdown in the growth of their balance sheets, but are generally also doing well thanks to the “sustainability of operating income flow.” On the flipside, the industrial and real estate sectors were the worse hit in 2Q2020, according to the note.