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Thursday, 2 April 2020

The Market Yesterday

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Pharos Holding -

EGP / USD CBE market average: Buy 15.69 | Sell 15.79
EGP / USD at CIB: Buy 15.70 | Sell 15.80
EGP / USD at NBE: Buy 15.68 | Sell 15.78

EGX30 (Wednesday): 9,425 (-1.8%)
Turnover: EGP 610 mn (2% above the 90-day average)
EGX 30 year-to-date: -32.5%

THE MARKET ON WEDNESDAY: The EGX30 ended Wednesday’s session down 1.8%. CIB, the index’s heaviest constituent, ended down 1.8%. EGX30’s top performing constituents were EFG Hermes up 1.6%, Porto Group up 1.2%, and Credit Agricole up 1.1%. Yesterday’s worst performing stocks were Juhayna down 9.8%, Ibnsina Pharma down 5.1% and CIRA down 4.9%. The market turnover was EGP 610 mn, and local investors were the sole net buyers.

Foreigners: Net short | EGP -280.3 mn
Regional: Net short | EGP -0.9 mn
Domestic: Net long | EGP +281.2 mn

Retail: 38.5% of total trades | 40.6% of buyers | 36.3% of sellers
Institutions: 61.5% of total trades | 59.4% of buyers | 63.7% of sellers


Notes from the covid economy: Pharos takes a look at how the telecom, tech, auto, textile and logistics sectors are responding to the pandemic.

The telecom sector is a rare ray of light for an economy coming under increasing amounts of stress. Internet service providers and mobile companies will likely see revenues increase as school and university closures, social distancing and the curfew cause a rise in data consumption, Pharos says.

And fintech may also come out of the pandemic a big winner: The central bank has waived fees and commissions on transfers made through mobile wallets and introduced daily limits on cash withdrawals and deposits. This will likely increase the usage of e-payment platforms, and companies offering basic services (for example bill payment) should see a “solid transaction flow,” Pharos says. If the outbreak causes serious problems for the economy and impacts consumer spending patterns, e-payment companies may see transaction volumes for entertainment and amusement fall. Read the full note covering telecoms and tech here (pdf).

Auto companies under pressure: Local auto distributors have said that monthly sales will contract “significantly” in March after the Interior Ministry suspended vehicle licensing for a month and the government reduced working hours as a precautionary measure against the virus. Price cuts and/or promotional offers to boost demand are likely if lockdowns are extended. On the bright side, the central bank’s 300 bps rate cut and the freezing of debt repayments for six months are positives that mitigate the impact due its favorable effect on car loan repayments, Pharos says.

Textile exporters are facing a global and local demand shock: The textile industry is struggling as global importers halt new orders and amend existing orders. Firms that are heavily reliant on raw materials from China are suffering the most from the disruption to supply chains, and are trying to secure at least one month of inventory. Factories could also face labor shortages due to precautionary measures taken by the state. Local demand is also likely to fall after the government closed retail stores at night and on weekends. Read the full note on the auto and textile sectors here (pdf).

The virus is wreaking havoc on logistics firms which are facing simultaneous supply and demand shocks as governments resort to export controls, shut down industry and place restrictions on movement. Logistics firms are having to raise prices amid downwards pressure on cargo and container volumes, longer waiting times and higher storage costs. Read the note here (pdf).

Read the Pharos View published earlier this week on the industrial, real estate, and food sectors here (pdf).


WTI: USD 21.01 (+2.59%)
Brent: USD 25.39 (-3.64%)

Natural Gas (Nymex, futures prices) USD 1.59 MMBtu, (-3.23%, May 2020 contract)
Gold: USD 1,600.50 / troy ounce (+0.24%)

TASI: 6,569 (+0.98%) (YTD: -21.69%)
ADX: 3,745 (+0.28%) (YTD: -26.22%)
DFM: 1,720 (-2.85%) (YTD: -37.76%)
KSE Premier Market: 5,108 (-1.73%)
QE: 8,195 (-0.15%) (YTD: -21.39%)
MSM: 3,424 (-0.68%) (YTD: -13.97%)
BB: 1,341 (-0.69%) (YTD: -16.70%)

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

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