The EGX30 fell 0.8% at today’s close on turnover of EGP 1.59 bn (8.5% above the 90-day average). Foreign investors were net sellers. The index is up 6.27% YTD.

In the green: Orascom Investment Holding (+7.3%), Ibn Sina Pharma (+3.7%) and Oriental Weavers (+3.4%).

In the red: MM Group (-5.3%), Sidi Kerir Petrochem (-3.9%) and Alexandria Minerals Oil Company (-3.5%).

Automotive’s rebound reflected in the markets: Analysts are focusing on the auto sector today following GB Auto’s annual earnings release last week which saw the company report record profits for 2020. Higher-than-expected earnings has analysts calling a buy on the stock, with Prime Research saying it offers an 8% upside and suggests that the industry began to see green shoots towards the end of 2020 after a rough first half of the year. Pharos, meanwhile, pointed out that revenues came in 6% higher than analysts had penciled in. This was driven by growth in GB’s passenger car and two- and three-wheeler segments, despite a drop in commercial vehicle and construction equipment sales.

Auto sales had a good 2020 despite the pandemic. Passenger car sales rose 32% y-o-y to 168k, and sales of trucks and buses were also up, even as the pandemic forced a partial lockdown on the economy, figures from the Automobile Market Information Council recently showed.

On the macro front, HC Securities is bullish on the economy: A private sector recovery is picking up speed, driven by the lower interest rate environment, moderate inflation, and the stable EGP, HC’s research team said in a note. Monetary and fiscal support introduced in response to the pandemic, together with the fresh IMF support, has helped the economy perform better than anticipated, they said.

The bad news: Lower tourism receipts in 2020 is expected to lead to a wider current account deficit of c. 4% of GDP in FY2020-2021, despite the country’s balance of payments forecast to record an oil trade surplus and remittances expected to rise 10%, they added.

HC’s top stock picks are real estate, finance, and certain high-performing names in the consumer sector. They include Orascom Construction, Eastern Company, GB Auto, CIB, Abu Dhabi Islamic Bank, EFG Hermes, TMG Holding, SODIC and Orascom Development Egypt.

EARNINGS WATCH- Madinet Nasr Housing & Development’s (MNHD) net profit inched up 2% to EGP 1 bn in 2020, it said in its earnings statement (pdf). Consolidated revenues climbed to EGP 3.1 bn from EGP 2.2 bn last year as pre sales grew 11% y-o-y, driven by increased demand for the real estate developer’s Taj City and Sarai projects. “While 2020 was a challenging year, for the economy in general and the real estate market in particular … MNHD continued delivery of outstanding operational performance and financial results backed by strong capabilities of land bank, managerial, financial, and human resources,” CEO Ahmed El Hitamy said.

Oriental Weavers net income increased 30% in 2020 to EGP 1.1 bn, compared to EGP 855 mn in 2019, the company said in a filing to the EGX (pdf).

Pioneers Holding’s net profit was down 12% in 2020 to EGP 946 mn, compared to EGP 1.1 bn in 2019, according to the company’s financials (pdf).

Amer Group’s net profit fell to EGP 25.5 mn in 2020, down from EGP 56.4 mn last year, its full year earnings (pdf) showed.

Arabian Cement reported net losses of EGP 122.8 mn for 2020, down from a net profit of EGP 29 mn last year, according to its consolidated financials (pdf).