OUR ANALYST OF THE WEEK- Noha Baraka, vice president of research and head of consumer and pharma at HC Securities (Linkedin).

My name is Noha Baraka and I’ve been at HC Securities for 10 years. I graduated from AUC with a degree in business administration and a minor in economics and I started my career at the Central Bank of Egypt (CBE), where I worked in the domestic markets unit as a member of both the FX and money market teams. My experience and exposure while at the CBE gave me a great boost of confidence for the world of finance. I consolidated my love for finance and data analysis by getting my CFA in 2014.

I’ve been covering consumer and pharma names in the local market and I love these two sectors because they are concerned with things that I feel and live. I experience the food and beverage industry every day, for example, and having this makes me better understand the trends and see what’s happening on the ground on a day to day basis.

The best part of my job is that it's a continuous learning process and always full challenges. It also gives you a sense of ownership of your work that adds to the satisfaction of when a call you make materializes.

The worst part is that there are days that are slow and become kind of a routine. I’m a very dynamic person and on those days I just try to power through.

While traveling helps you get to know the client in person, being in the same boat as the rest of the world has fostered new kinds of relationships. They’ve become more dynamic, interactive, and often informal. You get to see them in their own homes and sometimes meet their kids [laughs]. That’s been the case with me at least. My four year-old likes to interrupt my meetings and tell me “Mommy, that’s enough for today.” But I do see the roadshow coming back once the pandemic subsides, it’s a critical part of our job.

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My theory of investment is to make sure my recommendations make sense for the investor. I continuously ask myself what would the investor want to know about the stock and I write all the information down. I look at all aspects at the same time, so I can get an outcome that is reasonable and comprehensive. Those include the governance, the market itself, the clients, the cost structure, and the current underlying themes and challenges in the sector.

The most important thing I look at is what would cause this stock to rerate in the short term or long term. From there, you can look at all the other factors I previously mentioned to determine how feasible the rerating is and if there are signals that elude that it could be soon. I create a story and make sure it makes sense to me and the investor at the end.

I think Egypt’s economic conditions will get better towards the end of the year. The world had expected that by now the vaccine rollouts would be going faster and that the impact of the virus would have somewhat subsided. However, we do see signs that overall sentiment, economic activity, and trading on the capital markets will improve in the country once we’re past the pandemic. Also the narrowing gap between wage increases and inflation is signalling an impending pickup for consumption.

The pandemic brought about many trends in the past period. The biggest I’ve seen in the sectors I cover is that there was a huge pickup in the snack food and the basic goods market. Even though cars were hit at the beginning, they managed to bounce back quickly and are now recovering nicely. As for tobacco, it surprised me that despite warnings that smoking could potentially make you more subjectable to the virus, demand and consumption never dissipated. Overall, I would say that the consumption overhang is behind us.

I think the technology sector has huge potential to grow in the coming period. The sector proved its worth tenfold during the pandemic and it has as a result started gaining traction and its stocks are performing well worldwide. I believe this growth will soon translate into the local market as more companies come forward with product offerings.

If I had to switch and cover another industry, I would go for banking. I like that it's challenging, but still close to home and something I can experience on a daily basis.

The last great thing I watched was You on Netflix and I loved it even though it’s quite abnormal [laughs]. I also enjoyed season nine of Suits. This Ramadan, I enjoyed Yousra’s Harb Ahleya, Mona Zaki’s Le3bet Newton, and Amina Khalil’s Khali Balak Min Zizi.

Most of my reading is bedtime stories with my daughter. She loves Aladdin and I’ve probably read the book to her around 100 times already. It’s fascinating to me how she always gets excited as if it’s the first time she hears the story.

When I’m not working, I try to spend as much time as I can with her. We watch TV, read, or go to her practices. Every once in a while I’ll work out, but it gets tough to stick to it with family related duties and work.

I’m a very organized person, to the extent that people sometimes feel pity for me [laughs]. I always have my calendar on me and I write down everything I need to do, everywhere I need to go, and even my shopping lists for the supermarket.

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CLOSING BELL-

The EGX30 rose 0.8% at today’s close on turnover of EGP 1.11 bn (10.5% below the 90-day average). Foreign investors were net sellers. The index is down 0.7% YTD.

In the green: Edita (+8.9%), Fawry (+5.0%) and MM Group (+4.2%).

In the red: Cleopatra Hospital (-3.4%), Credit Agricole (-0.9%) and Madinet Nasr Housing (-0.6%).

EARNINGS WATCH-

Landline and mobile operator Telecom Egypt saw its net income grow 62% y-o-y in 1Q2021 to EGP 2.12 bn, from EGP 1.3 bn in the same period last year, according to the company’s earnings release (pdf). Consolidated revenues grew 20% y-o-y to EGP 8.4 bn, against EGP 7 bn in the same period last year.

Abu Dhabi Islamic Bank reported an EGP 332.2 mn bottom line in 1Q2021, up from EGP 230.3 mn in the same quarter last year, according to the bank’s financial statement (pdf). Revenues grew to EGP 1.85 bn in the same period, from EGP 1.79 bn last year.

GLOBAL MARKET WATCH-

Big tech stocks are experiencing a global sell-off as concerns escalate about interest rates, high valuations and regulatory risk. Investors have been exiting high flying companies such as Apple, Microsoft, Netflix, and Amazon. The sell-off saw tech-heavy Nasdaq 100 futures fall 1.3% lower and the Nasdaq Composite fall 2.5%, while S&P 500 futures declined 0.7%, pushing the benchmarks off the previous record highs. Europe and Asia have since followed suit, with the European benchmark Euro Stoxx 50 futures tumbling around 2% — the most since January — while the Asian gauge posted the biggest losses since March. The Wall Street Journal, CNBC, Reuters, and Bloomberg have the story.

Chinese trucking startup The Full Truck Alliance could file for a USD 30 bn IPO as soon as this week, a source told CNBC. The ‘Uber for trucks’ firm could raise as much as USD 1.5 bn with its valuation in the range of USD 20-30 bn and is expected to list on the New York Stock Exchange, the source added. Bloomberg reported in February that The Full Truck Alliance confidentially for an IPO with US regulators.