Egypt | EGX

CIB Bank posted a net income figure of EGP 10 24 bn in 2020 vs EGP 11 80 bn in 2019 showing a 13 3 YoY drop This decrease in bottom line came mainly from surging the loan loss provision to EGP 5 02 bn in 2020 from EGP 1 43 bn in the previous year This acceleration in loan loss provision was to cover any sudden increase in non performing loans due to the breakout of the COVID 19 pandemic in March 2020 Throughout Q 2 2020 the cabinet imposed a curfew at night, leading to a partial suspension of some of the economic activities, which represented a pressuring factor for asset quality Worth to mention that the bank charged loan loss provisions of 12 0 of gross loans, surpassing listed peers average of 5 6 in 2020 However, in terms of profitability ratios, CIB succeeded to record a NIM of 6 92 and ROAA of 2 5 vs peers' average of 5 2 and 2 3 respectively in 2020.

Last week was a falling week as the EGX 30 index fell from 10,900 to 10,560 retracing exactly 62% of the previous rise, thus hinting of a potential higher low formation, which should have a bullish effect on the market.

The EGX 30 was able to close near 10,900 despite that it reached 10,300 during the week, but was able to close clearly above 10,400 at the end of the weekly bar.

One year ago, we were wondering to what extent the outbreak of COVID-19 would affect the Egyptian real estate market in 2020, the span which has witnessed a series of events, between negative and positive for the sector. Today, we present our review for 2020 with an analysis of the sales performance of the largest real estate developers listed on the Egyptian Exchange.

Ibnsina Pharma managed to grow its market share from 15.4% in 2015 to 22.4% in 2020 as revenues grew at a 5-year CACGR of 29%. Across our forecast period, we assumed Ibnsina Pharma will manage to grow its market share by c.1% to reach 25.5% by 2025, thanks to the presence of small players who are not profitable and are exiting the market that is highly regulated. Market share growth translates into a top line 5-year CAGR of 15%, where retail revenues is assumed to capture an average of 70% across our forecast period. Given the fact that industry prices and margins are regulated, we assumed GPM to start at 7.8% in 2021, before hovering around 8.3% across our forecast period. Moreover, 60% of salaries are fixed, translating into an average EBITDA margin of 4% compared to 3.6% in 2020 and a historical average of 3.9%.

Last week was a negative week as the market declined significantly, leading the EGX 30index below its support that lies at 11,300. The index is approaching our target that lies at 10,700and should begin to rebound once again near this area. It is important, however, not to break below 10,400-10,500as a violation below this major support will have real bearish implications on the market.