Curfew ends on Saturday, but shorter hours for retailers and restaurants are “permanent”

Good morning, friends. The big news of the day: The Madbouly government is easing next week (nearly) all the restrictions it had put in place to stem the transmission of the virus that causes covid-19. We have chapter and verse in this morning’s Speed Round, below.

Perhaps the most interesting news: Early closing of shops, malls, restaurants and coffee shops is going to be the new normal post-covid in our fair city that never sleeps, according to appearances by Cabinet Spokesman Nader Saad. Don’t discount the staying power of the country’s shop owners and big retailers on this one. — it’s really impossible for us to imagine no midnight eating or shopping in our city that never sleeps.

We’re still in the grip of an oddly-timed news slowdown. This is Enterprise’s sixth summer and the twentieth summer reporting on our fair country for at least one of the olds among us. So trust us when we tell you this: There’s no such thing as a “summer slowdown” in Cairo (though the Dog Days of August are very real). We suspect it may be a case of folks being a bit tired out after nearly four months of covid and WFH — coupled with government attention being paid to the situations with Ethiopia and Libya.

Random observation: We’ve always wanted to live in one of the foreign tourism videos put out by the Tourism MInistry. Its latest — emphasizing measures in place to protect visitors from corona — is no exception (watch, runtime: 2:15).

Need a dose of optimism? Visit Planet Startup as the folks at accelerator Flat6Labs Cairo hold their spring 2020 demo day online today at 5pm. The spring 2020 cycle started in mid-February, the firm said in a press release (pdf), and has seen eight fledgling tech-focused companies working in fintech, e-commerce, logistics, software as a service, AI, on-demand car services, freelance marketplace services, and bio materials develop their ideas get ready to pitch their ideas to potential investors and the media. You can register for the digital event here.

Heading into the end of the week, keep an eye on:

• The CBE will meet to review interest rates tomorrow. Our poll earlier this week showed consensus among analysts that the central bank will leave rates on hold for the third consecutive meeting.

• The IMF’s executive board will meet on Friday to discuss Egypt’s request for a USD 5.2 bn standby facility, according to the fund’s calendar.

Next week: The good people at CNBC think there’s a chance US stocks may come under pressure in the final days of June as big funds consider cashing out their gains in equities this quarter and moving into bonds. Wags suggest as much as USD 76 bn could be rebalanced out of equities and into fixed income. Why now? The S&P is up more than 21% for the quarter, a signal that it might be time to book your gains and get into a safer asset given nobody knows how the coming months will unfold for the market or for the US economy.

Next month: Are you (as an employee) considering working remotely (say, from Sahel?) for a long, long time? The Wall Street Journal has advice for professionals in their 20s and 30s. The cautionary tale: Plenty of bosses are happy to have staff working from their homes in the city in which they were hired — it makes ‘em feel all good in side that they could, for example, summon you to the office tomorrow. Read: How to plan before leaving town to work remotely.

Next year: It’s time to start planning NEXT summer’s vacation. Thinking of taking a big trip next summer? Odds are good that everyone who booked that same destination has already rolled over non-refundable deposits to snap up the same hotel / resort / safari. You want to be thinking this weekend not just about what you’re doing for a staycation this summer, but where you may want to head in the summer of 2021. Read: That big vacation you scrapped is already selling out for next summer in the WSJ.

COVID-19 IN EGYPT-

The Health Ministry confirmed 87 new deaths from covid-19 yesterday, bringing the country’s total death toll to 2,365. Egypt has now disclosed a total of 58,141 confirmed cases of covid-19, after the ministry reported 1,323 new infections yesterday. We now have a total of 17,022 confirmed cases that have since tested negative for the virus after being hospitalized or isolated, of whom 15,535 have fully recovered.

Isolation hospitals have reached 59% of their total capacity, while 71% of ICU beds are currently occupied, said Health Minister Hala Zayed, according to a cabinet statement. Around 23% of the available ventilators are also currently in use, Zayed said. There are 367 state facilities — including university hospitals — authorized to treat covid patients.

After yesterday’s crushing news that no foreign pilgrims would be allowed to go on Hajj, Cabinet spokesman Nader Saad was on the airwaves to reassure Egypt’s faithful that everyone who had a slot for pilgrimage this year will see their place roll forward to 2021 (watch, runtime 1:06).

The academic year for Egypt’s universities will now end on 15 September to accommodate end-of-year exams, which will begin on 1 July, according to a cabinet statement.

An additional 35 hotels have received health and safety certificates allowing them to reopen at reduced capacity, bringing the total number of hotels the Tourism Ministry has licensed to reopen to 301, according to Al Shorouk.

ON THE GLOBAL FRONT-

In a “warning to poor nations,” covid is tearing into Latin America, which accounted for nearly half the world’s covid-19 deaths in past two weeks — and where the WSJ says mns are falling back into poverty

The US’ leading disease expert Anthony Fauci is “cautiously optimistic” about a vaccine becoming available by the end of the year, the Associated Press reports. There are currently over a dozen potential vaccines being tested globally for safe use and efficacy, while the US is poised to conduct its largest study on some 30k people next month.

The virus is not in control in the US, Faucci told lawmakers yesterday, citing a “disturbing surge” as “Americans ignore social distancing guidelines and states reopen without adequate plans for testing and tracing the contacts of those who get sick,” the New York Times reports.

GLOBAL MACRO-

Eurozone manufacturing and service activity is continuing to rebound, with the bloc’s flash PMI (pdf) jumping an unprecedented 15.6 points in June from May. June’s 47.5 reading is still lower than the 50-point mark indicating expansion, but the gauge came in much higher than expected by Reuters economists who saw it at only 42.4, reports CNBC.

One Yale University economist is going ultra-bearish on the USD: Yale senior fellow and ex-Morgan Stanley Asia chairman Stephen Roach tells Marketwatch that the greenback could crash 35% against competitors in the coming months due to Washington’s spiraling deficit and dwindling savings.

AND THE REST OF THE WORLD-

Banks and fintech bros take note: The once-high-flying founder of German fintech outfit Wirecard is in handcuffs on “suspicion of false accounting and market manipulation two days after the company he built into Europe’s leading fintech group admitted that €1.9bn of cash reported on its balance sheet probably does ‘not exist,’” the Financial Times reports.

Legendary investor Bill Ackman is raising funds for what would be the largest ever blank-check investment vehicle, Reuters reports. Ackman is seeking USD 3 bn for the venture and could boost its overall size to USD 6.5 bn using money from his Pershing Square hedge fund.

Another contender has thrown her hat into the ring for the top job at the WTO. South Korean Trade Minister Yoo Myung-hee joins Egypt’s Abdel Hamid Mamdouh in the list of candidates who want to lead the trade body when Roberto Azevedo steps down in August — a year early.

A trade agreement between the US and China looks likely to stay for now, former American trade official Clete Willems said, according to CNBC. The agreement “remains a winner” for Trump’s reelection bid and China has been doing a good job committing to its side of the bargain, Willems says. Fears over the fate of the ‘Phase One’ agreement have increased in recent weeks after trade was dragged into a war of words between Beijing and Washington over the coronavirus outbreak. The agreement was signed in January and saw the US pledge not to increase tariffs on China’s imports in exchange for Beijing committing to increase its agricultural imports and opening discussions on tech policy.

Businesses boycott Facebook: Outdoor gear brands are boycotting Facebook and Instagram ads to push them to be more accountable towards racism, according to TechCrunch. REI, North Face, and Patagonia have joined a campaign to push the platforms to clamp down on racism and hate speech under the hashtag #StopHateForProfit. They’re demanding that social media outfits stop collecting ad revenue from “misinformation and harmful content.”

The talking heads were largely focused last night on the Madbouly Cabinet’s decision to ease several lockdown restrictions, which Cabinet spokesman Nader Saad discussed in back-to-back-to-back appearances on the airwaves. We have the story in this morning’s Speed Round, below.

The decision to curtail operating hours for restaurants, cafes, stores, and shopping malls is “permanent” and will remain in place even after the pandemic, Saad told Masaa DMC’s Ramy Radwan. Operating hours may be tweaked between the summer and winter seasons, and the government might approve longer operating hours for establishments in tourist governorates. According to Saad, the government doesn’t see any economic benefit to allowing people to sit at cafes after 10pm — but will allow restaurants to operate takeaway and delivery services around the clock (watch, runtime: 14:13). Saad had a similar conversation with Yahduth fi Misr’s Sherif Amer (watch, runtime: 3:14 and runtime: 1:06).

Arab League meeting on GERD, Libya: Amer also called up Arab League Assistant Secretary General Hossam Zaki for a debrief on yesterday’s emergency meeting on the Grand Ethiopian Renaissance Dam and the situation in Libya. Zaki noted that the league was broadly supportive of Egypt’s position on the standstill with Ethiopia, with the exception of Somalia and Djibouti (watch, runtime: 3:02). Radwan also recapped the meeting (watch, runtime: 1:55). We also have the story in this morning’s Diplomacy + Foreign Trade, below.

Curfew to be lifted on Saturday as part of phased reopening plan, retail hours permanently shortened: The nighttime curfew will be lifted on Saturday as the government moves to gradually end the lockdown, according to a cabinet statement. The nationwide nighttime curfew is currently in force between 8pm and 4am. Prime Minister Moustafa Madbouly also announced at a press conference yesterday a package of policies that will regulate the reopening of the country.

The order imposes new, permanent and shorter opening hours for shops, malls, eateries and cafes. Even after corona, shops and malls will have to close at 9pm and restaurants and coffeeshops will have to lock up by 10pm, according to Cabinet Spokesman Nader Saad. Shops had been required under the covid measures to close for the day at 6pm, but had previously been largely free to set their own opening hours. Saad left some wiggle room, saying opening hours could be adjusted in the future, perhaps moving with the season.

From Saturday, cafes and restaurants around the country will be allowed to operate until 10pm and sports clubs, cinemas, and theaters will reopen their doors. All sites will only be permitted to operate at a maximum 25% capacity. Sports clubs will only be required to implement the capacity limit at on-site facilities, including gyms and restaurants, but will not be required to limit the number of people entering the club at any given time.

Say bye-bye to late-night eating. Want to dash out for coffee with friends at midnight? Business meeting at a restaurant at 10pm? Fuggedaboudit. Cabinet says restaurants and cafes are closing at 10pm forevermore. Don’t worry: Delivery service and takeaway will still be allowed around the clock for those nights when a big vat of greasy, crispy chicken is the only thing that will see your through.

Also: And don’t be surprised if there’s soon an exception to the early closing hour for restaurants at hotels, at a minimum.

Malls and retail shops will need to close up by 9pm under the order.

Public parks and beaches will remain closed until further notice. This does not apply to resorts and private compounds, which will be allowed to reopen their beaches, Cabinet spokesman Nader Saad said yesterday (watch, runtime: 1:31).

Places of worship will be allowed to partially reopen to the public as of Saturday — but Friday prayers and weekly mass remain suspended until further notice. The Awqaf Ministry will allow select mosques to hold the five daily Muslim prayers throughout the week for men only (women’s prayer areas will remain closed). Mosques will need to keep washrooms and ablution facilities closed to the public and open their doors no more than 10 minutes before the call to prayer. The Coptic Church said it will decide on Saturday how to proceed with masses on other days of the week, while the Catholic Church has said it will resume prayers this Saturday and cap attendance at 25% of any church’s capacity. Representatives from the Evangelical Church will hold a virtual meeting today to coordinate the reopening of churches, according to Akhbar El Yom.

Hotels will see their maximum occupancy rate raised to 50% from a current 25%. This cap will last until October when it will likely increase to 75%, the cabinet said last week.

Public transportation will be available from 4am until midnight.

The decisions earned digital ink on Reuters, Bloomberg, and the National.

Gov’t to streamline public sector in FY2020-2021, cut 25% of state-owned enterprises: The government is planning to reduce the number of state-owned enterprises (SOEs) to 90 from 119 in FY2020-2021 through mergers or liquidations as it looks to streamline the sector, Youm7 reports, quoting unnamed sources with ties to the Public Enterprises Ministry. At least four SOEs have already been merged and procedures are ongoing for more, the sources say.

Textiles, construction sectors are at the forefront: Look for plenty of action coming out of the Cotton and Textile Industries Holding Company, with 32 companies planned to be reduced to just 10. A handful operating in the real estate and construction sectors will also be assimilated into others.

Background: In-the-works amendments to the Public Enterprises Act are expected to put in place regulations to streamline financial performance in SOEs, many of whom make bns of losses every year. Under those regulations, SOEs unable to turn profits will be forced into liquidation or be merged with another public entity. The legislative changes come as part of a rescue plan for loss-making SOEs announced by minister Hisham Tawfik when he was sworn in 2018. The plan has seen the ministry undertake feasibility studies to determine each company’s financial viability to shut down those found incapable of making a turnaround.

FinMin to lay out plans to tighten state purse strings next fiscal year: The Finance Ministry is working on proposals to trim state spending in the upcoming fiscal year, which begins on 1 July, the local press reports, citing unnamed government officials. The proposed steps include slashing funding that goes into so-called “special funds,” as well as trimming allocations for expenses like travel and conferences, which will likely be limited due to social distancing measures. The officials also noted that the “corona tax” the Madbouly Cabinet introduced last month — which would, if passed by the House of Representatives, dock 1% from all employees’ salaries and 0.5% from state pensions during FY2020-2021 to help fund efforts to contain the spread of the virus — would also help cushion state coffers.

Sarwa Capital has received approval from the Financial Regulatory Authority to roll out four new insurance products, head of technical affairs Sameh El Shourbagy told the local press. These include a EGP 70-300k personal protection policy that covers death or disability, an accident policy, and two others covering commercial and private vehicles. EGX-listed Sarwa acquired licenses for life and non-life insurance products last year.

LEGISLATION WATCH- Your dog food is about to get more expensive: President Abdel Fattah El Sisi signed into law yesterday a bill introducing new or higher development fees on a laundry list of goods and services, such as mobile phones, commercial internet bills, pet food, and raw tobacco, according to Al Shorouk. The new fees, which the Finance Ministry had proposed last month, are designed to help shore up public finances as government covid-19 support packages and stimulus spending strains budgets.

EARNINGS WATCH: Dice Sport and Casual Wear reported consolidated net losses of EGP 43.3 mn for 1Q2020, compared with the net profits of EGP 31.1 mn recorded in the same period last year, according to a disclosure to the EGX.

MOVES- The Egyptian Leasing Association has appointed AT Lease CEO Tarek Fahmy as chairman of the board and ADILease board member Mohamed Amiri as vice chairman, according to the local press.

MOVES- EFG Hermes subsidiary Tanmeyah Micro Enterprise Services has named Hossam El Naggar (LinkedIn) as deputy CEO, the local press reports.

The arrest yesterday of human rights activist Sanaa Seif is leading the conversation on Egypt in the foreign press this morning. Seif is being charged with misusing social media, inciting terrorism and spreading false news and has been ordered to remain in pretrail detention for a 15 day period. Amnesty International issued a statement on her arrest, and the Associated Press picked up the story.

Other stories to keep on your radar:

• The suicide of exiled LGBT activist Sarah Hegazi is still getting digital ink in the foreign press, this time from the Quint.
• Cairene architecture falls victim to presidential whims: The Forte Tower in Zamalek, which remains empty and unfinished more than 50 years after it was started, exemplifies the price exacted on the city’s architecture by the changing ambitions of successive governments, Oliver Wainwright writes in the Guardian.

Russia calls for a ceasefire in Libya, as Egypt-Turkey tensions remain high: Russia’s foreign minister has called for an immediate ceasefire in Libya, saying that this is a step supported by both Egypt and Turkey — which back rival factions in Libya, Reuters reports. This follows a recent statement from a senior Turkish official that Egypt’s warning that it could intervene directly in Libya would not dissuade Turkey from supporting preparations to recapture the coastal city of Sirte. Turkey supports Libya’s internationally recognized Government of National Accord (GNA), which has recently reversed gains made by the Libyan National Army (LNA), led by General Khalifa Haftar and supported by Egypt, Russia and the UAE.

Arab League backs Egypt on GERD, calls for renewed talks: The Arab League issued a statement (pdf) yesterday backing Egypt in its stand-off with Ethiopia over the Grand Ethipian Renaissance Dam (GERD), saying that Egypt and Sudan’s water security is “inseparable from Arab national security.” The statement, which was issued after an emergency meeting, warns Ethiopia against unilaterally filling the dam’s reservoir and proposes renewed talks under the auspices of the United Nations. The league also proposed forming a joint committee between Arab League states and the UN Security Council — which Egypt has turned to for intervention in resolving the dispute — to oversee the completion of technical studies on the dam’s filling and monitor future operations.

The Arab League also discussed the escalating situation in Libya yesterday, according to a Foreign Ministry statement. Minister Sameh Shouky reiterated that Egypt is willing to take every measure necessary to avoid terrorism in its bordering country, but is still open to finding a political solution through negotiation.

The Suez Canal Authority (SCA) has renewed discounts on container ships and bulk carriers crossing the Suez Canal until the end of the year. Crude oil tankers traveling towards the US Gulf and the Caribbean islands, and those heading towards ports between Kochi in India and Karachi in Pakistan will continue to enjoy a 45% fee reduction. Tankers traveling to ports to the west of Kochi will, meanwhile, see a 75% discount in place. Other ports will also continue to benefit from discounts on liquified petroleum gas carriers, including some in South America and southeast Asia. The SCA has regularly been offering discounts to vessels passing through the canal in a bid to attract more traffic.