More clarity on when (and from whom) we’re getting vaccines

Good morning, wonderful people, and welcome to Wednesday, where the big news remains the rollout of Pfizer and BioNTech’s covid-19 vaccine in the UK — the first widescale vaccination campaign with an internationally tested jab. The news dominates front pages across the globe this morning, from the Financial Times to the New York Times. All eyes now shift to the United States, where the Food and Drug Administration should give Pfizer regulatory approval in the coming days.

We have lots more on the fight against covid here in Egypt below, as the government continues to warn us all to take things seriously as we’re still months away from a vaccine making an appearance in Egypt.

A (WELCOME) SIGN OF THE TIMES- Elissar Farah Antonios has become the first woman to head Citigroup’s MENA operations, Bloomberg reports. Antonios, who has headed the bank’s operations in the UAE, Levant and Iraq since 2009, will also join the Europe, Middle East and Africa committee, reporting to Atiq Rehman, who heads Citi’s EMEA business.

Oil companies and banks have hired the Pope to tell them how to stop polluting the planet and evading taxes. Big business will be consulting with Pope Francis on ESG goals in what will soon become the cartoonishly named Council for Inclusive Capitalism with the Vatican, the New York Times reports. The council will bring together 27 “Guardians for Inclusive Capitalism” (or, “business executives,” if you’re a normal person) with the Pope to discuss how to make capitalism more socially responsible.

Three Shell executives in charge of clean energy have resigned over frustrations with the oil giant’s slow transition to green energy sources ahead of Shell’s anticipated February announcement of its plans to transform into a net zero emissions business, the Financial Times reports.

And while we’re on the topic of doing what’s right in business: Add the FT’s Martin Wolf to the chorus of voices saying that Milton Friedman was wrong — companies really do have responsibilities other than to “maximize shareholder value.”

After nuclear war, there will be Cher, cockroaches, and Facebook’s crypto ambitions: That’s right, folks: El Face hasn’t given up its crypto ambitions. Having rebranded its Libra ‘stablecoin’ following regulatory pushback, the social media overlord is hoping to launch a currency it’s calling Diem its Novi e-wallet in 2021, David Marcus, who heads Facebook Financial, was quoted as saying by CNBC.

Yeah, we’re in that kind of mood this morning. Little wonder, then, that this advert — featuring Satan going on a date with a woman named 2020 — has us smiling today.

The antidote? A little bit of retail therapy as Apple rolls out its AirPods Max over-the-ear, noise-canceling headphones that look both practical and fairly cool and sets December 14 as the launch date for its Apple Fitness+ workout-on-demand service.

CIRCLE YOUR CALENDAR-

A new GIZ webinar series aims to help the financial sector through covid, the group said in a statement (pdf) yesterday. Held in collaboration with the Financial Regulatory Authority, the Financial Services Institute and the Egyptian Banking Institute, the lectures will tackle digital transformation, financial sector liquidity and green finance. The first webinar goes live tomorrow. You can register for the event here.

Upcoming news triggers:

• Inflation data for November will be released tomorrow.
• The CBE’s Monetary Policy Committee will meet on 24 December to review interest rates.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: Enterprise’s industry vertical focuses each Wednesday on infrastructure, covering everything from energy, water, transportation, urban development and as well as social infrastructure such as health and education.

In today’s issue: Establishing Egypt as a data center hub is a priority for the government and state-owned Telecom Egypt. Major investments in building and revamping data centers are ongoing, and the last two years has seen an estimated USD 1 bn invested in the market by government and private sector players. In part 1 of a two-part series, we look at Egypt’s current data center landscape, and how it is poised for growth.

^^ It’s going to be a few months yet before this 90-year-old British grandma’s (metaphorical) Egyptian cousin gets her covid jab. Keep her and William Shakespeare (reincarnated?) safe in the meantime.

That’s our take on the Madbouly government’s key message to the nation yesterday as the PM told citizens that it’s imperative they continue wearing masks until a vaccine starts rolling out.

News on this front yesterday was good, bad and … meh yesterday. Here’s the rundown:

The good: Increasing clarity on where we’re getting vaccines. Egypt has applied to the Covax program to obtain vaccines and is scheduled to hold an “extended” meeting with Gavi — the global vaccine alliance that’s leading the Covox initiative — Health Minister Hala Zayed said during cabinet’s weekly meeting. The Covax program aims to ensure developing countries are able to easily access covid-19 vaccines and plans to distribute them around the world without charge.

The government will secure 20% of its vaccine needs from GAVI and another 30% from AstraZeneca, Finance Minister Mohamed Maait told Bloomberg. Authorities are in talks with other companies for the remainder, he added. Meanwhile, the Health Ministry announced a new protocol for the treatment of covid-19 that employs more effective medicines and uses a different categorization process for the severity of cases.

We’re fortunate: Fortune magazine estimates that only 10% of citizens in poor nations will have access to a covid vaccine next year.

Also good news coming out of a meeting yesterday of the state’s covid-19 task force: Only 30% of ventilators and 24% of beds in hospitals set aside for covid-19 patients are currently occupied. As many as 7.5k staffed beds, 1.5k ICU beds, and 325 ventilators were recently added to the state-run hospitals, Zayed said. There were concerns earlier during the pandemic that isolation capacity had maxed out, an issue which prompted the ministry to search for other alternatives including using hotels.

The bad news: The Health Ministry reported 434 new covid-19 infections yesterday, up from 415 on Monday. The ministry also reported 23 new deaths, bringing the country’s total death toll to 6,813.

The meh: The official tally could be more of “an estimate” than the “reality on the ground” as a focus on testing severe cases leaves space for mild cases to go undetected, said World Health Organization Regional Emergency Director Rick Brennan at a press conference yesterday.

But this doesn’t mean the state is fudging the numbers, a top policymaker says. If anything, reporting a higher tally would probably be good for public health if it prompted citizens to be more cautious and help curb the spread of the virus, presidential health advisor Mohamed Awad Tageldin said on the airwaves yesterday (watch, runtime: 9:20).

Take that, anti-vaxxers, part III: In the latest sign that governments around the world aren’t messing around, the Canadian province of Ontario is suggesting that it will be introducing vaccination cards for all residents — and that your freedom of movement is likely to be curtailed if you don’t get your jab.

What does ‘curtailed’ mean? Think “less freedom to travel” and “no movie theaters,” for starters, even if the vaccine isn’t made mandatory. CTV has more.

Egyptian debt is expected to be “Euroclearable” sometime between September and November next year, Finance Minister Mohamed Maait tells Bloomberg Daybreak (watch, runtime: 7:37). The prerequisites are “roughly” complete, he said, referring to the creation of a new clearing company, new legislation, and other requirements.

What’s with the hold-up? Mohamed Hegazy, head of the Finance Ministry’s debt management unit, told us last month that the ministry is making progress in meeting the terms of the 2019 agreement signed with Euroclear, but said the process had been slowed by the pandemic and hinted at the complexity of the requirements.

Why is it important? The agreement paves the way for local debt issuance to be cleared with the Belgium-based clearing house in a move to make debt more accessible to foreign investors, who can currently only access the market through a few local banks.

Foreign inflows into debt dipped in March and April due to the pandemic-induced risk off, but hot money started returning to the country in May, reaching USD 23 bn by the end of November, up from USD 21.1 bn six weeks earlier.

Egypt is also working to secure its spot on JPMorgan’s emerging markets indices to cut borrowing costs and boost debt inflows, a process which Maait told Bloomberg is pending action from the investment bank. “We have fulfilled, from our point of view, most if not all of the requirements … we are waiting to hear from them,” Maait said.

New “floating rate” bonds: The ministry hopes to soon wrap up discussions to determine the mechanism under which it will issue floating-rate sovereign bonds, says Maait. The discussions center around which benchmark to use, with a possibility to use the CBE’s corridor rate, Bloomberg quoted Maait as saying. Egypt also expects to take its first sovereign sukuk issuance to market sometime next year, as soon as a draft law recently approved by cabinet and shipped to legislators gets final approval. The government could also issue new eurobonds on the international market in the first half of 2021, Maait said.

The index-linked bonds and sukuk are two of three new debt instruments Egypt is adding to its debt mix, with the other being green bonds (which the government took to market earlier this year). The new instruments come as part of a debt diversification strategy which also entails a shift towards longer-term borrowing.

More from Maait:

• The government still hasn’t considered a post-loan agreement with the IMF after taking out nearly USD 8 bn in pandemic funding earlier this year, but “nothing is ruled out.”
• Egypt’s economy should be growing at a 5.5-6.5% clip under normal circumstances, a range the government hopes to hit in FY2021-2022.
• If circumstances start gradually improving starting now, growth could reach 4% by the end of the ongoing fiscal year, exceeding recent expectations.

IN OTHER DEBT NEWS- Morgan Stanley has cut back on its investment in Egyptian bonds as it becomes more selective in its emerging market investments, according to Reuters. The investment bank recently signaled its bullish sentiment on EMs, but then said it’s taking “a few chips off the table” and that only select EM currencies and bonds will continue to perform well. Its stance is “neutral on EM credit,” where “spreads are close to bottoming out.”

Egypt’s macro picture in 2021, according to Beltone: The coming 12 months will be characterized by solid economic growth, low inflation and strong investor appetite for Egyptian debt, Beltone Financial said in its annual Macro and Strategy research note. Stimulus measures pushed out by the central bank and the Finance Ministry in response to the pandemic will help normalize business conditions in 2021, resulting in improved PMI readings, more private sector investment, and stronger FX inflows, it said. Key takeaways from the report:

The economy is expected to grow 3.5% this fiscal year, down only slightly from 3.6% in FY2019-2020, but two percentage points below pre-covid levels. Beltone’s forecast is close to the government’s recent upward revision for FY2020-2021 growth, and is in line with forecasts from the IMF and Deutsche Bank. Fitch Solutions, meanwhile, expects Egypt’s GDP to grow at a 3.2% clip in calendar year 2021 before accelerating to 5.6% in 2022. The research firm now forecasts a quicker-than-expected global economic recovery in 2021 as the covid-19 vaccine is distributed, according to Ahram Online. The government forecast a growth rate of 2.8-4% in FY2021-2022.

Egypt’s current account deficit will continue to widen in FY2020-2021 on the back of a USD 5 bn drop in tourism revenues, which will remain weak as the second wave continues to take hold in Europe. The bank expects the deficit to reach USD 12.6 bn in FY2020-2021, up from USD 11.2 bn over last fiscal year.

The budget deficit will increase only marginally this fiscal year to 8.2% of GDP from an estimated 7.9% in FY2019-2020. “Fiscal buffers have provided economic stimulus with a minimal impact on the budget” and the government “remains broadly on track” to meet its deficit reduction targets, it said. Finally, Beltone sees Egypt’s debt-to-GDP at 90.3% in FY2020-2021, up from 80.5% two years earlier.

Inflation will remain below the central bank’s 9% (+/- 3%) target range, averaging 4.8% throughout the remainder of the fiscal year and rising only as we enter into FY2021-2022 and as the CBE further cuts interest rates, Beltone said. “Record low international commodity prices, a stronger EGP, and base effect throughout 2020 have all provided a buffer to domestic inflationary pressure,” Beltone says, noting that price growth could begin to pick up in 3Q2021 due to the global vaccine rollout and higher commodity prices that could accompany a potential detente between China and the incoming Biden administration.

With low inflation, Beltone believes the CBE will cut rates by at least 100 bps next year. Despite this, sovereign treasury yields will stabilize “at a premium” to the lending rate, keeping yields attractive to foreign investors, the investment bank added.

The EGP looks set to remain strong, stabilizing at EGP 15.78 to the greenback in 2021 and growing stronger over the next five years.

Government-led and central bank support, coupled with reduced natural gas prices, will promote a recovery in capex by the end of 2021, the investment bank said. A recovery in capex lending will need private demand to continue growing, as this remains key to unlocking Egypt’s capital spending potential, it added.

Egypt’s food exports to Europe are unlikely to fall significantly due to the resumption of lockdown restrictions introduced across Europe last month, Food Export Council head Hani Berzi told Masrawy. Many European countries import essential goods from Egypt, demand for which is only likely to rise due to lockdown restrictions, the Edita boss suggested.

Europe is a significant market for Egyptian firms: Food exports to the EU reached USD 366 mn in the first nine months of the year, making up 14% of the USD 2.6 bn in total exports during the period.

Exporters are more likely to be hit by instability in neighbouring Middle Eastern countries, Berzi said, noting that the bulk of exports go to the Gulf and countries with a recent history of political turmoil including Libya, Sudan, and Iraq. Saudi Arabia is the largest importer of Egyptian food products.

We could be seeing our first LNG exports out of Damietta by 1Q2021, soon after Eni and its state-owned partners the Egyptian Natural Gas Holding Company (EGAS) and the Egyptian General Petroleum Company (EGPC) reopen the long-dormant terminal, Youm7 reports, citing unnamed officials in the oil industry. An agreement reached last week between the Italian energy giant and its Union Fenosa Gas (UFG) partner Naturgy finally brought an end to an eight-year dispute with the Egyptian government, and is expected to pave the way for the facility to restart operations during the next quarter.

Refresher: What was agreed last week? Naturgy has agreed to exit UFG — its 50/50 JV with Eni that owns 80% of the facility — in return for a USD 600 mn payment and most of UFG’s assets outside of Egypt. Its share of ownership will then be distributed between Eni, EGAS and EGPC. Once the plant begins operations, Naturgy will leave Egypt and UFG will be closed.

A recent revamp of the standardized Thanaweya Amma exam received a nod from cabinet in its weekly meeting yesterday. The amendments to the 1981 Education Act (pdf) allow the tests to be electronically administered, give students the chance to sit for the same exams several times each year and pick their highest grade, and administer different versions of an exam as opposed to a single standardized sheet (akin to the SATs). They also stipulate new rules on progression and failure, allowing resits for up to two subjects the following year. The amended system is expected to be implemented on first-year Thanaweya Amma students as of the 2021-2022 academic year, according to Education Minister Tarek Shawki. The Education Ministry said last week that next year’s exams will all be held online. The new structure is designed to emphasize comprehension over rote memorization.

Also approved by cabinet in its meeting:

• An agreement between Egypt and the UK to open talks to liberalize trade and the cross-border movement of capital; and
• A contract between the Finance Ministry and state-owned fintech company E-Finance to streamline and automate systems used by the ministry’s tax appeals committees;
• A MoU between the Foreign Ministry and the UN World Food Programme to improve food security in Africa;
• A grant of up to USD 750k from the World Bank’s International Bank for Reconstruction and Development (IBRD) to reduce pollution.

Egyptian e-commerce beauty platform Source Beauty has secured a six-figure USD investment in a seed round led by Swiss investment firm Ace & Company and a number of angel investors, the company announced in a statement (pdf) yesterday. This is the second round of financing raised by the startup this year, after receiving an undisclosed investment from 500 Startups in May. The proceeds from the latest funding round will be used to expand in the local market, increase its headcount and launch new marketing campaigns.

ELSEWHERE ON PLANET STARTUP- Seven startups have won ITIDA’s latest Start IT Competition which sees tech entrepreneurs compete for the chance to have their business incubated for one year, ITIDA said in a press release (pdf). Those chosen include electronic design automation tool Analog Designer's Toolbox, graphic design digital platform DomDom, retail computer vision solution A-eye Tech, legal advice platform Avocato, e-commerce app Shoppy App, Arabic and Quran learning app Hafs Quran, and tourist storytelling app Vibes. The startups will receive a fully-funded year in an incubator as well as business consultancy services, mentorship, and software and hardware tools, among other services.

Orascom Pyramids, which is in charge of the Giza Plateau development plan, has promoted its development officer, Hesham Gadallah (LinkedIn), to chairman and CEO, succeeding Ashraf Halim, the company announced in a statement (pdf). Gadallah has over 22 years of experience in business development and consulting, holding senior roles at telecom operators Vodafone, Veon, and what was known as Orascom Telecom.

Juhayna’s board of directors unanimously voted to appoint Mohamed El Dogheim as chairman and Seif Thabet as managing director following the arrest of former chairman and managing director Safwan Thabet last week, according to an EGX disclosure (pdf).

Ezz Steel reported consolidated net losses of EGP 1.34 bn in 3Q2020, narrowing losses from EGP 1.85 bn in 3Q2019, according to its latest earnings (pdf). Sales revenue fell 7.7% y-o-y to EGP 8.6 bn during the three-month period.

President Abdel Fattah El Sisi’s last day in Paris headlined last night’s talk shows.

Foreign Minister Sameh Shoukry discussed the president’s visit with Kelma Akhira’s Lamees El Hadidi, touching on the meetings El Sisi held with various officials and the topics that came up. French President Emmanuel Macron and El Sisi broached the topics of human rights concerns and the Charlie Hebdo cartoons, with both topics taking “the attention they deserve” from the two leaders, Shoukry said (watch, runtime: 39:23). See also coverage on Al Hayah Al Youm (watch, runtime: 10:46) and Yahduth fi Misr (watch, runtime: 5:14).

Education Minister Tarek Shawki blanketed the airwaves yesterday to talk about the changes coming to Thanaweya Amma exams as of the 2021-2022 academic year, after the Madbouly Cabinet approved amendments to the 1981 Education Act (which we recap in Cabinet Watch, above). Shawki quelled parents' concerns that the new system will be more difficult for students, explaining that it will actually give them a chance to put their best foot forward. The minister phoned into several shows, including Ala Mas’ouleety (watch, runtime: 20:45) and Masaa DMC (watch, runtime: 10:03).

Also on the airwaves last night:

• The last day of runoff elections for the House of Representatives in and 11 other governorates passed smoothly. (Mohamed Sherdy on Al Hayah Al Youm | watch, runtime: 12:32).
• The National Council for Women has launched a new campaign against gender-based violence. (Sherif Amer on Yahduth fi Misr | watch, runtime: 4:08)

Egypt and France will likely cooperate more closely as The Donald exits the White House and President-Elect Joe Biden is expected to take a less forgiving approach to human rights concerns, Bobby Ghosh writes for Bloomberg Opinion. The likelihood of closer ties with France comes after President Emmanuel Macron made it clear that Paris’ cooperation with Cairo on counterterrorism will not be deterred by objections from human rights groups.

Meanwhile: Some 40 terrorists were killed in North Sinai over the past three months in operations by the Egyptian Army (Associated Press) and geothermal hot springs left the ground ablaze in a New Valley village earlier this week (Gulf News).

Financial inclusion must be supported by expanding access to digital communication technologies across Africa, CIB Non-Executive Chairman Sherif Samy said at the Smart Africa Initiative’s board of directors meeting, Al Mal reports.

Other things we’re keeping an eye on this morning:

• Egypt’s first microinsurance policy has been approved by the Financial Regulatory Authority, according to Al Mal. The Cooperative Ins Society’s policy is specifically designed to cover risks for microfinance companies.
• New Alamein is getting a branch of Switzerland’s Ecole hôtelière de Lausanne, one of the top hospitality schools in the world.
• The Egyptian Saudi Ins House has raised its stake in EGX-listed clothing manufacturer Dice to 10% from 7.1% in a EGP 27.4 mn transaction, according to a regulatory filing (pdf).

The big story of the morning globally is the rollout of a covid-19 vaccine in the UK, as we note in What We’re Tracking Today, above. Otherwise, UK Prime Minister Boris Johnson is in Brussels today for a final push on a possible Brexit agreement with the EU, the US Supreme Court rejected Agent Orange’s bid to throw out ballots in Pennsylvania.

IN DIPLOMACY: President Abdel Fattah El Sisi discussed regional affairs with French Prime Minister Jean Castex in a meeting at the French cabinet headquarters yesterday. The two also discussed cooperation on economic and developmental projects, as well as increasing French investments in Egypt. El Sisi also met with French Senate president Gérard Larcher, as well as with Airbus CEO Guillaume Faury.

December: Egypt-US Trade and Investment Framework Agreement (TIFA) talks.

December: A meeting to finalize membership and trading rules governing Egypt’s Commodities Exchange (Egycomex).

December: The Egyptian-Iraqi Joint Higher Committee will meet.

9-10 December (Wednesday-Thursday): BiznEx, the international business expo in Egypt, Nile Ritz Carlton Hotel, Cairo, Egypt.

14 December (Monday): Final results will be announced for Parliamentary elections held in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

15 December (Tuesday): House of Representatives reconvenes from recess.

15-16 December (Tuesday-Wednesday): US Federal Open Market Committee will hold its two-day policy meeting to review the interest rate.

24 December (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

25 December (Friday): Western Christmas.

31 December (Thursday): Egypt-UK post-Brexit trade agreement to take effect.

31 December (Thursday): Deadline for car owners to comply with traffic regulations to install a RFID electronic sticker on their cars.

1Q2021: The Seventh Annual Egypt Automotive Summit will be held

1H2021: Egypt’s Commodities Exchange (Egycomex) will begin trading.

1 January 2021 (Friday): New Year’s Day, national holiday.

7 January 2021 (Thursday): Coptic Christmas, national holiday.

13-31 January (Wednesday-Sunday): Egypt will host the 2021 Men’s Handball World Championship at the Giza Pyramids.

17 January 2021 (Sunday): A court will hold a postponed hearing to look into an appeal by Syria’s Anataradous against an arbitration ruling in favor of Amer Group and Amer Syria in case 445 of 2019.

25 January 2021 (Monday): 25 January revolution anniversary / Police Day.

25-29 January 2021 (Monday-Friday): The World Economic Forum’s “Davos Dialogues” will take place virtually.

26-28 January (Tuesday-Thursday): Future Investment Initiative, Riyadh, Saudi Arabia.

28 January 2021 (Thursday): National holiday in observance of 25 January revolution anniversary / Police Day.

4 February 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

6-18 February (Saturday-Thursday): Mid-year school break.

18 March 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

12 April 2021 (Monday): First day of Ramadan (TBC).

25 April 2021 (Sunday): Sinai Liberation Day.

29 April 2021 (Thursday): National holiday in observance of Sinai Liberation Day.

29 April 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

3 May 2021 (Monday): Sham El Nessim.

6 May 2021 (Thursday): National holiday in observance of Sham El Nessim.

12-15 May 2021 (Wednesday-Saturday): Eid El Fitr (TBC).

18-21 May 2021 (Tuesday-Friday): The World Economic Forum’s annual meeting will be held under the theme of “The Great Reset” in Lucerne-Bürgenstock, Switzerland

31 May-2 June 2021 (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, Nasr City, Cairo.

30 May-15 June 2021 (Wednesday-Thursday): Cairo International Book Fair.

1 June 2021 (Tuesday): The IMF will conduct a second review of targets set under the USD 5.2 bn standby loan approved in June 2020 (proposed date).

10 June 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

24 June 2021 (Thursday): End of the 2020-2021 academic year.

26-29 June 2021 (Saturday-Tuesday): The Big 5 Construct Egypt, Cairo International Convention Center

30 June- 15 July 2021: National Book Fair.

22 July 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

30 July-3 August 2021 (Thursday-Monday): Eid Al Adha, national holiday (TBC).

1 October 2021-31 March 2022 (Friday-Thursday): Postponed Expo 2020 Dubai.

December 2021: United Nations Convention against Corruption, Sharm El Sheikh, Egypt.