Flights into and out of Egypt are grounded at noon today until 31 March

We were going to rejoice that it is Thursday, but then we remembered that flights into and out of Egypt are suspended as of 12 noon today for a two-week period. The Madbouly government has said it will make sure that foreign visitors who stay past the deadline to finish out their trips can still get home and aren’t here in lockdown with us for the duration. Cargo flights will not be suspended at this time, officials have said.

The Armed Forces have not started deploying to enforce a curfew, the military’s official spokesman said last night amid persistent rumors that we were about to face a curfew as has been imposed in some European and American jurisdictions. “The Armed Forces, in cooperation with state agencies, continue their preparations to confront the threat of the novel coronavirus,” the statement added.

We saw common sense moves from regulators in Egypt yesterday as the FRA gave publicly traded companies more time to submit their financial statements for FY2019. We expect deadlines for AGMs to be pushed out in tandem, and the FRA has also extended the filing deadline for 1Q results.

The authority has also given businesses some breathing room by instructing leasing and factoring companies to delay payments for clients by up to six months. We have chapter and verse on both initiatives at the head of this morning’s Speed Round.

Other authorities will need to step up, too in the days ahead — and with smart policies that benefit not only listed companies: Privately-owned firms account for the substantial majority of private-sector economic activity and will need support, too. But don’t roll help out too fast: As tense as things are in Egypt right now, we’re not in the same boat as our counterparts in Europe. There’s something to be said for having more bullets in the chamber.

SMART POLICY SUGGESTION #1- Extend the tax filing and payment deadlines for businesses and individuals by 60-90 days. The idea was suggested to us by a number of very smart readers yesterday, and it makes sense: We’re at the height of tax preparation season. The disruption has so far been … substantial. And we wouldn’t be alone in looking at this kind of initiative: “Treasury Secretary Steven Mnuchin said Tuesday that taxpayers can delay paying their income taxes on as much as USD 1 mn in taxes owed for up to 90 days,” CNBC reports. Frankly, it just makes sense.

POLICY SUGGESTION #2- Start planning on a bridge loan program for all Egyptian businesses, from SAEs and LLCs to sole proprietorships, from SMEs to large corporations. A modified version of what Andrew Ross Sorkin (the chronicler of the global financial crisis) suggested yesterday: If you paid taxes in 2018, you get a “no-interest ‘bridge loan’ guaranteed for the duration of the crisis to be paid back over a five-year period. The only condition of the loan to businesses would be that companies continue to employ at least 90 percent of their work force at the same wage that they did before the crisis.” Expensive? Yup. But the alternative could be even costlier, as Sorkin points out. We’re not sure this one has legs (yet), but it’s an example of the type of creativity in policy making to which we may need to resort.

Oh, and granny here [redacted] speaks for all of us here at Enterprise when it comes to those who are panic-hoarding in certain districts (watch, runtime, 1:21). (Warning: If little kids are in earshot, you might want to wait before watching.)

How do markets look today? ????

(Japan is the only market posting gains in Asia as we dispatch this morning’s edition. China, Hong Kong and South Korea are deeply in the red, as is India, and futures suggest Europe and the US will open in the red later today, too.)

COVID-19 IN EGYPT-

Egypt now has 210 cases of covid-19 after 14 more cases were confirmed yesterday, a Health Ministry statement said last night. The new cases include 12 Egyptians and two foreign citizens, and all are cases of community transmission, according to the ministry statement. Of the 210 total cases, 28 have now fully recovered and been discharged from hospital. Twelve others have had a first negative PCR test and are still in hospital under observation. The total death toll is unchanged from yesterday at six people.

As of today, there will be a total of fourteen covid-19 test centers open nationwide, according Nancy El-Guindy from the Ministry of Health’s Central Laboratories Department. She was speaking on Wael El-Ibrachy’s show El Taseaa on state-owned Channel 1 (watch, runtime: 5:51). The count includes 13 satellite facilities and the central lab in Cairo.

The traffic police will not be issuing car or driver’s licenses until 16 April. Fees and fines can be paid in the interim at the post office or by Fawry, Youm7 reports.

South Sinai governorate will quarantine tourism industry workers for 14 days starting today before being allowed them to leave the governorate for their homes of record. The move mirrors one announced earlier this week by the Red Sea governorate.

The two governorates are not entirely sealed off: Tourists are being allowed to leave on schedule, Information Minister Osama Heikal said, according to Al Shorouk. No new visitors are being allowed in, including domestic tourists.

Friday is a national (deep) cleaning day: The Health Ministry wants businesses and the government alike to make Friday a cleaning day to sanitize everything in sight, from offices to public buildings and transportation infrastructure, according to a cabinet statement.

Social distancing at businesses that can’t work remotely: The folks at Al Mal have a rundown on how manufacturers are trying to reduce exposure for their people while still remaining open. The measures range from shorter workdays to shorter workweeks, running one shift instead of two, and replacing on-site meal service with a cash stipend.

The Finance Ministry is offering fee exemptions for private citizens filing taxes online in a bid to discourage in-person payments at tax offices, according to an official statement. The exemption is valid for this year only. The ministry and the Tax Authority had asked citizens to join companies in filing their taxes online before the tax season ends this month, as part of Egypt’s new unified digital tax payment system.

Clearing out the customs office: The Trade Ministry has suspended the need for importers to get Egyptian embassies to authenticate certificates of origin provided by sellers abroad as a condition of customs clearance, Al Mal reports.

The Supply Ministry will not be issuing new ration cards or allowing transfers between governorates, until further notice. Lost cards can be replaced through the Support Egypt website Tamwin.com.eg, which can also be used to register death notifications, Al Mal reports.

Businesses are starting to queue up for help: Mohamed Embaby, head of the cafes and restaurants division of the Giza Chamber of Commerce, will ask the government to exempt the sector from paying utilities and social security for six months and provide soft loans, the local press reports.

Otlob waives delivery fees: Otlob has reportedly begun waiving delivery fees on most food to encourage people to stay at home, according to the local press.

GLOBAL RESPONSE-

Saudi Arabia has suspended all work in the private sector for 15 days with exceptions only for healthcare providers and food services, according to Reuters.

The kingdom has also closed all mosques in the country, according to Bloomberg.

The UAE will temporarily stop issuing entry visas on arrival starting 19 March, excluding holders of diplomatic passports. Dubai is also suspending the issuance event permits until the end of the month.

The US Fed will backstop the money-market mutual-fund sector it said just before midnight, announcing it will “establish a facility to lend to money-market funds: after having secured USD 10 bn from the US Treasury to “protect against losses,” the WSJ reported moments before we hit “send” on this morning’s issue.

Two rounds of direct checks to American citizens may be on their way — and you know the SHTF when US Republicans are clamouring for what is effectively a nationwide universal basic income program. The Treasury wants USD 500 bn of a USD 1 tn relief package to be issued in direct checks to Americans, a first set on 6 April, and a second round in mid-May, the Associated Press reported.

The US is moving into war economy mode: President Trump yesterday announced he would invoke Korean-war era legislation giving him emergency powers to force industries to expand production and re-route the allocation of resources, according to the AP.

Canada and the US have closed their border to “non-essential” traffic, but said it would be open to people who commute to work on either side of the border (including healthcare professionals) as well as to trains and trucks moving goods.

Canada’s banks are closing branches and moving to shorter work hours, the Globe & Mail reports.

The Canadian government will roll out a fiscal package worth some USD 56.7 bn — equivalent to 3% of annual GDP — in the form of temporary tax deferrals (around USD 38 bn) and direct support to individuals and companies (around USD 19 bn), Prime Minister Justin Trudeau announced.

UK shutters schools, could be heading for lockdown: Europe’s second biggest economy yesterday signalled it could be joining France, Spain, Italy and Belgium in locking down its society. UK PM Boris Johnson announced the closure of the country’s education system and the cancellation of exams in the evening, and although he promised no new measures on Thursday, government officials said a lockdown on the capital could be announced tomorrow.

The new Bank of England governor promised unlimited funding for businesses: Andrew Bailey assured businesses that the bank is willing to plow unlimited amounts of money into the economy by buying up commercial paper, the Financial Times says.

The ECB in EUR 750 bn new asset-purchase program: The European Central Bank announced a ‘Pandemic Emergency Purchase Program’ that will see it purchase up to EUR 750 bn of commercial paper, and government and corporate bonds by the end of the year.

Turkey unveiled a USD 15.4 bn stimulus package of tax cuts and payment deferrals.

WHO says regional communications over covid-19 are falling short: The WHO’s regional director for the Eastern Mediterranean is urging Middle Eastern countries to step up cooperation and information sharing with the organization as fears over inaccurate covid-19 reporting are rising, Reuters reports.

WAIT, THERE IS GOOD NEWS-

The European Bank of Reconstruction and Development has said that recovery could be “robust” in its regions after weathering the initial economic shock.

There were no new infections in Wuhan, previously the epicenter of the outbreak, Chinese authorities announced yesterday.

TIPS FROM MCKINSEY- Suggestions for how to plan your own company policies to protect your workforce, while maintaining some sort of continuity on the operational front, courtesy of McKinsey & Company (pdf):

• Put in place clear policies that prioritize the health of your employees and are in line with public health recommendations. This includes setting up your people for remote work if necessary, or creating a rotating schedule or staggering shift system if physical presence is necessary;
• Double down on clear communication. That applies to top-down and bottom-up communication, and establishing a clear line of communication with health officials and healthcare providers if necessary;
• Assess where your business operations stand, and how you can best optimize them, including diversifying suppliers, estimating realistic customer demand, and planning for different scenarios;
• Bear in mind the situation today is not going to be the same in a few weeks or months. Hope for the best, but plan realistically with the information that’s out there.

COVID TIP OF THE DAY: What steps can you take to protect older people from covid-19? Ensure the older and more vulnerable people in your life follow official guidelines, including regular handwashing, keeping social interactions to an absolute minimum, using telemedicine if possible to attend doctor’s appointments remotely, and stocking up on essential supplies, including medicine, this New York Times piece advises.

Rowing might just be your best at-home workout buddy. Rowing machines are the most sensible home exercise solution, when compared to running on a treadmill or spinning. Research has found that the activity uses 86% of the body’s musculature and is good for joints, strength training, and cardiovascular endurance, according to the WSJ.

It may be the End of the World as We Know It (with apologies to REM) but we’re still iSheep: Apple announced yesterday a new iPad Pro with a backlit keyboard, track pad and new hinge system that has us cursing covid-19 even louder than we were before. You can check out iPad productivity guru Federico Vittici’s rundown here (from lockdown in Italy) or read Apple’s announcement or check out its product page.

*** A QUICK PROGRAMMING NOTE: My Morning Routine, our popular Thursday section, is on hiatus for the duration, as our grandparents would have said, as we focus on bringing you wall to wall coverage of this lousy virus.

The first order of the night: The daily covid-19 update. Masaa DMC’s Ramy Radwan reviewed the Health Ministry’s daily statement on covid-19 cases, which rose to 210 yesterday after 12 Egyptians and two foreigners tested positive for the virus. Of the total number of cases discovered since the virus entered the country, 40 have now tested negative and 28 have fully recovered (watch, runtime: 1:39). Min Masr’s Amr Khalil also covered the statement (watch, runtime: 2:01).

Egypt following WHO’s recommendations -Zayed: Al Hayah Al Youm’s Lobna Assal covered Hala Zayed’s meeting with the cabinet, during which she confirmed that Egypt has now received 27k rapid detectors and will obtain another 75k soon, she said, adding that the ministry will screen all travelers returning from Umrah and request that they self-isolate. Tourism workers in hotspots such as Luxor, Aswan and South Sinai will not be able to travel out of their homes for 14 days as a precautionary measure, she said (watch, runtime: 0:44) (watch, runtime: 0:51). Masaa DMC’s Ramy Radwan also covered Zayed’s statement to the cabinet (watch, runtime: 1:22).

Interview with WHO advisor: Min Masr’s Amr Khalil spoke with WHO advisor Maha Al-Rabat who said that the global health body allows each country to take precautionary measures specific to their circumstances (watch, runtime: 10:12).

REGULATION WATCH- Regulator extends financial statement submission deadline, allows trading via email, text: The Financial Regulatory Authority (FRA) decided yesterday to extend the deadline for EGX-listed companies to submit their financial statements for 4Q2019 to 30 April, according to an official statement (pdf). The deadline to disclose 1Q2020 financials has been extended to 15 June.

Trading in the time of covid-19: The authority is now allowing brokerages to receive buy and sell orders via email or texting apps as long as the order bears the approved signature of clients and the approval of the customer, an official statement reads.

The FRA is also giving EGX-listed companies the option to hold general assembly meetings online, provided they have an effective online system in place. The decision comes as companies are increasingly shifting to remote working and social distancing to curb the spread of the virus. We’ve been told that official custodian MCDR is developing the official voting system, so watch this space for more news.

Mortgage lenders, factoring and leasing companies to give clients six-month grace period: The Financial Regulatory Authority has ordered mortgage lenders, factoring and leasing companies to give a six-month grace period to any client who asks. This comes after the Central Bank of Egypt moved to extend the tenor of all bank loans to businesses for six months and provide debt relief for individuals at risk of default. The debt relief program is expected to benefit some 940k borrowers. The debt relief measures were announced alongside the central bank’s emergency 300 bps interest rate cut.

CBE debt initiative could exclude microcredit: Banking sources told the local press that microcredit could be excluded from its initiative to delay loan maturities by six months since it is more likely to cause more financial difficulties than provide relief. The program delays only the installments on individual and corporate loans, meaning that interest will continue to accrue during the six-month period.

The EGX30 index closed in the red yesterday for the fourth consecutive day as concern among investors over the economic impact of the covid-19 outbreak and turbulence in global markets showed no sign of lifting. The benchmark EGX30 index fell 3.8% in the first hour of trading, before extending its losses to close down 4.8%. Circuit breakers were triggered for the fifth time this month toward the end of the session after the broad-based EGX100 index fell more than 5%. The drop came despite the government announcing on Tuesday a raft of new measures to support the economy which included energy price cuts, a real estate tax holiday for the industrial and tourism sectors, and stamp and dividend tax breaks for EGX investors.

Juhayna and Cleopatra Hospitals Group were the only two EGX30 constituents to see gains: Juhayna gained 1.4% and CHG was up 0.5% at the close of play. Orascom Development Egypt, Dice, and GB Auto all finished deeply in the red, down 9.7%. Index heavyweight CIB lost 4.4%.

Yesterday’s slide means the EGX is now the worst-performing index in the region YTD: The EGX30 has plunged almost 22% this week alone and is now down 37% YTD, a bigger fall than the Abu Dhabi and Dubai exchanges which both saw modest gains yesterday. The EGX30 has

Stock buybacks are all the rage right now: GB Auto said yesterday (pdf) it is purchasing 2.1 mn treasury shares, Egyptians for Housing and Development purchased 20.6 mn shares (pdf), while Egypt Kuwait Holding (EKH) bought back 423k shares (pdf). Arabia Investments Holding is also purchasing another 5.65 mn in treasury stock, in addition to the 1.4 mn bought on Monday. The company has plans to continue purchasing shares pursuant to the 10% max threshold outlined by the FRA, according to an EGX disclosure (pdf).

Background: A growing number of EGX companies have resorted to buying back stock in recent weeks after the Financial Regulatory Authority eased rules to support share prices through the current market volatility.

GLOBAL MARKETS- This seems like an awfully long time ago… The emerald city is now getting further and further away.

Investors dumped stocks and bonds and flooded into cash yesterday as oil prices crashed to 18-year lows and uncertainty grew over the ability of world leaders to respond to the covid-19 outbreak.

The Dow Jones closed below 20,000 points for the first time since 2016 as investors continued to fret over the impact of covid-19 on the US economy. The index suffered the heaviest losses of the three main indices, closing 6.3% in the red. The S&P 500 was down 5.2% and the Nasdaq fell 4.7%.

It was another normal trading day in Europe, which brought 4-6% in losses on the continent’s major exchanges. A silver lining (if you can call it that): Spain’s IBEX only fell 3.5% and Italian stocks were down just 1.3%. Baby steps.

The oil crash is taking on historic proportions: US crude suffered its third-worst day on record, crashing 24% to USD 20.37 / bbl — its lowest level since February 2002. The price of Brent plunged to 17-year lows, finishing down 14.1% to USD 24.67 / bbl.

And we still haven’t seen the floor: Analysts warn that prices could fall into single-digits next month when Saudi Arabia begins flooding the market with ultra-cheap oil and ramps up production to record levels, the Wall Street Journal says. Warren Russell, commodities strategist at Bank of America, said that there could be a surplus as large as 10 mn bbl / d as the covid-19 reaches its peak in Europe, bringing oil inventories up to more than 900 mn bbl over the second quarter.

The ballooning levels of proposed fiscal stimulus are putting pressure on the bond markets: Bondholders sold off US and European debt, causing yields on European bonds to hit their highest levels in weeks and the rate on the benchmark US 10-year note to rise 0.12% percentage points to 1.2%, the Financial Times reports.

But yields on short-term US debt sunk into negative territory: The yields on one-month and three-month US treasury bills fell below zero in another indicator that investors are flocking to safety, the FT said.

“I don’t think we’ve seen a day like this which is so obvious that investors are going to cash,” said Yousef Abbasi, global markets strategist for INTL FCStone Financial in New York. “Anything you thought would indicate a market bottom, throw it out the window.”

Bloomberg USD index hits record high amid “staggering” moves in the FX market: The Bloomberg USD index hit a record high yesterday amid the bond and equity sell-offs. The GBP plunged to its lowest level in almost 35 years, the Norwegian krone hit lows not seen since 1971 and the Canadian USD fell 3.1% to new three-year lows. Investors threw USD 137 bn at cash-like assets in the five days to 11 March, according to Bank of America, whose monthly fund manager survey showed the fourth-biggest monthly rise in allocations on record, from 4% to 5.1%.

IPO WATCH- Banque du Caire shelves IPO on market volatility -sources: State-owned Banque du Caire (BdC) has postponed plans to debut 20-30% of its shares on the EGX in April due to market volatility, the domestic press reports, citing unnamed sources involved with the state privatization program. This was telegraphed by bank chairman, Tarek Fayed, who said earlier this month that, while the bank was preparing to go public next month, the sale would depend on the state of the markets. The transaction was the most hotly-anticipated IPO of the year.

The listing could go ahead during the second half of the year if calm returns to the markets, the sources said.

Background: BdC was hoping to raise some USD 500 mn via its IPO on the EGX in April. The bank's two-legged roadshow was described as a success by bank officials and at least three major ‘anchor investors’ were reportedly interested, namely the European Bank for Reconstruction and Development, the Sovereign Fund of Egypt, and Abu Dhabi Development Holding.

EARNINGS WATCH- EFG Hermes’ net profit surged 36% in 2019 to EGP 1.38 bn from EGP 1 bn a year earlier, according to the company’s earnings release (pdf). Revenues in 2019 reached EGP 4.8 bn, up from EGP 4 bn in 2018. On a quarterly basis, profits grew by 16% to EGP 344 mn in 4Q2019, from EGP 297 mn a year earlier, and revenues rose 5% to EGP 1.3 bn.

Outlook: “I am particularly satisfied with our progress in expanding our NBFI’s product offering,” EFG Hermes Group CEO Karim Awad said in a statement, adding that the non-bank financial services portfolio would “soon include insurance” alongside “leasing, microfinance, fintech-enabled consumer finance, mortgage finance, factoring,” giving the firm “greater flexibility to overcome challenges posed by global and regional market conditions and support profitability.” EFG Hermes closed 2019 as number one broker by market share in Egypt, Abu Dhabi, Dubai, Nasdaq Dubai, and Kuwait and continued its push into Nigeria, Kenya and Pakistan.

STARTUP WATCH- Egyptian Fitness startup ElCoach has raised USD six-figure seed funding from investors that include Endure Capital, 500 Startups (500 Falcons), and Wise Capital, along with local angel investors, Menabytes reports. It plans to use the funds to expand its team and increase its marketing, with a particular focus on the Saudi market. Founded in 2018, ElCoach is an Arabic fitness and nutrition app covering the MENA region, and offers its users personalized body transformation programs. It works according to a freemium model, whereby basic fitness programs are free but paid users have access to a “highly-customized” plan for less than USD 20 per month.

MOVES- Microsoft has tapped Mirna Aref (LinkedIn) as its new country manager for Egypt, according to an emailed statement (pdf). Aref joined Microsoft last year from Baker Hughes, and previously worked at Schlumberger and Egypt’s Oil Ministry.

MOVES- Farouk Saleh Nasser (bio) was appointed as vice chairman of the board at Alexandria Portland Cement, according to an EGX disclosure (pdf).

…and everyone’s a winner!

This morning in the foreign press: Novelist Ahdaf Soueif was one of three women arrested after they staged a demonstration to demand the government release prisoners amid fears of a covid-19 outbreak in the country’s prisons, the Guardian reports. The prosecutor ordered their release late last night, local media reported. Three of them were related to Alaa Abdel Fattah, the longtime, high-profile activist who was detained again last year, not long after having been released from prison.

Could covid-19’s late arrival in sub-Saharan Africa leave it better-positioned to cope than the rest of the world? While the virus has continued to spread around the world at breakneck speed, Africa has until now escaped relatively unscatched — a blessing considering the fragility of many of the continent’s healthcare systems. While watching from a safe distance, African countries have been preparing for the virus’ inevitable arrival: 40 countries are now equipped to test for covid-19 (from only two in January), while the continent has also been able to learn from the successes and failures of its peers. That’s all without taking into account Africa’s experience in handling health epidemics, including the ebola outbreak (watch, runtime: 02:14).

Shoukry continues Africa GERD tour: Foreign Minister Sameh Shoukry yesterday met with South African President Cyril Ramaphosa in the second stop of his African tour to secure diplomatic backing in Egypt’s dispute with Ethiopia over the Grand Ethiopian Renaissance Dam (GERD) dispute, according to a ministry statement. Shoukry visited Burundi on Tuesday and is planning to head to Tanzania, DR Congo, South Sudan, Niger, and Rwanda in the coming days. President Abdel Fattah El Sisi spoke by phone on Tuesday with Kenyan President Uhuru Kenyatta who signalled support for Egypt. Foreign ministry officials this week visited Algeria, Tunisia and Mauritania after Shoukry toured several European and Arab capitals to rally support for Egypt’s position in the dispute.

Acwa Power will power its planned desalination plants in Egypt via a series of solar facilities, Country Director Hassan Amin told the local press. The cabinet announced in September that Acwa was planning to submit a proposal to establish a desalination plants, and the company last month signed an initial agreement with the Holding Company for Water and Waste Water to conduct a feasibility study into the project. The Saudi renewable energy company plans to construct the desalination plants and sell the water to the state-owned water company. It is currently in talks with the Egyptian government over land but has not yet negotiated a selling price for the water.

The National Tunnel Authority has awarded a consortium of French and Egyptian companies the EGP 410 mn tender to design and restore the Raml tram in Alexandria, according to Al Mal. The alliance — made up of France’s Systra and Egis Rail and Egypt’s ACE Moharram Bakhoum and Projacs — beat offers from two other consortiums: one consisting of Egypt’s Menarail and France’s Artellia Ville & Transport and Ingerop, and the other of Spain’s Sener Ingenieria Y Systemas, France’s Setec Group and Lebanon’s Khatib & Alami, according to Meed.

Beltone Financial is setting up a EGP 30 mn SME finance arm, Beltone SME, according to a regulatory filing (pdf). Beltone will own 100% of Beltone SME.

MENA-focused accelerator Womentum opens doors for third cycle startups: Womentum is now accepting applications from startups looking to join the accelerator program’s third cycle, Womena, which runs the program along with Standard Chartered, it said in a press release (pdf). Startups with at least one female co-founder who owns equity can apply here. Applicants will be accepted until 19 April. Selected startups will then participate in a four-month program beginning in Egypt and ending in the UAE.