Cabinet will spell out tax relief eligibility for businesses before the end of April

Words that should never be said again by anyone, anywhere: “We’re all in this together.” Just sayin’.

TWO THEMES are playing out today in the global policymaking circles, each relevant to those of us doing business here in Egypt.

#1- When is it time to re-open economies? To lift restrictions including curfews, store closures and the like? Some European countries are cautiously testing the waters this week with limited easing of restrictions, and the debate is hitting a fever-pitch in the United States, where the top White House trade advisor is calling scientists “tone deaf” over the covid-19 shutdown. The Donald claims to have “total” authority on when to lift lockdown orders as states there start coordinating talks on when and how to reopen their economies. French President Emmanual Macron, meanwhile, said last night that he was extending the country’s lockdown until 11 May, by which time “there would be enough masks and tests to start lifting some restrictions,” the NYT added.

Time to read only one piece? Make it this: The coronavirus economic reopening will be fragile, partial and slow in the WSJ.

#2- How long will covid-19 weaken economies and sap market sentiment? The Wall Street Journal notes that bear markets can scar investors and fund managers for years afterward, while historian Adam Tooze’s lucid piece on the economic response to the pandemic offers a compelling look a how this is hitting the three engine rooms of the global economy.

Don’t be a pledge monkey: Tempted to burnish your ESG credentials when “maximizing shareholder value” is your only real concern? The NYT guts companies that have paid dividends to shareholders, moved on with share buybacks and promised to hike CEO pay while laying off staff — all after having made big noise about signing a pledge to be better corporate citizens last fall. Read: Big business pledged gentler capitalism. It’s not happening in a pandemic. If there was ever a time to stand by your people, it is now…

COVID-19 IN EGYPT-

Egypt now has 2,190 confirmed cases of covid-19 after the Health Ministry reported 125 new infections yesterday. The ministry also said that another five people had died from the virus, taking the death toll to 164. We now have a total of 622 cases that have tested negative for the virus after first testing positive and being isolated or hospitalized, of whom 488 have fully recovered.

Egypt’s covid case fatality rate is higher than the global average, with 7.6% of confirmed cases in Egypt resulting in death, World Health Organization Egypt representative Dr. John Jabbour said at a press conference (watch, runtime: 1:31:38). Jabbour suggested that 30% of those who died passed before being hospitalized. The WHO is studying the figure closely, he said. The current global case fatality rate looks to be about 6.2%, but scientists caution that the true figure everywhere could be significantly lower given that as many as 50% of those infected with the virus that causes covid-19 are likely asymptomatic.

Government planners think it likely the virus will rumble on in Egypt until September before being contained. Planning Minister Hala Said yesterday told reporters that models give this scenario a 50% chance of becoming reality. There is apparently a 30% chance that we will all still be talking about this come December, while a scenario that sees the outbreak brought to an end by June is the least likely to happen at 20%.

The private sector is willing to step up and start testing if asked: LSE-listed Integrated Diagnostics Holdings (IDH) is ready to begin testing for covid-19 if approval is granted by the Health Ministry, CEO Hend El Sherbini tells Forbes Middle East in an interview for the cover story of the magazine’s April issue. Cairo-headquartered IDH owns more than 400 labs across Egypt, Jordan, Sudan and Nigeria including Al Borg and Al Mokhtabar labs. It is already testing in Jordan for the virus that causes covid-19 and has disclosed measures it has in place (pdf) to keep staff and patients safe across its branch network. The Forbes piece is worth reading in full for its look at how IDH has built out a compelling business despite challenges in recent years including devaluation.

The government will announce within the next few days a schedule for repatriation flights to bring home more than 3k Egyptians stuck abroad, according to a cabinet statement. The flights will be available for citizens who traveled for tourism, work, or health reasons and have been unable to come home because of the suspension of flights.

Travel agents are working overtime to recoup deposits paid to foreign suppliers for hotel and activity reservations as well as deposits on umrah trips, according to Al Mal.

Businesses are getting a break from the Industrial Development Authority, which is giving a three-month break on payments on industrial land and fees. The IDA is also extending project completion deadlines by three months, according to the local press.

Damietta Furniture City has closed its permanent exhibition in Damietta and postponed exhibitions that were scheduled to take place in Minya (this summer) and Ras El Bar (next year), CEO Bassem Nabil told Al Mal.

The Education Ministry has launched its online teaching platform Edmodo, through which it will provide students live and pre-recorded access to virtual instruction from teachers, according to a cabinet statement.

DONATIONS-

Al Shafar Contracting Company has donated EGP 5 mn to support day laborers, according to a cabinet statement.

ON THE GLOBAL FRONT-

Global financial leaders will turn on their webcams this weekend for one of the most important rounds of IMF / World Bank spring meetings in history: With the global economy set for a severe contraction, a looming debt crisis in emerging markets and a historically bad earnings season ahead, whether the world is able to prevent the worst economic slump this side of the Great Depression may be decided when financial chiefs gather — virtually — for this year’s IMF and World Bank Spring Meetings on Friday.

The meetings, running through Sunday, will see the release of forecasts “showing the deepest contraction for the global economy since the 1930s Great Depression,” the Financial Times said. Three months before the pandemic, the fund had expected 160 of its 189 member countries to prosper in the coming years. Now, as many as 170 could suffer falling per capita GDP.

The world economy was probably already on the brink of recession before the crisis intensified: The Brookings-FT Tiger index has revealed “historically large” declines in major fiscal indicators and economic and confidence indicators around the world in March, a month when the covid-19 pandemic was still far from peaking, the FT says. What’s even more worrisome is the index is in line with other indicators, “which increasingly point to the most difficult moment for the global economy in almost a century.”

The fate of emerging economies hangs in the balance: The G20 will finalize a 6-9 month moratorium on debt repayments for developing countries at the meetings in an effort to prevent a wave of sovereign defaults, the FT reported a G20 official as saying.

“It’s a make or break moment,” said former IMF chief economist Maury Obstfeld, who warns of rampant contagion and “biblical” levels of migration from developing countries if the G20 fails to cooperate.

The terrible, horrible, no good, very bad earnings season gets underway in America today. PMorgan, Wells Fargo and Johnson & Johnson will all report first quarter earnings today, with Citi, Bank of America, Goldman and UnitedHealth following on Wednesday. Japan’s Softbank now says it expects to turn in a loss of nearly USD 12.5 bn after its Saudi-backed tech-focused Vision Fund recorded a JPY 1.8 tn (USD 16.7 bn) investment loss due to “the deteriorating market environment,” it said in a statement yesterday, according to Reuters.

Asian markets are in the green this morning and European markets are set to open in the green re-open after a break for Easter long weekend. US stocks were down yesterday on pre-earnings season jitters (we goofed — they were open yesterday and closed only last Friday). Futures suggest US markets will open in the green later today.

US equity prices are unlikely to fall below last months’ lows due to the extraordinary policy support provided by the US Federal Reserve, Goldman Sachs said in a research note cited by Bloomberg. Markets will only hit new lows if the US witnesses another surge in new infections, Goldman strategists wrote yesterday.

Executives could be on track to benefit disproportionately from long-term incentive plans put in place during the recent market crash, the Financial Times reports. These measures often involve awarding executives a basic salary converted into shares in place of pay cuts. But the slump in stock prices could see executives receiving huge numbers of shares for their salaries, putting them on course for windfalls when the market rebounds.

Private equity firms are rushing to protect investments in areas seen as particularly vulnerable as buyout volumes plummet, the Wall Street Journal reports. Firms are pumping more capital into at-risk healthcare, leisure and entertainment companies to keep them afloat and instructing them to free up cash as hopes for profitable sales dwindle.

The global telecom industry could see revenue losses of USD 25 bn this year, as covid-19 continues to curb international travel and with it the need for roaming — where mobile phone users incur extra charges when they connect to overseas networks abroad — the Financial Times reports.

WHO Egypt representative John Jabbour’s presser yesterday on covid-19 developments in the country was front and center on last night’s talk shows. We have a link to the full video of the press conference in What We’re Tracking Today, above.

Jabbour stressed the importance of Egypt ramping up its testing procedures to help detect asymptomatic cases, which have contributed significantly to the spread of the virus in other countries, Al Kahera Alaan’s Lamees El Hadidi noted. Lamees also highlighted Jabbour’s calls for citizens to stay at home and avoid large gatherings (watch, runtime: 4:51). Masaa DMC’s Eman El Hosary (watch, runtime: 1:49) and Min Masr’s Reham Ibrahim (watch, runtime: 3:31) also took note of the press conference.

Cabinet is looking at ways to cut down on crowds in the street in a bid to contain the spread of covid-19, Information Minister Osama Heikal told Lamees, but didn’t give any indication of what these measures could entail (watch, runtime: 8:49).

The planned repatriation of Egyptians stranded abroad also earned attention, with Immigration Minister Nabila Makram telling Lamees that the majority of Egyptians who will be brought home are in Saudi Arabia and Kuwait (watch, runtime: 6:55). Ibrahim also took note of the government’s announcement (watch, runtime: 0:53).

EXCLUSIVE- Businesses will find out before month’s end whether they are eligible for corporate income tax relief: The Madbouly Cabinet will issue a decision as early as next week on which industries are and are not eligible for the income tax relief program ordered by President Abdel Fattah El Sisi, a senior government official told Enterprise yesterday. The program, which El Sisi announced last week, will allow businesses in industries that have been affected by the covid-19 outbreak to pay corporate income taxes in three instalments, with the final instalment due on or before 30 June.

The key here is how Cabinet will choose to define “affected” industries. Our source remained tight-lipped on which industries are most likely to be eligible for the program, but signaled that it would likely be sector-specific. Obvious candidates include tourism and aviation, both of which have ground to a complete halt. Other senior government officials we spoke with last week had suggested that the government could make the relief plan available for all businesses since the slowdown has touched most industries.

Cabinet will also decide on the program’s fine print, including whether eligible businesses will have to submit individual requests to participate in the instalment program or if they’ll be automatically enrolled. We’re also waiting to find out whether Cabinet will require the instalments to be three equal chunks. The sources we spoke with last week had said taxes would need to be paid in three equal installments on 30 April, 30 May, and 30 June.

Reminder: There will be no interest, fines, or late fees for businesses benefiting from this program.

Meanwhile, don’t expect the government to budge on the healthcare tithe, which businesses will be required to pay when they file and remit their taxes, the official tells us. The fee — which will be calculated as 0.25% of all companies’ revenues — will be used to fund the new universal healthcare system. The tithe is not tax deductible.

Companies need to pay other taxes including wage taxes, VAT and withholding taxes on schedule, our source stressed.

Not at issue: Breathers on real estate tax for companies in tourism and select sectors of manufacturing, as well as changes to the stamp tax, both of which were announced earlier in the covid-19 outbreak as part of the government’s wider policy response.

BUDGET WATCH- In a climate of global uncertainty, the Finance Ministry is leaving its projection for FY2020-2021 GDP growth unchanged for the moment, suggesting the figure will come in at 4.5%, according to the draft budget (pdf) released yesterday. The document makes explicit that the ministry will revisit its growth assumptions as the economic impact of the covid-19 pandemic becomes clearer.

The budget was released as policymakers suggested Egypt could still escape a recession, with Deputy Planning Minister Ahmed Kamaly suggesting yesterday that growth could still clock in at 1% in this final quarter of the state’s fiscal year, according to Reuters. Kamaly was speaking at a press conference yesterday. Masrawy also has coverage.

The budget was drafted before the worsening of the covid-19 crisis, and Finance Minister Mohamed Maait and Vice Minister of Finance Ahmed Kouchouk told us in early March the government would likely need to rethink its growth and budget targets in light of the covid-19 outbreak.

President Abdel Fattah El Sisi had reviewed the draft budget last month before shipping it to the House of Representatives for approval. The House needs to sign the budget into law by the end of June and in time for the start of the fiscal year on 1 July. MPs are due back at their benches in the House by 29 April, and the budget is near the top of their agenda.

The budget deficit is expected to narrow to 6.3% of GDP, from 7.2% in the current fiscal year.

Revenues are forecast to rise 13.6% y-o-y to reach EGP 1.28 tn, outpacing the anticipated 8.8% uptick in state spending, which is expected to come in at EGP 1.71 tn. Other highlights:

• Spending on healthcare will rise 45% to EGP 254.5 bn. This includes a 75% bump in wages and bonuses for medical workers, which will cost an extra EGP 2.25 bn;
• Social welfare spending will climb 2.7% to EGP 19 bn;
• Commodity subsidies have been allotted EGP 84.5 bn;
• The public wage bill will rise EGP 34 bn as civil servants will be granted higher annual raises and the threshold for personal tax exemption has been raised.

Also in the forecast:

• Primary budget surplus: 2%;
• Public debt: 82.8% of GDP;
• Average oil price: USD 61 / bbl.

The Planning Ministry has already revised downward its growth projections for Egypt’s economy: Minister Hala El Said had said last month that GDP was expected to grow at a 4% clip during the final quarter of the current fiscal year, which would bring growth in FY2019-2020 to 5.1% (down from initial forecasts of 5.6%). Kamaly and El Said did not provide a revised growth forecast for the full fiscal year based on the revised 4Q projections. The state budget had targeted 6% growth for FY2019-2020.

Tourism revenue projections have also been revised downward to USD 11 bn from USD 16 bn this fiscal year, the minister said, according to Reuters. Tourism revenues came in at USD 7.2 bn for the first half of the current fiscal year.

M&A WATCH- STC extends Vodafone Egypt stake purchase agreement by three months on covid-related delays: Saudi Telecom (STC) has extended by 90 days its agreement with Vodafone Group for its planned acquisition of the group’s 55% stake in Vodafone Egypt due to complications caused by the covid-19 pandemic, it said in a disclosure to the Saudi stock exchange. The company cited “logistical challenges” caused by the coronavirus and said that it required more time to complete due diligence. A preliminary agreement for the USD 2.4 bn sale signed in January was valid for 75 days but allowed for an extension provided both companies agreed.

Corona continues to interrupt what could be Egypt’s largest-ever M&A: This is the second setback to the agreement this month amid lingering economic uncertainty caused by the covid-19 pandemic. Sources told Bloomberg earlier this month that STC had postponed talks for a loan to finance the Vodafone takeover and that it may reopen negotiations for a USD 2 bn+ loan when the crisis eases or consider other financing options.

Background: STC signed a non-binding MoU with UK-based Vodafone Group to buy its stake in Vodafone Egypt for USD 2.4 bn in January. Telecom Egypt, which owns the remaining 45%, has a right of first refusal on the transaction and will reportedly decide this month how it plans to proceed. The Financial Regulatory Authority said after the initial acquisition agreement that the Saudi company may be required to make a mandatory tender offer for 100% of the company if it goes ahead with the Vodafone Group buyout.

Advisers: Barclays is working with STC on the transaction, Goldman Sachs is advising Vodafone and EFG Hermes and Citibank are advising Telecom Egypt.

EFG Hermes moves into online payments space: EFG Hermes has signed an agreement with online payment platform PayTabs to set up PayTabs Egypt, EFG said yesterday (pdf). The new company will launch before the end of this month, EFG Hermes CEO Walid Hassouna said, according to Al Mal. No details were provided on value of the investment. The move comes as EFG Hermes continues to build its non-bank financial services arm, which already includes microfinance, leasing, factoring and consumer finance, among other offerings.

New services: The fintech partnership with PayTabs will offer digital payment platforms including one-click payments and merchant solutions, the release notes. EFG Hermes’ venture into NBFS has helped the company smooth out its earnings amid the traditional volatility of the investment banking business for which it is best known.

NMC Health’s BR Shetty quits Alex Medical board: Alexandria Medical’s board of directors has accepted the resignation of chairman and majority shareholder BR Shetty, who stepped down amid questions about his involvement in alleged fraud at his Emirati healthcare company NMC Health, according to an EGX filing (pdf). The company’s board has tapped Farouk Mohamed Talaat as its new chairman and current CEO Alaa Abdel Meguid as his deputy. This leaves the Indian bn’aire without a say in the company’s decision-making, despite holding 87.6% of the company’s shares.

Abdel Meguid downplayed Shetty’s involvement in the company yesterday, assuring the EGX that the company’s financial position is sound and NMC’s insolvency has no bearing on the company’s stability.

Pharmed Health is also distancing itself from Shetty: Pharmed Healthcare Egypt board member Alaa Borhan took to the local press to stress that the company’s cash position is solid and its operations remain unaffected by Shetty’s legal issues. Shetty-owned Neopharma, which he is reportedly considering offloading, holds a 30% stake in Pharmed, according to company Chairman Mohamed Mabrouk.

Meanwhile, NMC Health’s USD 6.6 bn debt will be restructured by a committee of exposed lenders expected to include Abu Dhabi Commercial Bank, HSBC, Barclays and Standard Chartered, Bloomberg reports, citing sources familiar with the discussions. NMC’s administrators decided yesterday to dissolve the company’s board of directors, replacing them with four non-executive directors.

LEGISLATION WATCH- House Planning Committee to review Unified Budget Act in June: The House of Representatives’ Planning and Budget Committee will review the Finance Ministry’s draft Unified Budget Act in June, committee chairman Hussein Eissa told Al Mal.

Background: The draft bill, unveiled by the ministry in January, merges legislation governing the annual fiscal budget and government accountability into a single bill that eliminates legislative overlap. The bill would require governments to present annual medium-term budgetary and fiscal strategies to the House of Representatives, and impose fiscal discipline by setting spending limits for each ministry. The legislation would also require the implementation of program and performance budgeting, and contain measures to increase transparency and oversight over government spending to curb graft and the misuse of public funds.

Almost 1k businesses have lodged tax complaints with the government’s dispute resolution committee under temporary tax dispute resolution bill ratified on 8 March, government sources told the local press. There are no plans to extend the end-of-June deadline for settlements over implications from the covid-19 outbreak, the sources said.

Background: The legislation extends the expired Tax Dispute Resolution Act for six months, allowing the newly-established dispute settlement committees to handle tax disputes until 30 June this year. It permits businesses whose assets were frozen for not paying taxes to make a 10% down payment to unfreeze them and allow them to file for a settlement.

MOVES- Our friends at Algebra Ventures have named Omar Khashaba (Linkedin) a principal; Khashaba had previously been senior associate in the firm, according to a company statement (pdf). Khashaba will be charged with identifying possible new investments as well as working and holding board positions with portfolio companies. Before joining Algebra, Khashaba was CCO at Yodawy and co-founded Tutorama.

MOVES- Porto Group appointed Gamal Fathalla (Linkedin) as chairman and managing director of the company after Mohamed Sayed Razek resigned from the positions, according to a bourse disclosure (pdf). The board also tapped non-executive board member Ayman Bin-Mokhtar as managing director for financial affairs.

EARNINGS WATCH- Porto Group’s FY2019 profits dropped to EGP 116.9 mn from EGP 133.6 mn the previous year, while revenues were up marginally to EGP 1.7 bn from EGP 1.6 bn, according to the company’s earnings release (pdf).

QNB Al-Ahli’s net profits dipped 8% to EGP 1.87 bn in 1Q2020 compared to EGP 2.02 bn during the same period last year, according to an EGX disclosure (pdf).

Neeraj Mishra, group CEO of Alameda Healthcare, on how private sector healthcare is handling the covid crisis: Since the advent of the covid-19 crisis, perhaps no sector has been in the spotlight more than healthcare. Healthcare workers have been on the front line of the fight against the virus, but this has largely been contained to government and state facilities. What about private sector healthcare? What is its role during the current crisis and could that evolve to become? We put these questions to Neeraj Mishra (Linkedin), group CEO of Alameda Healthcare — one of Egypt’s leading private sector hospital groups, which owns brands including As-Salam International and Dar Al Fouad hospitals and whose combined capacity is expected to reach 900 beds by the end of the year. Edited excerpts from our discussion:

Enterprise: How have Alameda's hospitals been impacted by covid-19, on the operational side and financially?

Neeraj Mishra: We have witnessed a drop in outpatient consultations and diagnostics (OPD), and a steep fall in non-critical surgeries, largely due to the lockdown and caution by patients. This indicates that patients are choosing to only visit hospitals in times of emergency, and consequently we are not seeing a drop in the number of emergency visitations. Financially speaking, prior to the crisis we were seeing very handsome growth on the revenue side, which has extended to March, with revenues seeing a strong 20% growth y-o-y in 1Q2020. We are, however, witnessing a drop, which began in mid-March and is expected to continue through April. The second quarter is usually a lean time of the year because of Ramadan. Combined with the impact of covid-19, we expect a 20-25% drop in revenues in 2Q2020. We have a plan in place to correctly deploy our working capital to ensure that staff is paid, with our chairman Fahad Khater announcing that salaries will be paid without delay.

I would like to stress that this does not mean that demand has dropped. Instead, patients have decided to allay these non-critical procedures to a time when it is safer. As such, we are expecting a backlog of visitation, which will surge following the crisis. We expect to see a pick up during 3Q and 4Q, and we expect to see an 8-10% y-o-y increase in revenues in 2020.

E: Private sector hospitals are not currently handling covid-19 cases. What plans do you have in place in case you are called up to treat covid-19 cases?

NM: On 5 April, the Health Ministry issued an advisory to all private hospitals to create isolation wings that could house covid-19 patients, which we’ve done. We have also begun conducting emergency trials and multi-department drills to get our staff prepared. We are also building sanitization tunnels in our hospitals to ensure everyone entering the hospital is fully sanitized to reduce any exposure to hospital staff and patients.

We’ve also raised our overall capacity by fast-tracking construction on our facilities. We are looking to add 235 beds to our overall portfolio, with 100 beds in As-Salam International in Maadi and 135 beds in our newest hospital in the 5th Settlement area, which is also under the As-Salam brand. This should bring the total number of beds in the group’s facilities to around 900 by the year’s end. These resources will be made available to the government if the need should arise.

Prior to receiving the notice from the Health Ministry, we had already begun implementing safety procedures and protocols at our facilities. We ensured that our chest and internal medicine wings were moved away from any OPD areas. We implemented strict infection protocols, which include sanitizing the entire hospital once a week, mandating that all doctors and nurses change their clothes at the hospital, and making sure that everyone walking into the hospital has had their temperatures checked and hands sanitized. All frontline staff (anyone exposed to patients and visitors) were provided with masks and hand sanitizers. Staff have also been put on rotational leave to reduce the number of people working at the facilities at one time. We’ve also revised our visitation policy by restricting visits to one per patient and cutting down visitation hours. These will be entirely eliminated in the event of exposure to covid-19. Furthermore, we launched tele-medicine services and began conducting home visits for those in need. We also created a free hotline to address requests by our patients.

E: Are we seeing shortages in essential medical items and equipment (including masks) in Egypt and are there plans in place to guard against this?

NM: I don’t think there is a shortage nationwide, particularly as the Armed Forces have also been participating in importing essential medical supplies. Alameda has ensured that we are well-stocked for the next 60 days and we are in talks with the Armed Forces for more supplies. We’ve been asked to submit our supply needs for three months, which we did last week.

E: Can Egypt’s healthcare system handle the worst case scenario of widespread community transmission?

NM: I don’t think Egypt will see the same issues we’ve been seeing in countries such as Italy, as the country is well prepared in terms of creating isolation facilities for covid-19 positive cases. The Health Ministry has said that 94 hospitals are being readied, alongside university hospitals. Furthermore, the Armed Forces are working on setting up field hospitals. And this does not include the private sector, which has significant resources to bear if the need should arise.

E: If growth is slow this year, what does 2021 look like for you?

NM: 2021 will be about raising our capacity utilization. Our mature facilities — As-Salam International in Maadi and Dar Al Fouad in 6 October — are operating at 80% utilization. Our new Dar Al Fouad facility in Nasr City is currently operating at 50% and we expect it to reach 75% by the end of 2020.

2021 will also be about consolidating our various brands by integrating our supply chain, clinical systems, operational processes, and IT systems. Our facilities have similar accreditation, which makes it easier and more beneficial to integrate our systems.

E: What is the M&A outlook for Egypt’s healthcare sector in the coming few years?

NM: I don’t think we will see M&A in Egypt’s private healthcare despite the increased interest in the sector by investors globally. Egypt’s private healthcare is fragmented, with few brands operating on a structured model. You might see M&A with one or two players, but it is doubtful that it will be any more than that. What I do see is an increased investment in expansion and expanding capacities, particularly outside of Cairo and Alexandria.

E: Is Alameda still looking to pursue a merger?

NM: We are in talks with another major health group. Once we reach an agreement on a transaction that will be of major benefit to the industry we will announce it. The expected transaction will likely see our chairman Fahed Khater become the largest individual shareholder and become involved on the executive level at Alameda hospitals, as well as having a major non-executive role in the other group of hospitals.

E: Can we expect more IPOs in Egypt’s private sector healthcare?

NM: For sure. Private healthcare brands will be primely positioned to take advantage of the growing interest in healthcare and use that to tap equity markets.

E: Has Egypt’s healthcare system proven its metal as a defensive sector?

NM: All stock markets have been hit by the covid-19 crisis, and we have seen this impact pharma and healthcare stocks in Egypt. But once overall market conditions improve and stocks rally, pharma and healthcare stocks will be the fastest to recover and rise in value. Again, we’re not seeing a decline, but rather a postponement in demand. Once the crisis subsides, we will see patient volumes pick up again and with it, so will the stocks.

The disputed burial of an Egyptian doctor with covid-19 is still getting attention in the foreign press, with the BBC noting that Prime Minister Moustafa Madbouly condemned protests in the Dakahlia village where the doctor was buried.

Shoukry, Lavrov talk covid-19: Foreign Minister Sameh Shoukry discussed the covid-19 pandemic in a phone call yesterday with his Russian counterpart Sergey Lavrov. The two also talked Libya, Syria, and Palestine, according to an official statement.

El Sewedy Electric has delivered the USD 364 mn 500 kV electric line feeding Borg El Arab Entertainment City, the North Coast, Marsa Matrouh, and Saloum, according to Al Mal.

The Trade and Industry Ministry has postponed cutting import tariffs imposed on steel rebar and iron billets for a six-month period starting on 11 April 2020, according to an official document obtained by Al Mal. The ministry had imposed a 25% duty on steel rebar and a 16% duty on iron billets for three years, which is still being challenged by rolling mills despite backing from the High Administrative Court.

The Trade and Industry Ministry has exempted frozen vegetables from a three-month ban on legume exports, Al Shorouk reports. The ban was put in place at the end of last month to ensure local market needs would be met.

The National Bank of Egypt (NBE) was rated as the country’s top bank for syndicated loans for 1Q2020, having arranged EGP 15.4 bn-worth of syndicated loans, a Bloomberg evaluation (pdf) shows. The state-owned bank also ranked third in Africa and the Middle East, taking a 19.82% market share of syndicated loans in Africa. The bank is providing a EGP 750 mn loan with SAIB and the Suez Canal Bank for Dorra Group’s Construction and Reconstruction Engineering company, according to Hapi Journal.

Vitas Egypt is in talks with German Development Bank KfW’s Sanad Fund and unnamed local banks for several loans to finance its expansion plans, Managing Director Hossam Heiba tells Al Mal. Vitas is looking to borrow EGP 100 mn from local banks and is still in talks with Sanad over the value of the loan.