It’s PMI day here in Egypt, and if the rest of the world is any indication, it won’t be pretty: April’s PMI figures for Egypt, Saudi Arabia and the UAE will land today at around 6:15am CLT. You can find it here when it’s out.
As expected, April PMI figures from Asian and European economies yesterday showed the contracting deepening month-on-month. The IHS Markit Eurozone Manufacturing purchasing managers’ index (pdf) reached its lowest level in recorded history, dropping to 33.6 as demand and production were hard-hit due to covid-19 lockdowns. Confidence across the eurozone also took a nosedive.
Who had it the worst? Greece and Spain’s PMI readings were the lowest among the bunch, followed by Italy and France. But all countries included in the composite reading had PMI scores that were either an all-time low, or at the lowest level since the global financial crisis a decade ago.
Asian PMI readings also took a beating. India’s manufacturing PMI (pdf) plunged to 27.4 — the lowest score since its recordings began in 2008. Japan’s manufacturing PMI (pdf) dropped to an 11-year low, while South Korea — Asia’s fourth-largest economy — also saw its manufacturing PMI reading (pdf) fall to its lowest since January 2009.
Other news triggers to keep your eye on over the next several days:
- Foreign reserves figures for April should be released sometime this week;
- Inflation figures for April are out on Sunday, 10 May.
- The CBE’s Monetary Policy Committee meets next Thursday, 14 May, to review interest rates.
Your latest reminder that how we approach offices and office design is changing comes courtesy the New York Times.
Your latest reminder that things can get bad, fast comes from Brazil, where the Wall Street Journal tells us that the country has “just passed China, the origin of the pandemic, both in confirmed cases, 105,222, and in deaths, 7,288, becoming the hardest-hit country in the developing world.
The antidote to everything: Take a long view with these 68 bits of wisdom from Wired magazine founding editor (and author of 1,000 True Fans), Kevin Kelly, offered on his 68th birthday.
The markets today: Shares in Japan and South Korea were down in early trading this morning while equities in Hong Kong and China were in the green. Futures suggest the odds are good European stocks will open in the red, while US indices will open in positive territory later today. The EGX30 closed down 1.2% yesterday, in the red for the second day in a row in very light trading: Turnover was EGP 605 mn compared to the EGP 1 bn or more we’ve seen in recent weeks.
So, when do we eat? Maghrib prayers are at 6:35pm and you’ll have until 3:32am to finish caffeinating. Fajr is coming one minute earlier every day through the end of the Holy Month.
COVID-19 IN EGYPT-
Egypt has now disclosed a total of 6,813 confirmed cases of covid-19 after the Health Ministry reported 348 new infections yesterday. The ministry also said that another seven people had died from the virus, taking the death toll to 436. We now have a total of 2,139 confirmed cases that have since tested negative for the virus after being hospitalized or isolated, of whom 1,632 have fully recovered.
Among the dead was another physician, the Medical Syndicate said yesterday, bringing to eight the number of medical doctors who have died from the disease caused by the coronavirus, according to Youm7.
Expect to hear by Thursday that the 9pm-6am curfew will be extended until the end of Ramadan. Cabinet Spokesman Nader Saad told nighttime talkshow queen Lamees El Hadidy last night that the government looks set to leave the curfew in place until the end of the Holy Month (watch, runtime: 22:32). The curfew is scheduled to expire on Thursday.
And don’t expect to hear whether we’ll pass Eid El Fitr under curfew until just before the holiday, Saad warned, saying, “With the coronavirus, there are no guarantees. No nation can say that the situation is under control.”
Tax relief on corporate income tax payments was a good first step, but many businesses wants more help from the government. A handful of businesses polled by Al Mal — including Orascom Construction, Pyramisa Hotels, Cleopatra Hospitals, and Dice Clothing — want more from policymakers to help see them through the corona storm. At the top of the wish list: Businesses want electricity and water price cuts given to the industrial sector to be extended to other areas of the economy, a six-month real estate tax holiday, and an installment plan for VAT and utility payments similar to what the Finance Ministry did with income tax.
When will the government tap private hospitals to handle covid-19 cases? Renaissance Capital thinks we’re quite some ways away from that milestone, saying in a research note yesterday that state-owned hospitals currently have enough capacity to absorb 42k active cases based on its estimate of a 20% hospitalization rate and suggestion that the state has north of 8.4k ICU beds available. Private sector hospitals should see 25-35% drops in patient volumes in 2Q and recover gradually in 3Q before “reverting to pre-covid levels in 4Q20,” RenCap’s Omar Aboulmagd writes. Pharma players should be the least impacted players in the sector.
Separately, MPs have been lobbying the Health Ministry to allow private labs to provide covid-19 testing to help expand the country’s testing capacity.
The Health Ministry has shut down 26 medical facilities in Beni Suef for not complying with covid-19 safety precautions, according to a statement. Sixteen private clinics and 10 labs were closed while eight private hospitals are being inspected by the ministry to ensure their compliance with safety measures.
State wheat importer GASC has lined up USD 100 mn financing agreement for commodity imports from the International Islamic Trade Finance Corporation, according to an ITFC statement. The financing will be used to purchase 240k tonnes of wheat and 100k tonnes of sugar.
Tensions boil over in Kuwait as stranded Egyptian workers demand to come home: Kuwaiti police dispersed what officials there called a “riot” by Egyptian workers who were being held for allegedly violating the kingdom’s residency laws, Kuwait’s Interior Ministry said yesterday.
Egypt’s Emigration Ministry moved to reassure Egyptians working in the Gulf that the government would organize repatriation flights in the coming days and would prioritize those whose work contracts or residency permits had expired. The Egyptian ambassador to Kuwait told Kuna that the repatriation flights would begin this week.
The story is getting significant play in the foreign press this morning: Reuters | AP | AFP | The Guardian.
ON THE GLOBAL FRONT-
Are countries around the world exiting lockdown a bit too quickly? That’s the question in the minds of policymakers as “Italy and the United States were among a slew of countries tentatively easing coronavirus lockdowns on Monday,” Reuters reports. But the New York Times suggests it has seen US government documents that show ending lockdowns now will “make matters worse” as the “daily death toll will reach about 3k on June 1 … a 70 percent increase from the current number of about 1,750.” New cases will skyrocket to “200k new cases each day by the end of the month, up from about 25k cases a day currently.”
Dubai Expo officially postponed to next year: The Bureau International des Expositions (BIE) has approved the UAE government’s request to postpone Dubai Expo 2020 until 1 October 2021, according to a BIE statement. The expo will run until March 2022.
Japan has extended its national state of emergency until the end of the month but has signaled it could lift restrictions if there is a slowdown in infections, according to Reuters.
Global stocks mixed on US-China tensions, manufacturing collapse, easing lockdown restrictions in New York: It was a mixed picture in the global equity markets yesterday. US stocks joined their European and Asian counterparts in the red for much of the day before rebounding late in the session on news that New York would begin to ease its lockdown restrictions this week. European and Asian markets finished deep in the red as fresh PMI data showed manufacturing activity in the euro area and some parts of Asia falling to record lows.
Oil continues winning streak as glut slows: Brent crude rallied for the fourth consecutive day, with July futures gaining USD 0.76 to close at USD 27.2/bbl, and US crude edging up by USD 0.61 to settle at USD 20.39 as stockpiling showed signs of easing.
Another blow for the aviation sector as GE cuts 10k jobs: GE became the latest aviation giant to announce lay-offs yesterday as the sector struggles through the pandemic. The US corporation said that 10k people would be let go following in the footsteps of British engine maker Rolls-Royce which is preparing to lay-off 8k people and British Airways, which announced last week that 12k jobs would be cut.
Can algorithmic economics help steer the economic recovery post-covid-19? Researchers from Harvard University and the software team behind Salesforce are hoping machine learning applied to economic modelling will prove useful. The research tool can be used to assess likely results of stimulus packages and universal basic income. A Financial Times report examines the strengths of the approach, such as predicting outcomes not considered by conventional models, as well as its shortcomings, like the inability to factor in real-world variables of players that never act entirely rationally.