It’s official: You can fly starting 1 July

We’re not sure where we’d go — or who would have us — but commercial flights are set to resume on 1 July and this makes us very happy. Regularly scheduled flights will be allowed anywhere in the country airlines operate, but charter flights will be confined to three prime tourism destinations in a move designed to balance risk nationwide. We have the full rundown in this morning’s Speed Round, below.

A balanced approach to risk is smart given the experience of countries that rushed reopening: India and the United States are now struggling with infection spikes (prompting New York and Houston to mull reimposing lockdowns) and China (which had a very strict lockdown in many areas) is seeing a large cluster of infections in the capital city. Europe is easing border controls today but isn’t allowing folks to travel freely just yet, and Japan denied it is easing its entry ban.

Your daily dose of optimism: Morgan Stanley is doubling down on the notion of a sharp, V-shaped recovery, citing “recent upside surprises in growth data and policy action” that have led it to conclude the global economy “is in a new expansion cycle and output will return to pre-coronavirus crisis levels by the fourth quarter.”

With a chaser of pessimism: Asian markets are in the red in early trading this morning and futures at dispatch time suggest European and US shares will follow suit. What’s going on? The Financial Times expects we could be looking at a volatile week ahead as markets get their heads around the fact that the global economy is hurting, while the Wall Street Journal quotes famed money manager Jeremy Grantham as saying that “the current market seems lost in one-sided optimism.”

Don’t worry, though. The folks who speculate on the outcome of sports contests have entered the market to save us all. Nope. We’re not kidding. A good chunk of the rally in recent months may be attributable to folks who usually put money on the outcome of NBA and NFL games deciding they’d like to try their hands at day trading given professional sports has been shut down, the New York Times suggests. PT Barnum probably never said the words, but… (Also: Sorry for not using the verb for what those folks do with their money, but the algorithms that decide whether we make it into your inbox don’t like that…)

COVID-19 IN EGYPT-

The Health Ministry confirmed a new daily record of 91 new deaths from covid-19 yesterday, bringing the country’s total death toll to 1,575. Egypt has now disclosed a total of 44,598 confirmed cases of covid-19, after the ministry reported 1,618 new infections yesterday. We now have a total of 13,332 confirmed cases that have since tested negative for the virus after being hospitalized or isolated, of whom 11,931 have fully recovered.

Two more doctors have passed away: Cardiologist Nabil Nessim and ophthalmology specialist Amira Mounir were the latest to die from complications of covid-19. The total number of physicians that have died of the illness has now reached 60, the local press reports.

Youth Minister Ashraf Sobhi will announce plans to reopen sporting clubs and youth centers at a press conference today, according to Al Shorouk. The Madbouly Cabinet’s most recent extension of lockdown measures will see these establishments closed at least until the end of the month, but they’re allowed to accept membership applications and payments as of today.

EvaPharma lands license to manufacture, distribute remdesivir: EvaPharma has signed an agreement with Gilead Sciences granting it a license to manufacture and market remdesivir, an antiviral medication which has been said to shorten recovery times, a source from the company said. The US pharma giant has given distribution rights to pharma companies in 127 countries, including Egypt. Egypt ordered a shipment of the medication last month after both the US and Japan approved its use for covid-19. Gilead and EvaPharma announced a partnership a little over a year ago to use Egypt as a manufacturing and distribution hub for Africa.

EGYPT BEYOND COVID-

House pushes budget discussion: Lawmakers will discuss the House Planning and Budgeting Committee’s report on the draft budget FY2020-2021 at a later plenary session, House Speaker Abdel Aal said on Sunday, according to the local press. Next Sunday's general assembly will vote on a bill governing parliament, and discussions on the draft law and another to constitute the Senate as an upper house of parliament — approved by the House Legislative Committee last week — will be completed within three days.

AND THE REST OF THE WORLD-

Saudi mortgage finance player plans MENA’s first pandemic IPO: Saudi’s Amlak International for Real Estate Finance is planning what would be the first initial public offering in the Middle East since the covid-19 pandemic knocked the region’s financial markets, says Bloomberg. The sharia-compliant home financier is set to begin the book-building process next Monday, which will be the first in the kingdom since healthcare provider Sulaiman Al Habib listed in February.

The reopening of Egypt’s airports to regularly scheduled international commercial flights next month stole the spotlight on last night’s talk shows. Tourism and Antiquities Minister Khaled El Enany and Civil Aviation Minister Mohamed Manar both blanketed the airwaves to fill in the nation’s talking heads on the details of the planned reopening, which we have in full in this morning’s Speed Round, below.

Egypt’s covid-19 case and death tally remain “within expectations,” presidential health advisor Mohamed Awad Tag Eldin told Masaa DMC’s Eman El Hosary (watch, runtime: 5:24). Tag Eldin also discussed the planned manufacturing and distribution of remdesivir here in Egypt (which we note in What We’re Tracking Today, above) with El Hosary and Al Kahera Alaan’s Lamees El Hadidi (watch, runtime: 9:19).

It’s official: All airports are reopening to regularly scheduled international commercial flights as of 1 July, Civil Aviation Minister Mohamed Manar and Tourism Minister Khaled El Enany said at a joint press conference yesterday (watch, runtime: 38:28). Reuters also had the story.

There are limits, though: Charter flights will be allowed to land in only three governorates — the Red Sea, South Sinai, and Matrouh.

You’re going to hear the words “tourist flights” a lot today, and the term caused some confusion when Manar and El Enany used it yesterday. Commercial flights means all normal flights — such as when you book your own seat with EgyptAir to Cairo or Emirates to Dubai, for example. By “tourist flights,” officials mean any flight (including charter flights) that bring organized tour or travel groups into the country, Manar explained to ‘Ala Mas’ouleety’s Ahmed Moussa (watch, runtime: 8:47).

So, you want to come to Cairo to meet with companies you’ve invested in? Ahlan. Book your ticket and you’re good to go.

Want to come with 100 of your best friends for a seaside vacation? That’s a charter, and you’re only welcome (for now) on the Red Sea, South Sinai, and Matrouh. No package tours to Cairo, Alex or anywhere else are permitted in the initial reopening of airspace.

A bunch of incentives are in place for packed tour operators to the three approved destinations, including tourist visas at no charge until the end of October and discounts on airport fees and services, Cabinet decided last week.

National flag carrier EgyptAir confirmed it will begin operating regular flights to “several destinations” as of next month, with the exact schedule of flights on offer due to be announced within a few days.

There’s no timeline yet for when operators can begin selling holiday packages for other destinations in the country, El Enany said.

Tourists arriving on charter flights to any of the three governorates will not be allowed to travel outside of these governorates once they land, El Enany told Moussa (watch, runtime: 8:31). They won’t be allowed to board domestic flights, the minister said, and we’re presuming there will be measures in place to ensure they don’t hop on buses or rent cars to move between governorates. The minister also had a similar conversation with Al Kahera Alaan’s Lamees El Hadidi (watch, runtime: 21:20).

Tourist sites will gradually begin to reopen at the beginning of the month, starting with the Hurghada Museum, followed by the Egyptian Museum in downtown Cairo and the Karnak Temple in Luxor, El Enany said at the presser.

Get ready to embrace no-frills flying: All airports across the country will be regularly sanitized, and airlines will not be permitted to serve hot meals on flights. Only dry foods and boxed beverages will be served. Airlines will also be barred from circulating magazines, newspapers, and other printed materials on flights. All passengers and crew members will also be required to wear face masks for the duration of all flights, Enany said at the presser.

Arriving travelers will be required to submit PCR test results if they are arriving from countries with high infection rates as assessed by the World Health Organization, officials said. The test results must be submitted 48 hours before departure. Before getting their boarding passes, travelers will be required to sign a declaration certifying that they are not infected and that they are personally responsible for informing Egyptian officials if they begin to show any signs of illness during their travel. Travelers arriving from countries where the outbreak is contained will only have their temperatures checked on arrival at the airport, which has been outfitted with thermal screening gates, according to Manar.

What happens if a tourist contracts the virus while visiting Egypt? If a tourist begins to show mild symptoms of covid-19 during their holiday in Egypt, they will be quarantined in the same hotel and will receive medical treatment on site, El Enany told El Hekaya’s Amr Adib. All hotels have agreed to designate a specific wing or floor to these cases to ensure their isolation, the minister said (watch, runtime: 4:09).

Domestically, hotels across the country will be capped at having 50% of their workforce on site at any given time. Hotel and resort employees will be allowed to take leave only every 60 days to limit their movement between governorates, El Enany said. All employees will also be required to have their temperature checked on-site on a daily basis.

The decision to reopen our airspace doesn’t necessarily mean tourists will begin returning in droves right away, Enany told Adib (watch, runtime: 2:05). The speed at which activity picks up depends on consumer appetite (and financial ability) for travel, as well as the policies tour operators and airlines put in place, such as whether airlines will require a minimum number of seats to be filled per flight. The government has been working to gradually prepare for this reopening since last month, when it began licensing hotels to reopen to domestic tourists at reduced occupancy levels, he noted.

Egypt, UK Brexit trade negotiations in final stages -Gamea: Negotiations between Egypt and the UK over the terms of a post-Brexit trade agreement are being finalized and the two sides will put pen to paper “in the coming period,” Trade Minister Nevine Gamea said at a roundtable hosted yesterday by the British Egyptian Business Association. Egypt wants to increase its agricultural exports to Britain under the pact, she said, without providing further details.

A trade agreement two years in the making: Trade talks have been ongoing since 2018, two years after the UK voted to leave the European Union — and with it, the bloc’s trade pact with Egypt, which removed trade barriers on agricultural and manufacturing goods. At the time, the UK was said to be looking to negotiate terms similar to those in the EU pact, while Egypt was pushing for ways to increase exports.

Also from Gamea: New export subsidies framework under review, gov’t postpones implementation: The government has postponed implementing a new scheme to support exporters following complaints about the executive regulations governing the subsidies disbursal mechanism, Gamea said. Lobbyists are looking to push for a return to an old framework that provided subsidies in cash, rather than the mixed model of cash payments and tax discount under the new scheme, we noted yesterday. Gamea didn’t specify when a revised program is planned to be implemented but export councils are reportedly pushing for changes to be made in time for the coming fiscal year, which starts on 1 July.

INVESTMENT WATCH- Coca-Cola Egypt is planning to invest EGP 1 bn this year to expand production capacity and increase sales outlets, a cabinet statement said yesterday. The plan is part of a wider strategy to invest EGP 5 bn over the coming five years, CEO Ahmed Elafifi said in a meeting and GAFI chairman Mohamed Abdel Wahab. Coca-Cola said in November that it planned to spend USD 500 mn on its Egypt operations over the coming three years after investing USD 500 mn between 2016 and 2019.

INVESTMENT WATCH- Sovereign fund mulls investment in state-owned pharma firm: The Sovereign Fund of Egypt (SFE) is considering investing in state-owned pharma company Chemical Industries Development (CID) through its newly-established healthcare fund, Al Mal reports, citing sources familiar with the matter. CID is one of a number of companies under consideration by the fund, according to the sources, who didn’t disclose when final decisions would be made.

Background: The SFE signed an MoU last month with New-York based Concord International Investments to set up a joint venture to manage a USD 300 mn healthcare fund focused on Egypt and the Middle East. The sub-fund aims to support the expansion of both public and private healthcare infrastructure projects, as well as set up export-driven healthcare ventures. The SFE said last month that it would be putting healthcare and pharma storage at the forefront of its sub-fund plans amid the covid-19 pandemic.

LEGISLATION WATCH- Rejoice, we’re about to have even more MPs: The House of Representatives’ general assembly signed off yesterday on amendments to the legislation regulating parliamentary elections that would increase the total number of parliamentary seats up for grabs to 568, from 540, according to Al Shorouk. The draft law would, if passed, allow the president to appoint 5% of MPs and would see the election of the remaining MPs split evenly between individual candidates and a list system. The bill has been shipped off to the Council of State (Maglis El Dawla) for legal review before coming back to parliament for a final vote.

Parliamentary elections are due to be held at the end of the year, before the sitting parliament completes its sixth and final legislative session.

STARTUP WATCH- CIB’s VC arm CVentures has made an undisclosed investment in US-based mobile security startup MagicCube, according to a statement (pdf). CVentures joins a group of investors led by Bold Capital, Epic Ventures, Sony, NTT Data, Azure Capital, Visa and Luqman Weise Capital. “We are delighted to see VC firms of large acquiring banks like CIB supporting the new paradigm of mobile and IoT security,” MagicCibe co-founders Nancy Zayed and Sam Shawki said. MagicCube offers a software-based “trusted execution environment” for mobile and internet of things devices, allowing businesses to process secure payments and protect personal data. The company says it wants to “disrupt the legacy payment terminals market, a USD 48 bn a year industry that merchants and banks are forced to participate in.”

Making payments easier is the goal, says CVentures director Shady Tadros: ““Hardware-based security has prevented banks and progressive retailers from trading archaic POS systems for modern, user-friendly consumer devices able to scan cards, digital wallets, and QR codes.”

STARTUP WATCH- Egyptian homebuying online platform Sakneen has raised USD 150k in pre-seed funding from US accelerator Y Combinator, co-founders Hussein El Kheshen and Ramy Khorshed told Enterprise in an exclusive interview. The company became one of the very few Egyptian startups to receive funding from the high-profile accelerator earlier this year, joining its Winter 2020 batch and receiving mentorship in California from January-March.

This is the first time the company has received outside funding: Until Y Combinator entered the fray the company had been entirely bootstrapped, said Khorshed, CEO of the company. “To receive this funding was super encouraging in terms of getting our first bit of institutional validation,” he added.

The funds have been directed towards building Sakneen’s web-based platform, which is expected to launch shortly. Sakneen aims to help real estate developers and agents connect directly with prospective homebuyers, and is now focused on bringing real estate developers ahead of the launch. One core goal is to make it easier for developers to showcase their available properties, which can be quickly uploaded to the company’s platform. “We’re essentially building a control panel for real estate developers, who can bring all their inventory online in the space of a few minutes,” said CTO El Kheshen.

More funding on the horizon: Khorshed is optimistic about securing more investments within the next year. “It will definitely be within the next year. Probably by the end of the calendar year, maybe even in the next two to three months,” he said.

STARTUP WATCH- Zedny launches with USD 1.2 mn pre-seed investment: Arabic-language learning and development platform Zedny.com launches today with a pre-seed investment of USD 1.2 secured from unnamed angel investors, the company said in a press release (pdf). The platform features over online courses, animated video summaries of business books, and 5k+ hours of learning using AI, machine learning, and gamification techniques to customize user experience.

STARTUP WATCH- Egypt-based Chefaa raises seven figure series A funding: AI driven pharmacy locator and on-demand medical delivery platform Chefaa has raised seven figures in pre-series A funding from 500 Startups, Vision Ventures, and Womena, according to Menabytes. The investment will be used to grow the company’s recently launched private and white-label products, its operations team, and help launch its B2B service to SMEs. Chefaa, which was founded in 2017 by Doaa Aref and Rasha Rady, secured a six figure investment in its seed round from Flat6Labs and 500 Startups.

LEGISLATION WATCH- SCZone working on new incentives for investors, amendments to special economic zones law: Officials from the Suez Canal Economic Zone (SCZone) are working with the government to introduce new incentives for investors through changes to the executive regulations of a law governing special economic zones, SCZone head Yehia Zaki said during a meeting with the House Economic Committee. A mixture of non-tax incentives and custom breaks could be on the cards, Zaki said, without providing specifics.

There’s a chance the legislation could get House approval this month: Draft legislation could be presented to the House in the coming two weeks, Al Masry Al Youm reported Zaki as saying. The SCZone first approached the cabinet with the plan in April.

Egyptian Media Production City to buy up to 10% in treasury stocks: The Egyptian Media Production City's board of directors has agreed to buyback 10% of the company’s shares over the next three months, according to a regulatory disclosure (pdf). A handful of companies have launched an unprecedented wave of buybacks over the past three months in response to the market turbulence that came in the wake of the covid-19 pandemic. The Financial Regulatory Authority eased rules in March allowing companies to complete same-day buybacks in a bid to support share prices.

EARNINGS WATCH- Arabian Cement profits triple in 1Q2020 to EGP 16 mn: Spending cuts helped Arabian Cement to deliver a threefold increase in net profit during 1Q2020 despite falling sales revenue. The company yesterday reported (pdf) EGP 15.91 mn in profit during the first three months of the year, up from EGP 5.98 mn a year ago, even as revenue fell 15% to EGP 702 mn. The company’s bottom line growth came as a result of substantial cuts to administration expenses and financing costs.

Ezz Steel plunges deeper into the red in 2019: Ezz Steel reported a EGP 7.9 bn loss in 2019, down from a EGP 1 bn loss in 2018, according to a regulatory disclosure (pdf). The company's sales fell slightly to EGP 45.7bn in 2019 from EGP 49.2 bn in 2018.

Amer Group reported net losses of EGP 8.45 mn in 1Q2020, from net profits of EGP 72.40 mn in 1Q2019, according to an EGX statement (pdf).

MOVES- Emad El Din Fawzy has been tapped as Maridive & Oil Services’ managing director, while Vice President Shahira Zeid will become chairman of the company’s board of directors, according to Al Masry Al Youm.

Foster the skills needed for our automated future, SAP Egypt Managing Director Hoda Mansour told us on this week's episode of Making It. With digital infrastructure and automation becoming the backbone of many businesses during the pandemic, Mansour highlights how hiring from outside the tech industry has been critical to SAP’s success in providing industry-specific software.

Tap or click here to listen to the episode on: Apple Podcast | Google Podcast | Our website | Omny. We’re also available on Spotify, but only for non-MENA accounts. Subscribe to Making It on your podcatcher of choice here.

A quick programming note: Making It is taking a publishing break this week and will return next week with the final episode of season two.

The war of words over the Grand Ethiopian Renaissance Dam is dominating the conversation on Egypt this morning, with both the Associated Press and AFP running with the story.

The Madbouly government must use its newly-acquired IMF funding to spend more on healthcare and provide food subsidies for those facing unemployment, beyond maintaining a macroeconomic standing that will enable it to keep borrowing, AUC’s Amr Adly argues in a Bloomberg op-ed.

Ethiopia calls Egypt’s comments on GERD talks “regrettable,” reaffirms committing to “good faith” discussions: The Ethiopian Foreign Ministry said yesterday it remains committed to engaging in “good faith” negotiations on the Grand Ethiopian Renaissance Dam (GERD), and denounced Egypt’s accusations earlier this week that Addis Ababa showed a “lack in political will to reach a fair agreement.” Ethiopia denied it is seeking sole discretion in Nile water allocation and said it will continue to abide by the Declaration of Principles signed by all three parties in March 2015 to guide continued talks. The statement blames tensions in the talks on “Egypt’s obstinacy to maintain a colonial based water allocation agreement.”

Talks are expected to continue trudging along today, despite the rising tensions (and threats of war): Egypt, Ethiopia and Sudan have all confirmed that Grand Ethipian Renaissance Dam (GERD) negotiations will proceed as scheduled with the next meeting slated for today, according to an Irrigation Ministry spokesperson statement. Ethiopia’s deputy army chief raised the spectre of war on Saturday, saying “Egyptians know too well how we conduct war whenever it comes.” Prime Minister Abiy Ahmed said last October that his country could “mobilize mns” to fight if Egypt took military action against the dam.

Egypt will resume poultry exports for the first time in 14 years after being added to a World Organization for Animal Health list of countries with avian flu-free facilities, according to an Agriculture Ministry statement. Poultry exports were suspended in 2006 during the avian flu outbreak.