Good morning, friends, and welcome to the day we here like to think of as almost-THURSDAY. Three-day weekends are supplanting summer vacation for many of you, so how about we start this morning with a handful of stories to feed your soul as you look forward to unplugging for three days.
But first: Were you freaked out about the US government’s plan to pull the visas of foreign students who are being forced to take most of their courses online this fall? Whether you or your spawn were impacted, take a deep breath: The Trump administration backed down yesterday — for the moment. The requirement that foreign students take at least one in-person class (or leave the country / transfer schools) has been dropped, according to the judge hearing a case brought against the government by Harvard, MIT and other top-flight universities.
The problem is that it ain’t over until it’s over, as Yogi Berra (not Lenny Kravitz) said back in 1973. The presiding judge said the case isn’t yet closed, and at least one pundit is warning that US Immigration and Customs Enforcement is probably looking for other ways to deliver the same result. Start with this piece from Bloomberg (which takes a more pessimistic look), then flip over to the New York Times for more.
Remember that piece we suggested you read yesterday about midlife gap years? The notion started with college-aged kids…
Back to that long weekend. We’re not suggesting you go hang out in a restaurant — but placing an order for takeout from your favourite local joint is not a bad idea. Restauranteurs have been hammered the past four months, and it’s time folks started offering them support in between all of the baking of sourdough bread and finding of ways to stuff cake inside … stuff. You’re a regular somewhere, right?
Takeout in hand, head over to Billboard and remember that “music can help get us through some of the toughest moments in our lives.” Bands, orchestras and solo performers love recording albums — but they make their real money in live performances, which aren’t exactly on the menu at the moment. Some are streaming entire historic concerts online without charge (think: Metallica Mondays and Pink Floyd on Fridays), while everyone from the LA Philharmonic to Pink Sweat$ via Pearl Jam, Ice-T, Lil Wayne and Chuck D are doing at-home performances. Billboard has an exhaustive list of which of your favourite artists has (or will) live stream or release something awesome from their archive.
Settled into your favourite slot on the beach, with a full tummy and happy ears? Now start educating yourself about how contemporary art is changing in the of covid. Perhaps especially in times like this, “art can set you free,” The Conversation reminds us. One of our favourites right now: Up and coming Egyptian artist Alaa Abul Hamd, who draws inspiration from ancient Egyptian art without being hackneyed — or “obnoxiously orientalist,” as one of us recently remarked on our internal chat system. Abul Hamd is a native of Upper Egypt and professor in Luxor whose “subjects are recognizable by their strikingly Egyptian features, stillness, strength, proud postures, and silence.”
Go explore him via our friends at Cairo gallery TAM — or look at this awesome annual report we built for CIB back in 2011 that stands as a shining example of how your company can support the arts while buffing your bottom line. (TAM, by the way, made an appearance in season one of our podcast, Making It.)
REMINDER- We have a holiday long weekend next week as Thursday will be off in observance of the 23 July Revolution thanks to cabinet’s new policy of making Thursdays substitutes for midweek holidays. We’ll all be off again at the end of the following week for Eid Al Adha.
COVID-19 IN EGYPT-
The Health Ministry confirmed 73 new deaths from covid-19 yesterday, bringing the country’s total death toll to 4,008. Egypt has now disclosed a total of 83,930 confirmed cases of covid-19, after the ministry reported 929 new infections yesterday. We now have a total of 25,544 cases who have fully recovered.
The occupancy rates of quarantine facilities and ICU beds for covid-19 cases have both dropped to 60%, Health Ministry adviser Sherif Wadie said on Tuesday. Some 200 people are currently in intensive care while 111 patients are on ventilators, he said.
British Airways may resume regular flights to Egypt from the beginning of September, Youm7 reports, citing unnamed sources at Cairo International Airport. The carrier has been operating a limited number of flights between the UK and Cairo since Egypt reopened its airspace to international flights at the beginning of the month.
EgyptAir is still waiting on that EGP 3 bn loan: National flag carrier EgyptAir has yet to receive approval from the Finance Ministry for a credit guarantee that would allow it to draw down a EGP 3 bn loan from state-owned National Bank of Egypt, said Mohamed Roshdy Zakaria, the holding company’s chairman. The airline said in June it’s seeking the loan after having fallen into the red since the suspension of flights in March.
EgyptAir is notifying people travelling to Sharjah that they must have a PCR test certificate that shows they’ve been tested for covid-19 prior to departure.
ON THE GLOBAL FRONT-
Another hurdle cleared in the quest for a covid-19 vaccine: A vaccination for the novel coronavirus being developed by US pharma company Moderna has cleared an important hurdle after it succeeded in producing antibodies in all 45 volunteers during safety trials, Bloomberg reports. The catch? A number of patients experienced sometimes severe side effects from the vaccine. Moderna will move to large-scale testing later this month.
Indonesia is dramatically widening the Overton Window of what constitutes sensible monetary policy: The country’s central bank will start directly monetizing government debt when it soon purchases USD 40 bn in sovereign bonds, most of them directly from the state, Bloomberg reports. Direct monetization has long been taboo due to fears of out-of-control inflation caused by accelerated state spending, and a perceived threat to the independence of monetary policymakers.
In a sign of how topsy-turvy the world has become, investors have welcomed the move, anxious for aggressive measures to stabilize the economy. The bank’s governor has also sought to calm nerves about the policy, assuring that it would stop purchases if inflation began to surge.
And other emerging markets may soon follow if Indonesia doesn’t get burned. The business information service suggests that the Indian, Malaysian and Philippines central banks may be tempted to purchase government debt directly from the primary market, should Indonesia come out the other side intact.
If the exhilaration in the global stock markets has convinced you that it’s time to start partying like it’s January 2020, Mohamed El Erian is here to bring the sober analysis. “The financial stress caused by covid-19 is far from over,” reads the first sentence of El Erian’s latest opinion piece in the Financial Times, in which he warns us to prepare for non-payments to surge even among corporates and sovereigns with decent credit ratings. Investors, who are currently buying into a liquidity-fuelled rally producing valuations “stunningly decoupled” from the fundamentals, need to become more circumspect and pay attention to the signs of trouble ahead: record corporate bankruptcies, job cuts in large companies, delays in household and commercial rent payments, and a number of developing countries delaying debt payments.
US banks are preparing for the flood: The three biggest US banks put aside USD 28 bn in 2Q2020 to cover losses on personal and business loans in anticipation of a coming wave of defaults. This is a serious step up from the loan loss provisions made in the first quarter, demonstrating how thinking has changed about the longevity and severity of the economic crisis caused by the pandemic. Jamie Dimon, CEO of JPMorgan which has earmarked a record USD 10.5 bn to cover loan losses, said that the bank was “prepared for the worst-case scenario” and warned that things would likely get worse in the coming months. “This is not a normal recession … The recessionary part of this you’re going to see down the road.” The Wall Street Journal and the Financial Times have the story.
AND THE REST OF THE WORLD-
Derivatives trading is coming to Saudi Arabia: The Saudi stock exchange will allow futures trading starting 31 August, it said in a statement. The country’s first exchange-traded derivative contract — the Saudi Futures 30 (SF30) — will track the country’s MSCI Tadawul 30 Index.
We were supposed to be launching derivatives trading and a futures exchange here in Egypt during the first half of this year. We haven’t received any explanations for the delay, but we wouldn’t be surprised if something beginning with ‘C’ and ending in ‘ovid-19’ played a part.
The UK government decided yesterday to ban all new purchases of equipment from Chinese telecom giant Huawei and require mobile operators to remove its technology from the UK’s 5G infrastructure by 2027, the BBC reports. The announcement came after diplomatic pressure by the US to abandon cooperation with the now-sanctioned company and following British intelligence recommendations that could not verify the security of the company’s 5G technology.
*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: Enterprise’s industry vertical focuses each Wednesday on infrastructure, covering everything from energy, water, transportation, urban development and as well as social infrastructure such as health and education.
In today’s issue: Egypt holds a unique position as far as global internet infrastructure is concerned. With 17 cables passing through the country, Egypt is second only to the US in terms of the number of submarine cables in its territory. But despite this, Egypt doesn’t rank among the strongest regional countries in terms of its internet speeds and cost effectiveness, due to our domestic infrastructure needing improvement. The answer? Open up domestic IT infrastructure development to the private sector, insiders and former officials tell us.