It’s a relatively slow news day this morning as we slide into the weekend, suggesting that we’re in the thick of the regularly scheduled summer news slowdown.
Look for the news cycle to pick up again later today, when the Central Bank of Egypt’s Monetary Policy Committee meets to review interest rates. All signs point to a hold, with nine of the 10 analysts we polled this week expecting the central bank to leave rates unchanged.
RiseUp is holding a three-day digital conference starting today: RiseUp from Home will bring together regional entrepreneurs for its first event since the onset of the pandemic and feature talks from some regional entrepreneurs, investors and business experts.
COVID-19 IN EGYPT-
The Health Ministry confirmed 26 new deaths from covid-19 yesterday, bringing the country’s total death toll to 5,085. Egypt has now disclosed a total of 95,963 confirmed cases of covid-19, after the ministry reported 129 new infections yesterday. We now have a total of 55,901 confirmed cases that have fully recovered.
Germany’s diplomatic mission in Cairo is donating EUR 30k to Egypt’s Mersal Foundation to help provide hospitals across the country with medical equipment and PPE, according to a statement.
Egypt sends fourth aid shipment to Lebanon: An Egyptian plane loaded with 14 tonnes of flour arrived in Lebanon yesterday, as the country’s primary wheat silo was destroyed by the devastating blast which hit the Port of Beirut on 4 August, Egypt’s embassy in Lebanon said.
WHO calls for more donations: The World Health Organization is calling on foreign donors to raise USD 76 mn to offset damages to medical facilities and supplies, the agency’s regional programme director, Rana Hajjeh, said, according to Reuters. The organization is particularly concerned about the country’s ability to cope with covid-19, particularly as last week’s blast put three hospitals out of operation — critically reducing the number of hospital beds available to treat cases.
Pompeo is heading to Vienna to talk EastMed tensions with Greece’s Dendias: US Secretary of State Mike Pompeo will meet with his Greek counterpart Nikos Dendias in Vienna on Friday to discuss Turkish-Greek disputes over gas exploration and drilling in the eastern Mediterranean, Reuters reports. Egypt and Greece signed a joint economic zone agreement in the EastMed earlier this week, drawing ire from Turkey and leading to a series of escalations from Ankara and Athens. Turkey says it wants to engage in dialogue to resolve its dispute with Greece over the EastMed, but warned it was prepared to defend its “rights and interests,” the newswire said.
With oil prices still low, Saudi Aramco is slashing its planned capex spending by 50% next year to USD 25 bn, and might not ramp up this figure until 2023, Bloomberg reports, citing sources familiar with the matter. The oil giant is cutting spending at the same time it committed to pay out USD 75 bn in dividends this year despite sustaining a 73% plunge in its 2Q2020 earnings. “They view their ability to maintain the dividend as a competitive advantage over other oil companies, and they can cut back on capex without putting themselves in a precarious position to ramp up production when demand recovers, SMBC Nikko Securities America energy equity research David Havens says.
The “summer of discontent” that petrostates are grappling with may be the shape of things to come, even after OPEC salvaged oil from its historic drop to bring it up to the USD 40 / bbl mark, Bloomberg says. The oil cartel’s “shaky six” — Algeria, Iran, Iraq, Libya, Nigeria, Venezuela — all face restive political and economic climates that underscore the lack of a quick fix anytime soon, even if production rebounds. The pandemic’s toll on travel, international and local, is also likely to be long-lasting, hastening the conversation about peak demand and an inevitable shift to clean and renewable energy.
A rally in tech stocks helped the S&P 500 close trading yesterday just shy of its February peak, Reuters reports. The Nasdaq and Dow Jones also rallied yesterday, but the Dow Jones has yet to rebound to record levels reached in February. “Clearly the market has been outperforming the economy by a wide stretch recently,” said JP Morgan Asset Management Chief Global Strategist David Kelly. Democratic presidential nominee Joe Biden’s selection of California Senator Kamala Harris earlier this week has also given the market “a little bit of relief in that you now have basically two centrist candidates on the Democratic ticket,” Kelly said.
The UK economy is a basketcase right now: UK economic output collapsed by a stunning 20.4% in the second quarter, the deepest recession of any major European economy and the biggest contraction on record, official figures showed yesterday. Analysts speaking to the Financial Times attributed the cratering economy to the country’s long lockdown and its dependency on consumer-facing services, which account for 80% of output.
Time to be on the EUR? Speculation that the USD will fall and that the EUR will rise to record levels has reached a nine year high, thanks in large part to a USD 882 bn stimulus package passed by eurozone leaders, and better containment of the pandemic on the continent compared to the US, Axios says. Proceed with caution: The last time investors piled into the EUR in 2018, the market reversed and the USD soared.
A glimpse into Egypt’s WTO director-general candidate’s proposed policy plan: Egypt’s candidate for the top position at the World Trade Organization (WTO) wants to overhaul the organization’s political vision to better address the host of trade issues currently plaguing the world, according to the National. Speaking at a webinar yesterday, Abdel Hamid Mamdouh said that, if he is elected to the top job, his top priorities would be “to have a clear vision for a reform agenda and reform process … What do we want to do with this organization?” The career diplomat said the WTO is facing a “complete meltdown” in its systems as a result of unsustainable and “‘excessive pressure on its dispute settlement function,’” putting it under a stress test that necessitates serious reforms. Mamdouh is one of six candidates that have been shortlisted to become the new WTO director-general, with the winning nominee set to be named before Roberto Azevêdo steps down on 31 August.
How the pandemic has forced businesses to adapt their operations to become more resilient: The covid-19 pandemic uncovered significant weaknesses in global businesses’ key operational areas, leading many to adopt new business plans that are grounded in diversification and agility, HSBC said in a report (pdf). Businesses surveyed by the bank are setting long-term plans for their staffing and office arrangements, with some saying they are looking to cut back on their office spaces or production locations, and 69% telling the bank that “flexible working will become standard practice” as virtual work and meetings also become more commonplace.
Altogether, sustainability is the name of the game: Businesses are restructuring their own operations to increase sustainability, and some are also looking at environmental sustainability. To that end, companies are making changes to their supply chains in the next two years, either by diversifying, restricting or shortening their supply chain, or increasing the security of their supply chains “by identifying and securing critical suppliers.”
Some 42% of the world’s youth (ages 18-29) witnessed a fall in their incomes since the onset of the pandemic, according to findings by UN’s International Labor Organization (ILO). The pandemic’s impact on the youth was found to be “systematic, deep and disproportionate,” with young women, youth in lower-income countries, and youth working in “support services and sales-related occupations” bearing the brunt of the losses, the ILO report (pdf) said.