Monday, 21 September 2020

Fawry gets nod for bank transfer service + fintech industry faces new regulation drive

TL;DR

What We’re Tracking Today

Good morning, friends, and welcome to another busy September morning. Let’s jump right in:

It’s interest rate week: The Central Bank of Egypt’s Monetary Policy Committee meets to review interest rates this Thursday. All 11 analysts and economists we surveyed expect rates to be left unchanged for a fifth consecutive meeting.

The Madbouly Cabinet’s decision to relax some restrictions on mass gatherings comes into effect today. Public wedding celebrations, funeral prayers, expos, and some sports and educational activities will resume — subject to restrictions — for the first time since March after the government last week agreed to ease curbs on gatherings.

EFG Hermes’ virtual investor conference kicks off today and wraps next Thursday, 1 October. You can visit the conference website here.

The building that will house the newly-constituted Senate will be ready to hold sessions by the end of the week, state news agency MENA quotes the body’s acting secretary-general as saying. Sessions will be held in the old Shura Council building before the Senate moves to the new administrative capital as early as next year.

The date of the first session is still TBD: President Abdel Fattah El Sisi is expected to appoint the remaining 100 senators to the 300-seat chamber “during the next few days,” after which the first official session will be held. Nationwide elections held in August and September saw 200 representatives elected to the Senate.


GOOD COVID (related) NEWS- It’s time you started thinking big once again, says the Wall Street Journal, noting that CEOs are rediscovering they had big ambitions as the pandemic grinds on. Company leaders are shifting “from survival mode to strategic moves with takeovers, leadership changes and restored financial targets” all on the agenda. A must-read.

GOOD-BAD COVID NEWS- The coronavirus may be mutating to become less lethal, according to a study in the Lancet. But it might be worth rethinking that “flight to nowhere”: The virus really appears to like attacking folks on airplanes, per a CDC paper.

CREEPY NEWS- WhatsApp knows when you’re sleeping, it knows when you’re awake… It’s time to break out your tinfoil hats, ladies and gentlemen. Tracking apps allow creeps to use your WhatsApp activity to “figure out when you’re sleeping and who you’re talking to on the app,” CNBC reports.


The Health Ministry reported 115 new covid-19 infections yesterday, down from 128 the day before. Egypt has now disclosed a total of 102,015 confirmed cases of covid-19. The ministry also reported 20 new deaths, bringing the country’s total death toll to 5,770. We now have a total of 89,532 confirmed cases that have fully recovered.

The first post-covid flight operated by Swiss carrier Chair Airlines landed in Hurghada yesterday, the Civil Aviation Ministry said in a statement.

Private carrier Nile Air saw revenues plunge 90% during FY2019-2020 as it struggled amid competition from budget airlines and the suspension of flights during the pandemic, Vice President and Managing Director Yossrey Abdel Wahab told Al Mal. The company shelved in May its plans to IPO on the EGX this year and scaled back ambitions to upgrade the size of its fleet.

Russia inks agreements to sell covid-19 vaccine globally: Russia has reached early agreements to ship its Sputnik V vaccine to more than 10 countries in the Middle East, Asia, and South America, the Wall Street Journal quotes officials as saying. Russian authorities are in talks with some 10 others, and have received inquiries and requests for nearly 1.2 bn vaccine shots. Egypt, the UAE, and Belarus were among the countries Russia recently announced it partnered with on vaccine clinical trials.

enterpriseTake a moment to breathe in and watch the beauty around. It’s time for your mind to wander to beautiful places at Somabay and let nature work its magic.

Emerging market bond funds are enjoying their longest rally since 4Q2017, when the asset class saw 12 straight weeks of gains, according to EPFR Global data. Driven by the collapse in yields in the US and Europe, EM bonds have now seen 10 consecutive weeks of net inflows, with most of the money coming during a three-week period in late August and early September when flows hit USD 8 bn. Despite falling considerably from March as EM central banks slashed policy rates, yields continue to remain attractive: sub-investment grade EM bonds are currently paying a 7.6% yield, more than 300 bps higher than their counterparts in the US, according to JPMorgan and Bloomberg Barclays index data. The Wall Street Journal and Bloomberg have the story.

Global trade is rebounding faster from the covid slump than it did from the 2008 financial crisis, despite suffering the sharpest y-o-y drop since the Great Depression, the Wall Street Journal reports. This comes as consumers up their spending on imported goods and shipping activity begins to normalize following months of turmoil caused by the Great Lockdown.

The big banking scandal of 2020: Thousands of leaked documents have revealed the extent of complicity between some of the world’s largest banks and organized criminal networks. The documents, handed to Buzzfeed and the International Consortium of Investigative Journalists, show that banks such as JPMorgan, HSBC and Deutsche Bank facilitated the movement of dirty money across borders, assisted ponzi schemes and enabled money laundering.

Also worth knowing about this morning:

  • Saudi energy firms are eyeing consolidation to weather the pandemic’s blow to the oil industry: Saudi Industrial Investment Group (SIIG) and National Petrochemical Co. (NPC) have kicked off merger talks to create a USD 11 bn energy company amid slumping oil prices, according to Bloomberg.
  • Donald Trump’s blessing may not be enough to get the TikTok sale over the line: The TikTok-Oracle agreement to split the Chinese media giant’s US operations is coming under scrutiny. The key sticking points: ownership and a USD 5 bn donation to a “patriotic” education fund. (Bloomberg | FT | WSJ)
  • Antitrust momentum is building against Big Tech as the EU mulls new measures that could see it gain the power to break up firms or force them to sell some of their European operations if their market power threatens consumer and small business interests, the Financial Times reports. This comes as the US Justice Department prepares to file an antitrust case against Google parent Alphabet as soon as this month.

US ELECTION WATCH- The stage is being set for a pre-election Supreme Court showdown: House Speaker Nancy Pelosi yesterday refused to rule out impeaching The Donald or his attorney general after the president vowed to appoint a new judge to the Supreme Court following Justice Ruth Bader Ginsburg’s death, CNBC reports. Trump promised to name Ginsburg’s successor “without delay” and says he will nominate a woman.

The story, and its potential impact on the election, dominates the front pages this morning: New York Times | Washington Post | Financial Times | Wall Street Journal | Bloomberg | BBC.

The Emmy awards were still rolling at dispatch time, with Schitt’s Creek sweeping the comedy categories and HBO again winning top drama for Succession. The NYT’s liveblog is worth checking out to get up to speed.

SIGN OF THE TIMES- American MBA programs are starting to lose their appeal: Put off by online learning and the Trump administration’s strict visa rules, international graduate students are less keen on the US as a top MBA destination, a Bloomberg Businessweek survey of over 3,500 students from 95 business schools worldwide shows. Local and international students seemed to have the same reading on the efficacy of online learning and the quality of the material, but international students, who accounted for 38% of those surveyed, reported lower levels of confidence in the return on investment from getting their degree online. Speaking of which:

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*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed. Blackboard appears every Monday in Enterprise in the place of our traditional industry news roundups.

In today’s issue: With covid-19 forcing international students to think about their study choices harder than ever, will the UK and US government’s chaotic responses to the pandemic persuade Egyptians to look elsewhere?

Enterprise+: Last Night’s Talk Shows

The nation’s talking heads were preoccupied with Mohamed Ali’s renewed calls for protests on the anniversary of the small demonstrations seen in 2019. Meanwhile, Suez Canal Authority head Osama Rabie talked to Al Hadath Al Youm about a potential UAE-Israel oil pipeline, Al Hayah Al Youm hosted a discussion about private/non-profit universities, and Masaa DMC turned its attention to the upcoming parliamentary elections.

Empty streets: Last night’s main talking point was the hush on the streets that greeted calls from exiled actor Mohamed Ali for anti-government protests. Ala Mas'ouleety's Ahmed Moussa showed videos of Mansoura (watch, runtime: 4:17), Al Hayah Al Youm’s Lobna Assal made sure to point out Ali’s failure (watch, runtime: 2:50), and Masaa DMC's Eman El Hosary gave a rundown of social media coverage (watch, runtime: 2:50). Adib also got on the bandwagon with a review of government-commissioned development projects over the past few years (watch, runtime: 1:07).

Proposal for UAE-Israel oil pipeline spells trouble for the Suez Canal? In a phone call with Al Hadath Al Youm’s Sayed Ali, Suez Canal Authority head Osama Rabie warned of the potential consequences for Egypt’s Suez Canal revenues of a proposed oil pipeline linking Israel and the UAE. The owners of the Eilat-Ashkelon pipeline, a 60-year-old pipeline built to lessen Israel’s dependence on the Suez Canal, recently suggested that the UAE-Israel normalization pact means that it could now be used to connect oil and gas reserves in the Gulf to Israel’s Mediterranean shores. Rabie said the plans would pose a national security risk to Egypt, depriving it of a vital source of revenue. The government is now working on a new marketing strategy to attract ships to the Suez Canal, he said, adding that the pipeline for now does not pose a threat to Egypt’s strategic position (watch, runtime: 4:31).

Talks with heads of Gen-2 universities: Assal sat down with the heads of four new non-profit and private universities that recently opened their doors. Ashraf Haidar, acting head of Galala University, told her that his institution houses 15 faculties offering 33 degree programs in fields covering advanced sciences. Ahmed El Gohary, who leads the Egypt-Japan University, meanwhile, said that Egypt attracted partnerships with Japan despite competition from many other Arab countries (watch, runtime: 42:37). The guests also included Magdy El Kady, president of University of Canada’s new branch in the administrative capital, and Ashraf Saad, who leads King Salman International University, which will have several branches in Sinai.

‘Welcome Schools’ expo open for visitors: Assal phoned assistant Supply Minister Ayman Hossam, who said that nearly 175 exhibitors are now stationed at the Cairo Fair Zone for the annual ‘Welcome Schools’ expo, which kicked off yesterday and will wrap up on Sunday (watch, runtime: 7:49).

A lot of people want a seat in the House of Representatives: Masaa DMC’s Eman El Hosary phoned constitutional lawyer Shawki El Sayed, who reported that a significant number of people have submitted applications to run in the upcoming parliamentary elections. Prospective MPs have until Saturday to submit their applications to the National Election Authority. The elections will take place over two phases in October and November, and will kick-off on 21 October when expats from the 14 governorates included in the first phase of voting go to the polls (watch, runtime: 8:15).

Speed Round

Fawry gets CBE nod to partner with state-owned bank for transfer service: E-payments platform Fawry has received preliminary approval from the Central Bank of Egypt (CBE) to set up a bank transfer service for Egyptian expats; the service will be offered in partnership with an unnamed state-owned bank, CEO Ashraf Sabry tells Al Mal. Fawry has been in talks with several local and regional banks — including the National Bank of Egypt (NBE), Bank of Alexandria, Banque du Caire, and ADIB — to set up the remittances service for Egyptians living in the Gulf since last year, former managing director Mohamed Okasha said in December, saying at the time that the service would initially be rolled out in the UAE, Kuwait, and Saudi Arabia. Remittances, particularly from expats in the GCC, are a key source of foreign currency for Egypt and helped to narrow its current account deficit through the worst of the pandemic in 3Q2019-2020.

Could Fawry be teaming up with NBE on the service? The country’s largest bank has been working to speed up remittance payments through an agreement with currency exchange network Ripple. The NBE also expanded its internet banking platform and mobile banking app, introducing payment services through Fawry and other platforms.

In other news from the industry:

LEGISLATION WATCH- Insurtech, crowdfunding startups and other fintech players could soon face new FRA regulations: The Financial Regulatory Authority (FRA) has approved a draft bill that would regulate the use of financial technology to deliver non-bank financial services, it said in a statement. The bill was reviewed by representatives from the Central Bank of Egypt, the National Telecommunications Regulatory Authority, and the Money Laundering and Terrorist Financing Combating Unit. The 34-article bill, the first draft of which the FRA completed in July, covers crowdfunding, robo-advisory, nano-finance, and insurtech. The legislation would enable the FRA to license and regulate crowdfunding platforms, and issue temporary fintech startup licenses. Violations would result in imprisonment or fines of EGP 200k-1 mn.

M&A WATCH- Alta Semper ups stake in Macro Holding to 80%: Private equity outfit Alta Semper Capital has raised its stake in consumer healthcare firm Macro Holding to 80%, it said in an emailed statement (pdf). The frontier markets-focused firm, which held 60% of Macro prior to the transaction, said the follow-on investment came as a result of the company’s “outstanding performance” since it made its initial investment in 2017. Alta Semper is working with emerging-market PE firm IDI Emerging Markets, African investor Mbuyu Capital Partners, and London-based frontier markets specialist Kingsway Capital to grow Macro’s product range and expand into new markets, the statement said.

Macro is a perennial IPO or M&A target given its performance and private-equity backing. Ahmed Rady, managing director and head of North Africa at Alta Semper, said in January that Macro was looking to raise USD 100 mn in an IPO on the EGX during 4Q2020 or 1Q2021, but talk of a transaction naturally cooled after the outbreak of the pandemic.

Advisors: Matouk Bassiouny & Hennawy advised Alta Semper on the transaction.

M&A WATCH- Is IFC selling its stake in AUB Egypt? The International Finance Corporation (IFC) is reportedly selling its 10% stake in Ahli United Bank (AUB) Egypt to AUB Egypt’s parent company in Bahrain, the local press reported, citing unnamed sources familiar with the matter. This would account for the bulk of the 14.52% stake that AUB and Misr Strategia are trying to acquire. An IFC representative Enterprise spoke with declined to comment on the report. The IFC acquired its 10% stake in the bank (which was named Delta International Bank at the time) in 2006 for USD 40 mn.

The Bahraini bank and Misr Strategia submitted an offer for the stake last week, which would effectively give AUB full ownership of its Egypt arm. The Financial Regulatory Authority is still reviewing the sale, which would be worth about EGP 1.29 bn.

Will AUB sell its Egypt unit or will this be an entry point to the market for Kuwait Finance House? Kuwait Finance House has been in the process of acquiring Bahrain’s AUB since 2019 but the potential USD 8.8 bn transaction was postponed until December earlier this year due to the pandemic. If it materializes, the acquisition would require KFH to obtain an Islamic banking license to operate in the country. Previous reports had indicated, however, that KFH could instead negotiate an exit from Egypt, which would include the sale of AUB Egypt. Though Egypt’s banks are considered desirable M&A targets, it’s rare that they are up for sale. Acquisitions are currently the only way into Egypt’s banking sector, as the CBE has for years denied new banking licenses and has told new entrants to attempt to acquire a licensed local bank instead.

DEBT WATCH- Sodic subsidiary signs EGP 2.57 bn medium term facility with AAIB: Sodic subsidiary Soreal Real Estate Development signed a EGP 2.57 bn medium-term facility with the Arab African International Bank to finance Sodic’s Villette project in New Cairo, according to an emailed statement (pdf). Villette is a 301-feddan residential project featuring single family homes, high-end apartment buildings, and a sports club managed by Sodic’s sports arm. “In an exceptionally challenging year, the facility comes as a true testament to Sodic’s credibility as a developer as well as its consistently strong financial position and the confidence of Egypt’s leading banks in Sodic’s ability to deliver on its commitments,” said Managing Director Magued Sherif.

STARTUP WATCH- Saudi Arabia-based retail management platform Foodics has set up shop in Egypt as part of the company’s regional expansion plan after raising USD 4 mn in a pre-series B investment round in 2019, Wamda reports. Foodics, which was founded in 2014, is now working on outfitting 15 local businesses with its cloud computing software, which it hopes to grow to 50 local partners by the end of the year. “Egypt is the second largest F&B market in the region after Saudi Arabia. There is so much potential in there,” said co-founder Ahmad Al-Zaini.

Foodics is also looking to launch its micro-loan subsidiary, Foodics Capital, in Egypt next year after launching in Saudi Arabia by the end of 2020. The company has secured north of USD 100 mn for on-lending to its merchants, AlZaini said.

Does the new Customs Act contravene int’l trade + shipping agreements? Maersk seems to think so. The shipping line’s Egypt arm blasted the recently-passed Customs Act, claiming in a memo to the Alexandria Chamber of Shipping that some articles of the law breach international trade agreements Egypt has ratified, including the UN Convention on the Carriage of Goods by Sea, according to Al Mal. Maersk, the largest shipping company in the world, accounts for some 30% of activity in Egypt’s ports.

What’s Maersk unhappy with? Its biggest complaint is that the law holds shipping lines accountable for incorrect information on shipments, and liable for any damage or loss of goods being shipped. The company is also unhappy with the idea of having to keep customs documents on file for a five-year period; objects to a provision that imposes a monthly levy equivalent to 2% of the customs rate on containers admitted to Egypt’s ports ahead of re-export (allegedly in violation of the UN Convention on Containers (pdf)); and claims it would be an “abuse” of authority for customs agents to be able to raid shipping lines’ local agents without obtaining warrants or providing prior notice.

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Red Sea a ray of light for Egypt’s battered tourism sector: A pick up in the number of tourists visiting Red Sea resorts has provided a ray of light for Egypt’s tourism industry which is struggling to recover from the effects of the covid-19 pandemic. Tourism Minister Khaled El Enany revealed yesterday that some 250k tourists have visited Sharm El Sheikh and Hurghada since commercial flights resumed in July, almost double the 126k people who had landed in the two Red Sea resorts and Matrouh by late August.

But let’s keep this in perspective: The number of tourists who have visited the Red Sea and South Sinai since 1 July is down more than 90% from last year’s levels, Deputy Tourism and Antiquities Minister Ghada Shalaby told Reuters. And although cultural tourism in Luxor and Aswan resumed earlier this month, it’s far from clear how long it will take for things to return to normal. A travel agent reported that only a few tour groups have been showing up to Luxor each day since sites reopened on 1 September. Hotels are still only allowed to operate at 50% capacity, placing a firm ceiling on how many tourists Egypt can accommodate while the pandemic spreads overseas. Last year, the number of tourists visiting Egypt hit a record high of 13 mn, but plummeted after the government suspended flights to prevent the spread of the virus.

Steel demand plummets on covid-19, gov’t construction ban: The government’s decision to place a six-month ban on construction permits is intensifying a demand crisis in the steel sector already reeling from the covid-19 pandemic, Al Shorouk reports, following up on a story we first reported last month.

In other news from the industry: There’s debate over whether state-owned Egyptian Iron and Steel should spin off its most valuable business as it looks to place its mining and quarrying unit in a separate joint stock company. The company’s shareholders are being asked to sign off on the demerger next month, the company said in an EGX filing (pdf). A company board member has taken to the pages of Al Mal to speak against the idea, which is apparently being proposed by a consultant.

Spotlight

What do BP’s plans tell us about the future of sustainable energy? For starters, fossil fuels will comprise a decreasing portion of the global energy mix, while renewable energy will account for an increasing share, buoyed by an increasing electrification of the energy system, BP said in its annual Energy Outlook released last week. The energy outlook suggests that global demand for oil may have already peaked and that the fossil fuel industry is facing a terminal decline. With that in mind, BP is setting its sights on becoming an integrated energy company, as opposed to a hydrocarbon-focus player, with an eye to implement a resilient strategy “weighted towards a rapid transition.”

That’s why BP is looking to become an integrated energy company by 2030, CEO Bernard Looney said in his opening speech (pdf). Among his goals: slashing its oil and gas production by 40%, increasing 20-fold its developed net renewable generating capacity to hit 50 GW, ramping up its investment in low carbon energy sources to USD 5 bn per annum, and reducing emissions from its low carbon and renewable energy activities by 30-40%.

How do you get to the other side? By focusing on three key areas of activity: Low carbon electricity and energy, convenience and mobility, and resilient and focused hydrocarbons. BP plans to invest in low carbon electricity and energy sources — an investment it anticipates will mature in the back half of the decade. These investments include leaning into wind and solar energy, as well as combining different sources of energy (such as solar with biopower or gas with renewables) to provide cleaner, yet affordable energy, said EVP of Production and Operations Gordon Birrell (pdf). Meanwhile, the company is “in no rush” to sell its hydrocarbon assets, Looney stressed, but is rather refocusing on resilient hydrocarbons. “This is not about turning off one tap and turning on a different one. This is about adjusting the flows.” All of these activities, together, will help contribute to growing the company’s cash flow over the next five years, Looney said.

Speaking of the financials: BP has laid out a strategy to continue delivering competitive EBITDA, growth in returns, and attractive upside to shareholders. The strategy rests on three key principles: Prioritizing its capital allocation, maintaining a strong investment grade credit rating and resilient balance sheet, and adopting a clear and disciplined approach to investments, according to CFO Murray Auchincloss (pdf). As part of this strategy, BP is directing its capital allocations over the next five years to funding a resilient dividend, deleveraging its balance sheet to USD 35 bn net debt, and earmarking sufficient capital to push along its energy transition strategy. At a later phase, BP is also committing to share buybacks to return 60% or more of its surplus liquidity to shareholders.

Egypt in the News

The discovery of 14, 2.5k year-old tombs in Saqqara is leading the conversation in the foreign press this morning. The find, announced yesterday, brings to 27 the number of ancient coffins unearthed in the area this month: AFP | Times of Israel | Daily Mail | BBC.

What would Egypt-US relations look like under a Biden presidency? If the Financial Times’ crystal ball is any indicator, Egypt and the rest of the Middle East should expect a return to Obama-era policies if incumbent Donald Trump fails to secure a second term. The salmon-colored paper suggests that Democratic nominee Joe Biden would scrutinize human rights records across the region and be less forgiving on foreign interventions — such as Saudi Arabia’s involvement in Yemen. Other countries, including Israel, are also fretting that they could be punished for their closeness to the Trump administration.

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Egyptian students at US and UK universities were thrown into a covid-19 tailspin. Will this push them towards other study destinations? Last year Egyptian students at UK and US universities faced stress, extra costs and academic disruption as their institutions tackled covid-19. Blended learning this year may offer some normalcy, but global reports say international study won’t recover for at least five years. Appetite for a degree from these countries hasn’t yet diminished, say Egyptian students who spoke with Enterprise. But as covid-19 mitigation measures continue, experts predict that international students will start to question the value of expensive US and UK study in the long-term.

The pandemic has left universities and students scrambling to adjust. International students had to decide at short notice whether to return to their home countries when covid-19 broke out in March, amid speculation that country-wide lockdowns could last for months. Most universities switched to online learning immediately, with some fully closing their campus accommodation. While international students will be able to participate in blended learning and attend classes in person in 2020-21, some also fear losing their university places due to an inability to pay tuition fees.

Students made travel and accommodation arrangements amid a flurry of covid panic: One Egyptian student completing her MA at SOAS juggled two flight bookings to secure her luggage allowance when she returned to Egypt in mid-March. She learned about Cairo’s mandatory two-week quarantine in a pre-departure Heathrow airport announcement. Another completing her MPhil at Cambridge had just returned to Egypt for fieldwork when flights were suspended. Cambridge didn’t provide clear accommodation advice, and while some students were able to stay in their colleges, several who were asked to return home ended up seeking private accommodation, she says.

Not everyone could afford the extra costs of returning home: Her return flight cost just over EGP 6k, the first student estimates. The mandatory 14-day hotel quarantine that was later imposed may have cost an estimated EGP 15-20k, with the cost paid by the individuals returning. Not all families would have been able to bear these costs.

A lack of financial security could prevent some students from finishing their programs. One Egyptian student two years into a five-year part-time MSc at City University may lose the chance to complete his degree. He couldn’t pay this year’s tuition fees — GBP 5k per year — after losing his job in a wave of redundancies that followed the outbreak. His student union advised him to complete an interruption of studies form and defer to next year while he finds another job. If the university rejects his request and appeal, he’ll simply be given a certificate. The process has been filled with bureaucracy and slow communication, he says.

For many, the shift to online learning was a poor substitute for in-person teaching. Amina El Sheikh’s undergraduate studies at Emerson College quickly moved online after covid-19 hit the US. Her academic experience changed from highly discussion-based and interactive to much more traditional, she says. Getting clarification from professors or feeling urgency to complete assignments is harder when classes are online, says a Sussex University student. And while it’s useful to have lectures posted, another undergraduate at Nottingham University misses interactive tutorials, finding written assignments and handouts less engaging. The students attending SOAS and Cambridge faced challenges working on their dissertations in Egypt, with one noting that she missed having access to the library’s academic resources and the overall work environment.

Priority disciplines — like medicine — saw fast-tracked visas: A March decision by the US Bureau of Consular Affairs saw 8.6k Egyptian doctors accepted into the US in May.

But some travel restrictions remain in place all over the world, impacting universities as far afield as Japan and Canada.

The US and UK’s clumsy handling of covid-19 left many international students feeling unsafe and unwelcome. UK Prime Minister Boris Johnson’s initial response to the crisis made them feel unsafe and eager to return to Egypt, say several students. July’s hastily-retracted decision by the US Immigration and Customs Enforcement (ICE) that international students whose courses moved online could have their visas revoked left many students feeling deeply insecure.

Though students in other countries may have faced less disruption: Egyptian students in the UAE — numbering over 5k in 2016 compared to some 3k in the US and 2k in the UK — may have been largely shielded because the majority live with their families, says Mohamed Badry, Cultural Attaché at the Egyptian Cultural Bureau in Abu Dhabi. A small group of about 20 students requested support to return to Egypt, but he believes most experienced minimal disruption. Unlike the US and UK, Malaysia’s movement control order required international students to register with their university if they chose to stay in the country, and a government directive ordered that institutions prioritize their welfare. The UAE, Saudi Arabia, US, UK, France, Qatar and Malaysia were the top destinations for Egyptian students in 2017, numbering over 31k.

Has this dampened Egyptian students’ appetite for a US or UK education? So far, no. Students want to return to their host countries, hoping that a blended learning model, with extra preparation time for universities, will mitigate the worst challenges they faced earlier. The UK’s Warwick University actually saw a 17% increase in Egyptian applicants this year, according to a university representative. UK and US institutions will retain an edge for Egyptian students, because of linguistic and cultural familiarity and the value of an anglophone education for the Egyptian job market, predicts CIRA CEO Mohamed El Kalla.

Will this interest remain if covid-19 mitigation measures continue? There’s at least a chance it won’t.

Reduced demand for international study is feared by the global education industry. Almost two-thirds (64%) of 200 global university leaders anticipated that covid-19 will diminish student interest in overseas study in the coming five years, and 76% expected to recruit fewer international students this academic year, due to increased fear of overseas travel and higher costs, says a Times Higher Education survey.

US and UK universities will be hit the hardest. British universities could lose 25% of their annual income from fewer international students, while the US could see a 30-40% reduction in international students — a loss of some 400k students and USD 15 bn. Annual tuition fees for international students can reach USD 50k in the US and GBP 10k in the UK, translating into annual revenue of USD 45 bn for the US from its 1.1 mn foreign students, and GBP 21 bn for the UK from its half a mn students.

Some international students are questioning the value proposition of expensive US and UK education. The cost of attending US and UK universities is usually justified by teaching quality, networking, and the chance to live in these countries, say students we spoke to. But many international students — including Egyptians — are studying either fully or partly online this academic year, missing out on many of the benefits of international study. Some state plainly that a year of online study isn’t worth the high cost of tuition fees. A July WES survey of some 600 prospective international students found only 38% would enroll at a US university if classes were only online.

Globally, experts are asking if US and UK universities will lose their pre-eminence. Some predict that post-covid-19 European universities will become more attractive and East Asia will emerge as a regional hub for international student mobility. One Indian university official cited in the THE survey predicts the desirability of certain countries for higher education will be reassessed, as “the major current destinations treated international students rather poorly.”

And could this help fuel Egypt’s bid to become a hub for international students and retain more of our own? Egypt is working to attract more international students and to encourage Egyptian students who would normally look overseas to remain here, through internationalizing private and public universities, ministry-led reform and establishing partnerships with overseas entities. Mohamed Eid, BUE’s Director of the Internationalization Office, says that while it’s still too early to know if student transfers from international universities have increased this academic year, it is a chance for BUE to show it’s a viable competitor to any overseas institution.

(xxYE) Your top education stories of the week:

  • Higher education: A new phase of the Egypt-Japan University for Sciences and Technology in Borg El Arab, Alexandria, was inaugurated by President Abdel Fattah El Sisi last week.
  • E-learning: All high-school students will be provided tablets and internet connectivity in classrooms, eliminating the need for books, said Education Minister Tarek Shawki.
  • Education reform: The government has drafted a law that would establish a government body to accredit institutions offering technical learning and training programs, and ensure they meet educational standards.
  • Continuing education: Adult education and literacy courses are back in session from today after the government eased restrictions on public gatherings.
  • Back to School expo: Parents will get the chance to attend the annual ‘Welcome Schools’ expo, held on 20-27 September at the Cairo Fair Zone in Nasr City.

The Market Yesterday

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EGP / USD CBE market average: Buy 15.68 | Sell 15.78
EGP / USD at CIB: Buy 15.68 | Sell 15.78
EGP / USD at NBE: Buy 15.70 | Sell 15.80

EGX30 (Sunday): 10,969 (-0.7%)
Turnover: EGP 1.1 bn (2% below the 90-day average)
EGX 30 year-to-date: -21.4%

THE MARKET ON SUNDAY: The EGX30 ended Sunday’s session down 0.7%. CIB, the index’s heaviest constituent, ended down 1.2%. EGX30’s top performing constituents were Porto Group up 3.8%, Kima up 2.7%, and Pioneers Holding up 2.0%. Yesterday’s worst performing stocks were Orascom Development Egypt down 1.9%, Heliopolis Housing down 1.5% and Sodic down 1.5%. The market turnover was EGP 1.1 bn, and regional investors were the sole net buyers.

Foreigners: Net short | EGP -5.7 mn
Regional: Net long | EGP +15.4 mn
Domestic: Net short | EGP -9.7 mn

Retail: 82.9% of total trades | 83.5% of buyers | 82.2% of sellers
Institutions: 17.1% of total trades | 16.5% of buyers | 17.8% of sellers

WTI: USD 41.11 (+0.34%)

Brent: USD 43.15 (-0.35%)

Natural Gas: (Nymex, futures prices) USD 2.05 MMBtu, (+0.29%, October 2020 contract)

Gold: USD 1,962.10 / troy ounce (+0.63%)

TASI: 8,364 (+0.32%) (YTD: -0.29%)
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DFM: 2,320 (-0.03%) (YTD: -16.08%)
KSE Premier Market: 6,075 (+1.09%)
QE: 9,915 (-0.26%) (YTD: -4.89%)
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Calendar

September: The Egyptian Federation for Securities will hold elections for its board of directors after they were postponed in March due to the lockdown.

September: The General Authority for Investment (GAFI) will host a virtual meeting with the Arab-German Chamber of Commerce and Industry and some 120 German companies to discuss investment prospects in Egypt.

20 September (Sunday): A Cairo administrative court is due to issue a ruling in a third-party lawsuit demanding the government block YouTube in Egypt for carrying an allegedly sacreligious video. The case is an infamous 2012-vintage lawsuit still wending its way through the courts.

20-27 September (Sunday-Sunday): Welcome Schools expo, Cairo Fair Zone, Nasr City.

21 September (Monday): Government to relax some of the restrictions on mass gatherings.

21 September-1 October (Monday-Thursday): EFG Hermes’ second Virtual Investors Conference.

24 September (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

24-25 September (Thursday-Friday): The European Union will discuss imposing sanctions on Turkey to limit the country’s ability to expand its search for oil and gas in contested eastern Mediterranean waters.

27 September (Sunday): Former Finance Minister Youssef Boutros Ghali to be retried on charges he squandered public funds in a case related to the printing of coupons for butane canisters.

28 September-3 October (Monday-Saturday): CIB PSA World Tour Finals, Cairo, Egypt.

End of September: Last chance to settle building code violations for illegal buildings.

1 October (Thursday): House of Representatives reconvenes for its sixth and final legislative session before elections for the house later in October or November.

1-10 October (Thursday-Saturday): Alexandria Book Fair, Kouta, Alexandria.

4 October (Sunday): Senate convenes for its first session.

6 October (Tuesday): Armed Forces Day.

8 October (Thursday): National holiday in observance of Armed Forces Day.

12 October (Monday): The Egyptian Iron and Steel company general assembly would discuss demerging its mining and quarrying unit and restructure the company’s board of directors

17 October (Saturday): 2020-2021 academic year begins for K-12 students at state schools and students in public universities.

18-22 October (Sunday-Thursday): The annual Cairo Water Week event — which will be semi- virtual this year — will be held under the slogan “Water Security for Peace and Development in Arid Regions”

21-23 October (Wednesday-Friday): Polls open to international voters for first round of Parliamentary elections in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

23-31 October (Friday-Saturday): El Gouna Film Festival, El Gouna, Egypt.

24-25 October (Saturday – Sunday) Polls open for first round of Parliamentary elections in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

29 October (Thursday): Prophet Mohamed’s birthday (TBC), national holiday.

November: Egypt will host simultaneously the International Capital Market Association’s emerging market, and Africa and Middle East meetings.

November: An Egyptian-Russian ministerial committee will meet to discuss trade and investment in Moscow.

2 November: Former Civil Aviation Minister Ahmed Shafik faces retrial at Cairo Court of Appeals in the so-called Aviation Ministry corruption case.

4-5 November (Tuesday-Wednesday): US Federal Open Market Committee will hold its two-day policy meeting to review the interest rate.

4-6 November (Wednesday-Friday): Polls open to international voters for first round of Parliamentary elections in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

4-7 November (Wednesday-Saturday): Cityscape Egypt Expo, International Exhibition Center, Cairo

7-8 November (Saturday-Sunday): Polls open for first round of Parliamentary elections in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

12 November (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

15 November (Sunday): Egyptian Tax Authority’s online intro seminar on new electronic invoice system for first tranche of companies transitioning to e-filing program.

19-28 November (Thursday-Sunday): Cairo International Film Festival, Cairo Opera House, Egypt.

23-24 November (Monday-Tuesday): Reruns for Parliamentary elections in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

30 November (Monday): Final results will be announced for Parliamentary elections held in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira, Matrouh.

December: The 110th regular session of the Egyptian-Iraqi Joint Higher Committee will be held under the chairmanship of the prime ministers of the two countries

1 December (Tuesday): The IMF will conduct a first review of targets set under the USD 5.2 bn standby loan approved in June (proposed date).

7-8 December (Monday-Tuesday): Reruns for Parliamentary elections in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

9-10 December (Wednesday-Thursday): BiznEx, the international business expo in Egypt, venue TBD.

14 December (Monday): Final results will be announced for Parliamentary elections held in Cairo, Qalyubia, Menofia, Gharbia, Kafr El Sheikh, Sharqia, Damietta, Port Said, Ismailia, Suez, North Sinai and South Sinai.

15-16 December (Tuesday-Wednesday): US Federal Open Market Committee will hold its two-day policy meeting to review the interest rate.

24 December (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

25 December (Friday): Western Christmas.

1 January 2021 (Friday): New Year’s Day, national holiday.

7 January 2021 (Thursday): Coptic Christmas, national holiday.

13-31 January (Wednesday-Sunday): Egypt will host the 2021 Men’s Handball World Championship at the Giza Pyramids

25 January 2021 (Monday): 25 January revolution anniversary / Police Day.

26-28 January (Tuesday-Thursday): Future Investment Initiative, Riyadh, Saudi Arabia

28 January 2021 (Thursday): National holiday in observance of 25 January revolution anniversary / Police Day.

4 February 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

18 March 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

12 April 2021 (Monday): First day of Ramadan (TBC).

25 April 2021 (Sunday): Sinai Liberation Day.

29 April 2021 (Thursday): National holiday in observance of Sinai Liberation Day.

29 April 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

3 May 2021 (Monday): Sham El Nessim.

6 May 2021 (Thursday): National holiday in observance of Sham El Nessim.

12-15 May 2021 (Wednesday-Saturday): Eid El Fitr (TBC).

31 May-2 June 2021 (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, Nasr City, Cairo.

1 June 2021 (Tuesday): The IMF will conduct a second review of targets set under the USD 5.2 bn standby loan approved in June 2020 (proposed date).

10 June 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

26-29 June 2021 (Saturday-Tuesday): The Big 5 Construct Egypt, Cairo International Convention Center

22 July 2021 (Thursday): The CBE’s Monetary Policy Committee will meet to review interest rates.

30 July-3 August 2021 (Thursday-Monday): Eid Al Adha, national holiday (TBC).

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