More than 2.25 mn vaccines will be delivered to Egypt this week

Good morning ladies and gents — we have quite a packed issue for you this morning so let’s get to it.

THE BIG STORY INTERNATIONALLY- The global press is proclaiming a new era of space travel this morning after bn’aire entrepreneur Richard Branson finally boarded a Virgin Galactic flight and flew to the edge of space. The VSS Unity yesterday took Branson and five other crew members some 86 km above New Mexico on an hour-long flight that we may look back on as a key moment in a future space tourism industry.

The next bn’aire in space: Jeff Bezos, who will board a rocket designed and built by his Blue Origin space company on 20 July.

The story is everywhere this morning, from Reuters and the AP, to Bloomberg and the Wall Street Journal.

WHAT’S HAPPENING TODAY-

The EGX will test out closing auctions on the EGX for the third and final time today. Last week we spoke to EGX boss Mohamed Farid, who gave us the lowdown on the proposal that’s currently on the table and what it could mean for the exchange.

FURTHER DOWN THE ROAD- The central bank’s EGP 100 bn initiative to allow low- and middle-income homebuyers to access mortgages at a subsidized rate of 3% is expected to kick off next month, courtesy of the Central Bank of Egypt, Tarek Shoukry, head of the Federation of Egyptian Chambers of Commerce’s real estate division, told Hapi Journal.

The program — originally announced in March — will provide would-be homeowners with subsidized mortgages on houses valued at up to EGP 1.4 mn, provided they make a 20% down payment, Shoukry said. Pensioners will also be eligible to take part in the program, provided they make 40% down payment, and provided that they are under 75 years old when the loan period concludes. Shoukry made no further mention of eligibility criteria, such as an income ceiling.

***CATCH UP QUICK on the top stories from yesterday’s edition of EnterprisePM:

• Elsewedy Electric will acquire 99.25% of International Cables Company: The firm signed a sale and purchase agreement for the EGP 410 mn transaction, which is still subject to regulatory approvals.
• The SFE confirms it is bidding for Amoun: The Sovereign Fund of Egypt will partner with Abu Dhabi’s wealth fund ADQ to acquire 100% of manufacturing powerhouse Amoun, and is also hoping to increase investments in healthcare, real estate, and logistics.
• GB Auto gets FRA OK for consumer finance license: The company’s factoring arm, Drive, has received regulatory approval to launch new consumer finance activities beyond car finance.

MARKET WATCH- US earnings season kicks off this week — and it’s expected to be a big one. America’s largest companies are expected to announce huge increases in profits during the second quarter. Earnings-per-share growth among S&P 500 companies is forecast to have grown almost 63% y-o-y, which if correct would be the fastest growth since the 2008-2009 financial crisis.

Up first this week: The financial sector will be the first to report, with the country's biggest banks — JPMorgan Chase, Goldman Sachs, Bank of America, Citigroup and Morgan Stanley — releasing their results over the next five days. The FT and the Wall Street Journal have more.

CIRCLE YOUR CALENDAR-

Expect a decision on fuel prices in the coming days: The government’s fuel pricing committee has been in talks since the beginning of the month over whether to raise, cut or leave on hold fuel prices during 3Q2021. We were expecting to hear something yesterday but a government official had suggested that a decision could instead be made later in the month.

The EGX will hold its board elections for the 2021-2025 term on Wednesday, 14 July. Here’s a rundown of the candidates vying to fill board positions.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

*** 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 demand for private education in Egypt far outpacing supply, a new entrant into the education industry could plug a gap in the market. Bringing together Misr Ins. Holding Company (MIH), the Sovereign Fund of Egypt, Banque Misr, and the Suez Canal Bank, the Lighthouse Education investment fund plans to invest in 10-12 private schools in Cairo, Giza, and further afield. We sat down with MIH Chairman Basel El Hini and Ironwood Managing Director Mohamed El Sherif to discuss how the platform is laying the groundwork for more public-private cooperation on education.

Pfizer, AstraZeneca, J&J jabs to arrive this week: Egypt will receive our first 2 mn-dose shipment of the Pfizer / BioNTech mRNA vaccine by the end of this week while a new 250k-jab batch of the Oxford / AstraZeneca vaccine is due as soon as mid-week, the Health Ministry’s spokesperson Khaled Megahed told Kelma Akhira’s Lamees El Hadidi last night (watch, runtime 2:57), elaborating on statements made by Health Minister Hala Zayed last week. The AstraZeneca shots could be part of the final 1.9 mn-dose batch allocated under the Gavi / Covax program that Zayed previously said would arrive in July.

The first shipment of Johnson & Johnson vaccines will also arrive this week, Megahed said, without specifying an amount.

State-owned vaccine maker Vacsera will produce another 1 mn Sinovac shots in the coming days, Megahed noted. We’ll receive raw materials that will be enough to produce another 3 mn doses by the end of this week, before receiving another shipment to manufacture an additional 4.7 mn a week later. The company manufactured 1 mn doses of the vaccine earlier this month and is targeting 10 mn by the end of July and 80 mn by the end of the year.

Home-made Sinovac will be available in clinics in mid-August, Vacsera head Heba Wali reiterated in an interview for Ala Mas’ouleety (watch, runtime 7:36). This contradicts information given by a health ministry advisor last week, who said that the first shots could be sent out in the coming two weeks.

The Health Ministry reported 117 new covid-19 infections yesterday, down from 121 the day before. Egypt has now disclosed a total of 283,102 confirmed cases of covid-19. The ministry also reported 13 new deaths, bringing the country’s total death toll to 16,396.

Egypt’s external debt jumped by 21% in 3Q2020-2021 to USD 134.8 bn, compared to USD 111.3 bn in the same period in the previous fiscal year, according to central bank figures released yesterday. On a quarterly basis, external debt increased 4.3% from USD 129.2 bn in the second quarter.

Blame lower foreign inflows: In May S&P forecast that Egypt’s external debt would continue to deteriorate during the remainder of the fiscal year due to lower foreign inflows.

This should change in the coming months as tourism revenues and Suez Canal receipts continue to rebound, resulting in a “gradual improvement” of government debt levels, the ratings agency said.

OTHER ECONOMY NEWS-

The Egyptian economy grew at a 2.8% clip in FY2020-2021, Planning Minister Hala El Said told CNBC Arabia in what we’re assuming are preliminary growth figures for the fiscal year that finished less than two weeks ago. The minister didn’t provide a growth figure for the fourth quarter of the fiscal year.

This is a slowdown from the 3.6% recorded in FY2019-2020 that witnessed a 1.7% contraction in the fourth quarter due to the covid-19 pandemic and the government’s lockdown measures.

A return to normalcy this year? The Finance Ministry expects the Egyptian economy to return to near pre-pandemic growth levels, expanding at a 5.4% clip.

Suez Canal revenues hit a record USD 5.84 bn in FY2020-2021, up slightly from USD 5.72 bn the year before, the Suez Canal Authority said in a statement yesterday.

This was despite the Ever Given debacle: Revenues during the first six months of 2021 rose to USD 3 bn from USD 2.7 bn in 1H2020, despite the Ever Given crisis that blocked the canal for almost a week in March. Almost 9.8K ships crossed the canal during 1H2021, compared to 9.5K ships last year.

The SCA has been doing its best to boost traffic through the canal, slashing transit fees for tankers at the end of 2020 and some container ships at the beginning of July, while transit fees for all ships were frozen at 2020 rates.

A bill that would enact sweeping regulatory changes to the real estate sector is back from the dead: The House Housing Committee has finished reviewing a bill that would introduce new regulations on real estate companies designed to mitigate sector-related risks, said Tarek Shoukry, deputy chair of the committee and head of the Federation of Egyptian Chambers of Commerce’s real estate division, in a statement (pdf) yesterday.

We haven’t heard anything about this for 2.5 years: The Housing Committee first green-lit the bill back in 2019 but disappeared into legislative limbo immediately after.

So what would the new incarnation of the legislation do? The bill would create a state-backed real estate federation, that would be in charge of issuing licenses, monitoring companies’ performances, hand out fines, and manage company-client disputes

Mitigating risk: Real estate developers would be divided into seven categories based on their solvency, and land would be distributed based on companies’ finances, their technical expertise and business history. This would help prevent projects from being delayed and companies from entering financial difficulties.

Consumer protection: Companies would face fines ranging from EGP 10k to EGP 10 mn should they breach contracts with their clients or miss delivery dates. The original bill approved back in 2019 contained a provision that would fine unlicensed developers to fines of up to EGP 1 mn, though it is unclear whether this remains in the latest iteration of the legislation.

What happens now? The bill has been passed to unspecified ministries for review, Shoukry said, without providing further information.

IN OTHER LEGISLATION NEWS– Lawmakers have given preliminary approval to amendments to the penal code to introduce tougher penalties for [redacted] harassment that would see offenders handed long prison sentences, Al Masry Al Youm reports. Under the amendments, offenders would be handed between two and four years in prison and fines worth EGP 100k-200k. Individuals who track the victim could see their punishment increased to three-five years in prison and a EGP 200k-300k fine, and penalties may be doubled in case of repeated offence. Jail terms may be extended to a minimum seven years under certain circumstances.

The status quo: Currently, the maximum penalty for [redacted] harassment is a one-year jail sentence and a fine of up to EGP 10k.

What’s next? The bill has been passed to the State Council for review before it heads back to the House for a final vote. The draft bill was approved by the House Legislative Committee in late June.

The government is set to sign two gold exploration contracts with two companies, Al Mal reported yesterday afternoon, citing an anonymous senior official. The companies are expected to be from a list of three including Canadian miner Barrick Gold, B2Gold and Australian gold miner and Sukkari operator Centamin.

The contracts were apparently due to be signed yesterday, according to the source who said that pens will be put to paper “in the coming hours.” They will be signed under last year’s Oil Ministry tender, which awarded eleven mining companies the rights for 82 gold exploration blocks in the Eastern Desert last November.

Who signed so far? Four mining companies signed 10 new gold exploration contracts worth a combined USD 11 mn with the Oil Ministry in February. These include Sawiris-backed Akh Gold, Red Sea Resources, the North Africa Mining and Petroleum Company, and Al Abadi Mining. A month earlier, Canadian miner Lotus Gold and local firms Mining and Manufacturing Company and Ebdaa Gold Mining also inked their agreements. All remaining contracts for gold exploration concessions were expected to be signed by the end of February.

Travel between MEA countries and Egypt is set to grow in the coming period, with the route identified as one of the top 10 travel corridors to watch as travel restrictions ease, according to a recently released Mastercard Economics Institute report on global travel, which can be accessed here. Intra-regional travel to Egypt and the UAE grew in 2021, the report found, without giving concrete figures, though international flight bookings are still a fraction of their pre-covid rates.

Flight bookings to Egypt remained more than 50% beneath 4Q2019 levels in May, according to the report’s Flight Booking Tracker, which measures travel bookings in relation to pre-pandemic levels.

Bookings gradually recovered in 3Q2020 after plummeting to near-zero in March and April last year. Since then, figures have been inconsistent, dipping through the second wave of the virus during the winter before recovering again in April and May.

International travel bookings are on the up worldwide: Global international leisure flight bookings grew 4.5 times faster than in previous months in May 2021, and recorded nearly double what they were in January, the report found.

And domestic flight activity is also seeing a surge: Local travel is returning to its pre-pandemic levels, with around 20% of countries reaching almost 90% of their pre-covid domestic flight booking levels.

But some travellers are favouring the old fashioned road trip over flights: Global gas spending is 13% higher than its 2019 peak, with gas spending in Egypt and Nigeria exceeding 2019 levels. In the US, more than 25% of vehicle rentals were used for interstate travel.

And all of this staying put has been good for our savings: Globally, people have saved an extra USD 5 tn during the pandemic, which is now fueling travel demand, Mastercard says.

But the global recovery of travel is set to be imbalanced: New strains of covid-19, supply constraints in the airline industry, changing rules for international travel, and a host of other uncertainties mean the trajectory of recovery remains uncertain.

QNB Alahli’s bottom line rose 8% to EGP 2.13 bn in 2Q2021, compared to EGP 1.97 bn in 2Q2020, the bank said in its quarterly financials (pdf). Interest income rose slightly to EGP 7.78 bn in 2Q2021 from EGP 7.57 bn in 2Q2020.

GERD is likely to stay on the talk shows’ agenda for some time: Egypt’s Permanent Representative at the UN Mohamed Edris was on Ala Mas'ouleety last night to share the latest updates on GERD issue at the UN Security Council (watch, runtime 21:38). Unfortunately, he didn’t have much insight, saying only that the council’s members don’t want to take a position on the dam that could be used against them later, but that Tunisia is continuing to follow up on its draft resolution.

Foreign Minister Sameh Shoukry’s visit to Brussels and his meetings with European foreign ministers and other officials also got coverage: Slovenia’s foreign minister confirmed following his meeting with Shoukry that the GERD will be on the agenda when the bloc's foreign ministers meet today, Ala Mas'ouleety’s reporter Magdy Youssef told Moussa (watch, runtime 16:18). Shoukry will hold more meetings with EU foreign ministers today, Youssef said.

ELSEWHERE- Suez Canal Authority boss Osama Rabie was on Al Hayah Al Youm (watch, runtime 4:56) and El Hekaya (watch, runtime 3:12) to talk about the latest revenue figures released yesterday. We have the full story in the news well, above.

This morning in the pages of the foreign press: The Court of Cassation has upheld the life sentences handed down to 10 Muslim Brotherhood leaders, including the outlawed group’s head Mohamed Badie, on charges of killing policemen and organizing jail breaks during the 2011 uprising, state-owned MENA news agency reported yesterday. This comes a couple of weeks after the court reduced the death penalty to life imprisonment for 31 Ikhwan leaders including Badie for their involvement in the 2013 Rabaa sit-in, while upholding death penalties for 12 Ikhwan members including Mohamed Beltagy and Safwat Hegazy. The Associated Press noted the story.

Other things we’re keeping an eye on this morning:

• The AUC School of Business has partnered (pdf) with Valu and Paymob to offer financing plans for students enrolled on the school’s executive education programs.
• State-owned National Bank of Egypt (NBE) has launched (pdf) a new current account, called “Faida Plus,” which will be the first account to pay out interest based on the CBE’s low-risk interest rate benchmark CONIA.
• Egypt will receive in August the first train that will be used on the Salam City-Tenth of Ramadan City electric rail.

Shoukry heads to Brussels following UN Security Council GERD negotiations: After a week in New York lobbying for UN help on the GERD dispute, Foreign Minister Sameh Shoukry was in Brussels yesterday to discuss “bilateral relations and regional issues” with European officials, a ministry statement said without providing further information. Shoukry met with the president of the European Council Charles Michel, as well as the Maltese and Slovenian foreign ministers during his visit.

Also from Brussels: Shoukry met new Israeli foreign minister Yair Lapid for the first time since Israel’s new coalition government entered office in June. He emphasized the need for Israel and Palestine to reenter talks and urged the Israeli government to avoid escalating tensions with the Palestinieans, Egypt’s foreign ministry spokesperson said in a statement.

Also worth knowing this morning:

• Sultan of Oman visits Saudi Arabia for first time: Sultan of Oman Haitham bin Tariq traveled to Saudi Arabia yesterday for the first time since assuming power last year, marking the first official visit by an Omani leader in over a decade. The two sides signed a document that should pave the way for several agreements covering commerce, culture, investment promotion and post and transport. The story got coverage in Bloomberg and Reuters.
• China warns US after companies blacklisted: China has threatened to retaliate against Washington’s “unreasonable suppression” of Chinese companies following the addition of 23 Chinese entities to a US economic blacklist over their alleged role in human rights abuses and military ties, Bloomberg reports, citing a statement by Beijing’s commerce ministry.

July: The government’s fuel pricing committee will meet to announce 3Q prices.

14 July (Wednesday): The EGX will hold board elections for the 2021-2025 term.

Mid-July: Legislative session expected to end.

19 July (Monday): Arafat Day (national holiday).

21 July (Wednesday): Clean Energy Business Council’s webinar Women entrepreneurs in clean energy (3pm)

20-23 July (Tuesday-Friday): Eid Al Adha (national holiday).

23 July (Friday): Revolution Day (national holiday).

23 July-11 August (Friday-Wednesday): Tokyo 2020 Olympics.

2-4 August (Monday-Wednesday): Egypt is hosting the Africa Food Manufacturing exhibition at the Egypt International Exhibition Center.

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

9 August (Monday): Islamic New Year.

12 August (Thursday): National holiday in observance of the Islamic New Year.

3-5 September (Friday-Sunday): The World Karate Federation will hold the third competition of the 2021 Karate 1-Premier League in Cairo.

12-15 September (Sunday-Wednesday): Sahara Expo: the 33rd International Agricultural Exhibition for Africa and the Middle East.

15 September (Wednesday): The CFO Leadership & Strategy Summit is taking place in Egypt.

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

30 September-2 October (Thursday-Saturday): Egypt Projects 2021 expo, Egypt International Exhibition Center, Cairo, Egypt.

30 September-8 October (Thursday-Friday): The Cairo International Fair, Cairo International Conference Center, Cairo, Egypt.

30 September: Closing of 2021’s first oil and gas tender in the Gulf of Suez, Western Desert, and the Mediterranean.

1 October (Friday): Businesses importing goods at seaports will need to file shipping documents and cargo data digitally to the Advance Cargo Information (ACI) system.

1 October (Friday): Expo 2020 Dubai opens.

6 October (Wednesday): Armed Forces Day.

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

12-14 October (Tuesday-Thursday): Mediterranean Offshore Conference, Alexandria, Egypt.

18 October (Monday): Prophet’s Birthday.

21 October (Thursday): National holiday in observance of the Prophet’s Birthday.

24-28 October (Sunday-Thursday) Cairo Water Week, Cairo, Egypt.

27-28 October (Wednesday-Thursday) Intelligent Cities Exhibition & Conference, Royal Maxim Palace Kempinski, Cairo, Egypt.

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

30 October – 4 November (Saturday-Thursday): The first edition of Race The Legends, Egypt.

1-3 November (Monday-Wednesday): Egypt Energy exhibition on power and renewable energy, Egypt International Exhibition Center, Cairo, Egypt.

November: Egypt will host another round of talks to reach a potential Egyptian-Eurasian trade agreement, which can significantly contribute to increasing the volume of Egyptian exports to the Russia-led bloc that includes Armenia, Belarus, Kazakhstan and Kyrgyzstan.

1-12 November (Monday-Friday): 2021 United Nations Climate Change Conference (COP26), Glasgow, United Kingdom.

29 November-2 December (Monday-Thursday): Egypt Defense Expo.

12-14 December (Sunday-Tuesday): Food Africa Cairo trade exhibition, Egypt International Exhibition Center, Cairo, Egypt.

13-17 December: United Nations Convention against Corruption, Sharm El Sheikh, Egypt.

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

14-16 February 2022 (Monday-Wednesday): Egypt Petroleum Show, Egypt International Exhibition Center, New Cairo, Egypt.

1H2022: The World Economic Forum annual meeting, location TBD.

May 2022: Investment in Logistics Conference, Cairo, Egypt.

27 June-3 July 2022 (Monday-Sunday): World University Squash Championships, New Giza.

**Note to readers: Some national holidays may appear twice above. Since 2020, Egypt has observed most mid-week holidays on Thursdays regardless of the day on which they fall and may also move those days to Sundays. We distinguish below between the actual holiday and its observance.