Egypt could lose out on EGP 31 mn daily if it remains on UK’s “red list”

Good morning, wonderful people. That change in the air? It’s the beginning of the end of summer. Families are starting to gear up to send their kids back to school. Corporate chieftains, meanwhile, contemplate the idea that they have only about four months left to make their budget for the year — and start planning for 2022.

Students and teachers at Cairo American College are heading back to class this morning. The resident 14-year-old is among them and starting high school, making the parents of said kid feel … just a bit older this morning (and very proud of her and her classmates). Students at NCBIS, MBIS and BISC follow before month’s end.

You still have a few weeks of good commuting left: The 2021-2022 school year starts at international schools on Sunday, 12 September, while public schools open their doors on Saturday, 9 October.

Thanaweya Amma results will be announced at an Education Ministry presser at 1pm today, the Youm7 reports, during which the minister will also announce preliminary indicators for university allocations. Students will receive a link to the results page, through which they can view their general evaluation, ranking in each subject, as well as compare their results with colleagues nationwide.

A student wellness campaign will kick off before the start of the 2021-2022 academic year, with students getting medical check-ups in schools nationwide. Students will be screened for covid-19, hepatitis C, diabetes, vision loss, ADHD, among other diseases, according to an Ittihadeya statement. President Abdel Fattah El Sisi had on Sunday directed officials to come up with a plan to jab all educators and students ahead of the start of the school year.

IT’S NOT JUST SCHOOL KIDS who can see the end of summer vacation bearing down on them like a freight train: Our elected representatives are due back in the House of Representatives for the next legislative season no later than the first Thursday in October. It’s still unclear when they’re due back at their benches — we’ll poke into this again for you toward the end of the month if there’s no news in the meantime.

PSA #1- The Traffic Police are no more interested in ticketing you than usual despite babbling on social media suggesting police are now enforcing a “new traffic act” that includes fines for offenses including “the inside of your car smells bad.” Trouble is, there’s no such act just yet: The Madbouly cabinet suspended in May a new traffic law, which would have imposed a range of new licensing fees and fines. Al Masry Al Youm, which kicked off the story, notes that the fine for having a stinky car (or a vehicle that belches noxious fumes) is already in the books. Youm7 also has security sources saying there’s no new law in effect.

PSA #2- Asian shares are solidly in the red this morning, and futures suggest much of Europe, Wall Street and Bay Street will follow suit later today. Keep an eye on US retail sales data, which should be out this afternoon. Consumer sentiment in the United States plunged last week to its lowest level in a decade, and Chinese investors remain skittish about Beijing’s still-unfolding Great Capitalist Smackdown.

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THE BIG STORY ABROAD- US President Joe Biden said he “stands squarely” behind his decision to withdraw troops from Afghanistan. Speaking in the White House’s East Room yesterday after cutting short his vacation, Biden blamed the Afghan military and Afghanistan’s politicians for not resisting the Taliban’s advance. “If Afghanistan is unable to mount any real resistance to the Taliban now, there is no chance that in one more year, five more years or 20 more years, that US military boots on the ground would have made any difference,” Biden said, saying that the US had provided everything from “salaries … [to the] maintenance of their airplanes. We gave them every chance to determine their own future. What we could not provide was the will to fight for that future.” You can read his full remarks here.

As Biden spoke, US troops re-established a semblance of order at Kabul’s airport to allow both US troops to land (they’re arriving to help oversee the exit) and others to fly out foreign nationals.

The collapse of Afghanistan to the Taliban is a “once in a generation” story that has captured global attention from the mainstream press to social media. The story dominates the front pages everywhere from the Financial Times and Wall Street Journal to the New York Times and Washington Post

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

• A third of the population to be vaccinated in the next three months: The Health ministry plans to vaccinate 35 mn people in the next 88 days, it announced in a statement yesterday. To reach its target, the country has amped up the number of vaccination centers from 539 to 580 centers nationwide.
• Russia will triple its number of weekly flights to Hurghada and Sharm El Sheikh: We can expect 15 weekly flights from Moscow to Egypt starting the 27th of August, RT reports.
• Earnings: Fawry is on the rise, with its net income climbing to EGP 51.4 mn in 2Q2021, a 7% increase from last quarter.

FOR FINANCE NERDS-

With hedge funds seeing a surge in investor interest, some wonder: Are they turning the corner on a “dismal decade”? The industry returned 11.8% last year — its best performance since 2009 — while overall assets under management reached a record USD 4 tn this year, the Financial Times reports. That comes after more than a decade in the doldrums as poor performance saw them cast aside, no longer the BSDs of finance as “rival private equity tycoons struggled to invest the piles of money they have raised, and tns of USD flow into [low cost] passive index funds, some of which promise to replicate what hedge funds do at a fraction of the price.” Today, surging investor interest is helping reverse a six-year trend where more hedge funds were liquidated than raised — and industry optimism is “almost palpable.”

Is it sustainable? The industry is reaping the benefits of trends including record low bond yields, notes the FT. Many investors are seeking safe havens in the event of soaring inflation and wobbling stock markets. Others feel overexposed to private equity and venture capital, anticipating dwindling returns.

Go read A hedge fund revival? Industry hopes a dismal decade is over in the FT.

CIRCLE YOUR CALENDAR-

GIZ Egypt and Fintech Egypt are launching GIZ Finance Summer School next month, a series of workshops designed to teach people in the finance industry about emerging technologies such as blockchain, open banking, and machine learning. The sessions will be held every Wednesday in September at 6pm. Register here.

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

The Egyptian economy could lose as much as EGP 31 mn in potential daily revenues if the country remains on the UK’s “red list” for international travel, the World Travel and Tourism Council (WTTC) said in a press release (pdf). Egypt’s continued status on the red list — where it was placed in June due to the UK government deeming it a high risk destination for risk of exposure to covid-19 variants — would “pose a significant threat to the nation’s struggling travel and tourism sector, and overall economy,” WTTC wrote. On a weekly basis, the Egyptian economy could lose more than EGP 237 mn, and EGP 1 bn+ every month should the country remain on the red list in the medium term.

Red list restrictions have deterred UK travellers from visiting Egypt due to the inconvenience and cost of a mandatory 10-day quarantine when reentering the UK, with tourists flinching at having to pay the GBP 2,285 charge, in addition to paying for mandatory PCR tests.

A sluggish vaccine rollout could continue to keep UK visitors at bay: A pick-up in the pace of Egypt’s vaccination campaign could help get the country off the red list and see the tourism sector recover, according to the WTTC report. The UK has successfully vaccinated more than three quarters of its adult population, meaning most travellers to Egypt would likely face minor risks, the WTTC wrote.

The caveat: The WTTC, while influential, isn’t explaining its methodology here, nor has it made its full report available for review. WTTC is a lobby group that represents business interests and tries to influence government policy.

UK visitors aside, the government sees a recovery for the tourism sector this year: Egypt has seen 2 mn people visit the country in 5M2021. This is only 40% of the tourist numbers we were getting before the pandemic devastated the sector, but has given the government reason to revise upward its tourism revenue targets for the year to between USD 6-9 bn.

A boon to our tourism recovery: The Russians are back to the Red Sea resorts after a six-year hiatus, as Russia’s flight ban finally came to an end. Russia is set to triple the number of weekly flights from Moscow to Sharm El Sheikh and Hurghada, each of which will welcome 15 planes each week.

Border authorities will not accept negative ID Now rapid covid tests in place of PCR tests, an official at Cairo International Airport told Al Shorouk, emphasizing that everyone must show a negative PCR test or a covid-19 vaccination certificate before being allowed into the country. Vaccination certificates need to include a valid QR code issued by the home country to be accepted. Egypt began administering ID Now tests in May to people coming from countries where covid-19 variants have been detected.

Will Egypt manufacture Moderna vaccines? African Vaccine Acquisition Trust (AVAT) has offered to buy 100% of Vacsera’s production of Moderna vaccines if it becomes one of the 20 joint manufacturing facilities Moderna aims to set up globally in association with the World Health Organization, Health Minister Hala Zayed said yesterday in a statement. Vacsera has not yet been informed of talks underway that would see them produce Moderna’s very well-respected mRNA jab, an official told us when we reached out yesterday for more information.

The Health Ministry reported 107 new covid-19 infections yesterday, up from 101 the day before. Egypt has now disclosed a total of 285,465 confirmed cases of covid-19. The ministry also reported six new deaths, bringing the country’s total death toll to 16,625.

IN GLOBAL COVID NEWS-

Herd immunity against covid is not a thing? Scientists who have long believed that the population will eventually develop “herd immunity” against covid — just like it did with previous viruses — are now ditching their hopes, according to Bloomberg. With new variants spreading fast, a top vaccine researcher at the Mayo Clinic says that even if 95% of the population was vaccinated, herd immunity may now be off the table.

QNB Al Ahli lands a USD 50 mn loan for green projects: The European Bank for Reconstruction and Development (EBRD), the Green Climate Fund (GCF), and the European Union (EU) will loan QNB Al Ahli USD 50 mn to on-lend to Egypt-based green projects and individual households, EBRD said yesterday on its website. SMEs in diverse sectors such as residential, agribusiness, industrial, commercial and service sectors who are developing energy, water, and resource efficiency projects will receive funds, in a bid to help the transition to a greener economy by promoting the use of “high performance technologies.”

The GCF will provide USD 7.5 mn in concessional finance, while the EU will contribute up to EUR 5.1 mn (c. USD 6 mn) for incentive payments to successfully implemented green projects, in addition to providing up to EUR 6.2 mn (USD 7.3 mn) to fund technical assistance as well as policy dialogue.

QNB Al Ahli is the first Egyptian bank to receive financing under the EBRD’s second green economy financing facility (GEFF) in Egypt, part of the GCF-GEFF regional framework. This is the second green EBRD green loan we’ve heard about this month, with Ahli United Bank Egypt also in line for up to USD 22 mn from the European lender and the GCF for on-lending to green projects and SMEs in agribusiness, manufacturing and services, and IT.

The funding is the latest in a series of green loans to Egyptian banks from the EBRD under its GCF-GEFF framework, including USD 25 mn to National Bank of Kuwait Egypt, approved in April, as well as USD 100 mn for the National Bank of Egypt for on-lending to green projects, announced in June — the third such loan the state bank has received through the GEFF.

Want to know all about EBRD’s plans for a greener Egyptian economy? We recently sat down with EBRD President Odile Renaud-Basso + Southern and Easten Mediterranean Managing Director Heike Harmgart to talk about all things green economy in Egypt.

Egyptian real estate joint stock company Arabia Holding secured a six-year EGP 800 mn loan from state-owned Banque Misr under an agreement signed yesterday, according to a Banque Misr statement. The funds will be used to construct the first two phases of the company’s Sun Capital project — a 557 feddan residential gated community in West Cairo, developed in partnership with the New Urban Communities Authority (NUCA).

Raya Holding returned to profit in 1H2021, reporting net income of EGP 151.9 mn after posting an EGP 95.5 mn loss in the same period last year, according to a company earnings release (pdf). Revenues rose to EGP 8.3 bn in 1H2021, compared to EGP 4.8 bn in 1H2020.

It was covid as far as our eyes could see on the nation’s airwaves last night: Expect some public and private sector institutions to mandate vaccines in the near future, presidential health advisor Mohamed Awad Tag El Din said in a phone-in to Al Hayah Al Youm (watch, runtime: 22:09), noting that the government plans to vaccinate as many as 40 mn citizens in the next few months. A conference will be held next week to touch on post-covid conditions and the range of new, returning or ongoing health problems people can experience four or more weeks after first being infected with the virus, Tag El Din said.

Covid-19 vaccination at school communities could become mandatory at some point in the near future, Cabinet spokesperson Nader Saad told Channel One (watch, runtime: 6:42). President Abdelfattah El Sisi directed officials last week to come up with a plan to jab all teachers and students ahead of the start of the 2021-2022 school year. El Sisi also directed authorities to launch a medical check-up campaign for students nationwide, screening for mental and physical health conditions. We have more on this in the news well, above. Masaa DMC (watch, runtime: 11:09) also took note.

Ala Mas’ouleety’s Ahmed Moussa dedicated a lengthy segment to Kabul’s fall to the Taliban: Two decades after US troops invaded Afghanistan to root out Al Qaeda terrorists who attacked the country in September 2001, the US nation-building experiment was in ruins — undercut by misguided and contradictory policies, Moussa said (watch, runtime: 3:55).

FROM THE DUMPSTER FIRE that is our social media: We’re not sure if he deserves a kudo or a bump on the noggin, but Moussa talked with a Taliban spokesman and asked whether parties will be allowed — and whether Afghanistan’s national TV broadcasters will be allowed to play music on air now that the Islamist fundamentalists are in charge.

On an otherwise quiet morning in the foreign press: The rush to build housing to accommodate civil servants relocating to the new administrative capital is getting attention from Reuters, while ANI is the latest to report on the security situation in North Sinai. Meanwhile an exhibition dedicated to Ramses II will open at the Houston Museum of Natural Science as part of a world tour in November, Culturemap Dallas reports.

ALSO- Two Syrian Youtubers could face legal repercussions in Egypt after sharing a video that showed them “lighting up the Pyramids of Giza” blue to reveal the gender of their baby, Sky News Arabia reports. Authorities said the pyramids are not available for individual use, and that the youtubers had made false claims after shooting their video during the rehearsals of one of the Giza pyramids’ sound and light shows.

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

• Heliopolis Housing is on course to become a joint stock company after its board of directors agreed (pdf) yesterday to remove it from the purview of the Public Enterprises Act, and bring the EGX-listed company within the scope of the Companies Act instead. The change of status comes after amendments to the Public Enterprises Act enabled companies in which that state owns less than 75% to be reclassified as “law 159” enterprises, giving company execs to manage the business according to market norms.

Egypt, Japan pledge to help reach political resolutions to the ongoing Afghan conflict: Egyptian Foreign Minister Sameh Shoukry and his Japanese counterpart Toshimitsu Motegi said their countries will work to restore peace in Afghanistan after the Taliban poured into the capital and other major cities in the country, Motegi told a press conference yesterday (watch, runtime: 18:45). This came following Motegi’s sitdown with Shoukry and President Abdel Fattah El Sisi, during which they discussed ways to strengthen bilateral cooperation in the fields of tech, energy, and transport, as well as the in-progress Grand Egyptian Museum, according to an Ittihadeya statement. Motegi is on the first leg of a 10-day Middle East tour that will also take him to Israel and Palestine, where he is expected to urge both sides to resume peace talks.

Prime Minister Moustafa Madbouly discussed yesterday ways to boost Egypt-Somalia cooperation and trade ties with his Somali counterpart Mohamed Hussein Roble: During his first visit to Cairo, Roble expressed his desire to increase the number of direct EgyptAir flights to Mogadishu to facilitate trade and the movement of individuals between the two countries, according to a cabinet statement. President Abdel Fattah El Sisi has instructed officials to double the number of annual scholarships granted to Somali students to 400, PM Madbouly said, in addition to increasing the supply of medical conveys and aid to the Somali government.

Worth knowing this morning:

• Haiti was hit with Tropical Storm Grace days after a 7.2-magnitude earthquake earlier this week left over 1.4k dead, with the country declaring a state of emergency, the BBC, the Guardian, CBS News, and others report.
• Israeli troops killed four Palestinian men during a police raid in Jenin, a week after Israel’s military chief urged troops to “act with discretion,” The Guardian reports.

26-28 August (Thursday-Saturday): Jackson Hole Economic Symposium.

September: Delegation of Russian companies to visit Russian Industrial Zone.

1-3 September (Wednesday-Friday): Digi Sign Africa, Cairo International Convention Centre, Cairo, Egypt.

2 September (Thursday): The new EGX mechanism for calculating closing share prices will come into effect.

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

5-7 September (Sunday-Tuesday): The Arab Security Conference, The Nile Ritz-Carlton, Cairo, Egypt.

7-8 September (Tuesday-Wednesday): Euromoney Conferences will host the GlobalCapital Sustainable and Responsible Capital Markets Forum 2021, featuring Vice Minister of Finance Minister Ahmed Kouchouk.

7-9 September (Tuesday-Thursday): Egy Health Expo, Al Manara International Conference, Cairo, Egypt.

9 September (Thursday): DevOpsDays Cairo 2021 is being organized by ITIDA and the Software Engineering Competence Center in cooperation with DXC Technology, IBM Egypt and Orange Labs.

12 September (Sunday): International schools begin 2021-2022 academic year

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.

21-22 September (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

22-25 September (Wednesday-Saturday): Cityscape Egypt, Egypt International Exhibition Center, Cairo, Egypt.

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.

October: New legislative session begins.

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.

1 October (Friday): State-owned companies and government service bodies selling goods and services to customers that have not yet signed on to the e-invoicing platform will suffer a host of penalties, including removal from large taxpayer classification, losing access to government services and business, and losing subsidies.

6 October (Wednesday): Armed Forces Day.

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

9 October (Saturday): Public schools begin 2021-2022 academic year

11-17 October (Monday-Sunday): IMF + World Bank Annual Meetings.

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.

31 October – 12 November (Sunday-Friday): The 26th UN Climate Change Conference, Glasgow, UK.

November: The French-Egyptian Business Forum is set to take place in the Suez Canal Economic Zone.

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.

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

2-3 November (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

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

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

7-8 December (Tuesday-Wednesday): North Africa Trade Finance Summit.

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.

14-19 December (Tuesday-Sunday): The Cairo International Festival for Experimental Theater.

14-15 December (Tuesday-Wednesday): The Federal Reserve meets to review interest rates.

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.

16 June 2022 (Thursday): End of 2021-2022 academic year for public schools

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.