What we’re tracking on 8 March 2020
Egypt has 48 confirmed covid-19 cases, the Health Ministry confirmed over the weekend, 45 of them passengers and crew on a Nile cruise. Hotels nationwide have been briefed on procedures for staff and guests in the event they think they have a case on their hands. The Minister of Religious Endowments, meanwhile, has said that although cancellation of communal Friday prayers is an option, he’s not yet ready to go down that route. Meanwhile, Egypt and Kuwait have each suspended flights to the other country in a bid to contain the virus.
Government sets up hotline, website: Citizens can dial 105 to report suspected cases of covid-19 or can visit Care.gov.eg for more information on prevention, the virus in Egypt and the government’s response.
The responsible thing to do if you have a cough, runny nose or fever is to quarantine yourself. The New York Times has helpful instructions on that front.
SCZone investment conference postponed: The Suez Canal Economic Zone has postponed the investment conference due to take place later this month due to the covid-19 outbreak, it said in a statement yesterday. The event — scheduled for 21-22 March — looked to promote the zone as an investment destination for foreign investors.
We have chapter and verse on the virus’ slow-burn spread in Egypt in this morning’s Speed Round, below.
Globally, we breached 100k cases at the weekend, with 3.4k people now having died as a result of covid-19. The tally on coronavirus cases continues ticking as the virus marked its imprint on at least 90 countries, seven of which have just seen their first cases reported on Friday, Reuters reports.
Containment of the epidemic should be made every country’s top priority, the World Health Organization warned, singling out Iran’s efforts (aka concealment) as an example of exactly what not to do. But the WHO is still holding back from officially declaring a pandemic: “Unless we’re convinced it’s uncontrollable, why [would] we call it a pandemic?” said WHO director-general Tedros Adhanom Ghebreyesus, according to the AP.
Iran has threatened to use force to suspend domestic travel, the Sydney Morning Herald reported. This came after an Iranian health expert warned that up to 40% of Tehran’s 9 mn population could become infected by the end of the Persian month and an advisor to the foreign minister died from the virus.
Italy just locked-down an entire province: Italians living in the populous northern province of Lombardy will not be allowed to enter or exit as the government takes increasingly drastic steps to contain the outbreak, which has so far infected 5,883 people and killed 233, the Guardian reports. All public events will be banned, and people caught trying to enter or exit the province will be fined. The government last week announced that schools and universities across the country will be closed until 15 March and that all Serie A football matches will be closed to the public.
Friday trading was wild as fears of covid-19 again pushed stocks into the red: A last minute rally helped US stocks to claw back some of the losses sustained early on Friday to end a wild week of trading on Wall Street. The S&P 500 finished the day 1.7% in the red having fallen as much as 4% earlier in the day, with 2.4% being added in the final minutes of trading, according to the Financial Times. The late surge was caused by investors not wanting to be out of the market in case there was some good news about containing the covid-19 outbreak, said Max Gokhman, head of asset allocation for Pacific Life Fund Advisors. This drove the VIX index — a measure of share market volatility — to a new nine-year high.
The US bond market continued to make history as yields fell through the floor: The yield on the benchmark US 10-year bond collapsed to as low as 0.66%, having fallen past the 1% handle for the first time in history just two days before. “These low yields are no badge of honor for the bond market,” said Mark Spindel, chief executive officer of Potomac River Capital. “They are indicative of a very downbeat, if not dire, view of the economic outlook.”
We have more figures revealing just how much covid-19 is affecting the Chinese economy: Chinese exports plunged 17.2% in the first two months of the year as the virus outbreak disrupted global supply chains and economic activity, Reuters reports. This compares to a 14% drop predicted by a Reuters poll of analysts.
The virus could cost the global economy USD 2.7 tn in lost output: Drawing on both plummeting consumer sales and slowing industrial operations in China and taking into account disruptions in global trade, supply chains and tourism, the worst of four doom and gloom scenarios conjured up by Bloomberg Economics suggests a USD 2.7 tn loss to the global economy in 2020 if the virus remains on its current trajectory. Losses could potentially be curbed and even recouped in 2Q2020 if rapid containment becomes a reality but given the virus’ spread to less authoritarian countries which would find it harder to shut down an 11 mn person city, that outcome looks unlikely.
Commodities also continue to feel sting as crude takes massive one day hit: Oil prices dropped more than 9% to their lowest level in three years on Friday after Opec and Russia failed to reach an agreement to cut production in response to covid-19, the Financial Times reports. The Russian-led group that has coordinated with the cartel to support oil prices since 2016 dismissed calls by Saudi Arabia to make another 1.5 mn bbl/d in supply curbs in addition to the existing cuts of 2.1 mn bbl/d.
Cue an “all-out oil war”: Saudi Arabia has made the deepest price cuts to its main grades in at least 20 years, launching what Bloomberg is calling an “all-out oil war” in response to Russia’s refusal to play ball. Saudi Aramco slashed its April pricing by USD 4-6/bbl for Asia and USD 7/bbl for the US. Moscow’s refusal to cut its output is being motivated by a desire to wipe out the burgeoning US shale oil industry, Alexander Dynkin, president of the state-run Institute of World Economy and International Relations in Moscow, told Bloomberg.
IN NON-COVID-19 NEWS: Foreign Minister Sameh Shoukry is on a regional tour that see him visit Jordan before heading to Saudi Arabia, Iraq, Kuwait, Oman, Bahrain and the UAE, The ministry said in a statement yesterday. Though the statement is light on details, you can expect the latest developments in our dispute with Ethiopia over the Grand Ethiopian Renaissance Dam to be on the agenda (more on this in this morning’s Speed Round below).
Inflation figures for February will be released on Tuesday, 10 March. Price growth accelerated for the third consecutive month in January, rising slightly to 7.2% from 7.1% in December.
Events coming up this month:
- Our friends at AmCham will host Planning and Economic Development Minister Hala El Said for its monthly luncheon on Thursday, 12 March. El Said will discuss the future of Egypt’s economic development agenda. Members can register for the event here.
- The Annual Export Summit will be held on 24 March at the Nile Ritz Carlton.
Lebanon is set to default on USD 1.2 bn debt: Lebanon will default on its USD 1.2 bn eurobond payment due Monday and will negotiate new payment terms with its creditors, Prime Minister Hassan Diab said yesterday, according to the New York Times. “The reserves of hard currency have reached a critical and dangerous level…It is necessary to use these funds to secure the basic needs of the Lebanese people,” he said in a televised statement, adding that the government will hold talks with its creditors to restructure the rest of its USD 31 bn debt, without providing details. (New York Times | Bloomberg | BBC | FT | The Guardian)
Two prominent Saudi royal family members were detained on Friday for an alleged coup attempt, the Wall Street Journal reports. Prince Ahmed bin Abdulaziz al Saud, brother of Saudi King Salman, and Prince Mohammed bin Nayef bin Abdulaziz al Saud, Salman’s nephew, now face lifetime imprisonment or execution on charges of treason. Both princes have held senior positions in the Saudi royal court and were at one time in line for the throne.
Two people blew themselves up near the US Embassy in Tunisia on Friday in what local authorities are recognizing as a targeted attack on an embassy security patrol, Bloomberg reports.
PSA #1- Clocks spring forward in much of the United States and Canada today as daylight savings time ends. Egypt did away with the spring forward / fall back ritual after a year in which the time changed four times.
PSA #2- If you think it’s hot today, wait for tomorrow. The mercury is set to peak today at 27°C before spiking to 32°C tomorrow — corona killing weather, we’re hoping. Our favourite weather app cautions that we’re looking at cool weather by the weekend with a chance of rain and highs of 18-20°C Friday and Saturday.
PSA# 3- That plastic EGP 10 note isn’t a fake. The Central Bank of Egypt will start rolling out EGP 10 notes made of plastic (much like Canada and Australia). Look for the notes to hit the streets later this year, the CBE Deputy Governor Gamal Negm said.