What we’re tracking on 19 March 2020
We were going to rejoice that it is Thursday, but then we remembered that flights into and out of Egypt are suspended as of 12 noon today for a two-week period. The Madbouly government has said it will make sure that foreign visitors who stay past the deadline to finish out their trips can still get home and aren’t here in lockdown with us for the duration. Cargo flights will not be suspended at this time, officials have said.
The Armed Forces have not started deploying to enforce a curfew, the military’s official spokesman said last night amid persistent rumors that we were about to face a curfew as has been imposed in some European and American jurisdictions. “The Armed Forces, in cooperation with state agencies, continue their preparations to confront the threat of the novel coronavirus,” the statement added.
We saw common sense moves from regulators in Egypt yesterday as the FRA gave publicly traded companies more time to submit their financial statements for FY2019. We expect deadlines for AGMs to be pushed out in tandem, and the FRA has also extended the filing deadline for 1Q results.
The authority has also given businesses some breathing room by instructing leasing and factoring companies to delay payments for clients by up to six months. We have chapter and verse on both initiatives at the head of this morning’s Speed Round.
Other authorities will need to step up, too in the days ahead — and with smart policies that benefit not only listed companies: Privately-owned firms account for the substantial majority of private-sector economic activity and will need support, too. But don’t roll help out too fast: As tense as things are in Egypt right now, we’re not in the same boat as our counterparts in Europe. There’s something to be said for having more bullets in the chamber.
SMART POLICY SUGGESTION #1- Extend the tax filing and payment deadlines for businesses and individuals by 60-90 days. The idea was suggested to us by a number of very smart readers yesterday, and it makes sense: We’re at the height of tax preparation season. The disruption has so far been … substantial. And we wouldn’t be alone in looking at this kind of initiative: “Treasury Secretary Steven Mnuchin said Tuesday that taxpayers can delay paying their income taxes on as much as USD 1 mn in taxes owed for up to 90 days,” CNBC reports. Frankly, it just makes sense.
POLICY SUGGESTION #2- Start planning on a bridge loan program for all Egyptian businesses, from SAEs and LLCs to sole proprietorships, from SMEs to large corporations. A modified version of what Andrew Ross Sorkin (the chronicler of the global financial crisis) suggested yesterday: If you paid taxes in 2018, you get a “no-interest ‘bridge loan’ guaranteed for the duration of the crisis to be paid back over a five-year period. The only condition of the loan to businesses would be that companies continue to employ at least 90 percent of their work force at the same wage that they did before the crisis.” Expensive? Yup. But the alternative could be even costlier, as Sorkin points out. We’re not sure this one has legs (yet), but it’s an example of the type of creativity in policy making to which we may need to resort.
Oh, and granny here [redacted] speaks for all of us here at Enterprise when it comes to those who are panic-hoarding in certain districts (watch, runtime, 1:21). (Warning: If little kids are in earshot, you might want to wait before watching.)
How do markets look today? 💩
(Japan is the only market posting gains in Asia as we dispatch this morning’s edition. China, Hong Kong and South Korea are deeply in the red, as is India, and futures suggest Europe and the US will open in the red later today, too.)
COVID-19 IN EGYPT-
Egypt now has 210 cases of covid-19 after 14 more cases were confirmed yesterday, a Health Ministry statement said last night. The new cases include 12 Egyptians and two foreign citizens, and all are cases of community transmission, according to the ministry statement. Of the 210 total cases, 28 have now fully recovered and been discharged from hospital. Twelve others have had a first negative PCR test and are still in hospital under observation. The total death toll is unchanged from yesterday at six people.
As of today, there will be a total of fourteen covid-19 test centers open nationwide, according Nancy El-Guindy from the Ministry of Health’s Central Laboratories Department. She was speaking on Wael El-Ibrachy’s show El Taseaa on state-owned Channel 1 (watch, runtime: 5:51). The count includes 13 satellite facilities and the central lab in Cairo.
The traffic police will not be issuing car or driver’s licenses until 16 April. Fees and fines can be paid in the interim at the post office or by Fawry, Youm7 reports.
South Sinai governorate will quarantine tourism industry workers for 14 days starting today before being allowed them to leave the governorate for their homes of record. The move mirrors one announced earlier this week by the Red Sea governorate.
The two governorates are not entirely sealed off: Tourists are being allowed to leave on schedule, Information Minister Osama Heikal said, according to Al Shorouk. No new visitors are being allowed in, including domestic tourists.
Friday is a national (deep) cleaning day: The Health Ministry wants businesses and the government alike to make Friday a cleaning day to sanitize everything in sight, from offices to public buildings and transportation infrastructure, according to a cabinet statement.
Social distancing at businesses that can’t work remotely: The folks at Al Mal have a rundown on how manufacturers are trying to reduce exposure for their people while still remaining open. The measures range from shorter workdays to shorter workweeks, running one shift instead of two, and replacing on-site meal service with a cash stipend.
The Finance Ministry is offering fee exemptions for private citizens filing taxes online in a bid to discourage in-person payments at tax offices, according to an official statement. The exemption is valid for this year only. The ministry and the Tax Authority had asked citizens to join companies in filing their taxes online before the tax season ends this month, as part of Egypt’s new unified digital tax payment system.
Clearing out the customs office: The Trade Ministry has suspended the need for importers to get Egyptian embassies to authenticate certificates of origin provided by sellers abroad as a condition of customs clearance, Al Mal reports.
The Supply Ministry will not be issuing new ration cards or allowing transfers between governorates, until further notice. Lost cards can be replaced through the Support Egypt website Tamwin.com.eg, which can also be used to register death notifications, Al Mal reports.
Businesses are starting to queue up for help: Mohamed Embaby, head of the cafes and restaurants division of the Giza Chamber of Commerce, will ask the government to exempt the sector from paying utilities and social security for six months and provide soft loans, the local press reports.
Otlob waives delivery fees: Otlob has reportedly begun waiving delivery fees on most food to encourage people to stay at home, according to the local press.
Saudi Arabia has suspended all work in the private sector for 15 days with exceptions only for healthcare providers and food services, according to Reuters.
The kingdom has also closed all mosques in the country, according to Bloomberg.
The UAE will temporarily stop issuing entry visas on arrival starting 19 March, excluding holders of diplomatic passports. Dubai is also suspending the issuance event permits until the end of the month.
The US Fed will backstop the money-market mutual-fund sector it said just before midnight, announcing it will “establish a facility to lend to money-market funds: after having secured USD 10 bn from the US Treasury to “protect against losses,” the WSJ reported moments before we hit “send” on this morning’s issue.
Two rounds of direct checks to American citizens may be on their way — and you know the SHTF when US Republicans are clamouring for what is effectively a nationwide universal basic income program. The Treasury wants USD 500 bn of a USD 1 tn relief package to be issued in direct checks to Americans, a first set on 6 April, and a second round in mid-May, the Associated Press reported.
The US is moving into war economy mode: President Trump yesterday announced he would invoke Korean-war era legislation giving him emergency powers to force industries to expand production and re-route the allocation of resources, according to the AP.
Canada and the US have closed their border to “non-essential” traffic, but said it would be open to people who commute to work on either side of the border (including healthcare professionals) as well as to trains and trucks moving goods.
Canada’s banks are closing branches and moving to shorter work hours, the Globe & Mail reports.
The Canadian government will roll out a fiscal package worth some USD 56.7 bn — equivalent to 3% of annual GDP — in the form of temporary tax deferrals (around USD 38 bn) and direct support to individuals and companies (around USD 19 bn), Prime Minister Justin Trudeau announced.
UK shutters schools, could be heading for lockdown: Europe’s second biggest economy yesterday signalled it could be joining France, Spain, Italy and Belgium in locking down its society. UK PM Boris Johnson announced the closure of the country’s education system and the cancellation of exams in the evening, and although he promised no new measures on Thursday, government officials said a lockdown on the capital could be announced tomorrow.
The new Bank of England governor promised unlimited funding for businesses: Andrew Bailey assured businesses that the bank is willing to plow unlimited amounts of money into the economy by buying up commercial paper, the Financial Times says.
The ECB in EUR 750 bn new asset-purchase program: The European Central Bank announced a ‘Pandemic Emergency Purchase Program’ that will see it purchase up to EUR 750 bn of commercial paper, and government and corporate bonds by the end of the year.
Turkey unveiled a USD 15.4 bn stimulus package of tax cuts and payment deferrals.
WHO says regional communications over covid-19 are falling short: The WHO’s regional director for the Eastern Mediterranean is urging Middle Eastern countries to step up cooperation and information sharing with the organization as fears over inaccurate covid-19 reporting are rising, Reuters reports.
WAIT, THERE IS GOOD NEWS-
TIPS FROM MCKINSEY- Suggestions for how to plan your own company policies to protect your workforce, while maintaining some sort of continuity on the operational front, courtesy of McKinsey & Company (pdf):
- Put in place clear policies that prioritize the health of your employees and are in line with public health recommendations. This includes setting up your people for remote work if necessary, or creating a rotating schedule or staggering shift system if physical presence is necessary;
- Double down on clear communication. That applies to top-down and bottom-up communication, and establishing a clear line of communication with health officials and healthcare providers if necessary;
- Assess where your business operations stand, and how you can best optimize them, including diversifying suppliers, estimating realistic customer demand, and planning for different scenarios;
- Bear in mind the situation today is not going to be the same in a few weeks or months. Hope for the best, but plan realistically with the information that’s out there.
COVID TIP OF THE DAY: What steps can you take to protect older people from covid-19? Ensure the older and more vulnerable people in your life follow official guidelines, including regular handwashing, keeping social interactions to an absolute minimum, using telemedicine if possible to attend doctor’s appointments remotely, and stocking up on essential supplies, including medicine, this New York Times piece advises.
Rowing might just be your best at-home workout buddy. Rowing machines are the most sensible home exercise solution, when compared to running on a treadmill or spinning. Research has found that the activity uses 86% of the body’s musculature and is good for joints, strength training, and cardiovascular endurance, according to the WSJ.
It may be the End of the World as We Know It (with apologies to REM) but we’re still iSheep: Apple announced yesterday a new iPad Pro with a backlit keyboard, track pad and new hinge system that has us cursing covid-19 even louder than we were before. You can check out iPad productivity guru Federico Vittici’s rundown here (from lockdown in Italy) or read Apple’s announcement or check out its product page.
*** A QUICK PROGRAMMING NOTE: My Morning Routine, our popular Thursday section, is on hiatus for the duration, as our grandparents would have said, as we focus on bringing you wall to wall coverage of this lousy virus.