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Tuesday, 24 March 2020

What we’re tracking on 24 March 2020

We’ll forgive you if it feels a little bit like you’re living in a remake of the Bill Murray classic Groundhog Day. And it seems unlikely to get better anytime soon, so we might as well settle in for the long haul, people. While a Nobel Laureate is suggesting that things could get better globally faster than we think, the consensus among scientists is that we could be living for some time with harsh measures to snuff out the coronavirus.

US politics will colour the debate over how long social distancing and more radical measures like business shutdowns should last. The Donald thinks the cure may be worse than the disease — and has said he believes businesses should reopen their doors in weeks, not months.

So, our two must-reads this morning: The epic The virus can be stopped, but only with harsh steps, experts say, in the New York Times. And this scientific paper (pdf) by the folks at Imperial College London, whose warning is US and UK-centric, but seems likely to apply globally.

Their bottom line: We may face on-again, off-again social distancing for a while to come. It’s worth reading in full: “Suppression will minimally require a combination of social distancing of the entire population, home isolation of cases and household quarantine of their family members. … The major challenge of suppression is that this type of intensive intervention package … will need to be maintained until a vaccine becomes available (potentially 18 months or more) — given that we predict that transmission will quickly rebound if interventions are relaxed. We show that intermittent social distancing — triggered by trends in disease surveillance — may allow interventions to be relaxed temporarily in relative short time windows, but measures will need to be reintroduced if or when case numbers rebound. Last, while experience in China and now South Korea show that suppression is possible in the short term, it remains to be seen whether it is possible long-term, and whether the social and economic costs of the interventions adopted thus far can be reduced.”


Egypt has now reported 366 cases of covid-19 after confirming yesterday 39 new infections, all of them Egyptians, a Health Ministry statement said. The MoH also confirmed five new deaths from the disease, including four Egyptians and an Indian national, bringing the death toll to 19. A total of 68 patients are now reported to have fully recovered, while another 96 appear to be on the path to recovery after having tested negative for the virus that causes covid-19.

Among the dead: A second senior member of the Armed Forces, as the military mourned the passing of Maj. Gen. Shafee Daoud, who it said died after contracting the virus that causes covid-19 while participating in disinfection efforts, Al Shorouk reports. Daoud, who was head of the major infrastructure projects at the Armed Forces Engineering Authority, is the second senior military officer to pass away from the virus in the past two days, after Maj. Gen. Khaled Shaltout was reported to have died on Sunday. AFP also has the story.

The House of Representatives will stay in recess until 12 April as a precaution against the spread of covid-19, Al Shorouk reports. MPs were originally scheduled to reconvene for a general assembly session on 29 March.

The Housing Ministry will expedite payments to New Alamein contractors who want to furlough their workforces, the local press reports. Contractors will use the funding to meet payment obligations to subcontractors if they decide to stop work for a two-week period to help prevent the spread of the viruses. They will be required to pay workers 50% of their salaries while they’re off work.

The Finance Ministry has extended again the deadline for personal tax return filings to April 16 and is encouraging people to file online by waiving e-payment fees, according to Al Masry Al Youm. A support hotline, which can be reached at 16395, will help guide individuals through the Tax Authority’s online portal.

*** With businesses and auditors alike facing disruptions, the Tax Authority needs to push back filing deadlines for businesses, too. And with the need for stimulus increasingly clear, it needs to look at deferring tax payments, particularly for SMEs. The US is rolling out this type of relief, as has Canada at the federal and many provincial levels. At this point, it’s simply the right thing to do.

Arab Contractors has suspended its work on phase 4B of Cairo Metro Line 3 for one week to deep clean workspaces for the project, according to an internal memo carried by Al Shorouk. The suspension came into effect yesterday, and work is set to resume next Sunday, 29 March. Phase 4B includes three stations spanning 2.3 km.

The Federation of Chambers of Commerce is trying to convince members in some key market districts to voluntarily shut down for 10 days, according to a report in the domestic press. The districts are popular for their wood, building materials, home appliance and sanitaryware vendors and are in districts including El Sabtia, Darb Saadah, Hammam El Talat, El Mousky, the Jewish Quarter, Al Azhar, and El Ghouria and Abu El Nimros in Giza.

Some 40k street vendors have been ordered to clear out of Attaba and El Mousky’s outdoor souks as part of the government’s efforts to prevent the spread of covid-19 through reduced physical contact, Masrawy reports. Exceptions made for grocery stores in the two districts, which will also have to abide by nationwide closures from 7pm to 6am.

The Journalist’ Syndicate is shutting its head office for two weeks as a precautionary measure to help slow the spread of the disease, Youm7 reports. Reporters and photojournalists will continue to work, as they have in other countries, where media have been declared essential personnel and enjoyed freedom of movement on city streets even during lockdowns.

The Lawyer’s Syndicate will be closing its doors for two weeks after a board member was reported as a suspected case of covid-19 who fears he may also have passed it on to his family, Al Shorouk reports.

The Oil Ministry is setting up an online platform to allow foreign companies to participate in the ongoing gold exploration tender amid global travel restrictions caused by the outbreak of covid-19, Al-Mal reports citing an unnamed Ministry official. The Oil Ministry started accepting bids last Sunday, and will continue to do so through 15 July, for a 56k sq km exploration area in the Eastern Desert. Further licensing details were released yesterday. This is the first tender of its kind since amendments to the Mineral Resources Act were passed last year that permitted the issuance of new gold exploration tenders.

Cairo University has set up five research teams to conduct research on the covid-19 virus, with members from the faculties of science, medicine, pharmacy, and the National Cancer Institute, the local press reports.

EgyptAir will operate a weekly flight repatriate citizens from Kuwait starting on Wednesday, Hapi Journal reports, citing Kuwait’s Civil Aviation’s Administration.

PSA #1- The International Baccalaureate (IB) officially announced yesterday (pdf) that this year’s IB exams will be canceled. Graduating students will receive their diploma or certificates based on submitted coursework, which includes internal assessments and independent presentations. Read yesterday’s edition of Blackboard for a recap on how schools, universities, and international testing organizations are adapting to the covid-19 outbreak.

PSA #2- The virus that causes covid-19 wasn’t bioengineered by anyone. Not by the Chinese or US military. Not by a Canadian defense lab. Think we’ve been coopted by the conspiracy? Read this.

PSA #3- The WHO has launched a messaging service on WhatsApp to provide updates on the global covid-19 outbreak, which you can access using this link.



The Federal Reserve really is willing to do whatever it takes to save the market from melting down: Enter QE Infinity and corporate bond purchases. The US Federal Reserve yesterday pledged to buy government bonds and mortgage-backed securities “in the amounts needed” and announced new programs to buy corporate bonds in the primary and secondary markets and through exchange-traded funds. It will also provide USD 300 bn in new lending to consumers and businesses. The central bank has already slashed interest rates to zero, launched a new USD 700 bn bond-buying program and dumped tns of USD into the repo market in what seems to be a futile effort to provide liquidity to the system and return the markets to normalcy. (FT | Bloomberg | MarketWatch | CNBC)

But still the markets fell: US stocks finished in the red again yesterday despite the wave of fresh Fed stimulus. Despite a late rally, the S&P 500 was down more than 3% at the closing bell, and the Dow Jones fell 2.9%.

Point your fingers at Washington: Senate negotiations over a USD 1.6 tn economic rescue package remained at a standstill yesterday amid partisan disagreements over the GOP legislation. Democrats, who want to make the corporate bailout process more transparent and allocate more funds to workers and the healthcare sector, unveiled a rival USD 2.5 tn plan that would place more restrictions on the financial industry. Treasury Secretary Steve Mnuchin and Senate Minority Leader Chuck Schumer both gave optimistic statements, but the day ended without agreement. The Wall Street Journal has more.

Monetary policy can only do so much: “The Fed has really rallied to do as much as it can to extend its reach, but I think at the end of the day, the markets recognize this requires a fiscal response,” said Nela Richardson, an investment strategist at Edward Jones. “Every time the Fed takes a strong step forward there’s a kind of, ‘Oh no, this is worse than anyone thought’ reaction in the market.”

Sawiris’ gold gambit may be paying off: Gold futures posted their biggest single-day gain against the USD on record yesterday in response to the Fed’s pledge to flood the system with unlimited stimulus, MarketWatch reported. Goldman Sachs analysts now see prices rising above USD 1.8k. We have more on Naguib Sawiris’ comments on the gold market in this morning’s Speed Round, below.

Meanwhile in Europe: Can the ECB’s latest stimulus prevent a new sovereign debt crisis?

The European Bank’s EUR 750 bn nine month liquidity injection plan into European markets is set to soften the blow of spiraling economies and already showed promise as bond markets rallied after the announcement, but much of the recovery still falls upon the fiscal policies put in place by national governments, the FT says.

MUST READ: The world’s richest countries are going to have to step up to the plate and spare emerging markets the pain of corona, the Financial Times editorial board argues. “Supporting emerging markets is not just about the moral imperative of caring for the world’s poorer populations. For richer countries, it is also a matter of self-interest. Economic disaster that stokes pandemic in, say, India, Indonesia or sub-Saharan Africa could rebound on the developed world if travellers from those regions cause additional waves of infection. The chain of defence against coronavirus is only as strong as the weakest link. Investing to bolster weak links will be money very well spent.”


Covid-19 “accelerating” -WHO: The World Health Organization (WHO) has warned that the covid-19 pandemic is “accelerating” as the global toll has surpassed 350k cases and more than 15k deaths. Health systems worldwide could be overwhelmed in a few matter of weeks if the outbreak is not brought under control, WHO Director-General Tedros Adhanom Ghebreyesus said at a press briefing.

But in Italy there is actually some good news: The rate of new confirmed cases and deaths slowed on Sunday, perhaps providing a first sign that the country’s unprecedented shutdown could be beginning to deliver results. Italy has been the hardest hit country by the covid-19 outbreak in Europe, now considered the epicenter of the global pandemic, with a confirmed 59,138 cases.

The Olympics will be postponed until 2021 due to the virus, member of the International Olympic Committee Dick Pound has said.

Curfews, shut-downs, lock-downs, travel bans:

  • The UK has become the latest European country to lock down: PM Boris Johnson yesterday announced strict new rules on when people can leave their homes. (BBC)
  • Saudi Arabia officially imposed a curfew last night, ordering a shutdown across all non-essential services from 7 pm to 6 am for up to 21 days. (Saudi Press Agency)
  • The UAE also suspended all flights, including transits, for two weeks, official state media announced. Etihad will only carry UAE citizens or diplomats from abroad whose final destination is Abu Dhabi, the airline said on Twitter.
  • South Africa will enter into a 21-day lockdown from Friday as its covid-19 cases have spiked to 402, President Cyril Ramaphosa said on Monday. (Reuters)

YOUR MORNING DISTRACTION- Want to learn a new magic trick or feel a little better about doing absolutely nothing? The New York Times’ Smarter Living column has a list of recommended uplifting reads to help you from going crazy amid the downpour of stressful news. The round up includes articles that teach you how to be more optimistic, relax or perform a playful card trick for friends (post-social distancing) to get you through the rest of the week.

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