What we’re tracking on 7 May 2020
Rejoice, friends, for it is Thursday — and also the end of the second week of Ramadan. A handful of things we’re thinking of as we get ready to slide into the weekend:
The Education Ministry is looking at how some students might return to the classroom in the fall, Education Minister Tarek Shawki told talk show host Wael El Ibrachy (watch, runtime: 33:35). The ministry is mulling a rotation system for public schools that would see a six-day school week with students divided into three groups, each of which would spend two days in the classroom and four days learning from home each week. We’re taking that as a signal students are unlikely to return to classrooms before fall.
That has us wondering what classes at private schools might look like when schools are “back to normal.” The rotation policy could be one solution. Another: Canada’s Globe & Mail looks at what’s happening as some K-12 schools prepare to reopen in the province of Quebec as early as next week. The takeaway: Look for art, PE, drama and other elective classes to be cancelled and far fewer students sitting in each classroom. On the postsecondary side, Business Insider says some high-profile US colleges are preparing for more online learning this fall, while others will take a hybrid approach, offering a mix of online learning and on-campus instruction — and no extracurricular activities to speak of.
Expect lots of pressure to revise not just your seating plan, but your WFH policies when schools do go back into session: With many in the business community starting to itch about returning to our way of life pre-covid, we’ve been thinking a lot about office space. We talked earlier this week about how the NYT thinks the open-plan office could be on the endangered species list. Yesterday, Reuters got in on the act, while the Wall Street Journal wonders whether corporate leaders are going to turn more and more to surveillance technologies in the workplace under the guise of safeguarding employee health. Real estate company Cushman & Wakefield, meanwhile, is pushing a new office design (watch, runtime: 2:09).
But what if you love WFH and just don’t wanna go back? Corporate leaders are going to come under pressure to re-think their work-from-home policies — particularly after schools go back (touch wood) and it becomes a lot easier for many knowledge workers to focus at home.
Oh, and speaking of kids going back: A growing body of evidence suggests the little ankle-biters may be important spreaders of covid-19 after all — a potentially worrisome development given the virus that causes covid appears to have mutated to become more infectious.
News triggers to keep your eye on over the coming days:
- Foreign reserves figures for April should be released today;
- Inflation figures for April are out on Sunday, 10 May.
- The CBE’s Monetary Policy Committee meets next Thursday, 14 May, to review interest rates.
The market today: Shares in Hong Kong, Tokyo, and China were down in early trading this morning, with only Seoul bucking the trend. Futures suggest shares in continental Europe will open down while the London Stock Exchange and US benchmarks appear set to up in the green later today.
The EGX30 was up 1% yesterday as foreigners emerged as net buyers. This is the first day this week the exchange ended the session in the green. EGP 909 mn-worth of shares changed hands yesterday, about 33% above the 90-day trailing average. The benchmark index is now down 26.3% since the start of the year.
So, when do we eat? Maghrib prayers are at 6:36pm and you’ll have until 3:29am to finish caffeinating. Fajr is coming one minute earlier every day through the end of the Holy Month.
COVID-19 IN EGYPT-
Egypt has now disclosed a total of 7,588 confirmed cases of covid-19 after the Health Ministry reported 387 new infections yesterday. The ministry also said that another 17 people had died from the virus, taking the death toll to 469. We now have a total of 2,314 confirmed cases that have since tested negative for the virus after being hospitalized or isolated, of whom 1,815 have fully recovered.
The advertising industry was driven to a near standstill by the outbreak, according to Federation of Egyptian Industries member Ashraf Khairy, according to Al Shorouk. Khairy suggests that advertising activity by real estate developers is down 70% from this time last year, with outdoor ads having taken it on the chin particularly hard. A study by outdoor ad aggregator Admazad earlier this week noted that more than half of billboards in the Greater Cairo Area were empty in April 2020 compared to a vacancy rate of just 18% in the same month last year.
The State Council is heading back to work on Saturday — under certain conditions. The local press reports that only staff and court lawyers will be admitted into the building and that there will be a cap on how many people are allowed into court to enforce social distancing.
The government is coordinating with unnamed producers to ramp up production of medical masks, Prime Minister Moustafa Madbouly said yesterday, according to a Cabinet statement.
Egypt has repatriated 104 citizens from India, according to Al Masry Al Youm. The returnees will remain under the regular 14-day quarantine at a Marsa Alam hotel before being released.
Hassan Allam and Elsewedy Electric have covered the cost of more than 40-tonnes of medical supplies. The Unified Procurement Authority has imported more than 40 tonnes of medical supplies in two separate shipments over the past month, according to an emailed statement (pdf). Hassan Allam and Elsewedy Group each paid for one of the shipments.
State-owned e-Finance has donated EGP 500k-worth of meals in collaboration with the Misr El Kheir Foundation and the ministries of social solidarity and youth and sports, a company statement (pdf) said.
Three stories are vying for your attention right now. Any one of them would be blockbuster news in normal times:
- The US is just now accepting it is in for a very long economic recovery;
- The slump in Europe is shaping up to be the worst since the Second World War;
- And this is the moment the Trump administration thinks the best idea is to ramp up tensions with Beijing.
SINO-AMERICAN TENSIONS- The new chill in Sino-American relations is front-page news on both sides of the Atlantic, as these stories from the Financial Times and the Wall Street Journal make clear. The Donald is considering measures to “curb supply chains and investment flows” out of anger over how Beijing handled the coronavirus outbreak. That comes as analyst expect China to report a double-digit drop in both exports and imports for April, a Reuters poll showed yesterday.
CORPORATE AMERICA has woken up to the fact that cash is king. US execs are more concerned about financing than at any point during the 2008-09 recession, according to a new study by researchers at the Federal Reserve. Data gathered from more than 600 earnings calls in April reveal that 42% of US non-financial public companies are considering cutting back on investments, significantly higher than the 25% recorded at the peak of the last recession. More than a quarter of firms are discussing cutting payouts and 17% are drawing down credit lines, more than twice the number in 2008.
The US jobs market is an unmitigated disaster right now: More than 20 mn Americans were laid off in the month of April, according to the latest ADP National Employment Report (pdf). It’s the worst month of job losses in the report’s history — more than twice as many jobs were lost in April as were lost during the entire global financial crisis.
With that in mind, it’s no wonder why states are desperate to reopen their economies. But with 30k cases still being reported every day, inadequate testing, and the inability to trace 30k people a day, “America is steamrolling toward a nightmarish failure to control the coronavirus,” Axios says.
Forget about that V-shaped recovery: Blackrock boss Larry Fink told a private meeting of investors to expect a wave of bankruptcies in the coming months, an extended slump in consumer demand, and an 8% corporate tax hike to 29%, Bloomberg reports, citing a person with knowledge of the conversation.
THE WORST OUTLOOK IN EUROPE since the war — and there’s more to come. “‘The euro area is facing an economic contraction of a magnitude and speed that are unprecedented in peacetime,’ Christine Lagarde, the president of the European Central Bank, said as she warned that the eurozone economy could shrink by as much as 12 percent this year,” the New York Times reports. Policymakers agree the ECB can’t turn things around without coordinated help from politicians, but analysts worry the “divided” EU may not be able to get the job done.
Germany is the poster child for what’s good and bad in the EU right now: Its constitutional court ruled this week that one of the ECB’s primary tools to protect the euro and support sovereign bond prices violates the German constitution, the FT reports. The news comes as Chancellor Angela Merkel said German has put the first phase of the pandemic behind it and will now prepare to reopen “schools, day care centers, stores and restaurants” in the coming days and hotels by the end of the month.
AND THE REST OF THE WORLD-
Almost a third of the world’s population will be living in regions too hot for human habitation by 2070 if climate change continues on its current track, according to a study published in the Proceedings of the National Academy of Sciences, the New York Times reports. The regions most likely to be affected are those whose populations are growing the fastest today, adding to concerns. The list includes the Middle East, sub-Saharan Africa, India, South America, Southeast Asia and Australia.
It’s Making It day: Episode three of the second season of our podcast on building a great business in Egypt is out today. Look for the latest episodes every Thursday this Ramadan.
Today’s guest: Amro Abouesh, CEO and Managing Director of Tanmeyah, who left a comfortable position with Banque du Caire to roll the dice as a founder of Tanmeyah, which has grown from a scrappy startup into the nation’s leading private-sector microfinance player — and prompted just about everyone else in the finance industry to look at how to make money serving the ‘bottom of the pyramid’ in the nation’s economy. Tanmeyah grew as a portfolio company of investment company Qalaa Holdings before being acquired by frontier and emerging markets financial services player EFG Hermes.
Tap or click here to listen to the episode on our website | Apple Podcast | Google Podcast | Omny. We’re also available on Spotify, but only for non-MENA accounts. Subscribe to Making It on your podcatcher of choice here.