What we’re tracking on 19 May 2020
It looks like many private-sector businesses will be required to give employees a five-day Eid next week. A Cabinet statement yesterday said Manpower Minister Mohamed Saafan has ordered a five-day paid Eid El-Fitr holiday for the private sector — the same as for public-sector employees.
It’s already a five-day holiday for retail businesses: The decision comes as the Madbouly government looks to keep people off the streets with stricter lockdown measures next week, including an extended 5pm-6am curfew, the closure of malls and other retail outlets, and measures to limit travel between governorates. Supermarkets and pharmacies are exempt from the closure order.
It’s still an open question whether Planet Finance will follow suit. We’re waiting to see whether the Central Bank of Egypt will order banks to close for the full five days, and it’s unusual for Egypt’s banks to be cut off from the global financial system for a full calendar week. The EGX typically follows the CBE in closing. Enterprise will be off next week whatever days the banks are closed and then slide back into your inbox after the break.
The House general assembly is on break until 7 June, parliament speaker Ali Abdel Aal said yesterday, according to Al Shorouk. Committee meetings will continue as usual. Tap or click here if you need a refresher on what’s on the legislative agenda as we slide toward summer recess.
Speaking of the House: We’re in an election year. Easy to forget amid all the corona news, but we had been scheduled to go to the polls in November to elect a new House as well as senators to fill the newly reconstituted upper house of parliament. The current House will sit one last time from October 2020 until January 2021, we reported lat last year.
Things we’re keeping an eye on this morning:
1- Markets rallied yesterday on hopes that a covid vaccine may not be as far away as most scientists fear after an eight-person trial of an mRNA-based vaccine by American biotech outfit Moderna showed promise. MSCI’s gauge of global stocks was up 2.9% yesterday, and shares in Europe and the US soared. The rally is front-page news on both sides of the Atlantic, with both the Wall Street Journal and the Financial Times leading with it as we eased toward our dispatch deadline this morning. You can read more about the eight-person (yes, 8) in the New York Times and in Bloomberg.
The markets today: Asian markets are uniformly in the green in early trading this morning. Futures suggest a mixed open for European shares and that US stocks are set to open (every so slightly) in the red.
2- The future of air travel on most western airlines is … ugly, the Wall Street Journal writes. Not the future of the industry — your likely experience in the air as flights resume. The headline says it all: The new airline travel: Fewer flights, more layovers, rules for bathrooms. Priority boarding may be a thing of the past, getting off the plane is going to take even longer — the list goes on. The only solution: Fly EgyptAir direct as much as you possibly can.
The heat wave is set to continue unabated until the weekend. Expect a daytime high of 42-43°C through Thursday, 37°C on Friday and then a balmy 32°C on Saturday before things cool off further to 29°C for the Sunday, the first day of Eid.
So, when do we eat? Maghrib prayers are at 6:44pm and you’ll have until 3:18am to finish caffeinating. Fajr is coming one minute earlier every day through the end of the Holy Month.
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COVID-19 IN EGYPT-
Egypt has now disclosed a total of 12,764 confirmed cases of covid-19 after the Health Ministry reported 535 new infections yesterday — the highest single-day count to-date. The ministry also said that another 15 people had died from the virus, taking the death toll to 645. We now have a total of 4,001 confirmed cases that have since tested negative for the virus after being hospitalized or isolated, of whom 3,440 have fully recovered.
The Madbouly government is actively talking with the business community about what the post-covid economy will look like. Prime Minister Moustafa Madbouly, Planning Minister Hala El Said, and GAFI head Mohamed Abdel Wahab held a discussion yesterday with a working group — which also includes members of academia — to hear proposals on how best to move towards “coexisting” with the virus that causes covid-19 while supporting the economy, according to a statement, which did not name who from the business community attended.
Eighteen hotels and resorts have reopened after meeting covid-19 health and safety standards. The properties are located in Matrouh, the Red Sea, and South Sinai governorates. Tap or click here to check the the full list of destinations. The facilities are presently capped at 25% capacity.
The Amcham Egypt Foundation has launched a campaign with Egypt’s business community to lend a hand to the Health Ministry in its response to the pandemic, according to an emailed statement (pdf). The campaign will provide more than 260 new and refurbished ventilators within the next few weeks, along with a supply of personal protective equipment. The campaign has backing from AmCham’s 2k members.
You can watch campaign videos, produced by our friends at Tarek Nour Communications, here (runtime: 1:56), here (runtime: 2:08), and here (runtime: 2:19). Among the many CEOs and chairmen making appearances are our friends
- Sherif Elsaid (CIB Foundation)
- Tarek Nour (TNC)
- Moataz ElHout (Nestle)
- Jose Maria Magrina (Suez Cement)
- Mahmoud Bazaan (Hero)
- Sarwat Abd El-Shahid (Shahid Law)
- Khaled Abu Bakr (TAQA Arabia)
- Akef El-Maghraby (Banque Misr)
- Ahmed El Hitamy (MNDH)
Our friends at SODIC have helped the Health Ministry to fully equip 50 quarantine units at the Mansoura Chest Hospital and Abbassia Fever Hospital. They have also helped outfit 21 hospital rooms to serve as isolation units at the Mahala Fever Hospital, according to a statement (pdf).
Our friends at Edita have donated EGP 2 mn-worth of products to Tahya Misr’s initiative to distribute 300k boxes of food to families in need in 16 governorates, according to an emailed statement (pdf).
Orange Egypt is helping the Egyptian Cure Bank acquire and repair ventilators for hospitals by donating an unspecified sum to the Breathe Campaign, according to a statement (pdf).
ON THE GLOBAL FRONT-
Europe is slowly but surely restoring a semblance of normality: Shoppers, worshippers and cafe goers were out and about in Italy yesterday as were Greeks on the country’s coastal waters and near the Acropolis, Reuters reports. Cafes in Denmark and Portugal also started receiving some foot traffic, with mostly masked and socially distanced patrons enjoying their first public coffee in many weeks, the AFP reports. Germany, meanwhile, will ease travel restrictions starting mid-June, but sees “no quick return to holidays as usual.”
The same cannot be said many emerging markets:
- More than 100 mn people in the Chinese province of Jilin now find themselves under lockdown after the government suspended transportation and quarantined tens of thousands of people after new clusters of infections were detected, Bloomberg reports.
- India has extended its lockdown measures for another two weeks, and promised to publish new guidelines about how it plans to reopen society, the BBC reports.
- West African countries are facing the risk of a significant rise in infections as they begin reopening mosques for Eid El Fitr, which are expected to attract mass gatherings despite cases already being on the rise, the AFP reports.
The IMF is back with more bad news: The global economy is unlikely to see a full recovery next year as the costs of the pandemic continue to defy expectations, IMF head Kristalina Georgieva told Reuters. The fund will rethink its forecast for 5.8% growth next year in response to weaker-than-expected data from countries across the world, Georgieva said, without disclosing a timeline for a full recovery. The IMF is also likely to revise downwards its forecast for a 3% contraction of the global economy this year, she said, without providing an estimate.
Germany and France hatch European rescue plan: Germany and France have outlined plans for a EUR 500 bn fund to provide emergency fiscal stimulus to Europe’s stricken economies, the Financial Times reports. The plan would see the European Commission capitalize the fund by borrowing in the capital markets — a potential workaround to the long-term dispute about common debt issuance that threatens to hamper the bloc’s response to the crisis.
FIve EU states lift short selling bans today, including Austria, Belgium, France, Greece and Spain. Italy will allow its ban to expire on 15 June, according to the European Securities and Markets Authority.
GCC investors are “flying blind” as the region’s reluctance to share key data make investment decisions increasingly difficult, Bloomberg says. For one, Qatar — although faster than some neighboring countries like Saudi and the UAE — only just released national accounts for 4Q2019 in late April.
Uber is planning to slash 3k more jobs and cut “non-core investments” as part of a sweeping plan to ensure long-term survival outlined by CEO Dara Khosrowshahi yesterday (Reuters | BBC | CNBC). The latest cutbacks come just two weeks after the company announced that 3.7k people would be laid off — including 40% of its Egypt staff — meaning the company has now reduced its global workforce by a quarter. It’s unclear if the latest lay-offs will further affect Egyptian staff.
You know we may be in the Investing End Times when the hedgies start talking up gold. Look no further than this Bloomberg report, which suggests some are counting on gold rising to “multiples of its current price” as central banks continue to print money alongside large stimulus packages and widening their balance sheets. Didn’t work out so well back in ‘08, boys and girls, now did it?
AND THE REST OF THE WORLD-
The butting of heads between the US and China is intensifying on multiple fronts:
- A tug of war at the WHO: The battle for influence spilled out into the open at the World Health Organization’s annual meeting yesterday after Chinese president Xi Jinping offered to donate USD 2 bn to fighting the pandemic in Africa, only for the US health secretary to denounce Beijing’s handling of the crisis. (New York Times)
- The economic decoupling could be gathering pace: The US is considering setting up a USD 25 bn “reshoring fund” to draw American companies and key suppliers back to its own soil from China. (Reuters)
- Nasdaq takes aim at Chinese IPOs: Nasdaq will introduce new IPO restrictions in a move that will place more roadblocks in front of Chinese companies hoping to list on the exchange. (Reuters)
- Huawei isn’t happy about the new US sanctions: Chinese tech giant Huawei has called the Trump administration’s decision to block it from importing semiconductors “arbitrary and pernicious.” (Financial Times)
Haftar suffers blow as forces loyal to the UN-backed gov’t seize strategic air base: Forces loyal to Libya’s UN-backed government have seized a key air base southwest of the capital from General Khalifa Haftar’s Libyan National Army in what Reuters suggests is “their most significant advance” in the past year.