What we’re tracking on 28 July 2020
Good morning, friends, and Happy Eid to you all. Today is the last workday of the week as banks (pdf), the EGX and the private sector are off starting from tomorrow (the wa’fa) until Monday, 3 August, in observance of Eid Al Adha.
We’re going to be off, too and will be back in your inbox at the appointed hour on Tuesday, 4 August.
COVID-19 IN EGYPT-
The Health Ministry yesterday confirmed 465 new cases of covid-19, up slightly from 420 on Sunday. This brings the nation’s total confirmed cases to 92,947. The ministry also reported 39 new deaths yesterday, increasing the overall death toll to 4,691. We now have a total of 35,959 cases who have fully recovered.
Pharma player EIPICO has begun manufacturing covid-19 treatment Epifluver-Favipiravir 200 mg after receiving the green light from the Egyptian Drug Authority, according to a bourse disclosure (pdf).
ON THE GLOBAL FRONT-
Google’s 200k employees will be working from home for at least the next 12 months, the company announced, according to the Wall Street Journal.
Covid-19 is not seasonal and we’re in the midst of what will be one “big wave”: World Health Organization Spokeswoman Margaret Harris poured cold water on the idea that the pandemic could slow down in warmer climates and during the summer season, saying that it is currently not behaving like an influenza, according to Reuters. Instead, she said, we should think of the pandemic as one big wave that needs to be flattened.
Global air travel may not recover to pre-pandemic levels before 2024, the International Air Transport Association’s chief economist Brian Pearce said in a briefing to journalists, the Associated Press reports. The global body previously predicted a full recovery by 2023 but has pushed its estimate back a year as the virus continues to spread in the US and the developing world.
Fed extends emergency lending programs until the end of the year: The US Federal Reserve has agreed to extend the multitude of lending facilities introduced in March to stabilize the financial markets by three months until the end of the year, the Financial Times reports. The extension of the programs, which inject liquidity into the short-term funding and corporate bond markets, were agreed by the board on the opening day of the bank’s two-meeting to review monetary policy.
Stimulus putting USD reserve status in jeopardy, Goldman warns: The greenback’s dominant position as the world’s reserve currency may be under threat if the wave of fiscal and monetary stimulus launched this year triggers inflation, Goldman Sachs analysts warned yesterday. The escalating flight into gold is indicative of a market increasingly concerned about hedging against a debasement of the currency and record-low interest rates caused by the stimulus. So much so that there are now “real concerns around the longevity of the USD as a reserve currency,” they wrote.
OPEC is waking up to the prospect of a post-oil future: There are fears among OPEC members that the slump in global demand for oil triggered by the pandemic may be the tipping point for ushering in a future less reliant on hydrocarbons and more thirsty for renewable sources of energy, Reuters reports, citing industry insiders. Daily crude consumption fell by as much as a third earlier this year, and as momentum builds behind green energy and electric vehicles, oil producers are concerned that demand may never recover to pre-covid levels.
AND THE REST OF THE WORLD-
The IMF could offer Lebanon a bailout of USD 5-9 bn — as little as half of the USD 10 bn it originally sought to recover from its severe financial crisis — as negotiations between the two continue, Economy Minister Raoul Nehme told Bloomberg Television. He gave no time frame for when a possible agreement could be reached. Lebanon needs a total of USD 30 bn for recovery, and if an agreement with the IMF can be reached, will look to allies and leverage international donor pledges of some USD 11 bn in 2018 in exchange for promised reforms, but the IMF agreement is a crucial first step, Nehme said.
Former Malaysian PM handed 12-year jail term in 1MDB scandal: Malaysia’s former prime minister Najib Razak has been sentenced to 12 years in jail and fined almost USD 50 mn after a Malaysian court found him guilty of all seven charges for his role in the 1MDB scandal. Razak was charged with money laundering, abuse of power and criminal breach of trust, after he allegedly plundered bns of USD from state investment fund 1MDB to buy property, artworks and finance The Wolf of Wall Street. The Guardian and the Wall Street Journal both have the story.
And Goldman gets a comparative slap on the wrist: Goldman Sachs, which allegedly facilitated Razak’s looting of the fund, agreed to pay a USD 2.5 bn fine (a third of what the finance minister had demanded) in return for the government dropping criminal charges against the bank and halting legal proceedings against 17 executives.
The president of the African Development Bank has been cleared of misconduct following an independent inquiry, paving the way for him to run unopposed for another five-year term next month, the Financial Times reports. Whistleblowers had claimed that Akinwumi Adesina was favoring his Nigerian countrymen in the development bank’s hiring process, as well as approving hefty severance packages.
*** It’s Hardhat day — your weekly briefing of all things infrastructure in Egypt: Enterprise’s industry vertical focuses each Wednesday on infrastructure, covering everything from energy, water, transportation, urban development and as well as social infrastructure such as health and education.
In today’s issue: Our three-part series on the feasibility of the government’s plan to convert us into a nation of drivers powered by natgas continues. Today, we look at the financing and infrastructure challenges