What we’re tracking on 9 August 2020
Good morning, friends, and welcome to another late-summer workweek. It’s the last full week before some of our readers send the kids back to school (in one form or another) and we hope all of you enjoy every last second of it.
Look for three stories to dominate headlines this week:
1- It’s an election week. Voters living abroad can cast ballots today and tomorrow in the first-ever elections to the nation’s Senate, the newly reconstituted upper house of parliament. Voters here at home will head to polling stations on Tuesday and Wednesday. We’re officially in a quiet period now after the 15-day campaign came to an end yesterday. Expect to go back to the polls in September if runoffs are necessary. Some 300 people will sit in the senate, 100 of them appointed by the presidency and the rest elected whether they run as individuals or on party lists.
2- It’s interest rate week. The Central Bank of Egypt’s monetary policy committee meets to review interest rates on Thursday. Will it take advantage of the low global interest rate environment and make it easier for Egyptian businesses to take on debt to finance post-covid growth? With many companies still at less than 100% utilization of both their existing plants and facilities, it wouldn’t be surprising if the CBE were to leave rates on hold to bolster our position as one of the world’s most attractive destinations for the carry trade. Doing so would help ensure a steady flow of FX into the country at the same time as tourism, remittances and Suez Canal receipts take it on the chin. Look for a hint on which way things are going tomorrow, when inflation data for July should land.
3- All eyes around the region are on Beirut, which was wracked by protests yesterday as businesses take stock in the wake of last week’s massive explosion. We have the full rundown in this morning’s Speed Round, below.
Is the gov’t planning to redefine “Made in Egypt”? How much local content does something need to be declared made in Egypt? A Trade and Industry Ministry committee is looking at that question right now, Al Shorouk reports. Manufacturers currently have to obtain at least 25% of their components from local sources for products to be considered Egyptian.
SIGN OF THE TIMES #1: 20% of incoming first years at Harvard are taking a gap year, having reportedly told the university they want to defer their admission.
SIGN OF THE TIMES #2: BP looks like it’s going to sell oil and gas assets with a view to cutting its output of hydrocarbons by as much as 40% and getting more into renewables, according to a Reuters exclusive. The story doesn’t specify which assets are on the auction block other than to note that “sources have previously told Reuters” that BP could shed oil sands projects in Canada and deep water blocks off Angola.
What’s it like to be a (new) CEO right now? That’s the subject of a lengthy Wall Street Journal piece that looks at how new bosses are getting squared away and working on that “vision thing” when they can’t meet face-to-face with their subordinates. It’s a story worth reading even if you’ve occupied your office for a few years now. Follow it with the Journal’s sage advice to let your deputies step up if you’re not able to and ask yourself if your company is doing remote work “right,” courtesy of the NYT.
Still think the best way to learn is with a case study? New leaders could do a lot worse than to go read about how “Tim Apple” took over from Steve Jobs and remade the world’s most valuable company in his image — while simultaneously preserving that which is special about its culture and DNA. See the WSJ’s How Tim Cook made Apple his own.
The Health Ministry confirmed 21 new deaths from covid-19 yesterday, bringing the country’s total death toll to 4,992. Egypt has now disclosed a total of 95,314 confirmed cases of covid-19, after the ministry reported 167 new infections yesterday. We now have a total of 51,672 confirmed cases that have fully recovered.
Starting 15 August, foreign visitors will need to show a negative PCR test for the virus that causes covid-19. The test must have been taken no more than 72 hours before passengers want to travel, the Civil Aviation Ministry said in a statement. Exemptions will apply for Arab travelers as well as passengers traveling on direct flights to Sharm El Sheikh, Taba, Hurghada, Marsa Alam, and Matrouh International Airports.
Sudan is officially reopening its land border with Egypt today, after closing the Argeen and Eshkeet crossings in March to curb the spread of covid-19, according to a Sudanese government decision picked up by the press.
Covid-19 cases in Africa top 1 mn: The number of confirmed cases of covid-19 in Africa has exceeded 1 mn, with South Africa accounting for more than half of infections on the continent, Reuters reported on Thursday. Almost 22k people had died from the virus as of Thursday and more than 676k had recovered. Although infection rates are low in comparison with the rest of the world, the virus is likely to be more widespread than the data suggests due to low levels of testing, according to health experts.
The current occupant of the White House signed four executive orders on covid relief for US citizens after the collapse of talks with opposition Democrats. The orders partially extend several measures passed in March that expired at the beginning of this month, potentially deepening economic hardship for unemployed citizens and damaging any recovery.
But at least the jobless rate is falling: The US unemployment rate fell to 10.2% in July from 11.1% in June, as employers added 1.8 mn jobs — a much lower number than June’s 4.8 mn — according to the US labor department. Leisure, hospitality, retail, and healthcare are among the industries that saw the largest gains, the Financial Times reports. The US has recovered fewer than half the jobs lost during the pandemic, data shows.
Twitter may be interested in buying TikTok, emerging as a late rival to Microsoft’s bid for the video sharing app’s US operations, Reuters writes, noting that it’s very much an open question whether Twitter could put together an offer that outbids whatever Microsoft is willing to put on the table.
Berkshire Hathaway’s net earnings shot up 87% y-o-y in 2Q2020, signaling a huge turnaround from massive first quarter losses, according to its earnings report (pdf). The Warren Buffett-owned conglomerate is often seen as “a bellwether for the market given the diverse businesses it owns,” says CNN Business.
Central bankers in emerging markets have done well throughout the covid-19 crisis, thanks to quantitative easing programs mirroring what advanced market central banks do to keep long-term interest low, the Financial Times’ Jonathan Wheatley writes. While the policy approach in EM is not quantitative easing in the traditional sense, the policies have, in some respects, “achieved spectacular success” in improving local bond markets. Since a panic-induced selloff in March saw investors flee USD 33.5 bn-worth of EM bonds, central bank policies have managed to lure back nearly USD 62 bn.