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Sunday, 25 October 2020

What we’re tracking on 25 October 2020

Good morning, friends. It’s a big day for: The EGX — and the financial system as a whole. One of Egypt’s most intense (if shortest) corporate dramas played out at CIB over some 33 hours between 9am on Thursday and 6pm Friday evening. The story kicked off first thing on Thursday, when CIB CEO Hussein Abaza received written notice that the Central Bank of Egypt was “discharging the chairman and managing director of CIB,” Hisham Ezz Al Arab, after an audit.

CIB’s board convened that morning for an emergency meeting with members joining both at the bank’s headquarters and by teleconference. On Thursday afternoon, the bank’s non-executive board members met with Central Bank of Egypt Governor Tarek Amer. Meanwhile, the rumor mill went into overdrive.

By late Friday afternoon, it was over: Ezz Al Arab had resigned as chairman and managing director. Veteran regulator Sherif Samy was named non-executive chairman. Abaza, now MD as well as CEO, notified the bank’s staff and then got on a 5pm call to reassure shareholders and investors in Egypt’s highest-profile publicly traded company.

As Abaza spoke with investors, the CBE issued a statement to Bloomberg saying that CIB “remains prudentially sound” and that depositor funds are “fully secure.” CIB’s board, meanwhile, said it “takes regulatory findings very seriously” and will investigate “all the issues identified by the central bank in its latest review.” CIB’s board and management anticipate receiving a copy of the audit report as early as today.

What to watch for: CIB’s shares are expected to resume trading this morning on the EGX after having been suspended by the FRA on Thursday.

We have the full rundown in this morning’s Speed Round, below.

Polls opened in 14 governorates yesterday for voters here at home to elect the next House of Representatives: Voters in Giza, Fayoum, Beni Suef, Minya, Assiut, New Valley, Sohag, Qena, Luxor, Aswan, Red Sea, Alexandria, Beheira and Matrouh have until tonight to cast their ballot.

The rest of the country will vote next week, with the second round of expat voting on 4-6 November and polls opening here at home on 7-8 November. Re-runs will be held at the end of November and early December.

The vote will see 568 MPs enter the new parliament, with more than 4k individual candidates vying for half of the seats and another 1.1k candidates running on four party lists. President Abdel Fattah El Sisi will hand pick 5% of the seats.

The election is getting attention in the foreign press, with Reuters, the Associated Press, and AFP noting that the pro-government Mostaqbal Watan party — which took almost three-quarters of the seats in last month’s Senate election — is likely to do best at the polls.

The Gouna Film Festival kicked off on Friday and wraps at the end of the month. Africanews took note, saying this year’s iteration of the festival is underpinned by “pomp and caution” amid covid-19.

PSA- We’re heading into a four-day workweek as the country takes this Thursday off in observance of the Prophet’s Birthday. The Madbouly Cabinet confirmed the national holiday yesterday, and you can expect announcements from the EGX and Central Bank of Egypt in due course.


The Health Ministry reported 167 new covid-19 infections yesterday, down from 170 the day before. Egypt has now disclosed a total of 106,397 confirmed cases of covid-19. The ministry also reported 11 new deaths, bringing the country’s total death toll to 6,187. We now have a total of 98,813 confirmed cases that have fully recovered.

The virus that causes covid-19 is spreading more widely than in the earlier months of the pandemic, head of the covid-19 task force Hossam Hosny warned El Hekaya’s Amr Adib yesterday. Hosny pointed to the looming seasonal flu season, which could be cause for confusion due to the similarity of its symptoms to the disease and urged citizens to continue observing precautionary measures (watch, runtime: 5:22).

The number of ICU beds in public hospitals is planned to increase 77% this fiscal year to 7,253 beds from 4,107 in FY2019-2020, the local press reports, quoting an unnamed government source. The Health Ministry is also working to add 400 incubators and 449 beds for children, the source added. The ministry had said in June that it had 5,800 ICU beds and 35k regular beds earmarked for covid-19 patients.

Russian tour operator begins organizing indirect flights to the Red Sea as direct flight ban is still in place: Russian travel agency Pegas Touristik will launch daily indirect flights from Moscow to Sharm El Sheikh and Hurghada via Turkey’s Antalya from this Thursday, 29 October, Al Shorouk reports. The number of trips will increase from 2 November. Russia’s ban on direct flights to the Red Sea resorts remains in place.

France expects to be fighting covid-19 until at least mid-2021, President Emmanuel Macron said as the country exceeded 1 mn cases Friday, recording a record daily tally of 42k, Reuters reports. Europe’s daily infection rate has doubled in the last 10 days, reaching a total of 7.8 mn cases, despite increased restrictions introduced over the past weeks designed to avoid the need for new nationwide lockdowns.

High-profile vaccine trials have resumed: Johnson & Johnson and Astrazeneca have been cleared by US regulators to resume vaccine trials after they were halted when a participant in each study fell ill, Bloomberg reports.


Sudan will get off US terror list after pledging to establish ties with Israel: US president Donald Trump has agreed to remove Sudan from its terrorism list after it paid USD mns to families affected by two terror attacks and agreed to normalize ties with Israel. Egypt’s Foreign Ministry said Cairo welcomed an end to Sudan’s “long years of political and economic isolation” in a statement Friday.

Sudan will move toward normalizing relations with Israel under a US-brokered accord and Israeli envoys will make their way to Khartoum in the coming days, Reuters reported. President Abdel Fattah El Sisi tweeted his approval of the US-brokered agreement.

Prepare for a surge in global debt restructuring: The world’s biggest asset manager has said that the quantity of debt requiring restructuring could surpass the peak that followed the global financial crisis, BlackRock Investment Institute said in a research note (pdf) last week..

More US companies are offering guidance during the 3Q earnings season, signaling to investors that they’re learning to cope with the uncertainty of the pandemic which could stretch well into next year, Reuters reports. Some 73 companies in the S&P 500 index have offered guidance so far (far below the 170 companies that typically provide guidance) and are apparently making their most bullish expectations in 23 years, according to Refinitiv data.


Other international news to keep on your radar:

  • US stimulus talks dragged on with prospects of more covid aid ahead of the election dimming as US House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continued to butt heads over the details, Reuters reports.
  • Facebook could face a US antitrust lawsuit as early as next month by state and federal investigators, the Washington Post reports, citing four people familiar with the matter.
  • The RMB is about to get more flexible as China’s central bank loosens its grip on the currency and eases restrictions on its cross-border use, Governor Yi Gang said following a rally of the RMB against the USD, according to Reuters.

The coming robo jobs apocalypse, pt 9,999: Almost a quarter of the global workforce faces displacement by our nascent robot overlords, with Bloomberg Economics predicting obsolescence for as many as 800 mn jobs in the years ahead. Countries with aging demographics are likely to welcome the increase in automation but elsewhere — particularly in countries reliant on simple labor such as the GCC, Japan, the Czech Republic and Slovakia — income inequality could grow as technology allows robots to complete more complex tasks.

On the flip side, the World Economic Forum expects automation to create 12 mn more jobs than it eliminates over the next five years. In a report published to coincide with its “Jobs Rest” summit, the forum warns that half of all employees will need some form of upskilling to bounce back from the “double disruption” caused by increased automation and a global pandemic.

US ELECTION WATCH- The second and final US presidential debate was a calmer, more civil affair, the New York Times says. President Donald Trump and former Vice President Joe Biden clashed over the handling of the pandemic and their track records in politics. Against the verbal assault, Biden was able to lay out plans for large-scale economic stimulus, and an expansion of healthcare and worker protection. With some 48 mn Americans having already voted, Trump trails in crucial swing states.

Emerging market currencies are rallying on the expectation that Biden will be in the Oval Office come January, with the MSCI EM index rising 2.4% since the start of September, the Financial Times reports. A Biden presidency would be good to the RMB, MXN, and KRW — which are leading the rally on expectations that Trump’s confrontational stance will soon be a thing of the past — but the RUB and TRY are lagging behind on expectations that “Biden would take a tougher approach on Moscow and Ankara” than The Donald.


If your business revolves around your people, this episode of Making It is for you.

Our guest is Bahaa Alieldean, managing partner at ALC Alieldean, Weshahi & Partners. Bahaa is a practising lawyer specializing in capital markets, banking transactions and dispute resolution. His firm provides counsel to national and global industry leaders.

Bahaa is a stand-in for any service industry company: We unpack the common challenges facing all service providers, from attracting talent and creating culture, to micromanagement and creating corporate structure.

You already have a podcast player on your iPhone, or you can listen to the episode through our website (no download required). We’re also on Google Podcasts | Anghami | Omny. Making It is on Spotify, but only for non-MENA accounts

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