What we’re tracking on 14 January 2021
Well, friends, we made it through another week together. We have a few more hours of blowing sand ahead of us, according to both the weather office and our favourite weather app, but we’ll slide into the weekend with clear skies and cooler temperatures.
THE BIG STORY here at home: Siemens is in line to snag a contract to work on a USD 23 bn national, high-speed electric rail system as the nation’s infrastructure investment boom continues. We have more below.
THE ONLY STORY internationally this morning: Donald Trump has become the first US president in history to be impeached twice. A resolution formally charging him with inciting an insurrection against Congress for last week’s Capitol riot passed the House of Representatives with a 232-197 majority — with 10 Republican lawmakers, including no.3 House Republican Liz Cheney voting in favor.
The Donald is likely going to be out of office when the trial starts: Although the House is planning to send the single impeachment article to the Senate immediately, Majority leader Mitch McConnell has intimated that the trial will start after President-elect Joe Biden is sworn in on 20 January, according to Politico.
- Mullets are coming back, proving we, as a species, have a very finite capacity to learn from past mistakes.
- And for our brethren and sistern in the Tinfoil Hat Brigade: The CIA appears to have released thousands of UFO documents online (overview here, or you can search them here).
- Maybe the aliens will use tech (already at work on snails here on earth) to implant false memories in us, transplant them from one person to another and erase others?
WHAT’S HAPPENING TODAY- Our newly sworn-in MPs will meet again today to elect 25 committee chairs. Well-connected MP Moustafa Bakry says majority bloc the Support Egypt Coalition has already decided who will lead 14 of the committees.
Business-relevant committees: Former IMF advisor and CBE board member Fakhry El Fiqi will be the new head of the Planning and Budgeting Committee while Ahmed Samir, deputy head of the Sixth of October Investors Association, will retain his position heading the Economic Committee. You can find Bakry’s full list of names here.
Meanwhile, Magles El Dawla Judge Ahmed Manaa was appointed as the House secretary-general yesterday, succeeding Mahmoud Fawzy, Al Mal reports.
It’s the second day of the 2021 Men’s Handball World Championship. Hosts Egypt don’t have matches scheduled today after beating Chile 35-29 in the opening game yesterday.
Qatar Airways will resume flights to Egypt on Monday, it said on Twitter yesterday. The carrier plans to operate a daily flight between Cairo and Doha and twice weekly flights to Alexandria. This comes a day after EgyptAir announced plans to restart flights to the statelet. Egypt, along with Saudi, the UAE, and Bahrain, agreed last week to restore trade and travel ties with Doha, bringing to an end the 3.5-year diplomatic crisis.
That “big announcement” teased by Apple this week? It isn’t likely to excite iSheep of the Egyptian variety. The company will put USD 100 mn into supporting racial justice initiatives in the US, it said yesterday.
WHY WE’RE OPTIMISTIC- REASON #923: Credit quality is holding up, CIB CEO Hussein Abaza told us yesterday, and “there’s light at the end of the tunnel” on capex spending.
Vaccine is a game-changer: “Heading into our second year of covid, the prospect of a vaccine is a game changer. We’re still in a tunnel, but we can see the light. The only question is how much longer we have to go,” he said. “It’s ‘Will capex spending pick up starting in June or starting in September?’ not ‘Will capex spending pick up at all?’ And while we’ll continue to be as aggressive as necessary with provisions, we’ve seen no signs of deterioration in credit quality.”
In the meantime, the CIB chief sees the economy moving in the right direction: “The vaccine will be a huge psychological leap for consumers, manufacturers, retailers. And in the meantime, as one of our clients told me the other day: We’ve all managed businesses through more challenging times — whether that’s Metrojet, devaluation or the events of 2011. Today, we have no curfew. Consumption is picking up. Businesses of all forms are open — we’re in a much better position than many other markets.”
AND REASON #924: The sell side continues to tip Egypt. Investors should bias toward equities in Egypt and the UAE, which are trading at “undemanding valuations … and have been significantly underperforming peers since 2017,” CI Capital wrote in a research note yesterday. The investment bank sees foreign and institutional investor activity ramping up in Egypt’s equity market, which is expected to support its rerating. Over in the Gulf, the UAE is expected to see a “strong correlation between the market and trade activity.”
On the macro front, CI Capital foresees a “convergence of treasury yields to market rates” during the first half of the year, helping to unlock the economy’s potential after a long wait. Private sector activity, spurred on by a potential revival in the tourism industry and the resumption of structural reforms, paired with the closing of the real wage gap, are all expected to underpin a resurgence in consumption.
CIRCLE YOUR CALENDAR-
Egyptian thinktank the Cairo Center for African Studies is hosting a webinar on the economic impact of covid-19 and policy responses in Africa on Tuesday, 19 January. Speaking at the event are World Bank Country Director for Egypt, Yemen, and Djibouti Marina Wes, IMF Senior Representative in Egypt Said Bakhache, and Institute of International Economic Finance Deputy Chief Economist Elina Ribakova. You can check out the flyer and register for the webinar here (pdf).
We could start seeing widespread use of QR codes on electricity bills by the end of the month, Al Shorouk reports, citing an unnamed source familiar with the government initiative. The QR codes are expected to contain unique user information like account numbers addresses, company names and dates of issue that could reduce fraud in bill collection.