What we’re tracking on 31 March 2021
…and that’s the first quarter in the books, everyone. It’s 2Q2020 (and April Fool’s Day) tomorrow. The Colonel was right: Time accelerates as you age.
THE BIG STORY at home this afternoon–
Former prime minister and veteran politician Kamal El Ganzouri died earlier today aged 88 after struggling with an undisclosed illness, Al Ahram reports. Ganzouri twice served as Egypt’s prime minister, first under former president Hosni Mubarak from 1996 to 1999, and later briefly appointed to the position by the Supreme Council of Armed Forces from November 2011 through June 2012, after Mubarak’s ouster. During his first spell in office, Ganzouri played a key role in setting the government’s privatization agenda, which saw the state sell off several large public sector companies in the late 1990s. Prime Minister Mostafa Madbouly called for a moment of silence at today’s cabinet meeting in honor of Ganzouri’s death. Bloomberg is also out with an obituary.
CATCH UP QUICK on the top stories from this morning’s issue of EnterpriseAM:
- There’s lots of news out of the Sovereign Fund of Egypt, including an EGP 250 mn commitment to the final close of EFG Hermes’ education fund, an MoU with GEMS Egypt to build schools on SFE-owned land, and the possibility that the SFE could roll its real estate assets into a new, IPO-able vehicle.
- The EGX could see as many as six listings this year. It’s already looking fantastic: innovative higher ed player Taaleem and cosmeceutical giant Macro Pharma are now in the market, and consumer healthcare leader IDH about to pull off the nation’s first-ever technical listing.
- A big batch of AstraZeneca’s covid-19 vaccine will land in Egypt today, one day after the Madbouly government announced rules and regs governing the month of Ramadan (which is, incidentally, 13 days away).
THE BIG STORY ABROAD-
The US could be getting over USD 2 tn in infrastructure funding, under a new plan to be officially announced by President Joe Biden in the coming hours, the White House announced in a statement. Dubbed “The American Jobs Plan,” the proposal is being billed as the biggest US investment into a national project since the space race. A second round of initiatives, focused on healthcare, child care, and education is due to be announced in mid-April, bringing the plan’s total budget to just over USD 3 tn.
Where’s the money going? The eight-year plan will include USD 620 bn for transport, USD 580 bn for manufacturing, USD 400 bn for elderly and disabled care, USD 180 bn for non-defense research, and USD 650 bn for improving home quality of life. The government will dedicate about 1% of GDP per year over those eight years to implement improvements in these areas.
Where’s the money coming from? The government plans to hike corporate income tax to 28% from 21%, and to set a minimum 21% tax on global corporate earnings, which should allow the plan, to be fully paid for within the next 15 years. The reforms are expected to add 0.5% in corporate revenue to USD GDP annually. The package did not include any proposed tax raises on individuals, though observers expect the administration to try and raise the top tax rate for individuals with the second round of initiatives next month.
Weaning the US economy off of fossil fuels is a major priority: The proposal has earmarked USD 174 bn for investment in the electric vehicle industry, and USD 165 bn for public transit meant to shift more Americans away from fuel-guzzling cars. The plan will also eliminate fossil fuel subsidies and tax loopholes, and require fossil fuel companies to contribute funds to an environmental recovery fund.
And outperforming China is also on the agenda, with the White House statement identifying “ambitions of an autocratic China” as the great challenges facing the US today, in addition to the need to create mns of jobs.
Covid-19 has turbo-charged Beijing’s quest to overtake the US economy, with China’s economy now expected to overtake the US as the world’s largest in 2028, two years earlier than pre-covid forecasts, Bloomberg reports. Last year saw more Chinese than US companies make it to a list of the world’s largest, while China attracted more foreign investment than the US for the first time. But China’s V-shaped recovery could be stalled by high debt levels, while demographic changes mean it could fall behind the US again in a decade’s time as an ageing population chips away at growth rates.
The plan is likely to struggle with congressional approval, with Republican Senator Mitch McConnell calling the new investment plans a “Trojan horse for massive tax hikes and other job-killing, leftwing policies.”
US 10-year treasury yields rose three basis points to 1.73% on news of the spending plan. The bonds had risen to a 14-month high of 1.77% early Tuesday before dropping back down by the end of the day.
The ambitious plan follows the Biden administration’s passing of a USD 1.9 tn fiscal stimulus package earlier this month, meant to buoy the US economy and provide relief to families struggling with the economic aftershocks of covid-19.
The announcement is all over the front pages of the foreign press: Bloomberg | The Financial Times | Reuters | The Wall Street Journal.
More relevant for us here in Egypt-
The IMF is set to announce more optimistic prospects for global growth when it publishes its latest World Economic Outlook due next week, with improved forecasts buoyed by the US’ USD 1.9 tn stimulus package and its successful vaccine rollout plan, Managing Director Kristalina Georgieva said in a speech yesterday, CNBC reports. But Georgieva warned that the increased growth would be uneven, and driven mainly by the US and China. “They are part of a small group of countries that will be well ahead of their pre-crisis GDP levels by the end of 2021. But they are the exception, not the rule,” she said. The IMF had already raised its global forecasts from 5.2% to 5.5% in January.
You can find the report here on the IMF’s World Economic Outlook landing page when it is out on Tuesday, 6 April.
Growth for the world, debt crisis for EMs? Georgieva warned of a potential emerging market debt crisis, as rising US interest rates draw capital away from EMs, a situation that “would pose major challenges, especially to middle-income countries with large external financing needs and elevated debt levels,” she said. Georgieva is ringing the same bell as UN Secretary General Antonio Guterres, who just a few days ago said the short term borrowing by a large number of EM economies had put them at serious risk of default. The IMF is widely expected to approve a new USD 650 bn batch of Special Drawing Rights (SDRs) to support EM recovery during its Spring meeting beginning 5 April, which would be the largest issuance in history.
The Spring Meetings of the IMF and the World Bank Group are set to take place from 5-11 April. This year’s virtual meetings will bring together central bankers, ministers of finance and development, private sector executives, representatives from civil society organizations and academics. The topics up for discussion include the world economic outlook, poverty eradication, economic development, aid effectiveness, and the global financial system. Some events will be open to the public and can be streamed live from the World Bank’s platform.
HAPPENING NOW- Deliveroo’s London IPO is falling on its face: Deliveroo shares are tanking on its LSE debut. The company shed over GBP 2 bn in market value in its first moments as a public company after seeing its shares fall 30% to GBP 2.71 from a GBP 3.90 opening price during the first 20 minutes of play, the Financial Times reports. The share price recovered slightly to GBP 2.90 later in the trading day. The performance puts the company on track for the worst debut day for any major London listing in at least one decade, data from Dealogic shows.
A blow to London’s bid to attract high growth tech companies: The British government has made a big thing of trying to lure more tech companies to list on the LSE and rejuvenate the stock market. The UK regulator is considering easing listing rules to lure more special purpose acquisition companies (SPACs) to London as part of a larger bid to boost IPO activity, especially new listings by SPACs and high-growth tech companies. Deliveroo’s performance could be a fresh blow to these efforts as it fueled growing doubts among large UK institutional investors about the wisdom of attempting to attract Silicon Valley-style listings, says the salmon-colored paper.
The green bond boom is leaving out emerging markets most in need of climate-friendly funding, according to a report by Imperial College Business School. While Egypt and Indonesia have led EMs in issuing sovereign green bonds, “the current green bond setup is designed by and for developed markets, and you can’t just apply it to EM,” said lead researcher Jonathan Amacker. The report suggests that “transition bonds” and “sustainability-linked bonds” may be more appropriate for EMs, as they tie borrowing rates to an environmental target. But if more is not done to give incentives to local investors and support the development of green finance infrastructure, the report suggests “local green issuance will continue to lag.”
YOUR STATUTORILY REQUIRED AFTERNOON COVID STORY- Have you already had covid? You may be protected against the variants that are now freaking out health officials worldwide. A recent US study suggests that T cells in folks who have natural immunity after an infection have a measure of protection against the troublesome UK, Brazil, and South Africa variants.
The Atlantic is diving into the AstraZeneca vaccine saga amid new reports of countries banning the use of the vaccine over possibly causing blood clots. The jab has been at the center of the World Health Organization’s plan to roll out some 2 bn doses to 92 nations by the end of the year, thus making the possible dangers a “nightmare scenario” for the world that could shake trust in vaccinations, and increase the toll of the pandemic globally. Successive investigations, including one in the European Union, have so far found that the jab does not create more clots than would normally appear in an unvaccinated population of the same size.
FOR TOMORROW- The HVAC-R Egypt Expo will run Thursday through Saturday at the Egypt International Exhibition Center in New Cairo. The fifth annual expo for heating, ventilation, air conditioning, refrigeration, and energy and brings together more than 170 national and international operators with different suppliers.
🗓 CIRCLE YOUR CALENDAR-
The National Museum of Egyptian Civilization will open this Saturday in El Fustat. Local and international visitors alike will pay less for admission for the first two weeks to explore the museum’s central hall, according to a cabinet statement. Meanwhile, the Royal Mummies Hall will be ready for visitors starting 18 April.
The Mohamed Mahmoud Khalil Museum will reopen after 10 years of closure this Sunday, 4 April, according to a statement (pdf) by the Culture Ministry. The museum is located in Mohamed Mahmoud Khalil’s palace built in the early 20th century and houses the family’s expansive collection of masterpieces by great artists such as Paul Gauguin, Auguste Renoir, Vincent van Gogh, Claude Monet, John Jongkind and Charles Francois Daubigny.
The Spring Flowers Exhibit (Ma3rad El Zohoor) is currently taking place at Orman Botanical Garden in Giza. More than 200 exhibitors have set up shop to sell flowers, plants, agricultural products, and gardening equipment. The exhibit runs through 13 April.
🚙 FOR YOUR COMMUTE-
VW’s name change to Voltswagen was apparently some sort of PR stunt: German automaker Volkswagen’s US unit won’t actually be changing its name to Voltswagen, after the company had last week amended its US website and press releases to reflect the new corporate moniker, the Guardian reports. The announcement was a pre-April Fool’s joke aimed at driving attention to its new EV fleet, a company spokesman explained. This from a company that was found in 2015 to have lied through its teeth about US emissions regulations after having been found to have installed software designed to deceive testing machines, costing the company some USD 35 bn in lawsuits and fines. Really smart PR, boys and girls.
Nike is suing Brooklyn art collective MSCHF over their modification of Nike Air Max 97s into “Satan Shoes,” reports the BBC. The shoes were created in collaboration with Lil Nas X — a rapper who reached fame after his single Old Town Road — and feature an inverted cross, a pentagram, the words “Luke 10:18,” and most notably a drop of real human blood in the soles. Nike claims trademark infringement and has asked that MSCHF stops selling the sneakers.
Experts are ringing the alarm that the Tokyo Summer Olympics could potentially be a “global super spreader event” despite precautions being taken to ensure that the games (which kick off on 23 June) are safe for the 60k athletes, coaches, staff, and media personnel set to attend, Bloomberg reports. The game plan in place is to make the Olympics the world’s biggest covid bubble, with participants to be somewhat isolated from the Japanese public. However, Tokyo has ruled out using two core tenets of containment: quarantines and vaccinations, a decision experts worry could see infections spread to those in Japan and internationally as people head home.
Two interesting counterpoints on the NFT craze:
- The Wall Street Journal thinks NFTs are probably here to stay, but suggests that pricing could cool as the world economy slowly returns to “normal” — in large part because pricing now may reflect (a) the boredom of collectors and (b) liquidity sloshing around thanks to things like US stimulus checks.
- And while lots of folks think NFTs make no sense, Bloomberg Businessweek reminds us that there is a precedent of sorts: How different are people who collect NFTs from those who collect prints of photographs?
📺 ON THE TUBE TONIGHT-
Golden Globe-nominated The Father has made its way to Egyptian cinemas nationwide. The film sees Anthony Hopkins and Olivia Colman playing a dementia-afflicted man and his daughter, both of them struggling to accept what the father’s deteriorating health means to their life and identity. You can check out these reviews by the Guardian and Hollywood Reporter.
Netflix has released Mandela: Long Walk to Freedom portraying the South African leader’s fight against political oppression and racism. Played by Idris Elba, Mandela takes us from his childhood in a rural village all the way to his inauguration as the country’s first democratically elected president. Both NPR and The Guardian thought the biopic was good, but needed more. You can also watch the film on Amazon Prime.
A whopping 15 matches are on today as part of the FIFA World Cup Qatar 2022 qualifiers. Matches to look out for at 8:45pm include England versus Poland, Spain versus Kosovo, Germany versus North Macedonia, and Lithuania versus Italy.
🎤 OUT AND ABOUT-
Tintera Photographic Art Consultancy will be hosting Swedish artist Xenia Nikolskaya as she presents her newly published book, The House My Grandfather Built, with an artist talk and book signing on Saturday, 3 April at 4:30-6:30pm. The book won the Swedish Photobook Award for 2021. You can reserve a seat for the event by emailing firstname.lastname@example.org.
The Cairo Flea Market will be holding a Ramadan Street Market this Friday at Sheikh Zayed’s Walk of Cairo.
Photo nerds in Alex, take note: Leon Dubois is giving a film photography workshop at Shelter Art Space in Alexandria. The six-session workshop will be held between 7-12 April.
💡UNDER THE LAMPLIGHT-
Kate Quinn is out with her latest piece of historical fiction, The Rose Code. A mystery set during the Second World War, three very different women come together to attempt to break German military codes at Bletchley Park. War, loss, and the pressure of secrecy ultimately push them apart, but years later they are reunited by a mysterious encrypted letter that reveals an enemy that is coming back for them. Check out this review by Book Reporter for more on what to expect.
🌤 TOMORROW’S WEATHER- Expect more of the same the coming two days, with daytime highs of 22°C and lows of 11°C.