THIS MORNING: US senate agrees USD 1 tn infrastructure plan; Google, Facebook mandate vaccines for employees; Fed close to tapering stimulus; Facebook shares fall on warnings of growth slowdown; Saudi visitors to Egypt not subject to travel ban.
We’re taking today off — and that means you won’t find EnterprisePM in your inboxes at this afternoon. We’ll be back at the appointed hour on Sunday.
We’re racing into the height of summer with August almost upon us. Fortunately / unfortunately for us, the business news cycle doesn’t take a break for the summer. Here’s what’s coming up in the next two weeks:
- PMI: July’s purchasing managers’ index will drop on Tuesday, 3 August.
- Interest rates: The Central Bank of Egypt will meet to review interest rates on Thursday, 5 August.
- Foreign reserves: July’s foreign reserves figure should land next week.
- Inflation: Inflation data for July will be out on Tuesday, 10 August.
YOUR MANDATORY COVID STORY- Google, Facebook employees will need to be vaccinated when they return to the office. Google has become the first company to mandate vaccines for employees returning to work in the office in a decision that will be applied to its 144k employees worldwide. Facebook followed suit, saying in its earnings release (more on that in this morning’s Planet Finance, below) that its workers too will need to be fully jabbed before setting foot in its US offices. Google has delayed reopening its offices and extended its work-from-home policy until 18 October due to the resurgence of covid-19, while Facebook also plans for a 50% return in September before raising the office capacity to 100% in October. The story got coverage in the Financial Times and CNBC.
THE BIG STORY INTERNATIONALLY- The US Senate is finally willing to start discussing the Biden administration’s USD 1 tn infrastructure bill: The Biden administration and a group of centrist senators reached a bipartisan agreement yesterday on the White House’s USD 1.2 tn infrastructure package following months of talks, paving the way for senators to begin discussing its provisions. Senators voted 67-32 in favor of considering the bill, which would unlock USD 1.2 tn in funds for the nation’s highways, broadband and electricity infrastructure over the next eight years.
***CATCH UP QUICK with the top stories from yesterday’s edition of EnterprisePM:
- Swvl might be heading to the Nasdaq: The Egyptian transport startup has reached a USD 345 mn agreement with blank-check firm Queen’s Gambit Growth Capital to take the company public in the US.
- Six in, seven out: Six new companies will join the EGX 30 next week when the latest biannual rebalancing of the benchmark index takes place on Sunday.
- We’re going to have another epayments player next month: Contact Financial Holding will begin rolling out e-payments services next month, the company’s CEO said yesterday.
MARKET WATCH- Federal Reserve officials are moving closer to taking a decision about when to start scaling back stimulus, but a rate hike is nowhere in sight. That’s according to chairman Jay Powell, who was speaking following the Federal Open Market Committee meeting yesterday when, as expected, the central bank left interest rates at near-zero. In a statement following the meeting, the Fed expressed optimism that the US economic recovery remains on track despite fears over the spread of the delta variant, saying that economic indicators and employment are continuing to “strengthen.”
No rate hikes are in the cards: The Fed has said that it will not begin to tighten policy until it sees “substantial further progress” on employment and inflation, but in the statement yesterday said that the economy has only “made progress toward these goals.” At its last meeting, Powell said that the bank would likely raise rates earlier than expected in 2023.
Though stimulus could soon be curtailed: Fed officials could decide to start tapering the bank’s huge USD 120 bn-a-month bond buying programme in coming meetings, Powell said, without providing further information.
How things go from here will in large part depend on what happens with inflation over the coming months: Inflation is already significantly higher than originally forecast by the Fed, which continues to maintain that price rises will be short-lived and being caused by supply issues related to the pandemic. Inflation rose at its quickest pace in 13 years last month and if this continues policymakers will come under increasing pressure to start turning off the liquidity taps earlier than expected.
GLOBAL EARNINGS WATCH- Facebook shares fell as much as 5% yesterday after the company warned that revenue growth is likely to take a “significant” hit in the coming months. The social media giant comfortably beat earnings and revenue estimates, reporting a 56% rise in 2Q revenues to USD 29.1 bn, and doubling its net income y-o-y to USD 10.3 bn, up from the expected USD 8.7 bn. However, the company warned investors to expect “y-o-y total revenue growth rates to decelerate significantly on a sequential basis as we lap periods of increasingly strong growth.” CNBC and the FT have more.
CORRECTION- Saudi visitors to Egypt will NOT be subject to a travel ban after they return home. EnterpriseAM picked up yesterday a Reuters story claiming Saudi Arabia had banned travel to Egypt, Argentina, South Africa, Lebanon and other countries — and that claimed Saudi citizens could face an automatic three-year travel ban if they visit those red-listed countries. Egypt is not on the kingdom’s “red list,” which covers 13 specific countries. We are, however, still classified by Riyadh as a “very high risk” destination, meaning KSA authorities are advising against travel here. The story has since been removed from our website.
Vaccinated Saudi citizens however will be allowed to travel internationally as of 9 August, Saudi authorities said yesterday, along with those who have recovered from covid-19 less than six months ago, and those who have had covid-19 and received one dose of a vaccine. It is unclear whether this means vaccinated citizens will be free to travel to countries on the red list.
CIRCLE YOUR CALENDAR-
Today is the deadline to apply for the second round of the Green Works Growth Acceleration Program, which aims to support green enterprises in Egypt. The 10-month program is supported by Hivos and implemented by Nahdet El Mahrousa and will see 10 startups receive financial and non-financial support. Chosen startups will be eligible for up to EGP 250k in funding. You can read more about eligibility requirements and the program here (pdf) and register using this form.
Egypt will host the Africa Food Manufacturing exhibition at the Egypt International Exhibition Center on 2-4 August.
Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.