{"id":570834,"date":"2020-04-16T04:37:58","date_gmt":"2020-04-16T04:37:58","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2020\/04\/16\/what-were-tracking-on-16-april-2020\/"},"modified":"2020-04-16T04:37:58","modified_gmt":"2020-04-16T04:37:58","slug":"what-were-tracking-on-16-april-2020","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2020\/04\/16\/what-were-tracking-on-16-april-2020\/","title":{"rendered":"What we\u2019re tracking on 16 April 2020"},"content":{"rendered":"

It\u2019s a relatively quiet news day in Egypt as we slide into a holiday long weekend.<\/strong> Banks and the EGX are officially off on Sunday and Monday in observance of Coptic Easter and Sham El Nessim, the Central Bank of Egypt (CBE) announced yesterday<\/a>. We\u2019re taking both days off and will be back in your inboxes on Tuesday morning.<\/p>\n

If you absolutely must indulge in feseekh and ringa this weekend, do it in your own <\/strong>homes.<\/strong> Prime Minister Moustafa Madbouly has ordered officials to be strict in preventing large public gathering<\/a>s at parks, beaches, and open spaces during Sham El Nessim. Madbouly will announce today the exact measures that will be in force for the long weekend.<\/p>\n

As of this morning, it has been 100 days since our last vacation<\/strong>, and it feels like the entire world has changed in the time since.<\/p>\n

Oh, and: There are just seven days left until Ramadan.<\/strong><\/p>\n

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<\/a> The news of the morning: There are now over 2 mn covid-19 cases worldwide<\/strong> and the US alone accounts for a third of them, having reported over 636k infections and 28k deaths. The global death toll \u2014 which experts think \u201cunderstates\u201d the magnitude of the situation \u2014 has reached 134k. The grim milestone is topping front pages around the world: Wall Street Journal<\/a> | Bloomberg<\/a> | Financial Times<\/a> | New York Times<\/a> | Reuters<\/a>.<\/p>\n

New Yorkers will need to wear face masks in public <\/strong>starting tomorrow. The governors of Connecticut, Maryland, New Jersey and Pennsylvania have also said residents will need to put on masks as \u201cshelter-in-place\u201d orders are lifted in the coming weeks.<\/p>\n

The EGX30 closed down 1.10 % yesterday<\/strong>, with shares worth EGP 967 mn changing hands, about 51% more than the trailing 90-day average. Index heavyweight CIB was down 1.4%, while Heliopolis Housing led decliners (-3.7%) and Orascom Development was the top gainer (+7.4%). The benchmark index is now down 25.9% for the year.<\/p>\n

How are the markets looking today? <\/strong>Shares in Asia are slumping this morning on poor US economic data on retail sales, factory output and construction \u2014 following the lead of US equities yesterday. Benchmark indexes in Japan, South Korea, Hong Kong and Australia were all in the red at dispatch time and Chinese shares flipping back and forth from green to red. Futures suggest European and US markets will open down later today.<\/p>\n

Meanwhile: Pundits are trying out names for what to call the [redacted] we\u2019re living <\/strong>through right <\/strong>now. <\/strong>1930s: Great Depression. 2007-2009: Global Financial Crisis. Now, we have entries including the Great Shutdown<\/strong> (from the FT<\/a>) and the Great Lockdown<\/strong> (from the IMF<\/a>).<\/p>\n

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COVID-19 IN EGYPT-<\/strong><\/p>\n

Egypt now has 2,505 confirmed cases of covid-19<\/strong> after the Health Ministry reported<\/a> 155 new infections yesterday. The ministry also said that another five people had died of the disease, taking the death toll to 183. We now have a total of 751 cases that have tested negative for the virus after identification and isolation \/ treatment, of whom 553 have fully recovered.<\/p>\n

Mosques will remain closed until there are no new cases of covid-19 in the country and <\/strong>the virus is fully contained<\/strong>, the Endowment Ministry said<\/a> yesterday. The ministry first ordered the closure of mosques on 21 March<\/a> and later also banned<\/a> all gatherings, mass iftars and other collective social activities this Ramadan.<\/p>\n

Egypt is one of a handful of countries in the region that has not requested a so-called <\/strong>\u201crapid f<\/strong>inancing instrument\u201d from<\/strong> the IMF<\/strong> to contain the economic fallout from the pandemic, Middle East and Central Asia Director Jihad Azour said at an online presser yesterday (watch, runtime: 32:51<\/a>). The IMF is still in \u201cdirect contact\u201d with the Central Bank of Egypt and the Finance Ministry should the need for bailout funding arise. Azour said Egypt\u2019s economic reform program and the strength of its FX reserves have helped mitigate the economic impact of the measures being taken to constrain spread of the virus.<\/p>\n

Al Mashat talks Egypt\u2019s covid-19 strategy at G24 meetings:<\/strong> International Cooperation Minister Rania Al Mashat discussed Egypt\u2019s measures to contain the spread of covid-19 and curb its effect on the country\u2019s economy during the Group of 24 Ministers and Governors Meetings, according to a cabinet statement<\/a>. The G24 recommended coordinating a global policy response with multilateral organizations to support individual countries\u2019 efforts to encourage a swift economic recovery, according to a press release (pdf)<\/a>.<\/p>\n

Small IT companies are asking ITIDA for subsidized loans <\/strong>to help stay afloat amid the economic fallout from measures taken to curb the spread of the virus that causes covid-19, Al Mal<\/a> reports. The Information Technology Industry Development Agency is the government agency that promote development of the technology and IT industries in Egypt.<\/p>\n

Covid-19 info service for people with hearing, speech disabilities:<\/strong> The ICT Ministry's Relay Center for People with Disabilities has launched a service to provide people with hearing impairment with advice and information on covid-19 around the clock, according to a cabinet statement<\/a>. The service is offered through the app Wasel. Android users can d<\/a>ownload the app here<\/a>.<\/p>\n

DONATIONS-<\/strong><\/p>\n

The Federation of Egyptian Industries\u2019 building materials division is donating EGP 1.3 <\/strong>mn<\/strong> to support doctors and other healthcare workers, according to Al Mal<\/a>.<\/p>\n

Medical syndicates pledge combined EGP 100k in financial support to families of deceased <\/strong>healthcare workers:<\/strong> The Doctors' Syndicate and the Medical Syndicates Union will each provide EGP 50k to support families of doctors who have died due to exposure to covid-19, according to Ahram Gate<\/a>. The Medical Syndicates Union will also hand out EGP 20k to any union member who has been quarantined after contracting the virus.<\/p>\n

HSBC will provide 34k Egyptians with food and hygiene supplies, including meals for <\/strong>Upper Egypt hospital workers<\/strong>, as part of its USD 25 mn global covid-19 charitable fund, according to a statement (pdf)<\/a>.<\/p>\n

ON THE GLOBAL FRONT-<\/strong><\/p>\n

Two of Europe\u2019s biggest economies will remain locked down until May. <\/strong>Germany has extended most restrictions on social life to 3 May, according to the FT<\/a>. The country has relaxed some restrictions, allowing smaller shops to reopen by Monday and some schools by 4 May, Bloomberg<\/a> adds. The UK, meanwhile, is expected to announce a three-week extension to the lockdown<\/strong>, cabinet ministers said yesterday. Any easing of restrictions will be gradual and likely to start with certain sectors, as ministers say the country must brace for a \u201cnew normal,\u201d officials said, the Financial Times<\/a> reports.<\/p>\n

<\/a> THINGS WE NEED TO WATCH #1: Food security. Romania \u2014 one of Egypt\u2019s biggest <\/strong>source markets for wheat \u2014 has ordered a halt to grain<\/strong> exports<\/strong> in a bid to secure local market needs during the pandemic, according to Bloomberg<\/a>. The country has already harvested and shipped the vast majority of this season\u2019s harvest, but the move could signal challenges to come for importers.<\/p>\n

The decision comes as Egypt <\/strong>kicks off its own harvest season<\/a><\/strong>, which runs until 15 July. The Sisi administration expects to harvest 3.6 mn tonnes of local wheat, in addition to importing 800k tonnes of the grain to boost strategic commodities, Minister Ali El Moselhy said previously<\/a>.<\/p>\n

THINGS WE NEED TO WATCH #2: It doesn\u2019t look like you\u2019re going to be vacationing in <\/strong>Europe this summer. <\/strong>The European Union has already signaled it is likely to extend until mid-May<\/a> the closure of its external borders to non-citizens, a move imposed in March. And it could last even longer: <\/strong>France has signaled it thinks the EU should keep both external and internal borders closed until at least September<\/a>.<\/p>\n

Is it the death of Schengen? <\/strong>Already EU members are extending their \u201ctemporary reintroduction of [internal] border controls\u201d until fall, according to the European Community\u2019s official tracker<\/a>. Germany and Norway have said they will extend border controls for inside-EU traffic until at least 11 November, while Denmark will leave controls in place until at least 12 November and France until 30 October.<\/p>\n

ROOM FOR OPTIMISM IN EMERGING MARKETS?<\/strong> That\u2019s the takeaway from a great thought paper from Actis\u2019 Ewen Cameron Watt making the point that there will be substantial opportunity for investors in emerging markets despite \u201creserve losses, foreign exchange depreciation and recessions.\u201d In a post-covid world, \u201c\u2018Getting back to land\u2019 \u2026 takes skill and entails taking calculated risks. Happily, experience points the way to stable cash flows at low prices without excessive liabilities attached. Many of these will or should exist in the countries which make up 80% of world population and resources<\/strong> \u2013 that is the Emerging Markets.\u201d Read the paper here (pdf)<\/a> or watch (runtime: 7:08)<\/a> Cameron Watt give a video rundown from home.<\/p>\n

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BUSINESS + MACRO FALLOUT-<\/strong><\/p>\n

Advanced economies are forecast to shrink 35% q-o-q in 2Q2020<\/strong> \u2014 a rate four times as high as a record set during the financial crisis, Goldman Sachs figures cited by Bloomberg<\/a> predict. While the number of covid-19 cases seems to be peaking globally, this came at an enormous economic cost, and there\u2019s no telling when people could get back to work, Goldman chief economist Jan Hatzius wrote in a client note. The way out:<\/strong> Europe\u2019s policymakers should do much more and developed countries should lend a helping hand to emerging markets, Hatzius said.<\/p>\n

More big banks reporting their<\/strong> less-than-stellar 1Q2020 earnings<\/strong> yesterday:<\/p>\n