The Israeli Government hopes to pass shortly a bill to set up a second stock market for small and medium-size businesses. On 15 July, the Netanyahu government approved the bill, which is in line with the recently published recommendations of the joint team of the Israel Securities Authority, the Ministry of Justice and other bodies. The Ministry of Justice hopes to introduce the bill for first reading in the current session of the Knesset, and to see it through second and third readings in the coming winter session. Government sources stress, however, that even after the legislation is passed, it will take time to set up the second stock exchange.

The bill provides for substantial relaxations for small and medium-size businesses as far as trading in their shares is concerned, in the hope of providing a better solution for high-tech companies in their early stages. The bill is jointly sponsored by Minister of Finance Kahlon and Minister of Justice Shaked. (Globes 16.07)

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1.2 Finance Committee Allows State 10 Months to Sell Bank Leumi Shares

On 16 July, the Knesset Finance Committee approved the sale of the state’s shares in Bank Leumi (5.8%), valued at some NIS 2 billion at current prices. Ministry of Finance Accountant General Hizkiyahu said that the state’s holding in Bank Leumi do not represent a controlling interest and is not being sold as such. The step is merely a financial investment. The state will also abide by its commitment to the bank’s employees in the sale and would offer them 10% of the shares being sold at a discount of 25% on the market price.

The state requested a year in which to sell the shares, but because of Finance Committee chairman Gafni’s view, which coincides with that of the bank’s workers committee, that this was too long a period, it was decided that ten months would be allowed for the process. The expectation is that the sale be used to reduce the state’s debt, which currently stands at NIS 750 billion, representing 60% of Israel’s annual GDP. The state is expected to hold a competitive auction and to distribute the shares on the market to investors. The Bank of Israel recently relaxed its rules to allow investment institutions to raise their holdings in bank shares to 7.5% of any bank (up from 5% previously), so that the capital market is not expected to have any problem in absorbing the shares. (Globes 16.07)

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1.3 Israeli Government Supports National Biotech & Healthcare With Significant Grants

The Israel Innovation Authority, the Israeli government’s support arm in the country’s development of industrial R&D, has announced the approval of a NIS 120 million (roughly $33 million) grant to three healthcare-related companies as part of a six-year program to expand R&D centers of multinational companies in biotechnology and medicine in Israel.

The three companies, medical device firm Medtronic, US General Electric subsidiary GE Healthcare, and healthcare business and tech solution Change Healthcare were approved after a competitive process by the Israel Innovation Authority that included a review of a number of proposals over several months as well as a marketing campaign with the Foreign Investment and Industrial Cooperation Authority at the Israel Ministry of Economy and Industry. The program is a significant boost to the digital health field, supporting the March 2018 Israeli government resolution to approve a NIS 1 billion (roughly $300 million) national digital health plan to establish Israel as a leading international digital health hub. The program also hopes to help establish the presence of important international medical leaders that will have an effect on the Israeli market and generate significant income through new intellectual property to Israel. (IIA 18.07)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Aurora Labs Raises $8.4 Million Series A for Self-Healing Automotive Software

Aurora Labs closed an $8.4 million A round of financing led by Fraser McCombs Capital, along with previous investor MizMaa Ventures. Aurora Labs, which already has three paying global OEM customers, will use the funds to expand its international presence beyond its new German offices and advance R&D activity.

In an industry where vehicle innovation is software driven, automakers are faced with ever-shortening development cycles and frequent and unpredictable software issues, resulting in increased rates of costly recalls. Fifteen million vehicles were recalled in 2017 for software flaws, costing the industry billions of dollars, and with the number of lines of code in vehicles projected to grow, so too are the costs. Aurora Labs offers an advanced Predictive Maintenance Solution for connected cars and autonomous vehicles. Their machine learning algorithms uniquely address all three stages of vehicle maintenance: The platform detects faults in software behavior and predicts downtime events; it fixes flaws on-the-go in the electronic control unit (ECU) software, guaranteeing a seamless user experience; and finally, Aurora Labs’ OEM-verified, clientless Over-the-Air (OTA) update solution provides cost-effective and swift ECU updates with zero downtime, without requiring dual memory. In short, Aurora Labs’ technology future-proofs software-driven connected cars.

Launched in 2016, Tel Aviv’s Aurora Labs is a leader in on-the-go automotive software fixes and predictive maintenance for connected vehicles, paving the way for the age of the self-healing car. Aurora Labs’ Line of Code Maintenance technology uses machine learning algorithms to uniquely address all three stages of an automotive maintenance system to detect, repair, and seamlessly implement OTA updates to faults in the software. With the rising cost and frequency of software-driven recalls, Aurora Labs’ Self-Healing Software enables reliable and cost-effective rollouts of new automotive features at a time of fundamental change in the industry. (Aurora Labs 11.07)

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2.2 monday.com Raises $50 Million in a Series C Funding Round

monday.com raised a $50 million Series C funding round, led by New York-based growth equity firm, Stripes Group, with participation from earlier investors Insight Venture Partners and Entre Capital. monday.com wanted to build a platform that is the first thing you check when you come into the office in the morning, that manages your every workplace process, and that at the end of the day, makes you smile. To keep doing that, we’re excited to bring on a new partner in Stripes Group that shares our vision.

We have big plans for the product and for you, our beloved community of users. With your constant support and feedback, we’re able to improve a product that we all really believe in—a workplace tool that you actually love to use. To that effect, we’re launching three transformative features today to help you work even better together:

The Column Center: We’re super excited about this! You know all of the columns that you already love on monday.com? Well, we’ve added 15 new ones and they’re awesome. The columns facilitate any sort of data input you could imagine including time tracking, a creation log, location views, and many more.

Board Views: We’re launching a brand new way for you and your teams to visualize, interpret, and extract data from the platform. You can now experience your boards and see your information from a variety of different perspectives. Charts to maps, calendars to files, the opportunities are endless.

Founded in 2012 and launched as an independent startup in February 2014, Tel Aviv’s monday.com is a tool that transforms the way teams work together. Their mission is to help teams build a culture of transparency, empowering everyone to achieve more and be happier at work. (monday.com 12.07)

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2.3 Foresight Increases Ownership in Rail Vision Becoming Largest Shareholder

Foresight Autonomous Holdings has increased its ownership in Rail Vision and is now the largest shareholder. Foresight exercised $2.24 million of warrants, raising their ownership stake to approximately 35% of issued and outstanding shares and 34% on a fully diluted basis.

Ra’anana’s Rail Vision is a developer and market leader of unique solutions and vision-based systems for advanced safety, asset and fleet management in the rail industry. In December 2017, Rail Vision completed a successful trial of its unique vision-based system with a leading European railway company. The trial was conducted under harsh winter conditions with minimal light and demonstrated the system’s real-time capabilities to detect and classify obstacles at distances of several hundred meters.

Ness Ziona’s Foresight Autonomous Holdings, founded in 2015, is a technology company engaged in the design, development and commercialization of stereo/quad-camera vision systems and V2X cellular-based solutions for the automotive industry. Foresight’s vision systems are based on 3D video analysis, advanced algorithms for image processing and sensor fusion. The company, through its wholly owned subsidiary Foresight Automotive, develops advanced systems for accident prevention which are designed to provide real-time information about the vehicle’s surroundings while in motion. (Foresight 12.07)

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2.4 Arbe Robotics Raises $10 Million in Additional Capital

Arbe Robotics has raised $10 million in additional capital. The investment will expedite the development of the Company’s next-generation imaging radar for the autonomous vehicle industry, the expansion of its customer-facing US operations, and enhanced focus on expanding its presence in the Chinese automotive market. This investment brings Arbe Robotics’ total funding to date to $23 million. The $10 million investment was led by 360 Capital Partners, a European venture capital firm with significant investments and experience in the global automotive space. Arbe’s existing shareholders – Canaan Partners Israel, iAngels, Manic Mobility, OurCrowd, O.G. Tech Ventures the VC arm of Eyal Ofer and Taya Ventures – also participated in the funding, illustrating their continued confidence in Arbe Robotics’ future development.

Arbe Robotics’ proprietary, patented, radar processing method is a full-stack 4D imaging system, which provides a cost-effective, long-range, high-resolution radar solution, providing improved products for level 2 automation at a lower cost, enabling level 3 automation as well as level 4 and 5 fully autonomous driving for the automotive industry. The Company’s platform implements two advanced technologies to create a full, comprehensive sensing solution for vehicle autonomy: ultra-high-resolution radar and Simultaneous Localization and Mapping (SLAM).

Tel Aviv’s Arbe Robotics is the world’s first company to demonstrate ultra high-resolution 4D imaging radar with post processing and Simultaneous Localization and Mapping (SLAM). It is disrupting autonomous vehicle sensor development by bridging the gap between radar and optics with its proprietary imaging solution that provides optic sensor resolution with the reliability and maturity of radar technology for all levels of vehicle autonomy. (Arbe Robotics 11.07)

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2.5 Salesforce Signs Definitive Agreement to Acquire Datorama

Salesforce has signed a definitive agreement to acquire Datorama, the leading cloud-based, AI-powered marketing intelligence and analytics platform for enterprises, agencies and publishers. Salesforce is excited to welcome Datorama’s incredible team to the Salesforce family.

Datorama enables more than 3,000 leading global agencies and brands – including PepsiCo, Ticketmaster, Trivago, Unilever, Pernod Ricard and Foursquare – to optimize marketing campaigns, automate reporting and make data-driven decisions faster. Salesforce’s acquisition of Datorama will enhance the power of Marketing Cloud with expanded data integration and intelligence, enabling marketers to unlock insights across all of their marketing channels and data sources. With one unified view of data and insights, companies can make smarter decisions across the entire customer journey and optimize engagement at scale. Datorama customers will be able to leverage the power of the world’s #1 CRM to take action on data and insights, delivering smarter engagement across the entire customer journey.

The announcement strengthens Salesforce’s ability to empower brands worldwide to deliver smarter, more personalized and connected customer experiences. It complements recent innovations including our integration with Google Analytics 360 and Marketing Cloud Einstein capabilities.

Tel Aviv’s Datorama is a software-as-a-service big data management platform for advertisers and ad agencies. Datorama integrates and tracks data from different advertising data channels, mash them up and provide advanced analytics / predictive analytics. By easily integrating marketing channels and creating a Marketing specific data models, we offer a new way of Marketing Data management allowing the Advertiser to seize ownership of the data and increase visibility and control. It allows better ROI optimization based on a holistic view, discovery of new revenue streams, suggestions for action and discovery of wasted budget. (Salesforce 16.07)

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2.6 Mantis Vision Announces $55 Million Funding and Luenmei Quantum Joint Venture

Mantis Vision announced the closing of its Series D round of $55 million, with a total investment of $84 million to date. The new funds will serve to extend the company’s technological edge, accelerate Mantis Vision’s go-to-market strategy, expand its international workforce and support external growth opportunities. The Series D investment was led by Luenmei Quantum Co., a new investor in Mantis Vision, and Samsung Catalyst Fund, an existing shareholder of the company. Mantis Vision and Luenmei Quantum also announced the formation of a new joint venture, MantisVision Technologies, to further strengthen Mantis Vision’s position and growth in the Greater China Market.

Under this new round of funding, Mantis Vision will be able to extend its R&D efforts by advancing today’s state of conventional 3D technology to new heights with its 3D sensing technology. Mantis Vision is planning to double its global workforce with an additional 140 employees in Israel, U.S., China and Slovak Republic by the end of 2020. As part of the latest series funding, Mantis Vision will expand its pool of talent engineers for advanced R&D algorithmic research in computer vision and deep learning, advanced optics experts, mobile camera engineers, 3D apps developers and 3D Volumetric studio experts among other open positions in program management and business development.

Petah Tikva’s Mantis Vision puts 3D image and video capturing into the hands of every consumer, application developer, game designer and industry professional. Turning people, objects and places into high resolution 3D content, in real-time, has never been easier. (Mantis Vision 11.07)

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2.7 Toka Launches to Help Strengthen Countries’ Cyber Defenses

Toka has raised $12.5 million in seed funding to help governmental agencies tasked with keeping their citizens and government institutions safe transform their cyber-defenses. Toka will design and help these agencies build a unique cyber strategy and suite of software products. The investors include: Andreessen Horowitz, Dell Technologies Capital, Entre Capital, Launch Capital and Ray Rothrock, CEO of cyber analytics firm RedSeal.

Toka will design, build, and manage a tailored ecosystem of cyber capabilities and software products for governmental, law enforcement, and security agencies tasked with keeping the digital landscape and their people safe. By working across strategic, operational, and tactical levels — and with deep, hands-on technical experience — Toka can address the full breadth of its clients’ defensive cybersecurity needs, including developing new technologies when required.

Tel Aviv’s Toka is a cyber capacity-building company that helps design, build, and manage a tailored ecosystem of cyber capabilities and software products for governmental, law enforcement, and security agencies. By working across the strategic, operational and tactical levels, and with deep, hands-on technical experience, Toka can address the full breadth of its clients’ cybersecurity needs, including developing new technologies when required. (Toka 16.07)

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2.8 Radiflow Raises $18 Million Venture Round

Radiflow announced that the company has closed an $18 million investment round. This investment round was led by Singapore’s ST Engineering Ventures, the corporate venture capital unit of ST Engineering.

Radiflow is experiencing strong demand for its industrial cybersecurity solutions across all critical infrastructure sectors and has more than doubled the sales of its threat detection tools and services over the past year. Radiflow will use the investment proceeds to extend its sales network to support the growing market demand, strengthen its brand globally and continue developing its innovative solutions to meet evolving customer needs. The investment and partnership enables ST Engineering to access Radiflow’s detection and prevention tools, which has been integrated with its Rail Command, Control and Communications (C3) Systems (SCADA) – in this instant the rail supervisory control and data acquisition (SCADA) system. The combining of these two technologies has resulted in the development of the region’s first end-to-end cybersecurity solution for the rail transport industry

Tel Aviv’s Radiflow is a leading provider of cybersecurity solutions for ICS and SCADA networks in critical infrastructure, including tools for NERC CIP and EU NIS compliance. Radiflow’s industrial cybersecurity solutions are protecting the operation technology networks of over 50 operators of critical infrastructure, including power generation, electricity supply, water facilities and others, in four continents around the world. Radiflow’s Industrial Threat Detection System passively learns and maps an OT network, providing in-depth Visibility and situational awareness, and alerts in real-time for any anomalies in unexpected network behaviors. (Radiflow 11.07)

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2.9 Photomyne Closes $5 Million A Round and Reaches 1 Million Monthly Active Users

Photomyne has reached new milestones of user acquisition and content generation through the app. To date, Photomyne’s Photo Scanner (available on iOS, Android, and online) has been downloaded by 7 million people, 250,000 of which are paying subscribers. The company’s service, which started as a photo scanning utility app for individual use, is turning into a unique integrated platform serving all family members, regardless of their primary technological device. With a single tap of a button, anyone using the app can instantly create a family website showcasing the photos they scanned. It is the easiest, most satisfying way to celebrate and share precious life memories with others – family, high school friends, the local community or simply, the world.

Bnei Brak’s Photomyne facilitates the way people around the world save, share, and enjoy their life memories, by harnessing the power of Machine Learning/AI technology to bridge between the past, present, and future of one’s personal legacy. With its mobile application on iOS/Android and supporting cloud services, Photomyne aims to create the largest indexed photo collection of the pre-digital era through its easy to use photo scanning app. (Photomyne 17.07)

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2.10 Orbit Wins $29.8 Million USAF Contract for KC-135 Audio Systems Sustainment

Orbit Communication Systems has been awarded a $29.8 million requirements contract for systems sustainment by the United States Air Force (USAF). The five-year framework agreement includes upgrades and service for the several thousand ADAS units currently installed on USAF KC-135 aircraft, with staged delivery expected to begin in 2018 and end in 2023. The upgrade, which is part of a massive USAF project to refurbish its fleet of tankers, calls for the front panels of the audio systems to be made water-resistant for improved operability and reliability under harsh flight conditions. Work will be performed by Orbit in its Deerfield Beach, Florida facility.

Orbit’s ADAS (Airborne Digital-controlled Audio System) was designed to meet the specific needs of advanced, large-crew mission aircraft. It integrates the routing and distribution of audio between crew members, maintenance personnel and technicians, with the cabin phone and recording systems. Supporting 8 radios, 8 navaids and 8 warnings, ADAS delivers secure, reliable intercommunications in high-noise environments.

Netanya’s Orbit Communications Systems is wholly-focused on precision tracking-based communications – in the areas of satcom, telemetry and remote sensing – and provides an innovative solution for airborne audio management. With certification by defense, government and commercial agencies, Orbit delivers tailor-made, turnkey solutions at sea, on land and in the air. (Orbit 18.07)

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2.11 Maniv Mobility Raising $80 Million Second Auto-Tech VC Fund

Globes reported that venture capital firm Maniv Mobility is raising a new $80 million fund for investment in the sector, according to documents filed with the US Securities and Exchange Commission (SEC). The fund is Maniv Mobility’s second after raising $40 million last year for investment in companies and ventures in the seed and A rounds. One likely participant in the fund is believed to be Renault-Nissan-Mitsubishi, one of the world’s largest auto corporations. The global company has set up a billion-dollar fund for global investments in auto-tech companies and technologies, which it announced last year. The investment in Maniv Mobility’s fund will be one of the first direct investments by a major auto manufacturer in an Israeli venture capital fund.

Maniv Mobility, Israel’s first venture capital fund dedicated exclusively to the new mobility future, has deep connections throughout the global automotive industry, as well as in the policy and technology communities. Investing primarily in early-stage Israeli startups, we seek out ideas around automotive connectivity and data, autonomous vehicle technologies such as sensors and software, and novel business models. (Globes 19.07)

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2.12 Proggio Investment Round to Disrupt the Project Management Market

Proggio announced a $2 million investment round led by Mangrove Capital Partners. The fund will enable Proggio to take on traditional Gantt-based tools such as Microsoft Project and Smartsheets. Proggio utilizes a unique project diagram called “Projectmap,” which enables building clear visual timeline with integrated team task management. Proggio shifts the paradigm, focusing on people and on the way project teams intuitively operate together to drive a project to success. The solution was introduced a year ago to the market, and customer interest has put Proggio on an accelerated growth path. The company says it will utilize the funding to further develop its product market fit, accelerate development, and build its acquisition engine.

Since its Beta launch in 2017 and following its GA in 2018, Proggio has experienced significant customer growth and is managing thousands of projects worldwide. Customers from enterprises across virtually every industry segment are using Proggio’s unique approach and accessing the platform’s latest innovations. Proggio customers are making over 300,000 project changes monthly – a number projected to hit 1,000,000 by the end of 2018.

Founded in 2016, Kfar Saba’s Proggio is an innovative project management solution built for teams. By providing clear project visuals, ensuring coordination, and keeping the team in focus, Proggio creates the dynamic of successful project teams for its users. (Proggio 19.07)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 POSRocket Secures $1.5 Million in Funding

POSRocket, a Jordanian cloud-based POS systems startup, has announced $1.5 million in a funding round led by Algebra Ventures, with participation from KISP Ventures, Arzan VC, Financial Horizon Group, and two angel investors. Founded in 2016, POSRocket develops cloud-based POS software for restaurants and retailers. The software supports growing businesses by optimizing staffing, regulating inventory, generating sales reports, and allowing owners to remotely monitor all operations in real time. POSRocket’s business and team did not go unnoticed by regional VCs and angel investors. The company initially raised funds from Jabbar Internet Group and Jordan-based accelerator, Propellor Inc. The company plans to use the acquired investment to continue its MENA-wide expansion. (ArabNet 09.07)

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3.2 UAE’s Gulftainer Gets Approval to Run the Port of Wilmington

UAE-based Gulftainer has announced that the US Federal Government has completed a review of the agreement that grants the port operator the rights to operate and develop the Port of Wilmington in Delaware for 50 years. Currently owned and operated by the Diamond State Port Corporation (DSPC), the Port of Wilmington is a fully serviced deep water port and marine terminal, located on 308 acres at the confluence of the Delaware and Christina Rivers. The announcement follows an earlier preliminary agreement between Gulftainer and the State of Delaware to grant its subsidiary, GT USA Wilmington, the exclusive concession rights. As part of the deal, Gulftainer said it is planning significant investments in developing the port’s cargo terminal capabilities to enhance its overall productivity. In addition, the deal will include the construction of a new 1.2 million TEU container facility at DuPont’s former Edgemoor site that DSPC acquired in 2016.

Established in 1976, Gulftainer is a privately owned independent port management and 3PL logistics company based in Sharjah. In the UAE, Gulftainer operates three main ports on behalf of the Sharjah Port Authority – the Khorfakkan Container Terminal (KCT), Hamriyah Port and the Sharjah Container Terminal (SCT). In the US, Gulftainer currently operates the Canaveral Cargo Terminal in Port Canaveral in Florida after winning a 35-year concession in 2015. (AB 17.07)

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3.3 Jacobs Engineering Group Selected to Oversee Construction of UAE Rail Network

US-based Jacobs Engineering Group has been selected by Etihad Rail to deliver critical technical and program consulting services for the UAE’s largest national freight and passenger railway network. Jacobs announced that it will deliver engineering and design services for the 900 km. network, review and provide critical oversight for the detailed designs to be prepared by a network of design and build contractors, and provide construction supervision for the entire project. The project will be built in phases to link the principal centers of population and industry of the UAE and will form a vital part of the planned GCC railway network.

In January 2016, it was announced that Etihad Rail had suspended the tendering process for stage 2 of the UAE’s railway network as it reviewed the project investment. At the time, Etihad Rail said in a statement that it was reviewing options for the timing and delivery of the project’s second phase. Upon completion, the Etihad Rail network will span approximately 1,200km across the UAE, providing both freight and passenger services.

In May, French firm Egis was awarded a project management consultancy contract for the UAE’s railway network. The company will assist Etihad Rail in developing stages 2 and 3. The existing and currently operated network of 264km will be expanded between now and 2024 by over 600km in stage 2 and 250km in stage 3, it added. (AB 14.07)

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3.4 Chinese Tourism to Dubai More Than Doubles Since 2014

The number of Chinese tourists to Dubai have more than doubled in the past four years, according to new figures released on the eve of a visit by President Xi Jinping. Dubai Tourism reported growth of 119% in overnight Chinese visitors since 2014 and a year-on-year increase of 41.4% from 2016 to 2017. Combined with a number of key agreements signed with major players in China, Dubai Tourism has confirmed its continued focus on its fourth top source market. China closed the first five months of 2018 with a record 400,547 visitors and this growth is predicted to continue in 2018.

Earlier this year, Dubai Tourism signed an agreement with Huawei, one of China’s leading smartphone manufacturers, in January which preloads devices with both user-generated and official cinematographic content of Dubai. In May, the agreement was expanded further, with Huawei Mobile Services agreeing to offer useful and accessible content about Dubai, in particular through the company’s newly-updated SkyTone travel and roaming apps. Additional milestones include an MOU with Fliggy, Alibaba’s online travel platform, and strategic alliance with China’s mega internet conglomerate Tencent to elevate the positioning of Dubai as the preferred destination for Chinese travellers and to launch an audio guide feature on WeChat. In addition through Dubai College of Tourism, an entity of Dubai Tourism, tour guide training in Mandarin has taken place with over 200 guides trained to date. (AB 18.07)

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3.5 Emaar to Build MidEast’s Largest Chinatown in Dubai Creek Harbor

Emaar on 18 July announced a landmark development in Dubai that will further strengthen UAE-China relations, coinciding with the historic visit of President Xi Jinping to the UAE. Emaar said it will develop the Middle East’s largest Chinatown within the retail district of Dubai Creek Harbor, its six-square kilometer mega-development. The retail precinct will occupy a central location within Dubai Creek Harbor. The company also announced that it will open three dedicated pavilions in China – Beijing, Shanghai and Guangzhou, all cities served by direct daily flights to Dubai on Emirates Airline. The three offices will promote tourism, education, trading and investment between UAE and China.

Emaar’s new China-focused initiatives build on the strong Chinese investment in the UAE as well as the continued growth of Chinese visitors to the country, especially following the visa-on-arrival status granted to Chinese nationals by the UAE in 2016. China is the fourth largest visitor source market for Dubai, with tourist and business traveler arrivals at 401,000 between 1 January and 31 May 2018, a growth of 9% over the same period in 2017. (AB 18.07)

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3.6 US Hedge Fund Said to Enter Race to Buy Abraaj Assets

York Capital Management is the latest party to join the race to buy the asset-management platform of embattled Dubai private-equity firm Abraaj Group. The New York-based firm is offering $45 million for the platform, including about $20 million in severance payments for staff. Abraaj is currently under a court-supervised liquidation, and that liquidator would keep managing the assets in the funds. No final agreements have been reached and the deliberations may not lead to a deal, the people said.

A unit of Abu Dhabi Financial Group made a $55 million bid for the asset-management platform, challenging a rival offer from Cerberus Capital Management. An earlier proposal from Tom Barrack’s Colony Capital was rejected by the liquidators, despite the firm making an offer for Abraaj’s limited-partnership stakes as well.

At its peak, Abraaj owned stakes in companies in most of the major emerging markets outside of China. The collapse of Abraaj, once one of the developing world’s most influential investors, came months after some of its stakeholders began an investigation into mismanagement of money in its healthcare fund. The 16-year-old buyout firm filed for a court-supervised restructuring last month. (AB 18.07)

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3.7 Pica8 Expands in Middle East with Distribution Agreement with Dubai’s Distilogix

Palo Alto, California’s Pica8, a leading provider of advanced, open networking software, signed an agreement with Dubai-based VAD (value-added distributor) Distilogix that licenses them to sell Pica8’s PICOS® Linux-based network operating system (NOS) and PicaPilot white box switch automation and management software in the Middle East and Africa. Distilogix specializes in bringing a variety of software-defined technologies to customers in the MEA region that are interested in breaking away from their decades-old expensive legacy networking architectures.

The agreement will allow Distilogix to sell PicaPilot and both the PICOS Enterprise Edition (which includes an unmodified Debian Linux kernel, OpenFlow Version 1.5 SDN, L2/L3 switching and routing features), Pica8’s industry-leading CrossFlow (a dual-control-plane technology that allows all switch ports in a network to be both L2/L3 and OpenFlow controlled at the same time), as well as the OpenFlow-only PICOS SDN Edition. (Pica8 18.07)

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3.8 Filipino Retailer Jollibee Plans 25 UAE Stores by 2020

Jollibee, the Philippines-based fast food chain, has announced plans to expand across the UAE to reach 25 outlets in the country by 2020. In line with its plans, the brand has opened its 12th store in Al Ain Mall and it is set to open two more outlets over the next quarter at Abu Dhabi’s Al Wahda Mall and Dubai’s Deira City Centre. The company said that the UAE plays a significant role in the company’s regional development plan. In an aim to further cater to the Gulf, Jollibee has also widened the scope of its menu options to ensure it satisfies the diverse palates of the UAE.

Jollibee said it has introduced new offerings that include the double patty beef burger, the spicy chicken burger and spicy chicken tenders, in addition to its regular serving of their flagship products Chickenjoy and Jolly spaghetti. An area of growth for the fast food chain is the soon-to-be launched chatbot ordering under the brand name of Bee Talks. Customers will be able to place their orders with the ease of a click via Jollibee’s Facebook Messenger or through their mobile browsers for home deliveries.

The expansion plan comes as the GCC food and beverage industry is expected to continue to grow at 7.1% annually, reaching $196 billion by 2021, according to MENA Research Partners. Jollibee was launched in 2015 in the UAE, where it operates under Golden Bee restaurants. The Filipino chain has 39 outlets in the GCC. (AB 13.07)

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3.9 Tint World Franchise Opens its First Store in UAE Capital

Florida’s Tint World Automotive Styling Centers, a leading auto accessory and window tinting franchise, has entered the growing United Arab Emirates market with its first store in Dubai, owned and operated by entrepreneur and education advocate Khalil Hijazi. The Dubai location marks the second store in the Arabian Gulf, with the first being in Saudi Arabia. Tint World® is seeking franchise master partners to continue to develop Tint World® in the area, specifically in Bahrain, Kuwait, Oman and Qatar.

Tint World® Automotive Styling Centers offer sales and installation of auto accessories, mobile electronics, audio video equipment, security systems, custom wheels and tire packages, window tinting, vehicle wraps, paint protection films, detailing services, nano-ceramic coatings, maintenance and repair services, and more. Tint World® is also the leading provider of residential, commercial and marine computerized window tinting and security film services with locations throughout the U.S. and abroad, with franchise opportunities available worldwide.

Founded in 1982, Tint World has grown to become an award-winning franchised provider of automotive, residential, commercial and marine window tinting and security film services. With Automotive Styling Centers in the U.S. and abroad, each franchise location houses approximately 20 profit centers, ranging from in-store accessory installations to off-site sales and installation of residential, commercial and marine window tinting and security films. (Tint World 20.07)

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3.10 UAE Retail Giant Lulu to Invest $270 Million in Saudi Expansion by 2020

UAE hypermarket giant Lulu has announced plans to invest SR1 billion ($270 million) in Saudi Arabia by 2020. The retailer said it will open another 15 hypermarkets in the next 18 months, of which five will open by the end of this year. These include three hypermarkets in Riyadh and one each in Tabuk and Dammam. Lulu chairman Yusuff Ali made the comments at the opening of the company’s 150th hypermarket in the Saudi capital. The hypermarket, which is Lulu’s biggest of 13 in the country, is located in the newly launched Atyaf Mall in Yarmouk, and is spread across 220,000 square feet. Lulu currently employs more than 3,000 Saudi nationals, with the goal to give employment to 6,000 Saudi nationals by the end of 2020. Lulu is also investing another SR200 million in setting up a 1 million sq. ft. wholesale and logistics center in King Abdulla Economic City (KAEC) to support the retail expansion help in ensuring food security. (AB 22.07)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Egyptian President Sisi Inaugurates Largest Wind Farm in the World

Egypt’s President Abdel-Fattah El-Sisi inaugurated a number of new electricity mega projects in the country, including the Gabal El-Zeit wind farm, which is considered the largest in the world, according to the Egyptian presidency. Launched in 2015 in the Red Sea governorate, the Gabal El-Zeit wind farm will have a total of 300 wind turbines with an overall capacity of 580 MW. Sisi will also inaugurate three electricity power plants constructed by German company Siemens in the new administrative capital, Beni Sweif and Burlus. The new power plants will produce 14.4 gigawatts, boosting Egypt’s power generation by 50%.

Siemens signed an €8 billion ($9.4 billion) deal in June 2017 to supply gas and wind power plants to Egypt. Egypt also said earlier this month that construction on its first nuclear power plant, which will be built by Russia, will begin in the next two to two-and-a-half years. The 4,800 MW plant at Dabaa in should be up and running by 2026, according to a spokesman for the energy and electricity ministry. Egypt has set a goal of obtaining 20% of its power from renewable resources by 2022, and 42% of its electricity from renewables by 2025. (Ahram Online 23.07)

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4.2 Clear Blue’s Smart Off-Grid System Powers 800 Solar/Wind Street Lights in Morocco

IDSUD Energies, a renewable energy company, has installed Smart Off-Grid technology from Toronto’s Clear Blue Technologies International to power 800 IDSUD Energies solar and wind powered street lights (NHEOLIGHT) for Logintek Morocco. Logintek Morocco, a project by Zinafrik Development Group, is the first national private network of integrated logistics and industrial cities, designed as transit hubs for Morocco and to the rest of Africa. This is phase 1 of a multi-phase project expected to total almost 5,000 Smart Off-Grid streetlights.

With extensive management and control capabilities, automated monitoring and alerts, proactive weather forecasting, and the ability to optimize systems remotely, Smart Off-Grid technology keeps off-grid systems running, prevents outages, and enables remote maintenance and troubleshooting when needed to quickly resolve any issues. The result is unmatched reliability, long-lasting system performance, and a reduction of up to 80% in installation and maintenance costs. Using Smart Off-Grid, Clear Blue will manage, control, and maintain all 800 of IDSUD’s solar and wind-powered lighting systems.

IDSUD Energies engages in the research and development of small 3D proximity wind turbines and outdoor lighting solutions to transform wind and solar energies into public lighting. It also offers self-reliant wind powered lampposts; telemetering solutions that simplify. (IDSUD 24.07)

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Trade Deficit Declined to $6.64 Billion in May 2018

Lebanon’s trade deficit dropped by 1.1% year on year (y-o-y) hitting $6.64B by May 2018 as an outcome of a 9.7% annual increase in exports to $1.32B, which outweighed the 0.5% increase in imports touching $7.96B. The leading imported goods to Lebanon were Mineral Products (17.17% of total imports) which decreased by 15.65% y-o-y to $1.36B on the back of a 45.17% y-o-y decline in the imported quantity of Mineral Fuels to 2.27M tons by May 2018.

It is worthy to note that the lower oil imports for the period could have been justified by the large amounts imported in 2017 (totaling 16M tons) prior to the increase of the VAT rate to 11%, effective January 2018. However, the customs data on oil imports for 2017 and 2016 were revised, such that the total volume of mineral fuels in 2017 now stands at 9.08M tons instead of 16M tons and 9.24M tons for 2016 instead of 7.68M tons.

In their turn, Products of Chemical or Allied Industries (11.84% of total imports) increased by 8.31% y-o-y to $942.76M, followed by Machinery & Electrical instruments (11.39% of total imports) which increased by 15.56% y-o-y to $907.25M. As for Vehicles and Transport Equipment (8.47% of total imports), they decreased by 10.33% y-o-y to $674.22M.

By May, the 3 main import destinations were China, Italy and Greece with shares of 11%, 9% and 8%, respectively.

In terms of exported goods, Pearls, Precious stones and Metals (grasping 25.96% of total exports) rose by a yearly 22.98%, reaching $343.96M by May 2018. This increase may be attributed to the 12.5% y-o-y uptick recorded in the volume of Pearls, Precious stones and Metals to 27 tons over the same period. Moreover, Base Metals and Article of Base Metal (13.86% of total exports) increased by 37.37% y-o-y to $183.66M. This is mainly justified by the 12% increase in steel volume to 192,472 tons in 2018 and to the 27% average price rise to $796.93 in 2018, contributing to a 50% hike in steel value which stroked $60.60M in 2018. However, Prepared Foodstuffs, Beverages and Tobacco (13.81% of total exports) decreased by 10.10% y-o-y to $182.91M, this was mainly due to the weakened economy in the UAE and Saudi Arabia. Lebanon’s top export destinations were UAE, South Africa, Saudi Arabia and Switzerland with contributions of 13%, 10%, 7% and 7%, respectively. (BLOM 15.07)

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5.2 Jordan Sees Annual 5.1% Inflation Increase for June 2018

The monthly report on inflation in Jordan issued by the Department of Statistics indicates that the Consumer Price Average (Inflation) reached 125.1 in June 2018 against 119.0 during June 2017, marking a 5.1% increase. The main commodities groups, which contributed to this increase, were Transport 1.59%, Cereals and its Products 1.09%, Tobacco and cigarettes 0.62%, Fuel and lighting 0.41% and Rents 0.40%. Meanwhile, the main commodities groups which witnessed a decrease in their prices were Meats and Poultry 0.21%, Clothes 0.06%, Foot wear 0.01% and Spices and flavor enhancers and other foods 0.01%.

The Consumer Price Average for June 2018 has increased by 0.1% compared with the previous month (May) 2018. The main commodities groups which contributed to this increase were Rents 0.46%, Clothes 0.14%, Personal Care 0.06%, Fruits and Nuts 0.02% and Foot Wear 0.02%. Meanwhile, the main groups which witnessed a decrease in their prices were Meat and poultry 0.32%, Vegetables, Dried and Canned Legumes 0.27%, drinks and beverage 0.03% and Cereals & its products 0.01%. (DoS 15.07)

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5.3 IMF Says 17% of Jordan’s GDP in Shadow Economy

The shadow economy in Jordan accounted for 17.38% of the GDP between 1991 and 2015, according to the International Monetary Fund (IMF). In a paper titled “Shadow Economies around the World”, the IMF showed that the Kingdom’s shadow economy’s part in the GDP ranged between 13.44% and 21.12% during the 20 years targeted in the study. The paper, which covered 158 countries, also showed that the ratio of the informal economy to the GDP took a downtrend starting from 2004.

However, the real volume of the shadow economy might be higher than that shown in the study in some countries like Jordan, Lebanon and Turkey as the impact of hosting refugees was not measured.

At the Arab countries level, the study indicated that the shadow economy in Qatar reached 15.93%, 16.56 in Saudi Arabia and 19.58 in Syria. The ratio was found to be significantly higher in Egypt (34.24%), Morocco (34.1%), Lebanon (31.58%), Algeria (30.86%) and the UAE, where it reached 26.54% in the same time span. (JT 14.07)

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►►Arabian Gulf

5.4 EU & US Complain over GCC Duty on Energy and Carbonated Drinks

The European Union, Switzerland and the United States have complained at the World Trade Organization about an excise tax imposed by three Gulf states on carbonated and energy drinks. Concerns were raised earlier this month about the 100% excise duty on energy drinks and a 50% duty on other carbonated drinks. The EU, Switzerland and US claimed that there is no rationale for applying duties on these products and no indication that the measures would be modified to make them consistent with the WTO.

GCC countries, particularly Saudi Arabia, the UAE and Bahrain, were asked to explain the rationale for targeting only carbonated soft drinks, with and without sugar, as well as energy drinks and why excise tax was applied instead of a tax-based on the volume or quantity of the relevant ingredients. On behalf of the three GCC members, Saudi Arabia said that the tax aims to protect human health and the environment, and is not intended to protect the local industry. The tax was introduced in 2017 and aims to promote healthy lifestyles in countries where there are high rates of diabetes and obesity.

The Gulf’s soft drink market, which also includes Qatar, Kuwait, and Oman, was worth $8.4 billion last year, according to market researchers Euromonitor. The tax would hit brands such as Coca-Cola, Pepsi and Red Bull. (AB 18.07)

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5.5 Higher Crude Prices & Output Hike to Boost UAE Economic Growth

The Institute of International Finance (IIF) has raised the projected UAE real GDP growth from 2.1% to 2.4% for 2018 and maintained 2.7% forecast for the next year. Similarly, it increased Saudi Arabia’s GDP growth projection for this year to 2.7%, an increase of 0.4% from its earlier forecast. Overall, it sees the GCC’s projected growth rate of 2.5% for 2018 and 2.9% for the next year. Fiscal deficits will narrow as oil earnings climb, which will more than offset the high levels of public spending – an average increase of 13% for the GCC in 2018.

Opec members recently agreed to hike output by one million barrels per day amidst rising global crude prices. The GCC countries – namely Saudi Arabia, the UAE and Kuwait – would the biggest beneficiaries of this hike output as they have spare capacities. These GCC countries increasing their output above their Opec quota levels in H2/18, supporting real GDP growth in their oil sectors. Moreover, oil revenue will be supported by oil prices remaining high as the overall November 2016 output agreement remains intact. The IIF analysts expect Brent prices to average $72 per barrel in 2018 and $65 in 2019.

The UAE earlier this month said it would increase production by 0.2 million barrels per day to 3.5m bpd by the end of 2018 to help meet any oil shortage and will also adhere to the conformity level. Moreover, the UAE has also announced a host of new measures such as Dh50 billion stimulus by Abu Dhabi, reduction in certain fees by the government and the free zones across the country. (KT 16.07)

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5.6 UAE Space Agency Signs Agreement with NASA on Space Exploration

The UAE Space Agency has signed a letter of intent with the National Aeronautics and Space Administration (NASA) that covers cooperation in the exploration of space and the UAE’s astronaut program. The agreement was signed at the Farnborough International Airshow, and was signed by the director-general of the UAE Space Agency a NASA administrator. The signing comes as the UAE’s space sector enters a new phase of activities, with the UAE Astronaut Program having recently announced the selection of nine candidates who will undergo a period of assessment and training. Following the selection of the final team of astronauts, the first Emirati astronaut is scheduled to launch and arrive at the International Space Station in April 2019. (AB 22.07)

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5.7 IMF Raises Saudi Growth Forecast on Higher Oil Prices

On 16 July, the International Monetary Fund raised its growth forecast for the world’s top crude exporter Saudi Arabia, citing higher oil prices. In its World Economic Outlook update, the IMF said the Saudi economy – which contracted by 0.9% last year — would grow by 1.9% in 2018, up 0.2%age points from its April projections. This is the third time since October that the IMF has raised its growth forecasts for the kingdom, reflecting soaring oil revenues which make up more than 70% of Saudi income. However, it maintained its Saudi growth projections for 2019 at 1.9% on predictions that oil prices would moderate.

Oil prices have more than doubled since early 2016, when major producers struck a deal to cut output. Last month, they agreed to boost output again to compensate for key supply disruptions in Venezuela and Libya, and in a bid to ease prices that have hit $80 a barrel.

Riyadh-based Jadwa Investment estimated Saudi Arabia would boost its oil output to 10.3 million barrels per day for 2018, up from 9.9 million bpd for the first six months. To achieve that, the kingdom must pump around 10.6 million bpd until the end of 2018. This will sharply cut Saudi Arabia’s budget deficit to around $30 billion (26 billion euros) from the projected $52 billion, Jadwa said in a report. Riyadh has posted a budget deficit for the past four consecutive years, borrowing from domestic and international markets and hiking fuel and power prices to finance the shortfall. It also introduced a 5% value-added tax at the start of 2018. Since 2014, Saudi budget deficits have totaled $260 billion. (Various 16.07)

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5.8 Saudi Construction Sector Hardest Hit by Expat Exodus

Saudi Arabia’s construction sector was hardest hit by an outflow of expat workers during the first three months of 2018, according to new research. Jadwa Investment’s latest update on the Saudi labor market said the largest number of foreign workers leaving the Gulf kingdom were unskilled and on low wages. It said the number of foreigners leaving the market in Q1/18 was not equally met by the number of Saudis hired, probably due to the wage gap between Saudis and expats. Overall, Saudi Arabia’s inched up to 12.9% in the first three months of 2018, according to official figures from the General Authority for Statistics.

During Q1/18, the labor market saw the implementation of expat levies, which raised expat labor costs, six months after the implementation of expat dependent fees. The total number of foreigners in the Saudi labor market has declined by around 796,000 since the start of 2017, with about 221,000 leaving the market during Q1, Jadwa said. At the same time, a new wave of Saudization was announced, by enforcing Saudi employment in 12 retail sectors by September. (AB 22.07)

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►►North Africa

5.9 Egypt’s Parliament Approves Law Creating Sovereign Wealth Fund

Egypt’s House of Representatives on 16 July passed a law presented by the government to set up a sovereign wealth fund to manage state companies. According to the new law, the EGP 200 billion fund is named the Egypt Fund and will be headquartered in Cairo. Finance Minister Maeit said that the draft law was presented to parliament as an answer to the house’s request to use Egypt’s misused sources of wealth in the best way. Speaker of parliament Abdel Aal also stated that no sovereign wealth fund had ever failed and that sovereign wealth funds had two types, which one was for natural sources of wealth while the other was to attract investments. The fund will focus on fields like petrochemicals, mining, tourism and pharmaceutical industries. (Ahram Online 16.07)

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5.10 Libya’s Largest Offshore Gas Field Comes Onstream

Libya’s National Oil Corporation (NOC) and Eni announce that Mellitah Oil & Gas, an Eni and NOC joint venture company (50/50), has started production in the first well of the offshore Bahr Essalam Phase 2 project. This comes just three years after the final investment decision. Two further wells will begin production within a week. An additional seven wells will come onstream by October 2018.

Phase 2 of the project completes the development of the largest offshore producing gas field in Libya, increasing production by 400 million cubic feet of standard gas per day (MMSCFD). Phase 2 will complete between September and October, bringing total field production to 1,100 MMSCFD. Bahr Essalam, located about 120 kilometers northwest of Tripoli, contains over 260 billion cubic meters of gas. This is delivered through the Sabratha platform to the Mellitah onshore treatment plant before principally being used to supply the national network.

Eni has been present in Libya since 1959, where it currently produces around 350,000 barrels of oil per day. (National Oil Corporation 12.07)

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5.11 MENA Youth and Women Most at Risk from Job Crisis

The International Labor Organization (ILO) ranks North Africa as having the worst regional unemployment rate in the world, with women and youth especially at risk. The ILO states that in 2018, North Africa will remain at a steady 8.7 million. It also mentions that five million Middle Easterners will face unemployment and one-third of those unemployed will be women. People aged 15 to 30 in the Middle East and North Africa make up 60% of the region’s entire population, according to IMF.

Saudi Arabia, which is the Middle East’s largest economy and nineteenth overall in the world according to GDP, has an estimated youth unemployment rate of 32.6% by the ILO. The IMF reports that the unemployment rate for young women is 62%. The Middle East and North Africa’s gender gap is triple the size of other developing economies in the world; women are three times less likely to be working than men.

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5.12 Morocco’s Trade Deficit Grows as Foreign Investment Plunges

Morocco’s trade deficit hit MAD 100.832 billion in the first six months of 2018, representing an increase of 7.8% compared to the same period in 2017. Morocco’s trade deficit of was estimated at MAD 93.507 billion in the first six months of 2017. Morocco’s imports increased by 9.9% to reach MAD 240.974 billion and exports saw an increase of 11.4%. .

Equipment imports, which rose 10.8%, led to the growth of Morocco’s trade deficit. Consumer goods imports increased by 8.6%, while energy imports increased by 15.7%. There was also a 9.5% surge in food imports, reaching MAD 25.541 billion.

The automotive industry led the list of increases in Morocco’s exports with an increase of 19.1%. The automotive sector was followed by agriculture and agri-food exports, with a 3.9% increase. Phosphates and derivatives exports increased by 16.5% to MAD 24.919 billion.

Tourism, one of the pillars of Morocco’s economy, increased by 15.5%. A year earlier tourism receipts fell by 5.8%, according to the foreign exchange regulator. There was an increase of 8.5% in remittances from Moroccan expats in the first six months of 2018 against 0.2% in the same period of 2017. Despite many multinational companies operating in Morocco, foreign direct investments (FDI) declined by 33.1% against a rise of 24% in 2017. (MWN 17.07)

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5.13 Morocco Touts Economic Zones for Aerospace Investment

Morocco has achieved significant growth in the aeronautical sector since attending its first Farnborough Airshow in 2010. Morocco’s Investment Development Agency (AMDI) will attend Farnborough Airshow to present the advantages Morocco has as a manufacturing destination for the aerospace industry.

Morocco has been successful in touting its inexpensive labor force and political stability to motivate international investments. China, more than other countries, has benefited from Morocco’s advantages of investment in various sectors. In an April 2017 statement, the AMDI expected “the arrival of 200 Chinese companies operating in a variety of areas including the manufacturing of cars, the aeronautics industry, aviation replacement parts, electronic information, textiles, the manufacturing of machines, and many more. Total investment by companies in the [free economic] zone after 10 years is expected to reach $10 billion.” Since the aviation sector is developing, especially in the manufacture of ancillary and spare parts, Morocco could be an attractive destination for companies seeking to invest in the aerospace industry.

In addition to more than 110 international aeronautical and aerospace companies operating in Morocco, it has nearly 11,500 aviation professionals, of whom 50% are women. Morocco’s aerospace industry plans to double its capacity and number of operators and create 23,000 new jobs by 2020. The Casablanca Free Zone in Nouaceur is a designated industrial integrated platform with special support for investors in the aerospace sector. (ANDI 18.07)

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5.14 Unemployment Rate Rises in Morocco

In Morocco, the unemployment rate rose from 10.2 to 10.5% from January 2018 to March 2018. The highest rates of unemployment in Morocco are held by women and young people. Unemployment rates for women stand at 14.1% and the rates for young people, aged 15 to 24, are estimated at 35.1% by the ILO. Morocco’s youth makes up about 17% of the country’s entire population yet stands as the front runners for the rate of unemployment.

From 2017 to 2018 in Morocco, the estimated number of working-age people set to join the labor-force was 245,000. A recent study reported Morocco would have to add 115,000 additional jobs each year as well as maintain its current opportunities to just remain at only 47% of the current population in the workforce.

The Middle East and North Africa need workforce opportunities to grow, or else by 2030, unemployment levels may reach 14%. The most common reasoning for an increase in unemployment is rapid population growth combined with only a steady or slow creation of jobs. By 2020, Morocco is projected to grow by another one million people. If the nation does not want unemployment rates to rise, it will have to create jobs for its people at an expeditious rate. (MWN 16.07)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkey’s Unemployment Rate Falls to Single Digits in April

Turkey’s unemployment rate fell to 9.6% in April, dropping 0.9% year-on-year, the country’s statistical authority announced on July 16. The unemployment rate was 10.1% in March. Thus, the country’s unemployment rate declined to single digits again for the first time since May 2016.

Over the past five years, the highest unemployment rate was 13% in January 2017, while the lowest was seen in June 2013 with 8.1%. Data from the Turkish Statistics Institute (TUIK) also showed on 16 July that the seasonally adjusted unemployment rate was 10.3% in April with a 0.4% increase. The number of unemployed persons aged 15 years and over declined by 201,000 on a yearly basis in April, amounting to 3.09 million in April. TUIK also noted the number of employed people rose by 850,000 to around 29 million over the same period, taking the employment rate to 47.9% with a 0.7% annual increase.

According to the distribution of employment by sector, 18.3% was employed in agriculture, 19.5% was in industry, 7.4% was in construction and 54.8% was in services, TUIK data showed. The labor force participation rate (LFPR) was 52.2%, a 0.3-percentage point annual rise, while the number of people in the labor force totaled nearly 32.1 million – rising 650,000. Official figures showed the LFPR for males was 72.4% with a 0.1% increase and 34% for females with an annual hike of 0.6-percentage point. The TUIK also reported that the rate of unregistered employment – people working without social security related to their principal occupation – was 33.3% in April, marking a 0.6% decrease year-on-year. (TUIK 16.07)

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6.2 Turkey Establishes Halal Accreditation Agency

Turkey has established a new halal certification body, the Halal Accreditation Agency (HAK). The HAK, established with a presidential decree, will strengthen Turkey’s central position in the field of halal certification and accreditation. It will allow the country to be a gold standard in terms of rulemaking, take steps moving forward and capitalizing on the growing global halal market. The agency, in the form of a public entity, will be responsible for accrediting halal-compliance evaluation institutions and ensure their operations are in compliance with national and international standards. HAK will also operate to ensure the acknowledgment of the documents prepared by the halal-compliance evaluation institutions on national and international platforms.

Operating under the Trade Ministry, it will be the only institution that would provide halal accreditation services in Turkey. The agency will also offer halal accreditation services for halal-compliance auditing firms in and outside Turkey, as well as determine and implement benchmark and measures regarding halal accreditation. The agency will represent Turkey at international and regional accreditation associations and organizations. It will also take part in their boards or serve as the center of such institutions.

In 2010, Turkey took some important steps regarding halal certification within the framework of the Organization of Islamic Cooperation (OIC). Regulations, including the Halal Food Standard and the Halal Accreditation Standard, were approved by the OIC, leading to the establishment of the Standards and Metrology Institute for Islamic Countries (SMIIC), which is headquartered in Turkey. It currently has 35 members. Global trade in halal products and services is currently valued at around $3.9 trillion. (Daily Sabah 17.07)

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6.3 Cyprus’ June Harmonized Inflation Reaches 1.7%

The harmonized consumer price index rose in June 1.7% compared to the respective month of 2017 mainly on higher energy prices, Cystat announced. Energy prices rose last month an annual 9.8%. Prices for food, alcoholic beverages and tobacco rose 2.3% while services became 1.5% more affordable. Prices for non-fuel industrial products fell last month 1.3%. In the first six months of the year, the harmonized inflation was 0%, Cystat said. (Cystat 18.07)

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6.4 Cyprus Sets New Record in Tourist Arrivals

More than 1.6 million tourists visited Cyprus in the six months to June, the largest number ever for the first half of the year, Cystat said on 17 July. Tourist arrivals in January-June rose 12.4% to 1.64 million from 1.46 million in the same period last year. An influx of tourists from main market Britain and an upswing from Sweden helped Cyprus mark another record as arrivals in June broke the 500,000 barrier. Arrivals reached 511,073 in June, an increase of 8.2% from last year’s 472,450. However, the statistical department noted a 5.1% drop in the number of Russian tourists, as well as a 15.1% decrease in arrivals from Israel and an 11.3% decline from Germany. Year-on-year tourist arrivals from number one market the United Kingdom rose by 9.9% in June to 164,477, while there was a 20.2% increase in tourists from Sweden. Sweden has now become the island’s third largest tourist market, with Russia still holding second place.

Industry officials argue that arrivals from Russia are down due to fluctuations of the ruble and the renewed popularity of Turkey — a destination made more attractive by a weak Turkish lira. The tourism boom has helped Cyprus return to growth following a €10-billion bailout in March 2013 to rescue its crumbling economy and insolvent banks. Income from tourism now accounts for about 15% of the eastern Mediterranean island’s gross domestic product and is credited with underpinning a quick recovery. A record 3.65 million tourists took holidays in Cyprus last year, spending an unprecedented €2.6 billion. (Cystat 17.07)

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6.5 Cyprus & Israel Talk Fire and Water

Israel and Cyprus agreed to develop further their cooperation in water management and firefighting, two areas in which both countries face similar challenges. Cypriot Agriculture Minister Kadis met with the Ambassador of Israel Revel in Nicosia, where the two men agreed to plan for a Cypriot delegation to visit Israel in an effort to enhance cooperation in water management. Kadis is also expected to visit Israel in order to exchange views on agricultural cooperation matters, following an invitation extended to him by his Israeli counterpart. Lately planes from Greece and Israel have been landing in the Republic of Cyprus as a precaution or to take part in aerial firefighting, with several of the fires being blamed on human factor and the success of most operations typically judged in the very early stages of a fire breaking out. (CNA 12.07)

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6.6 S&P Raises Outlook on Greece, Affirms Ratings

S&P Global Ratings said on 20 July that it raised its outlook on Greece to positive from stable while affirming its B-plus/B ratings. The outlook reflects a potential upgrade if Greek authorities were to boost competition in product markets, strengthen property rights, ease bankruptcy procedures and improve the enforcement of contracts, S&P said.

The ratings agency said it sees an enhanced policy stability supporting Greek banks and the economy, adding that the country’s growth projections will improve, driven by private investment in tourism and logistics due to large public infrastructure projects. Real growth in gross domestic product is projected at 2% to 2.5% over the next three years, S&P said.

Last month, S&P raised its long-term debt rating on Greece, based on reduced debt risks due to the creation of cash buffers and the extension of maturity on its debts. Eurogroup Chairman Mario Centeno said recently that Eurozone countries are set to disburse a final €15 billion bailout loan to Greece in August. Greece has been living primarily on money borrowed from Eurozone governments in three bailouts since 2010, when it lost market access because of a ballooning budget deficit, huge public debt and an inefficient economy and welfare system. (Reuters 21.07)

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6.7 Greece Unlikely to Pay Off Debts to Suppliers by the End of August

The Greek state’s overdue arrears to its suppliers remain at particularly high levels even though they posted a slight decline over the first five months of the year. The state’s obligations amounted to €2.974 billion in the January – May period, compared to €3.364 billion at the end of April, a €390 million decline. Crucially, the arrears are supposed to drop to zero by the end of August, according to the deal between Athens and its creditors.

Attaining that target is seen as almost impossible, not only because the state does not have the necessary resources to do so, but also because it finds it hard to channel the cash into the market. The data released by the State General Accounting Office for May put the expired debts of ministries, social security funds, hospitals, local authorities and other public entities to suppliers at €2.38 billion. Pending tax rebates were at €589 million. (eKathimerini 23.07)

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6.8 Greek Employment Rose in First Quarter of 2018

The employment rate in Greece grew to 54.1% of the working population aged 15-64 in the first quarter of 2018, from 53.8% in the fourth quarter of 2017 and 52.8% a year earlier, the Organisation for Economic Cooperation and Development (OECD) has said in a report. The employment rate among men was 63.8% in the first quarter of 2018, from 63.3% in the fourth quarter of 2017 and 61.8% in the first quarter of 2017, while among women it was 44.5%, unchanged from the fourth quarter of 2017, and 44.0% in the first quarter of 2017. The employment rate in the OECD member-states grew 0.2% to 68.2% in the first quarter, with 28 out of the 36 members of the OECD recording an increase. In the Eurozone, the employment rate rose 0.1% to 66.9%. (AMNA 17.07)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Third Chinese City to Open Economic Mission in Israel

Next month, Xiamen, a port city on China’s southeast coast, will open a trade mission to Israel, becoming the third Chinese city to do so this year. The other two are Beijing and Dongguan, an industrial center in southern China. All three initiatives are designed to help facilitate business ties between Chinese companies and Israeli entrepreneurs offering technological innovation.

Traditionally, Israeli businesses have looked to strike partnerships and market products in the U.S. and Europe where linguistic and cultural barriers are minimal compared to China. But a global realignment of economic and political interests and the growing reputation of Israel’s tech sector have combined to open up new opportunities in East Asia. The scale of Chinese cities—even modestly sized ones like Xiamen have millions of residents – means that that country’s municipal governments are large enough to provide the foreign commercial aid usually supplied by the embassies of national governments.

Starting in August, representatives of the Xiamen Torch Hi-Tech Development Zone will scout for technological innovation for the Chinese city’s largest companies from an office of Tel Aviv. (Calcalist 23.07)

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*REGIONAL:

7.2 Jordan’s Birth Rate has Fallen Significantly Since 1990’s

The average birth rate per woman in Jordan dropped from 5.6 births in 1990 to 2.7 in 2018, the Department of Statistics’ (DoS) 2017-2018 health and population survey showed. The DoS indicated that the rate increased from 3.7 in 2002 to 3.5 in 2012 for each woman aged between 15 and 45 years old. According to the 2015 national census figures, the average Jordanian family comprises 4.8 members.

Regarding nationalities, Syrian women give birth to 4.7 children on average, compared with 2.6 for Jordanian women and 1.9 for other nationalities.

As for birth by teenagers between 15 and 19 years old, the results showed that 5% of these young women gave birth at least twice, 3% already had one child and 2% were pregnant for the first time during the implementation of the survey. Mafraq also topped the Kingdom’s governorates in the number of children by teenage mothers, which reached 13%, while Syrian women recorded the highest rate of teen births (28%) compared to Jordanians and other nationalities.

The mortality rate of children below five amounted to 19 for every 1,000 children during the five years that preceded the survey, most of which occurred during the first year. The figure is way below the international rate. According to UNICEF, the global under-five mortality rate dropped from 93 deaths per 1,000 live births in 1990 to 41 in 2016. The DoS’ data indicated that 98% of pregnant women received healthcare from a doctor, nurse or midwife during 2013-2017 and that 86% of children between 12 and 32 months old received basic vaccinations.

The survey is the seventh on demographics and health implemented in the Kingdom. It aimed to collect data on birth and death rates, family planning, and the health and nutrition of mothers and children in urban and rural areas, which noted that more detailed statistics will be published in 2019. (DoS 16.07)

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7.3 Deal Signed to Implement New Health Policy in Dubai Schools

Dubai Health Authority (DHA) and the Knowledge and Human Development Authority (KHDA) have signed an agreement to help implement a new Dubai school health policy. DHA has developed the 5 year policy after extensive consultation with stakeholders with an aim to create a safe, healthy and motivating school environment for pupils. The agreement with KHDA will support the implementation of the policy, including screenings and school health clinics.

KHDA will cooperate with the DHA to implement the policy across private schools in Dubai. Some of the areas of collaboration include encouraging schools to increase physical activity to 150 minutes a week. DHA will train healthcare professionals on its comprehensive screening program that includes vision, dental, obesity and mental health screening and will also train school health professionals and academicians on early detection of children with developmental and behavioral issues. Health chiefs will also collaborate with KHDA to ensure that all schools in Dubai follow the same standards for health clinic set up. (AB 18.07)

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7.4 Egypt’s Population Officially Numbers 96.3 Million at Beginning of 2018

CAPMAS announced on 11 July that Egypt`s population increased to reach 96.3 million at the beginning of 2018. The CAPMAS added that the population increased from 72.8 million in 2006 (last census) to reach 76.1 million at the beginning of 2009. It then rose at the beginning of 2017 to reach about 94.8 million, before it increased again by 1.5 million in the beginning of 2018 to reach 96.3 million.

Cairo is considered the largest governorate in terms of population number, at 9.7 million, followed by Giza governorate with about 8.8 million in January 2018. The CAPMAS explained that the Egyptian society is considered a young one, as those less than 15 years old constitute one-third of the population by 34.2%, while the elderly (65 and above) constituted 3.9% at the beginning of 2018. Meanwhile, the CAPMAS stated that the percentage of urban population was 42.6% and rural population was 57.4%. (CAPMAS 11.07)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 PlantArcBio Completes $3 Million Funding & Agreement with the University of Wisconsin

PlantArcBio recently completed a funding round that raised $3 million from private investors and Israel Innovation Authority grants. PlantArcBio signed an agreement with the University of Wisconsin-Madison, under which genes that improve drought tolerance will be tested by the university’s scientists in soybean greenhouses and fields in the United States. The genes were discovered by the company using its patented platform.

The newly discovered genes have shown excellent results in model plants in greenhouses, improving their drought tolerance by tens of percentages. Trait development in plants, like drug development, includes three experiment stages: experiments in model plants (plants that are relatively easy to grow and have short life cycles); experiments in a target plant (corn, soybeans, etc.); and extensive field trials in the target plant. After successfully completing the first stage, PlantArcBio has moved on to the second stage. Based on the results of the soybean trials, PlantArcBio will be able to accelerate the commercialization of the genes, which will be sold to seed companies for use in soybean, corn, canola and other crops worldwide.

Climate change in general, and drought specifically, is one of the major causes of crop yield reduction worldwide. A UW-Madison study estimated that U.S. soybean farmers alone have lost $11 billion over the past 20 years due to changes in weather patterns. After averaging nationwide data, researchers found that U.S. soybean yields fell by around 2.4% for every one-degree rise in temperature. Activities associated with the soybean transformation and testing will be led by UW-Madison’s Wisconsin Crop Innovation Center (WCIC), which includes a state-of-the-art biotech plant laboratory and highly advanced greenhouses.

Givat Hen’s PlantArcBio is a leading biotechnology company for the improvement of crop productivity and performance for global food security. The Company developed and proved a unique, highly innovative Direct In Plant (DIP) gene discovery platform. The company works to improve seed traits for both conventional and biotech applications. PlantArcBio focuses on four key market segments: yield and abiotic stresses (environmental stresses); insect resistance; herbicide tolerance; and disease control. (PlantArcBio 11.07)

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8.2 BioSight Clinical Trial of BST-236 as a First-Line Treatment of Acute Myeloid Leukemia

BioSight announced that it has received the FDA and the Israeli Ministry of Health clearance to launch a Phase 2b clinical trial of BST-236 for treatment of Acute Myeloid Leukemia (AML). The trial, which will be launched in the upcoming month, will be conducted in 25 medical centers in the US and Israel. BST-236 will be administered as a single agent treatment for newly-diagnosed AML patients, either de novo or secondary to myelodysplastic disorder (MDS) who are unfit for standard chemotherapy due to its severe toxicity. This population is estimated to account for a third to half of the AML patients.

In the Phase 1/2 study, presented at the Annual American Society of Hematology (ASH) Meeting and Exposition on December 2017, 26 acute leukemia patients were treated with BST-236 as a single agent. The study enrolled mainly older patients with poor prognosis baseline characteristics, including prior treatment with hypomethylating agents for MDS. BST-236 was found to be safe and well tolerated at high doses, with no neurological or gastrointestinal toxicities or renal failure, all of which are life-threatening toxicities associated with the existing chemotherapy and which often attenuate or prevent its use in older patients. This encouraging safety profile allowed the treatment of older and medically unfit patients with high doses of BST-236 and led to 2-3-fold higher response rates compared to currently approved treatments for this patient population. The aim of the Phase 2b study is to repeat the results of the Phase 1/2 study in a larger number of patients in the US and Israel.

Airport City’s BioSight is a private Israeli clinical-stage pharmaceutical development company. BioSight focuses on the development of novel caner-targeted pro-drugs. BioSight’s lead product BST-236 is under clinical development for acute leukemia. (BioSight 11.07)

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8.3 NewStem Announces $4 Million Seed Investment

NewStem announced a $4 million seed financing from a publicly-traded US-based company to be named NovelStem International Corp. NewStem is a spinoff of Yissum, The Technology Transfer Company of The Hebrew University. NewStem’s technology can predict patients’ resistance to chemotherapy allowing for better, targeted cancer treatments and the potential to reduce resistance to chemotherapy.

Drug resistance is a major cause of treatment failure in cancer chemotherapy. In present clinical practice, resistance to chemotherapy is only recognized after the first course of treatment has been completed, once no major clinical response is observed. In nearly 50% of all cancer cases, resistance to chemotherapy already exists in the tumors before initiation of the treatment. Treatment of patients with ineffective chemotherapy results in major health hazards, unnecessary suffering and increased costs.

In addition to NewStem’s in-house development activities of chemotherapy resistance diagnosis, the company plans to leverage its unique haploid technology and enter into multiple collaborations for the development of therapeutics for genetic disorders as well as for reproductive purposes with leading pharmaceutical companies or promising start-ups.

Yissum is the technology transfer company of The Hebrew University of Jerusalem. Founded in 1964, it is the third company of its kind to be established and serves as a bridge between cutting-edge academic research and a global community of entrepreneurs, investors and industry. (Yissum 16.07)

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8.4 Aspect Imaging Receives ISO 13485:2016 Certification

Aspect Imaging, the developer and manufacturer of Embrace – the world’s first FDA-cleared and CE-approved MRI for neonatal brain and head imaging inside the neonatal intensive care unit (NICU), announced that it has received ISO 13485:2016 certification for its Quality Management System. The company received the certification based on a comprehensive audit by BSI, a global business standards firm specializing in assisting organizations comply with ISO standards. ISO 13485:2016 requires that organizations demonstrate the ability to provide medical devices and related services that consistently meet customer and applicable regulatory requirements. Aspect’s new ISO 13485:2016 certification complies with the requirements of ISO 13485:2016 and EN ISO 13485:2016, and includes design, manufacture, control of sales, installation, service and support of MRI systems. Aspect was previously certified according to the 2003 version of the Standard, which will become obsolete in February 2019, and made the transition this year in order to be ready ahead of the transition deadline.

Shoham’s Aspect Imaging is a world leader in the design and development of complete, compact MRI and NMR systems using permanent magnet at 1 and 1.5 Tesla. Their unique technology platform is the basis for a wide range of products, spanning medical, preclinical, oil & gas and advanced industrial markets. In the medical market, Aspect Imaging has several medical programs underway, including Embrace Neonatal MRI system and WristView point-of-care hand and wrist MRI system which are in full production, and a dedicated Stroke MRI for the ER which is under development. In the preclinical research market, the M-series compact MRI delivers a wide variety of in vivo and ex vivo applications. Advanced industrial applications include rheological analysis of both food products and industrial drilling mud with Aspect Imaging’s Flowscan. (Aspect Imaging 16.07)

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8.5 Evogene & IMAmt Collaborate in the Field of Insect Resistance Traits in Cotton

Evogene and Brazil’s Instituto Mato-grossense do Algodo (IMAmt), a leading developer and marketer of cotton seeds, signed a research and validation agreement in the field of insect resistance traits in cotton, primarily focusing on the Cotton Boll Weevil but also on the Fall Armyworm. Evogene will identify genes predicted to be effective against Cotton Boll Weevil and Fall Armyworm, and IMAmt will validate the candidate toxins in cotton. Following successful validation, the parties intend to enter negotiations for a commercial license agreement.

Brazil is the fourth largest producer of cotton in the world. Cotton Boll Weevil and Fall Armyworm are among the most devastating pests threatening the viability of the cotton industry. It is estimated that the Cotton Boll Weevil inflicts annual costs of $468m in Brazil alone, due to insecticide procurement and crop losses, with this pest seriously affecting all territories in which cotton is grown. Moreover, with insecticides being only marginally effective, this pest has made entire geographies inaccessible for cotton cultivation.

As part of the agreement, Evogene will screen its extensive, already tested insecticidal gene data base and select genes with predicted activity against Cotton Boll Weevil and Fall Armyworm. Following the identification of such genes IMAmt will validate these genes in lab assays directly against the target pests. Evogene will receive R&D funding for the initial discovery phase.

Rehovot’s Evogene is a leading biotechnology company developing novel products for major life science markets through the use of a unique computational predictive biology (CPB) platform incorporating deep scientific understandings and advanced computational technologies. This platform is utilized by the Company to discover and develop innovative ag-chemical, ag-biological and ag-seed products (GM and non-GM), and by two subsidiaries; Evofuel, focused on castor seeds, and Biomica, focused on human microbiome therapeutics. (Evogene 17.07)

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8.6 CyberMDX Raises $10 Million Series A to Expand Medical Cybersecurity to Hospitals

CyberMDX announced the completion of a $10 million Series A financing. The round was led by Pitango Venture Capital, with participation from OurCrowd Qure. CyberMDX delivers a non-intrusive solution that provides visibility and risk management, along with threat prevention and detection functionality for medical devices and other Internet of Medical Things (IoMT).

CyberMDX sheds light on security blind spots in the healthcare management landscape that security professionals otherwise struggle with. The solution automatically lets users know what medical devices are on the network, what they’re connecting to, and what the risk level is for each connected asset. This not only helps protect the hospital network, but also helps them save time and money with a friction-free solution. CyberMDX’s multidisciplinary team consists of veterans of Israeli Intelligence’s elite cyber units, medical device experts, and AI academic leaders with focus on the healthcare vertical.

Tel Aviv’s CyberMDX, a leading provider of medical cybersecurity, delivers zero touch visibility and threat prevention for medical devices and clinical assets. CyberMDX delivers a scalable, easy to deploy cybersecurity solution, providing unmatched visibility and protection of medical devices ensuring their operational continuity as well as patient and data safety. CyberMDX multidisciplinary team consist of veterans of Israeli Intelligence’s elite cyber units, medical devices experts, and AI academic leaders. (CyberMDX 17.07)

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8.7 Can-Fite Granted Australian and Chinese Patents for Erectile Dysfunction Drug

Can-Fite BioPharma announced that the Australian and Chinese patent offices have granted the Company a patent for the utilization of A3 adenosine receptor ligands in the treatment of sexual dysfunction, in a patent. The Company has been investigating compounds that target the A3 adenosine receptor (A3AR) and the Company’s CF602 drug candidate previously demonstrated a robust positive effect in the treatment of erectile dysfunction in preclinical studies. Can-Fite has been granted a similar patent in the U.S. for both the method for treating erectile dysfunction with different A3 adenosine receptor (A3AR) ligands and a composition of matter for allosteric compounds.

Petah Tikva’s Can-Fite BioPharma is an advanced clinical stage drug development company with a platform technology that is designed to address multi-billion dollar markets in the treatment of cancer, inflammatory disease and sexual dysfunction. The Company’s lead drug candidate, Piclidenoson, is currently in a Phase III trial for rheumatoid arthritis and is expected to enter a Phase III trial for psoriasis in 2018. Can-Fite’s liver cancer drug, Namodenoson, is in Phase II trials for hepatocellular carcinoma (HCC), the most common form of liver cancer, and for the treatment of non-alcoholic steatohepatitis (NASH). Namodenoson has been granted Orphan Drug Designation in the U.S. and Europe and Fast Track Designation as a second line treatment for HCC by the U.S. FDA. Namodenoson has also shown proof of concept to potentially treat other cancers including colon, prostate and melanoma. CF602, the Company’s third drug candidate, has shown efficacy in the treatment of erectile dysfunction in preclinical studies and the Company is investigating additional compounds, targeting A3AR, for the treatment of sexual dysfunction. (Can-Fite 17.07)

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8.8 Therapix Biosciences Reports Positive Pre-clinical Data for THX-160 for Treatment of Pain

Therapix Biosciences announced positive results in its pre-clinical studies evaluating THX-160, a novel pharmaceutical CB2 Receptor agonist for the treatment of pain. This innovative CB2 receptor agonist, which was found to be superior out of two candidates the company had tested, was synthesized by Raphael Mechoulam, Ph.D., Professor of Medicinal Chemistry at the Hebrew University, and a member of the Therapix Scientific Advisory Board. To date, prescription opioids are considered to be the most effective treatment for moderate-to-severe pain, but their abuse has been identified by the U.S. FDA and the Centers for Disease Control (CDC) as a significant public health issue.

In the preclinical studies, THX-160 was well tolerated and did not cause any significant adverse clinical effects. In addition, efficacy studies demonstrated the analgesic superiority of THX-160 over control and were comparable to high-dose morphine analgesic effects and in some instances exerted greater potency. The efficacy and safety of THX-160 was shown for both acute and chronic pain.

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8.9 Viz.ai Raises $21 Million in Series A Funding to Increase Patient Access to Proven Therapies

Viz.ai secured $21 million in Series A funding led by Kleiner Perkins, with participation from GV, formerly Google Ventures. The company will use the funding for market expansion and to extend their product portfolio beyond stroke. Worldwide, more than 6 million stroke-related deaths occur every year and strokes are the number one cause of long-term disability in the nation. Outcomes are predicated on timely diagnosis and early access to neurological specialists. With Viz.ai, CT scans are automatically analyzed by advanced deep learning algorithms, which look for large vessel occlusion strokes and alert a neurological specialist. This happens in minutes, enabling prompt action.

Tel Aviv’s Viz.ai is emerging as the leader in applied artificial intelligence in healthcare. Their mission is to fundamentally improve how healthcare is delivered in the world, through intelligent software that promises to reduce time to treatment and improve access to care. Their flagship product, Viz LVO, leverages advanced deep learning to communicate time-sensitive information about stroke patients straight to a specialist who can intervene and treat.

In February 2018, the U.S. FDA granted a De Novo clearance for Viz LVO, the first-ever computer-aided triage and notification platform. Most recently, Viz.ai announced its second FDA clearance for Viz CTP through the 510(k) pathway, offering healthcare providers an important tool for automated cerebral image analysis. (Viz.ai 18.07)

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8.10 PainReform Gets FDA Approval for Phase III Post-Operative Pain Relief Study

PainReform has received FDA approval to conduct two pivotal Phase III clinical trials for post-operative pain relief in soft and hard tissue. The trials will use PRF-110, a proprietary extended release version of ropivacaine (Naropin) which provides long relief of post-surgical incision pain. In a Phase II study, PRF-110 demonstrated pain relief for up to 72 hours – ten times longer than the current standard of care. PRF-110 has the complete set of attributes, including efficacy, safety, physical properties and low-cost, to position it as the leading candidate to carve out the biggest share of this very large market. PainReform is currently raising $15 million to conduct the trials.

Established in 2007, Herzliya’s PainReform is a venture-capital-backed, specialty pharmaceutical company. Investors include Medica Venture Partners, XT High-Tech and V Partners. (PainReform 18.07)

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8.11 K Health Launches Free Primary Care App & New Provider Network in New York

K Health announced the launch of K, a free, first-of-its-kind primary care app along with a new provider network available in New York. K is the first app to use AI and the experience of thousands of doctors to provide free personal health information based on “People Like Me.” This more accurate, proprietary approach delivers insights drawn from how similar people were diagnosed and treated in a clinical setting. Leading independent New York City-based primary care providers have partnered with the company to deliver same-day care to users. The company also announced $12.5 million in financing from Mangrove Capital Partners, Lerer Hippeau, Primary Venture Partners, BoxGroup, Max Ventures, Bessemer Venture Partners and Comcast Ventures.

K Health is creating an enormous paradigm shift in personal health, demonstrating the power of AI to provide relevant health information drawn from real clinical insights. Fueled by a unique data set of over one billion health interactions, including physician notes, lab results, treatments and prescriptions, K is the first completely data-driven health app to be available to the consumer market. Now, instead of reading overly generic or outright misleading information online, people can simply use K to look up how doctors treated people like them when they had the same symptoms. Through K, users understand what people like them had and how they were treated before seeking care from a provider, cutting down costs and unnecessary time spent on research, appointments, in-person visits and more.

Tel Aviv’s K Health is the first health tech company to empower people with access to personalized health information based on “People Like Me”. Founded in 2016, K Health has built the first HIPAA compliant AI primary care app 100% fueled by data, empowering users worldwide to take control of their health. By working with a unique data set of over a billion health interactions, K Health is able to generate better and more accurate insights based on PLM (a.k.a. “People Like Me”), a new approach to understanding our health that looks at other people like us who have had similar experiences. (K Health 17.07)

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8.12 Laminate Medical Technologies Announces First Forearm Fistula Cases in Germany

Laminate Medical Technologies (Laminate), a privately-held start-up developing VasQ, an implanted blood vessel external support device for patients requiring arteriovenous fistula as vascular access for hemodialysis, announced the first forearm fistula cases in Germany. The first surgeries were performed at six hospitals, by seven surgeons.

Developed by Laminate, VasQ is intended for patients suffering from kidney failure and in need of dialysis, which requires vascular access. The most common and preferred method of vascular access is an arteriovenous fistula, created by surgically connecting an artery to a vein, usually in the region of the wrist or the elbow. This allows for increased blood flow to pass through the vein which is necessary for successful dialysis. Following a successful creation of an arteriovenous fistula, two needles are inserted through the vein to remove the patient’s blood for filtration by the dialysis machine, and then return it.

Unfortunately, narrowing and blockage of the vein occur in more than half of newly created fistulae in response to increased pressure and thickening of the vein wall, making the fistula unusable for dialysis. As a result, the patient must undergo repeated interventions to salvage the fistula or, in cases where the fistula cannot be salvaged, use less common vascular access alternatives, affecting the ability to receive dialysis and creating a burden on hospital resources.

VasQ is an external scaffold placed over the fistula, creating an optimal geometric configuration with the artery and reducing the tension in the vein. This allows proper blood flow during dialysis while reducing vein blockage created by thickening of the vein wall. Studies show VasQ has significant success. VasQ is a CE Marked device already in use in hospitals in Europe and in Israel, with impressive results.

Laminate Medical Technologies was founded in 2012, beginning in the Rad-Biomed incubator. Laminate has developed VasQ, a blood vessel support device for patients receiving dialysis. VasQ is CE Marked and used in hospitals in Europe and Israel. (Laminate 20.07)

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8.13 Kalytera Enters Medical Cannabis Market With Focus on Psoriasis & Menstrual Cramp Treatment

Kalytera Therapeutics has entered into an agreement with Beetlebung Pharma (BPL) for an option to acquire all rights to medical cannabis products in development by BPL for the treatment of both dermatologic diseases and women’s health. Under this agreement, Kalytera will have the option to license from BPL certain proprietary medical cannabis formulations, which can initially be brought to market in jurisdictions that have already approved access to cannabis for medical purposes. Kalytera believes that this will provide a more near-term path to revenues, compared with the lengthier process required for commercialization following FDA approval.

The collaboration with BPL will bring together Kalytera’s expertise in clinical pharmaceutical development, with BPL’s proprietary cannabis technology. Kalytera is a leader in the development and commercialization of cannabinoid pharmaceuticals with a late-stage clinical program in the prevention and treatment of acute graft versus host disease, and BPL is an Israeli-based pharmaceutical discovery company conducting world-class research and development in the field of cannabinoid and cannabis-based therapeutics, with specific expertise in the development of novel formulations of cannabis extract.

The strategic aim of the alliance is to expedite development and commercialization of efficacious and low cost medical cannabis products that can be marketed in jurisdictions such as Australia, Canada, Germany and Israel, where access to medical cannabis has been legalized.

Kalytera and BPL are already collaborating in the development of a novel cannabinoid-based compound for the treatment of acute and chronic pain. Patents for this compound have been filed in the U.S. and other jurisdictions, and Kalytera has obtained an exclusive, worldwide license for this compound from BPL.

Kalytera Therapeutics is pioneering the development of CBD therapeutics. Through its proven leadership, drug development expertise, and intellectual property portfolio, Kalytera seeks to establish a leading position in the development of CBD medicines for a range of important unmet medical needs, with an initial focus on acute graft versus host disease and treatment of acute and chronic pain.

Beetlebung Pharma Limited (BPL), an Israeli affiliate of the Salzman Group, focuses on the discovery and development of novel cannabis-related pharmaceutical therapeutics. The Salzman Group provides clinical management and other services to Kalytera in connection with Kalytera’s programs evaluating CBD in the prevention and treatment of graft versus host disease. (Kalytera 19.07)

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8.14 Biogal-Galed Labs Commercializes PCRun Canine Distemper Molecular Detection Kit

Biogal Galed Labs has announced the commercialization of a new PCRun Veterinary Molecular Detection kit, the PCRun Canine Distemper RNA Molecular Detection Kit. This is now in addition to the ten previously commercialized PCRun® molecular detection test kits for Canine Pathogenic Leptospira, Canine Ehrlichia canis, Canine Leishmania infantum, Canine Anaplasma platys, Canine Babesia canis and gibsoni, Canine/Feline Parvovirus (CPV/FPLV), Canine Distemper virus, Feline Mycoplasma haemofelis, Feline Leukemia Virus (DNA and RNA). Clinical diagnosis of early canine distemper is difficult due to the broad spectrum of signs that may be confounded with other respiratory and enteric diseases for dogs.

Kibbutz Galed’s Biogal was established in 1986. Biogal’s various veterinary diagnostic products are available in over 35 countries. Biogal developed the patented ImmunoComb technology for detecting antibody levels in blood or serum. (Biogal 19.07)

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8.15 Netafim Launches the World’s Most Innovative Digital Irrigation System

NetBeat – the first irrigation system with a brain – is an irrigation and fertigation management system that integrates monitoring, analysis and automation into a single platform, enabling farmers to maximize productivity any time, from anywhere. Netafim chose Agritech 2018 to launch NetBeat. NetBeat provides farmers with real-time recommendations based on data pertaining to plant, soil and weather conditions obtained from both sensors in the field and external sources. This data is analyzed in the cloud, according to proprietary Dynamic Crop Models, developed by Netafim based on 50 years of unique experience and research in the field of agronomy and hydraulics. Based entirely on Israeli technology, NetBeat was developed in collaboration with mPrest, developers of the Command & Control platform used in the Iron Dome air-defense system. NetBeat is the first platform of its kind to integrate monitoring, analysis and automation in one system, controlled by the farmer through a friendly and simple user interface, which provides optimization and smart recommendations throughout all stages of the crop lifecycle, saving water, fertilizer and other inputs and improving profitability.

Tel Aviv’s Netafim is the global leader in smart irrigation solutions for a sustainable future. Since introducing the world’s first drip irrigation solutions in 1965, they have led the way by developing products that help our customers optimize results. (Netafim 21.07)

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8.16 OrthoSpin Completes $3 Million Raise for Orthopedic Robotic External Fixation System

OrthoSpin completed an investment round of $3 million for its smart, robotic external fixation system for orthopedic treatments. Johnson & Johnson Innovation led the investment round.

External fixation devices are a common treatment choice for bone lengthening, setting complex fractures, and correcting deformities. The OrthoSpin system makes pre-programmed adjustments automatically and continuously – without the need for patient involvement. Integrated software enables physicians to chart patient progress, and, when required, immediately adjust treatment programs. The accurate OrthoSpin system eliminates the need for weekly follow-up and is generally expected to improve patient experience resulting from smaller incremental adjustments with reduced soft tissue damage.

Misgav’s OrthoSpin was founded in December 2014, to offer a new robotic treatment system for use in orthopedics, specifically external fixation. OrthoSpin’s innovative system has the potential to change the outcomes of various orthopedic treatments, such as bone lengthening, setting complex fractures, and correcting deformities. Trendlines is an innovation commercialization company that invents, discovers, invests in, and incubates innovation-based medical and agricultural technologies to fulfil its mission to improve the human condition. (OrthoSpin 23.07)

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8.17 Ology & RAFA Get FDA Approval of Atropine Autoinjector as Countermeasure for Nerve Agents

Alachua, Florida’s Ology Bioservices, a biologics contract development and manufacturing organization (CDMO), and Rafa Laboratories announced that on 9 July 2018, they received full approval from the U.S. FDA for the Atropine Injection, 2mg/0.7mL, Single-Dose Autoinjector. The Atropine Autoinjector initially received Emergency Use Authorization from the FDA in April 2017. Atropine is one of the most commonly used drugs for the treatment of chemical nerve agent poisoning. With the approved autoinjector, U.S. troops can rapidly inject atropine into the thigh muscle following nerve agent exposure.

This FDA approval decreases reliance on a sole source drug product and device manufacturer and ensures that the Department of Defense (DoD), U.S. Government stakeholders and international partners can quickly and cost-effectively procure the Atropine Autoinjector in the event of a nerve agent threat. There is substantial potential for a public health emergency involving nerve agents and certain insecticides. The usage of these agents can affect national security as well as the health and security of U.S. citizens living abroad.

The Joint Project Management Office for Medical Countermeasure Systems (JPM-MCS) Chemical Defense Pharmaceuticals (CDP) Project Management Office, funded and led the collaboration for development of the Atropine Autoinjector, which also included the FDA, Centers for Disease Control and Prevention (CDC) and Battelle.

Jerusalem’s Rafa Laboratories, incorporated in 1937, is one of Israel’s leading pharmaceutical companies. The company specializes in marketing, manufacture and distribution of proprietary and generic formulations, prescription and over-the-counter medicines, as well as therapeutic products in various medical fields such as pain, gastroenterology, respiratory diseases and dermatology. (Rafa 24.07)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Israel to Launch Historic Moon Mission from Cape Canaveral this December

On 10 July, Israel Aerospace Industries (IAI)’s Space division in Yehud, nonprofit SpaceIL and IAI announced a lunar mission to launch from Cape Canaveral, Fla., this December, and land on the moon on 13 February 2019. A final launch date will be announced closer to the event.

The lunar landing will culminate eight years of intensive collaboration between SpaceIL and IAI, and will make Israel the fourth country after the U.S., China and Russia to reach the moon. The spacecraft will be launched as a secondary payload on a SpaceX Falcon 9 rocket from Cape Canaveral, Florida, and its journey to the moon will last about two months, ending on its expected landing date. The Israeli lunar spacecraft will be the smallest to land on the moon, weighing only 1,322 lbs, or 600 kilograms. Approximately $88 million (NIS 320 million) has been invested in the spacecraft’s development and construction, mostly from private donors.

Since SpaceIL’s establishment, the mission of landing an Israeli spacecraft on the moon has become a national project embodying educational values. IAI, which is the home of Israel’s space activity, has been a full partner in this project from its inception. Over the years, additional partners from the private sector, from government companies and from the academia have joined as well. The most prominent among these are Weizmann Institute of Science; Israel Space Agency; the Ministry of Science, Technology and Space; Bezeq and others. SpaceIL’s spacecraft will be launched on a SpaceX Falcon 9 rocket from Cape Canaveral, Florida. It will be the secondary payload, launched with other satellites.

Upon its landing on February 13, 2019, the spacecraft, carrying the Israeli flag, will begin taking photos and video of the landing site and will measure the moon’s magnetic field as part of a scientific experiment conducted in collaboration with Weizmann Institute. The data will be transmitted to the IAI control room during the two days following the landing.

IAI is Israel’s largest aerospace and Defense Company and a globally recognized technology and innovation leader, specializing in developing and manufacturing advanced, state-of-the-art systems for air, space, sea, land, cyber and homeland security. (IAI 10.07)

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9.2 Trigo Vision Unveils Advanced Retail Automation Platform with $7 Million Seed Funding

Trigo Vision emerged from stealth and announced $7 million in a seed funding round by UK-Israel based Hetz Ventures and Vertex Ventures Israel. Trigo Vision’s platform combines a highly sophisticated, ceiling-based camera network with machine vision algorithms to identify and capture customers’ shopping items with exceptional levels of accuracy during their in-store journey, eliminating the need for a checkout process. The funding will be used to acquire top talent in order to grow the company’s core R&D team and build new applications for their technology, the most precise retail automation platform available today.

Developed by world class AI and algorithmics experts, Trigo Vision’s founders have gained extensive experience working on a multitude of complex projects for Israel’s military intelligence. The company’s highly advanced, patent-pending computer vision technology necessitates significantly fewer cameras compared to other solutions on the market today. Coupled with a unique data collection process, Trigo Vision provides extremely precise identification of products, underlining the company’s competitive advantage. Complementing this, the company’s platform offers retailers complete flexibility and scalability for easy and swift deployment into a store of any size, without requiring any type of change to its layout or structure. Their system can also be customized according to cultural differences within each market.

Tel Aviv’s Trigo Vision is a computer vision startup reshaping the retail experience. Leveraging world class AI and algorithmics experts, the company’s advanced retail automation platform identifies customers’ shopping items with exceptional levels of accuracy, creating an entirely seamless checkout process. Trigo Vision’s technology streamlines retail operations, prevents shoplifting, provides invaluable retail insights and presents opportunities for new levels of customer engagement within retail environments. (Trigo Vision 11.07)

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9.3 NanoLock Security wins Gold as Startup of the Year in the 13th Annual 2018 IT World Awards

NanoLock Security announced that Network Products Guide, industry’s leading technology research and advisory guide, has named the company a Gold winner in the 13th Annual 2018 IT World Awards in the Startup of the Year, formed in 2016 category. These industry and peer recognitions from Network Products Guide are the world’s premier information technology awards honoring achievements and recognitions in every facet of the IT industry.

NanoLock Security recently unveiled its lightweight security and management platform purpose-built for the Internet of Things (IoT) and automotive ECUs ecosystem. NanoLock’s CPU and OS agnostic approach ensures all connected and IoT devices are protected as well as the cloud managing those devices, regardless of available processor power, energy consumption and even if the CPU is inevitably hacked. The NanoLock platform guarantees device-to-cloud integrity and mutual protection during regular operations and firmware-over-the-air (FOTA) updates, from the production line and through and after the device’s end of life.

NanoLock Security was founded in 2016 by seasoned industry executives and formed around the founders’ and senior management’s deep understanding of how to manage and secure the new generation of connected cars and IoT devices. The company provides the industry’s only lightweight, unbreakable, low-cost security and management solution for connected cars and IoT devices. Using virtually zero computing or power resources, NanoLock Security protects firmware and sensitive information stored on connected cars and IoT devices, preventing attacks ranging from ransomware to malicious manipulation of stored code. (NanoLock Security 12.07)

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9.4 Elbit Systems’ Hermes 900 StarLiner: an Unmanned Aircraft to Operate in Civilian Airspace

Elbit Systems commenced global marketing of the Hermes 900 StarLiner, a powerful and trend setting Medium Altitude Long Endurance (MALE) Unmanned Aircraft System (UAS) that features adverse weather capabilities and is fully compliant with NATO’s Standardization Agreement (STANAG) 4671, qualifying it to be safely integrated into civilian airspace and fly in the same environment with manned aircraft. Concluding an extensive year-long flying schedule, the Hermes 900 StarLiner has been performing Civil Aviation Authority certified flights in Masada National Park, Israel. A series of the Hermes 900 StarLiner (known as Hermes 900 HFE in the Swiss program) is currently being assembled for the Swiss Armed Forces and is scheduled to be delivered and integrated into Switzerland NAS during 2019.

Meeting the strict safety and certification requirements of non-segregated airspace regulations required all the components of Hermes 900 StarLiner to be designed in full compliance with STANAG 4671 and to incorporate the most advanced aviation technologies, including: cooperative and non-cooperative Detect & Avoid Systems, Train Avoidance Warning System, Automatic Take-off and Landing in near zero visibility, redundant broad bandwidth line-of-sight (LOS) and beyond line-of-sight (BLOS) data link and adverse weather capabilities such as de-icing and direct lightning strike sustainment. These technological enhancements allow the aircraft to operate in both visual and instrument meteorological conditions, and its powerful heavy fuel engine provides improved climb rate, extended endurance and higher ceiling and maximum speed.

Haifa’s Elbit Systems Ltd. is an international high technology company engaged in a wide range of defense, homeland security and commercial programs throughout the world. The company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance (C4ISR), unmanned aircraft systems, advanced electro-optics, electro-optic space systems, EW suites, signal intelligence systems, data links and communications systems, radios and cyber-based systems. ((Elbit Systems 12.07)

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9.5 Luminate Announces Microsoft Azure Integration Offering Access to Hosted Corporate Apps

Luminate Security announced that its agentless Secure Access Cloud platform is fully integrated with Microsoft Azure, providing direct, secure access to applications and services deployed on Azure. Luminate’s platform also integrates with Azure Active Directory for authentication and policy management throughout the lifetime of the user’s session.

Based on Software Defined Perimeter (SDP) principles, Luminate enables organizations to roll out corporate services with the speed, security, and agility that matches the dynamic nature of modern business and replaces network access with secure application access. By leveraging its tight integration with Azure Active Directory as well as Azure IaaS and PaaS services, such as Virtual Machines, Container Instances, Azure Kubernetes Services, and others, Luminate Secure Access Cloud allows organizations to provide secure access to any corporate IT resource in Azure. With that, Luminate eliminates the complexities and the risks associated with direct network access to corporate datacenters, or the internet, while providing easy management that benefits from the existing investment in Azure Active Directory and Azure Active Directory Conditional Access policies.

Tel Aviv’s Luminate enables security and IT teams to create Zero Trust Application Access architecture without traditional VPN appliances. Its Secure Access Cloud securely connects any user from any device, anywhere in the world to corporate applications, on-premises and in the cloud, while all other corporate resources are cloaked without granting access to the entire network. This prevents any lateral movements to other network resources while eliminating the risk of network-based attacks. Deployed in less than five minutes, Luminate’s Secure Access Cloud is agentless, and provides full visibility of users’ actions as they access corporate resources, as well as real-time governance of these resources. (Luminate Security 11.07)

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9.6 Adrian Kenya Selects New GenCell Solution to Provide Green Power to Telecom Base Stations

Petah Tikva’s GenCell Energy, the fuel cell power solution provider and manufacturer, announced that Adrian Kenya, a leading African telecom integrator, will install the new GenCell A5 Off-Grid Power Solution at 800 telecom base stations across Kenya. Shipment and installation of the GenCell A5 fuel cell solution will begin in Q4/18. Replacing costly, noisy and highly polluting diesel generators with green fuel cell power will enable Adrian Kenya to realize an expected savings of $84 million over 10 years and reduce its carbon footprint by 248,000 tons1.

The GenCell A5 is the world’s first affordable off-grid primary power alternative to diesel generators. It provides cost-effective, ultra-reliable, noise-free and weather-independent power for off-grid and poor-grid telecom base stations at a lower OPEX than diesel generators. The low maintenance of the GenCell solution further reduces its OPEX for Tower Management Companies (Towercos) and Mobile Network Operators (MNOs). Unlike diesel generators that require time-consuming and expensive monthly fueling and maintenance at each tower, a single 12-ton tank of ammonia provides the GenCell A5 with enough fuel for a year of 24/7 operation. In addition, the GenCell IoT Remote Manager enables remote diagnostics, monitoring, and maintenance of each fuel cell device, reducing the frequency and costs of onsite engineer visits. (GenCell Energy 02.07)

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9.7 Presenso Announces the Production Release of Its Predictive Maintenance Solution

Presenso announced the availability of its solution’s production release. Incorporating the latest advances in Automated Machine and Deep Learning (Auto-ML), the Presenso solution has now been tested by leading industrial manufacturers worldwide.

Initially funded by leading VCs in the renowned Israeli ecosystem and by the Israeli Innovation Authority, Presenso spent the last 2 years researching and developing its Auto-ML based solution which has 11 patents pending. Presenso’s system collects immense amounts of data at very high speed from hundreds of machines (thousands of sensors) and streams the data to the Cloud in real-time. Using unique, proprietary deep neural-network architectures, Presenso’s analytic engine autonomously interlinks events with components within the machines and ultimately predicts evolving failures. In addition, it provides valuable information about the remaining time to failure and its origin within the machine.

Following this significant investment in R&D, a beta product was launched in early 2017 and was deployed at multiple customers’ sites. As the result of extensive testing in multiple production environments, Presenso is now releasing its solution to the wider industrial market.

Haifa’s Presenso develops advanced analytical tools for Predictive Maintenance using data science innovations such as Automated Machine Learning (AutoML). These tools are accessible to maintenance and reliability professionals without the need to hire Big Data experts. Presenso solution is available today for both OEM’s which are now developing their Industry 4.0 offerings and to end users operating their own equipment. (Presenso 16.07)

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9.8 VodafoneZiggo Selects AudioCodes for Business Voice Services

AudioCodes has been selected by VodafoneZiggo to supply its Mediant multi-service business routers and virtualized session border controllers for VodafoneZiggo’s all-IP communications network infrastructure. The AudioCodes solutions enable VodafoneZiggo to connect new and existing business customers seamlessly to its SIP trunking and other hosted voice services. AudioCodes Mediant multi-service business routers (MSBR) combine session border controller (SBC), media gateway, access router and security functionality in a single, robust hardware platform. The Mediant MSBRs’ unique design ensures consistently high performance under all network and service conditions. VodafoneZiggo deploys AudioCodes’ MSBRs at its customers’ premises to deliver secure connectivity with the servers at its virtualized datacenters.

VodafoneZiggo employs AudioCodes Mediant VE virtualized SBC at its datacenters to provide secure and reliable connectivity for customers of its SIP trunk service. AudioCodes SBCs’ broad interoperability enables virtually any customer on-premises IP-PBX or unified communications platform to interconnect seamlessly with the service. Built to meet the demands of today’s virtualized datacenter environments, the Mediant VE supports rapid scalability and service automation.

Airport City’s AudioCodes is a leading vendor of advanced voice networking and media processing solutions for the digital workplace. AudioCodes enables enterprises and service providers to build and operate all-IP voice networks for unified communications, contact centers, and hosted business services. AudioCodes offers a broad range of innovative products, solutions and services that are used by large multi-national enterprises and leading tier-1 operators around the world. (AudioCodes 16.07)

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9.9 Allot Teams With Lifeboat to Safeguard Markets With Secure Service Gateway

Allot Communications has struck an agreement with Lifeboat Distribution to supply the Allot Secure Service Gateway (SSG) unified solution to its North American Enterprise and ISP customers. The Allot SSG solution includes real-time network intelligence, application control, DDoS protection and web security solutions across the entire network, providing end-to-end visibility of all network traffic and enhancing Quality of Service (QoS) and user Quality of Experience (QoE). Lifeboat Distribution, an international value-added distributor with more than $417 million in sales in 2017, helps vendors recruit and build multinational solution provider networks, power their networks, and drive incremental sales revenues that complement existing sales channels. The Allot SSG solution is available to Lifeboat partners and customers today.

Hod HaSharon’s Allot Communications is a provider of leading innovative network intelligence and security solutions for service providers worldwide, enhancing value to their customers. Their solutions are deployed globally for network and application analytics, traffic control and shaping, network-based security services, and more. Allot’s multi-service platforms are deployed by over 500 mobile, fixed and cloud service providers and over 1000 enterprises. (Allot Communications 17.07)

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9.10 Aero Vodochody & IAI Introduce Multirole F/A-259 Striker Aircraft for Combat Missions

At Farnborough 2018 Aero, the largest Czech aircraft manufacturer, and Israel Aerospace Industries introduced the F/A-259 Striker is a multirole aircraft for close air support, counter-insurgency operations and border patrolling with interception capabilities. The F/A-259 Striker combines the robustness and effectiveness of its successful predecessor, the L-159 Alca, with the latest advances in avionics and aircraft systems technology. Powered by the same “best in its class” Honeywell F124 engine and using benefits of a wet wing, F/A-259 Striker provides superior performance, great maneuverability, and a high range.

The F/A-259 is able to operate from unpaved runways and has seven hard points for any combination of fuel, weapons, or mission equipment, allowing smart weapons integration and standoff weapon capabilities. As an optional upgrade, the F/A-259 can be equipped by EASA radar and helmet mounted display. Another optional upgrade is air-to-air refueling, increasing the aircraft’s range and endurance. Advanced 4th generation avionics for the F/A-259 Striker has an open architecture concept, allowing future updates based on customer’s requirements and use of Real Time Data Link, supporting a high situational awareness capability. The advanced digital cockpit is equipped by two large multifunctional displays, electronic flight instrument system, and other features.

IAI a world leader in both the defense and commercial markets, delivering state-of-the-art technologies and systems in all domains: air, space, land, sea, cyber, homeland security and ISR. Drawing on over 60 years’ experience developing and supplying innovative, cutting-edge systems for customers around the world, IAI tailors optimized solutions that respond to the unique security challenges facing each customer. IAI employs its advanced and proven engineering, manufacturing and testing capabilities to develop, produce and support complete systems – from components, sensors and subsystems all the way to large-scale, fully-integrated systems of systems. (IAI 19.07)

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9.11 RFOptic is Rolling out its Optical Delay Line Solutions Worldwide

RFOptic is rolling out its Optical Delay Line (ODL) solutions worldwide leveraging its successful deployments in measurement of distances for radar calibration with unparalleled accuracy levels based on predefined ranges. RFOptic’s Optic Delay Line systems (ODL) are used for transposing signals to distances ranging from a few nano sec to more than 1 msec (1,000 microsec). The ODL system is an RF over Fiber solution with a defined delay line that is used in radar and microwave systems, e.g., for radar calibration. RFOptic’s ODL system can include several different delay lines, which are selected either manually or remotely by an external user interface. RFOptic offers five groups of ODL solutions operating at different frequency bands starting from 10 MHz up to 40 GHz.

RFOptic tailors its solutions upon customer’s spec with almost off-the-shelf delivery time. RFOptic offers single delay line, multi delay line ODLs as well as programmable (progressive) P-ODLs that can form up to 255 delay lines as standard, and even 4096 in special cases. Based on customer requirements, ODL solutions can include dispersion control, automatic gain control, optical amplification (EDFA) and RF amplification (LNA).

Kibbutz Einat’s RFOptic is a leading provider of RF over Fiber (RFoF) and Optical Delay Line (ODL) solutions. For the last 20 years, its team of industry veterans has been developing, designing and integrating superior quality technology for a wide range of RFoF and ODL solutions. The solutions are deployed at various industries, including broadcasting, aviation, automotive, and defense. RFOptic offers its customers and OEMs various off-the-shelf products, as well as custom-made solutions optimized for a wide range of RFoF products at affordable prices and with a quick turnaround. (RFOptic 18.07)

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9.12 Cato Transforms SD-WAN With Identity-aware Routing

Cato Networks introduced the first identity-aware routing engine for SD-WAN. Identity awareness abstracts policy creation from the network and application architecture, enabling business-centric routing policies based on user identity and group affiliation. Identity awareness headlines a series of SD-WAN enhancements Cato is introducing today for Cato Cloud.

Cato implements identity-aware routing seamlessly without changing the network infrastructure or the way users work. Cato dynamically correlates Microsoft Active Directory (AD) data, across distributed AD repositories, and real-time AD login events to associate a unique identity with every packet flow. Organizational context, such as groups and business units, is derived from the AD hierarchy.

Cato revolutionized the industry with the introduction of the first secure, cloud-based SD-WAN service. Since then, Cato expanded the comprehensive set of converged security services in Cato Cloud with the Cato Threat Hunting System (CTHS), IPS, and more. Identity awareness and the rest of the enhancements being introduced today build on that momentum. All features are currently available.

Tel Aviv’s Cato Networks provides organizations with a cloud-based and secure global SD-WAN. Cato delivers an integrated networking and security platform that securely connects all enterprise locations, people, and data. Cato Cloud cuts MPLS costs, improves performance between global locations and to cloud applications, eliminates branch appliances, provides secure internet access everywhere, and seamlessly integrates mobile users and cloud datacenters into the WAN. (Cato Networks 18.07)

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9.13 Gooper Hermetic Chosen for a NASA Space Technology Development Program

Gooper Hermetic was chosen by Canada’s Thin Red Line Aerospace to provide key technology for a NASA project requiring the highest performance, resealable gas- and liquid-tight closure. The Thin Red Line advanced research project seeks to develop critical containment technology for future NASA deep space missions. Gooper Hermetic’s insights will be applied to extend the capabilities of their patented magnetic closure system to the unforgiving environment of deep space where technology reliability is critical.

Gooper’s innovative technology is now fast becoming integrated into a multitude of products where safety and reliability are of the highest concern. In seeking to expand its business and OEM/ODM integration across a variety of market segments, Gooper Hermetic welcomes the opportunity to Co-Brand and develop new and exciting projects and products ranging from space technology through military development and high end swimwear with integrated waterproof pockets.

Michmoret’s Gooper Hermetic invented and patented the first and only “total protection” flexible, magnetic, self-sealing automatic closure that is waterproof, Thief-proof, Child-proof, Odor-proof and Gas-proof, yet easy to use and intuitively simple. Just like many novel ideas, Gooper started in a back yard garage and its owners spent years on R&D to make it the best sealing and “all proof” system available. Gooper Hermetic designed the sealing mechanism as a single unit with no clips or detached parts in order to ensure that the system will never break down due to loose or missing parts. (Gooper Hermetic 23.07)

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9.14 Illusive Networks Recognized on 2018 Emerging Security Vendors List

Illusive Networks announced that CRN®, a brand of The Channel Company, has named Illusive to its 2018 Emerging Vendors List in the Security category. This list recognizes recently founded, up-and-coming technology suppliers who are shaping the future of the IT channel through unique technological innovations. In addition to celebrating these notable companies, the Emerging Vendors list serves as a valuable resource for solution providers looking to expand their portfolios with cutting-edge technology.

Illusive’s deception-based technology pre-eempts attacks by depriving attackers of hidden keys they need to reach critical assets, detects attacks in their earliest stages, and enables security teams to quickly respond with actionable, real-time forensics. Enterprise customers are rapidly adopting Illusive’s breakthrough platform to protect against insider threats, exfiltration of intellectual property, personal identity information, financial cybercrime, and other critical cyber related business risk.

Illusive is a 100% channel-committed company, selling exclusively through value added resellers (VARs), managed security service providers (MSSP), and managed detection and response (MDR) partners around the world.

Tel Aviv’s Illusive Networks is a pioneer of deception technology, empowering security teams to take informed action against advanced, targeted attacks by preempting, detecting, and disrupting attackers early in the attack life cycle. Agentless and driven by intelligent automation, Illusive enables organizations to proactively defend critical information assets with minimal operational overhead. Conceived by cybersecurity experts with decades of combined experience in cyber warfare and cyber intelligence, Illusive helps customers avoid significant operational disruption and business risk, while operating with greater confidence in today’s complex, hyper-connected world. (Illusive Networks 23.07)

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10: ISRAEL ECONOMIC STATISTICS

10.1 OECD Says Israel Should Liberalize and Spend More On Infrastructure

Israel could benefit more than almost any other country in the world from product market liberalization and opening protected industries to competition, according to a report by the OECD entitled “The Long View: Scenarios for the World Economy to 2060”. The report says that efficiency measures and greater competition in Israel could boost GDP by the year 2060 by 20% more than it will reach without such measures. Another area on which it would be worthwhile for Israel to focus, according to the OECD, is public investment in infrastructure. Here too, Israel stands to gain more than other countries, and could add 10% to its GDP by 2060 through appropriate investment.

These figures for potential GDP gains are higher than for any other country except Turkey (24%). The OECD’s recommendation represents backing for measures such as reform of the National Standards Institution and moves to make obtaining a business license easier and to boost competition in various branches of manufacturing industry that the Ministry of Finance, the Ministry of Economy and Labor and the prime minister have been trying to promote in recent years.

High growth potential is only one side of the coin, the other side being the poor current situation in comparison with other countries when it comes to competition and regulation in manufacturing and public investment. Public investment in infrastructure in Israel is less than 2% of GDP, which compares with 6% in the five leading countries in the OECD in this respect: Hungary, Norway, Luxembourg, Slovenia, and New Zealand. (Globes 15.07)

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11: IN DEPTH

11.1 ISRAEL: Moody’s Changes Israel’s Outlook to Positive From Stable, Affirms A1 Rating

On 20 July 2018, Moody’s Investors Service (Moody’s) changed the outlook on the government of Israel’s A1 government ratings to positive from stable. Concurrently, Moody’s affirmed Israel’s long-term issuer and senior unsecured ratings at A1, senior unsecured MTN and shelf ratings at (P)A1 and backed senior unsecured rating at Aaa.

The change in the outlook was driven by the following factors:

(1) Favorable fiscal outcomes, which, if sustained, will further consolidate the shock absorption capacity of the government’s balance sheet.

(2) Increasingly resilient economy with an expanding high tech sector, increased energy self-sufficiency and a strengthening external position.

The affirmation of the A1 ratings balances Israel’s resilient economy, robust external position, strong institutional framework and favorable fiscal dynamics against a combination of longer-term demographic challenges and material geopolitical risks. The outlook horizon will allow Moody’s to assess whether that balance will continue to shift in Israel’s favor.

The Aaa rating on the backed senior unsecured bonds issued by the government was also affirmed. That rating reflects the debt guarantee provided by the US government (Aaa, stable) on these instruments.

Israel’s Aa3/P-1 country ceilings for foreign currency bonds, A1/P-1 country ceilings for foreign currency bank deposits and Aa3 country ceilings for domestic currency bonds and bank deposits remain unchanged. These ceilings represent the highest possible rating that an issuer domiciled in Israel can achieve.

RATINGS RATIONALE

Rationale for the Positive Outlook

First Driver: Sustaining Favorable Fiscal Outcomes Will Consolidate Shock Absorption Capacity

The first driver of the decision to assign a positive outlook is Israel’s favorable fiscal dynamics, which, if sustained, for example by maintaining prudent budgeting, will further consolidate the shock absorption capacity of the government’s balance sheet.

In particular, the general government debt ratio has declined by more than 10% since the last upward move in Israel’s credit rating in 2008 to around 60% of GDP, reflecting in part a prudent budgetary framework and a robust growth performance. This contrasts sharply against trends in many other advanced country peers both before and after the global financial crisis. For example, Israel is one of only a handful of advanced economies (including Norway, Switzerland and Singapore, which are all rated Aaa with a stable outlook) with a lower debt to GDP ratio today than before the global financial crisis. Furthermore, central government deficits have remained below 3% of GDP over the past 4 years, despite repeated upward revisions of the government’s own deficit targets.

Looking ahead, budget deficits which are likely to remain at or below 3% of the GDP will allow these gains to be preserved, with the debt burden remaining at around 60% of GDP or possibly nudging down gradually. Furthermore, the potential for further tax windfalls from foreign purchases of large tech sector companies, proceeds from privatizations and, further ahead, fiscal revenue gains from the gas sector, should help offset ongoing pressures for higher social spending and tax cuts.

Moody’s expects that recently adopted commitment controls, such as the Numerator Rule that took effect in 2016, will continue to play an important role in increasing transparency in the budget setting process through a multi-year budget framework that limits the ability of the government to make new fiscal commitments without an identified budgetary source. Furthermore, the approval of the 2019 budget more than eight months before the start of the year also reinforces clarity of direction around the fiscal strategy going into an election year in 2019, which should help to mitigate spending pressures and promote political stability.

The positive outlook also reflects Moody’s expectation that the government finances will remain highly resilient to shocks, benefitting from a large domestic market, exceptional access to external funding and low refinancing risks.

Israel’s steadily reduced interest payments reflect both a lower debt burden and reduction in funding costs, with around 90% of government debt taken up by a deep and highly developed domestic market. Furthermore, the lengthening of average debt maturity should help keep annual financing requirements, which have been less 10% of GDP since 2014, low while the relatively small share of foreign currency debt will continue to mitigate exchange rate risks.

Israel’s financing will also benefit from considerable foreign demand in its Israel Bonds program aimed at the Jewish diaspora which has shown a willingness to support in times of external shocks, as well as the direct benefits from the United States (Aaa stable) guarantee loan program with approximately $3.8 billion available through to 2020.

Second Driver: Increasingly Resilient Economy Which Is Likely To Sustain More Favorable Growth Than Peers

The second driver of the decision to assign a positive outlook is Israel’s increasingly resilient economy, supported by the dynamism of the high tech sector, increased energy independence and a strengthening external position, which, if sustained, will continue to support more favorable growth rates than similarly rated peers.

Israel’s economy has demonstrated robust economic growth since the last upgrade in the sovereign credit rating in 2008, with real GDP growth averaging 3.5% over the past decade, stronger than the median of A1 rated peers (2.9%). Growth has been supported by a well-developed and credible macroeconomic policy environment focused on maintaining economic and financial stability and in particular on lowering the government’s debt burden to around 60%, which was accomplished in 2017. The combination of a favorable external environment and a supportive macro stance allowed the economy to reach full employment, with labor participation at around 80% among 25 – 64 years olds in 2017 and unemployment falling consistently since 2009 to below 4% this year.

Importantly, the economy has shown resiliency to a range of domestic and external shocks over this period, including domestic unrest, military conflict, and the global financial crisis without a single year’s decline in real GDP. Notably, Israel’s economy has proven more resilient than regional peers which experienced sharp contractions during the global financial crisis, which is reflected in lower growth volatility, 1.3% over the past 10 years, compared to A1 and Aa3 rated sovereigns.

The economy’s resilience derives in large part from its diversified industries, ranging from agriculture to high-technology products and services, and a strong culture of innovation. The latter is reflected in the increasing share of the economy’s value added from the Information and Communication Technology sector and Moody’s expects the country’s strong education standards and substantial R&D spending will likely continue to underpin the sector’s role as a key productivity driver with positive spill-overs for the rest of the economy. This is also reflected in Israel’s third place on the World Economic Forum’s Global Competitiveness Index ranking for innovation, behind the United States and Switzerland.

The high tech sector has also contributed to Israel’s robust external position, notably growth in services exports which have supported Israel’s consistent current account surplus, averaging around 3% of GDP over the past decade. This sector is expected to continue to be the recipient of sizeable FDI inflows, supporting official reserves (which stand at record levels, around 32% of GDP at end 2017). As a result, the country’s net international investment position has strengthened, reaching a net creditor position equivalent of around 40% of GDP last year, materially larger than the A1 median (around 28%).

These attributes will likely support an average growth rate of 3.4% to 2022, outpacing that of most advanced industrial economies into the next decade, while the external position continues to strengthen, helping to insulate Israel’s open economy to future shocks. Moody’s expects the completion of the first phase of development of the Leviathan gas field and the start of production with associated exports of natural gas from the end of 2019 will bolster growth, strengthen the external position, continue to improve Israel’s energy independence and, over time, support government revenues.

Rationale for Affirming the A1 Rating

Israel’s A1 rating balances its strengthening government and external balance sheets, faster growth than peers and robust institutional framework against longer term structural changes in the labor market and persistent geopolitical risks.

In particular, the increasing share of the population expected to come from Israeli Arab and Ultra-Orthodox groups who are underrepresented in the labor force due to cultural reasons will constraint its ability to grow above current estimates of potential growth (around 3.5%). According to estimates by Israel’s Central Bureau of Statistics, these population groups are expected to comprise more than 40% of the total population by 2040 compared to around one-third currently.

Israel also faces persistent geopolitical risks, notably through ongoing tensions with Iran, the potential for Israel to be involved in low-scale conflicts in the region, as well as the risk of an escalation of tensions with Palestinians.

However, Israel has seen improvements in its security situation in recent years, benefitting not only from its strong military deterrent, military support from the United States, but also improving diplomatic and economic relations with neighboring Arab countries such as Egypt (B3 stable), Jordan (B1 stable) and most recently Saudi Arabia (A1 stable), including agreements to supply some neighboring countries with natural gas from the Leviathan fields. In addition, while defense spending still remains the government’s largest spending item, recent agreements with the civilian authorities have helped stabilize the defense budget, which has been decreasing in relative terms.

What Could Change the Rating Up/Down

Israel’s rating would be upgraded should the country’s very high economic strength, robust institutions, fiscal metrics and strong external creditor position continue to demonstrate resilience against both domestic and external risks, consistent with the characteristics of a sovereign rating in the Aa range. Such resilience would likely include the maintenance of balanced or surplus primary fiscal positions that would keep the government debt metrics reliably below 60% and possibly falling further despite the forthcoming election period. Continued healthy growth and current account surpluses in the face of persistent geopolitical tensions would be credit positive in this respect. Furthermore, continued progress developing the Leviathan gas fields, which provides increased clarity on the potential size and timing of the economic and fiscal benefits, would also support an upward move in the credit rating.

The positive outlook signals that the rating is unlikely to move down over the next 12-18 months. However, the outlook could be stabilized if geopolitical developments materially disrupted Israel’s economic stability, by deterring investment and likely requiring increased defense spending, with negative implications for the country’s external position and fiscal accounts. Furthermore, an escalation of tensions with Palestinians which leads to increased international isolation, hurting Israel’s export orientated economy, would also place downward pressure on the rating. Similarly, evidence that the government’s demonstrated commitment to fiscal discipline, including a low debt burden, was to wane would be credit negative.

GDP per capita (PPP basis): $36,340 (2017 Actual) (also known as Per Capita Income)

Real GDP growth (% change): 3.4% (2017 Actual) (also known as GDP Growth)

Inflation Rate (CPI, % change Dec/Dec): 0.4% (2017 Actual)

Gen. Gov. Financial Balance/GDP: -1.2% (2017 Actual) (also known as Fiscal Balance)

Current Account Balance/GDP: 3.1% (2017 Actual) (also known as External Balance)

Level of economic development: Very High level of economic resilience (Moody’s 20.07)

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11.2 ISRAEL: Israeli Tech Exits: 2 Mega Deals But Basic Trend Down

Exits in Israel’s high-tech industry in the first half of 2018 were worth a total of $6.22 billion in 58 deals, according to the exit report from IVC-Meitar. This total includes two deals worth over $1 billion each: the acquisition of automated inspection equipment company Orbotech by KLA-Tencor for 3.4 billion; and the $1 billion acquisition of NDS by Permira. These two exceptional deals raised the average exit amount to $107 million in the first half of this year, from $31 million in the first half of 2017.

Excluding these two deals, the remaining 56 exits in the first half of 2018 totaled $1.82 billion, giving an average of $32.5 million, down nearly 50% from the averages in 2015 and 2016. The number of exits in the first half of 2018 was down 20%, continuing a downward trend that started in the first half of 2015, when there were 72 exits. The aggregate of deal amounts in the $100 million to $1 billion range was $1.1 billion, just 30-35% of the aggregate of the amounts in the same range in each half year from the first half of 2014 to the first half of 2016.

Mergers and acquisitions (M&As) dominate exit activity in Israel, both in numbers and amounts. In the first half of 2018, there were 53 M&As (excluding the two mega-exits) totaling $1.71 billion. There were few such exits in the $100-500 million range, which contributed to the slowdown. According to the IVC-Meitar report, this range usually captures the largest amounts share and is responsible for most of the returns. The number of deals in this range has halved in the last few years, from 13 deals in the first half of 2015 to 6 in the first half of 2018. The first half of 2018 saw only three IPOs, compared with 8 in the corresponding period of 2017. The amounts raised by IPOs totaled $115 million the first half of 2018, compared with $247 million in the corresponding period.

“Usually, the second half is weaker compared to the first half of the year, and by now the decline both in number and amounts of exits indicates that 2018 is going to finish with poor exit performance. However, despite the sluggish performance in H1/2018, the annual exit activity might rise in a stronger second half,” said Marianna Shapira, Research Director at IVC Research Center.

The average exits multiple (return on capital invested on average in companies that made an exit during this period), excluding the mega exits, declined in the first half of 2018, reaching only 3.06 compared with 5.4 in 2014.

The comparison between the exits amount and the amount raised by the acquired companies suggests that the continuing increase in capital raised between 2013 and 2016 is not supported by exit activity. The average multiples have been declining since 2014; however, the decrease in non-VC-backed exits since 2014 is much steeper.

IT & Software and Life Science accounted for the largest number of exits in the first half of 2018. Life Science companies’ share of the total number of exits soared to 21%, compared with 6% in the first half of 2014. Three of the biggest exits in the first half of 2018 were in this sector. There were three IPOs by Life Science companies: Sol-Gel, Entera Bio and Motus GI Medical.

The main technology clusters that stood out in the first half of 2018 are the same as in the last five years: Cyber, Adtech, AI, and Pharmatech. AI companies led with nine exits totaling nearly $500 million.

Meitar Liquornik Geva Leshem Tal partner Alon Sahar said, “It’s important to draw attention to the connection between capital raising and mergers and acquisitions or public offerings. In recent years, there has been an increase in the number of companies raising a significant amount of high-value capital. In 2016, 27 companies raised capital of $30 million or more. In 2017, the number of companies doing so increased, and in the first half of 2018 another record was broken, with 26 companies raising more than $30 million. “In contrast to these figures, we are seeing a decline in the number of merger and acquisition transactions in general (and, in particular, in values exceeding $100 million), and a decline in the number of companies operating in the direction of an IPO on NASDAQ.

“To justify the investment, and provide reasonable returns for investors, the industry will have to produce a much larger number of sales or deals at a price range of hundreds of millions of dollars. The gap between the price of companies for purposes of raising capital and the number and value of exit events can serve as an explanation to the decline in the number of merger and acquisition transactions in recent years. More and more companies want to or can be construed as significant companies, a phenomenon that ‘distances’ the exit date and reduces the number of transactions. However, with respect to some of the companies, the gap between the cost of raising capital and exit prices can become a serious problem to bridge and will require transactions at lower prices than the cost of the capital raising. We have no choice but to follow the above-noted link, which will have a major impact on the entire industry.”

Fellow partner at Meitar Liquornik Geva Leshem Tal Dan Shamgar said, “There are many instances where local companies play in the same field and vie for talent they want to recruit, technology they are developing, and customers. If we want to build larger companies and bridge the gaps as presented by Adv. Alon Sahar, we will need to see more domestic deals and cooperation in the face of the challenges outside Israel.”

IVC Research Center is the leading online provider of data and analyses on Israel’s high-tech, venture capital and private equity industries. IVC owns and operates the IVC-Online Database which showcases over 16,000 Israeli technology startups and includes information on private companies, investors, venture capital and private equity funds, angel groups, incubators, accelerators, investment firms, professional service providers, investments, financings, exits, acquisitions, founders, key executives and R&D centers. (IVC-Meitar 11.07)

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11.3 ISRAEL: Summary of Israeli High-Tech Company Capital Raising – Q2/18

The IVC Research Center and ZAG S&W Zysman, Aharoni, Gayer & Co. reported on 23 July that Israeli high-tech companies raised $1.61 billion in 170 deals in Q2/18.

In Q2/18, Israeli high-tech companies raised $1.61 billion in 170 deals. The $300 million raised by Landa Digital Printing captured 19% of the total amount in Q2/2018.

Israeli high-tech companies raised an all-time record amount of $3.2 billion in H1/18 – higher than the annual total capital raised in 2010–2013. Excluding the Landa financing round, the overall amount raised in H1/2018 is still the highest since the beginning of the decade.

Chart 1: Israeli High-Tech Capital Raising Q1/2012–Q2/2018

According to IVC findings, in Q2/2018, 94 VC-backed deals accounted for 55% of the total number of deals. The capital raised in VC-backed deals totaled $841 million. Non-VC-backed capital raising reached $765 million. Due to the Landa financing round, the capital share of the non-VC-backed rounds soared to 48% of the total capital raised, higher compared to the historical quarterly benchmark.

Following a remarkable first quarter for A rounds companies, $200 million was raised in 39 deals in Q2/2018. Medium range rounds (B and C) attracted $857 million in 47 deals, 53%% of the total capital raised. The C round increase was the result of the large round by Landa ($300m). Excluding this deal, the amount raised in C round decreased dramatically to $117 million. The notable increase in total capital raised by B rounds was attributable to several high-value deals as well as the increase in number of transactions. According to IVC, companies with revenues (initial revenue and revenue growth levels) accounted for $1.3 billion (81%) of all the capital raised in this period.

Adv. Shmulik Zysman, managing partner at Zysman, Aharoni, Gayer & Co. (ZAG-S & W), says: “The trend of growth in investments in Israeli high-tech continues to stand out. After a particularly strong first quarter, the amount of capital raised in Q2/18 continues to rise. With the exception of the Q2/16, this quarter represents the most successful quarter in the last six years. We are also seeing an increase in capital raised from foreign investors. In our opinion, this growth is also due to an increase in investments from China, as well as from European investors who are interested, among other things, in automotive technology.”

Zysman added: “This quarter, along with a certain decline in the volume of investment in companies in the early maturity stages (Seed and R&D) compared to the previous quarter, we saw the continued increase in the amount of investment in late stage companies. Our optimism continues at the start of the second half of the year. Following the breaking of records in Q1, the amounts of capital raised in Q2/18 increased. We expect these trends to continue, both in terms of capital raising and foreign investors entering into the Israeli high-tech industry.”

After a year of steep declines in early stage deals, IVC data indicates the trend is changing – 186 early stage deals (seed and A rounds) were counted by end of H1/18. The number of early stage deals peaked in 2016 at 384 transactions before dropping nearly 18% in 2017. If the capital raising activity will continue in the same levels, 2018 forecasted to end as a good year for early stage capital raising.

Marianna Shapira, research director at IVC Research Center presented analysis of investors: “Since 2012, the number of investors involved in the Israeli high-tech market, has grown exponentially, reaching a peak in 2017. In H1/18 the number has already reached 60% of this number”. According to Shapira: “IVC findings showed that 65% of the investors in H1/18 were VC funds and corporate investors. The number of investment companies has also increased over the past four years. Lately, we have seen a wider variety of investors actively taking part in the Israeli high-tech industry, enlarging their portfolios with innovative Israeli companies. Israeli startups have never enjoyed such a vibrant and diverse investor community as it is right now.”

Capital Raising By Sector and Industry Verticals

Life science companies have lately attracted more attention in the Israeli high-tech industry. In Q2/18, life science deals amounted to $267 million in 39 deals. The capital raised by life science companies decreased slightly compared to the previous and corresponding last year’s quarter. Software companies led capital raising in Q2/18 with $584 million in 65 transactions, 36% of the total capital raised in Q2/18.

Looking at the industry verticals, artificial intelligence (AI) companies headed the leading verticals in Q2/18, raising $426 million in 45 deals. Cyber security capital raising remained high with 30 deals accounting for $394 million. In Q2/18, the number of cyber security deals in B round peaked, and attracted most of the capital, soaring to 62% of all capital raised by cyber companies. As a result, the cyber vertical contributed to the notable rise of B round amounts. Both IoT ($214 million) and fintech ($150 million) capital raising slowed down this quarter, following a hefty Q1/18.

Chart 2: Number of Israeli High-Tech Capital Raising Deals by Deal Size Q1/2012–Q2/18

US Capital raising by high-tech companies – H1/2018

US numbers are no less impressive and offer additional evidence of the availability of capital in the start-up landscape worldwide. A record $57.5 billion was raised by 3,912 high-tech companies in the US in H1/18 – the highest amount since the dotcom bubble. In Q2/18, the amount grew considerably, while the number of deals remained stable.

According to MoneyTree Q2/18 global report, an increase of 13% in European capital raising – $5.7 billion was raised in 659 deals.

Methodology: This Survey reviews capital raised by Israeli high-tech companies from Israeli and foreign venture capital funds as well as other investors, such as investment companies, corporate investors, incubators and angels. The Survey is based on reports from 408 investors of which 59 were Israeli VC management companies and 349 were other entities.

IVC Research Center is the leading online provider of data and analyses on Israel’s high-tech, venture capital, and private equity industries. Its information is used by all key decision-makers, strategic and financial investors, government agencies, and academic and research institutions in Israel.

IVC-Online Database (www.ivc-online.com) showcases over 8,000 Israeli technology startups, and includes information on private companies, investors, venture capital and private equity funds, angel groups, incubators, accelerators, investment firms, professional service providers, investments, financings, exits, acquisitions, founders, key executives, and R&D centers.

ZAG-S&W (Zysman, Aharoni, Gayer & Co.) is an international law firm with offices in Israel, the United States, China and the United Kingdom. The firm’s attorneys specialize in all disciplines of commercial law for both publicly held and private companies, with particular expertise in hi-tech, life science, international transactions, and capital markets. ZAG-S&W provides result-driven legal and business advice to its clients, addressing all aspects of the clients’ business activities, including penetration into new markets in strategic locations. (IVC 23.07)

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11.4 JORDAN: Arabian Gulf Has Designs on Jordan’s Foreign Policy

Sada posted on 17 July that Arabian Gulf economic aid has averted Jordan’s debt crisis for now, but further support may require concessions regarding the kingdom’s previously independent foreign policy.

Framed as an act of goodwill and regional support, the 10 June renewal of the Gulf Aid Package to Jordan – after new economic austerity measures ignited mass protests – may spell trouble for the kingdom. As the Gulf countries, especially Saudi Arabia and the United Arab Emirates (UAE), move toward a more aggressive regional policy, it is likely that this most recent infusion of aid will come with political strings. The Gulf countries see Jordan as a lynchpin in their Israel – Palestine strategy and as a potential ally in the ongoing Gulf crisis with Qatar. Facing mounting economic pressure at home, Jordan may have few options other than to make such political concessions in exchange for the much-needed financial relief.

Jordan is in a dire economic state with no easy solution. Public debt has reached 94% of the country’s GDP, unemployment remains high at 18.5%, and the ongoing refugee crisis is exacerbating current economic challenges. In response to these concerns and to pressure from the International Monetary Fund (IMF), which has extended the kingdom $723 million in loans, the Jordanian government drafted far-reaching austerity measures in May, sparking public protests that forced the government to restructure and walk back on its proposed increases to income taxes and cuts to subsidies for electricity, fuel and bread. This has left Jordan yet again reliant on foreign aid to support its economy. The fellow monarchies of Saudi Arabia, the UAE, and Kuwait quickly convened the Mecca Summit on 11 June to offer a five-year, $2.5 billion aid package to Jordan.

The aid package, however, provides neither immediate aid nor holistic long-term support and can be withdrawn at any time. The package is comprised mainly of loans in the form of deposits (which includes a deposit in the Jordanian Central Bank to reinforce currency reserves), guarantees of World Bank loans, annual budget support and funding for infrastructural investments. The Saudis, Emiratis and Kuwaitis can renege on the deposits to the Central Bank and infrastructural investments at their discretion, meaning these two loans can be used as leverage to extract political concessions – a distinct possibility as Jordan’s foreign policy strays further from the Saudi–Emirati line.

In 2017, at the tail end of the 2012 five-year Gulf aid package, Saudi Arabia decided not to renew it despite Jordan’s continued financial need. Jordanian officials have said the decision was punishment for taking positions inconsistent with those of Saudi Arabia on regional matters, mainly its continued support of a Palestinian state, its failure to ban the Muslim Brotherhood and its refusal to sever diplomatic ties with Qatar in June 2017. King Abdullah II even said in January 2018 that the kingdom has been financially pressured to mute its opposition to the U.S. decision to move its embassy from Tel Aviv to Jerusalem. As the Qatar crisis deepens and the Trump administration’s potential Israel–Palestine peace deal continues to dominate headlines, the Saudi–Emirati bloc now has even more motivation to use the aid package to capitalize on Jordan’s latest instability and constrain the country’s ability to act independently of its donors.

In recent months, the Arab Gulf countries have been rumored to be more actively supporting the Trump administration’s aspirations of making a peace deal between Israel and the Palestinian territories, hoping this means they can get U.S. and potentially Israeli assistance to counter Iran. As custodian of Jerusalem’s holy sites, home to millions of Palestinians in diaspora and neighbor to Israel and the Palestinian territories, Jordan is a crucial party to any future deal and, to the dismay of the Arab Gulf countries, has been outspokenly divergent from their policy decisions on the matter. Additionally, Saudi Arabia is eyeing taking over Jordan’s custodianship of Jerusalem’s holy sites as a way to facilitate the Trump administration’s peace deal. The Jordanian government has reportedly been increasingly concerned about Saudi Arabia’s expanding commercial and religious ties in Jerusalem, its rejection of Jordan’s assertion as custodian of these sites in recent months, and numerous diplomatic spats with Riyadh over the Jerusalem question.

For Jordan, acquiescing to the rumored Israel–Palestine peace agreement would, most notably, eliminate the right of Palestinian refugees to return to the Palestinian territories. This would likely also ignite anger among East Bank Jordanians who see the government as allowing Jordan to become an alternative country for Palestinians.

Amman has also been caught in the middle of the diplomatic war between Qatar and Saudi Arabia, the UAE and Bahrain. When the blockade was initiated in June 2017, Saudi Arabia and the UAE asked many countries in the region to cut diplomatic ties with Qatar, but Jordan opted to downgrade relations instead. It is likely that the coalition viewed the kingdom’s response as an act of defiance, which Jordanian officials speculated was a major reason Saudi Arabia declined to renew its aid in 2017. This had a considerable impact on Jordan’s ability to cope with its latest round of economic woes.

As the blockade continues with no apparent end in sight, it is likely that Saudi Arabia and the UAE will use this most recent aid package as leverage to force Jordan’s to take positions consistent with that of Riyadh and Abu Dhabi, including severing financial ties with Qatar. This would cut Jordan off from one of its most consistent donors and sources of foreign income. Qatar, a popular work location for Jordanian nationals, is the third-largest investor in Jordan, with an estimated $2 billion in investments and the volume of trade between the two countries is valued at over $400 million. Following the most recent protests, Qatar also extended its own financial support package, pledging $500 million in economic aid, including 10,000 job openings for Jordanian nationals in Qatar and investments in infrastructure and tourism in Jordan.

The Gulf monarchies would not let a fellow monarchy and a country as strategically located as Jordan collapse. But their generous aid package (3.5 times larger than the current IMF loan) buys them not just stability but also leverage. The popular protests drove the government to defer critical economic reforms, leaving it further reliant on foreign aid. However, accepting the Gulf aid package with all its potential foreign policy concessions could add to the turmoil and may force a complete re-evaluation of its foreign relations in the region, most especially the neutrality that has allowed the small kingdom to withstand a tumultuous regional political environment.

Rachel Furlow and Salvatore Borgognone are Amman-based independent Middle East analysts. (Sada 17.07)

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11.5 BAHRAIN: IMF Executive Board Concludes 2018 Article IV Consultation with Bahrain

On July 9, 2018, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with the Kingdom of Bahrain.

The decline in oil prices since 2014 and absence of buffers have led to a rise in fiscal and external vulnerabilities. Public debt increased to 89% of GDP, with large fiscal and external current deficits persisting. Reserves remain low, covering only 1.5 months of prospective non-oil imports at end 2017.

Output grew by 3.8% in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term. Despite planned fiscal consolidation measures, fiscal and external deficits are projected to continue over the medium term, due to the large and growing interest bill. Delays in implementing a credible fiscal plan and changes in market sentiment as global financing conditions tighten present downside risks to the baseline.

Executive Board Assessment

Executive Directors welcomed the resilience of growth in Bahrain, while noting downside risks to the outlook stemming from the rise in fiscal and external vulnerabilities, tighter global financing conditions, delays in fiscal adjustment, and lower energy prices. Against this background, Directors called for additional sustained efforts to improve Bahrain’s fiscal and external positions, preserve financial sector resilience, and support diversified, inclusive growth.

Directors welcomed the authorities’ continued fiscal reform efforts, but observed that public debt is expected to increase further over the medium term and reserves are projected to remain low. In this regard, they agreed that a comprehensive package of reforms is needed to reduce fiscal deficits over the medium term. Directors welcomed the authorities’ commitment to continue subsidy reforms, cut non-productive spending, and raise non-oil revenues by introducing a value added tax by 2019. They considered that additional steps are needed to put public finances on a sustainable trajectory, striking the right balance between revenue and expenditure measures while protecting the most vulnerable. In this context, Directors emphasized the need to introduce direct taxation, including a corporate income tax, while containing the public wage bill and targeting subsidies to the poorest. They looked forward to the newly established debt management office developing a contingent financing strategy to mitigate financing risks and costs. Directors also encouraged the authorities to strengthen their macro-fiscal framework and increase fiscal transparency and accountability, securing public support and awareness, and enhancing market confidence.

Directors agreed that the exchange rate peg remains appropriate for the economy, and delivers a clear and credible policy anchor, keeping inflation low and stable. They underscored the importance of fiscal adjustment in supporting the peg and rebuilding international reserves, and ensuring external sustainability. In this context, Directors recommended gradually unwinding central bank lending to the government.

Directors welcomed the central bank’s continued efforts to implement the 2017 FSAP recommendations to further strengthen the regulation and supervision of the financial sector. They emphasized the need to develop a well-defined emergency liquidity assistance framework, deepen the interbank market, and enhance the supervision of Islamic banks and insurance companies. Directors also encouraged close monitoring of the build-up of household debt. They welcomed Bahrain’s initiatives to promote fintech, while underscoring the importance of monitoring risks. Continued efforts to strengthen the AML/CFT framework were also encouraged.

Directors commended the authorities’ initiatives to streamline business regulations to promote private sector development, diversification, and job creation. They welcomed recent developments in enhancing SMEs’ access to finance, as well as recent labor market reforms to increase flexibility and promote employment in the private sector. They called for further structural reforms to boost productivity and competitiveness through more privatization plans and public/private partnerships, and measures to strengthen the education system and support greater female labor force participation. (IMF 15.07)

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11.6 QATAR: Moody’s Changes Qatar’s Rating Outlook to Stable, Affirms Aa3 Rating

On 13 July 2018, Moody’s Investors Service (Moody’s) changed the outlook on the Government of Qatar’s long-term issuer ratings to stable from negative and affirmed the long-term issuer and foreign-currency senior unsecured debt ratings at Aa3.

The key driver of the outlook change to stable is Moody’s assessment that Qatar can withstand the economic, financial and diplomatic boycott by the three neighboring Gulf Cooperation Council (GCC) countries and Egypt (B3 stable) in its current form, or with possible further restrictions, for an extended period of time without a material deterioration of the sovereign’s credit profile. This assessment is in part based on evidence of broad resilience of Qatar’s credit metrics to the economic and financial blockade over the past 13 months.

The rating affirmation at Aa3 takes into account a number of credit strengths embedded in Qatar’s credit profile which, in Moody’s view, remains supported by the large net asset position of Qatar’s government, exceptionally high levels of per-capita income, very large hydrocarbon reserves and relatively low fiscal and external break-even oil prices – all of which will continue to provide a significant shock absorption capacity to the sovereign.

The senior unsecured rating of SoQ Sukuk A Q.S.C. was affirmed at Aa3. According to Moody’s the debt obligations of SoQ Sukuk A Q.S.C. represent debt obligations of Qatar’s government.

Qatar’s long-term foreign-currency bond and deposit ceilings remain unchanged at Aa3 and the short-term foreign-currency bond and deposit ceilings remain unchanged at P-1. Qatar’s long-term local-currency bond and deposit country risk ceilings also remain unchanged at Aa3.

Rationale for Changing the Outlook to Stable from Negative

Evidence of Credit Resilience to the GCC Boycott: The stable outlook reflects Moody’s view that Qatar’s credit metrics will likely remain consistent with a Aa3 rating as the boycott continues. The stable outlook also makes provision for some additional restrictions and is supported by Moody’s view that a quick resolution or a significant escalation of the regional dispute materially affecting Qatar’s credit metrics are a low-probability event.

The boycott by Saudi Arabia (A1 stable), the United Arab Emirates (UAE, Aa2 stable), Bahrain (B1 negative) and Egypt started in June 2017 and caused a sudden closure of established land and maritime trade routes for Qatar’s imports, a sharp drop in its goods and services exports to the four countries and a large outflow of foreign funding from the Qatari banking system.

The rapid recovery in imports, with initial levels restored in less than four months, illustrates the economy’s flexibility and policy effectiveness in rerouting supplies. This involved arranging an “air bridge” for food and other staples in the early weeks of the blockade and increasing capacity of a newly completed Hamad Port to prevent macroeconomic disruptions and preserve social stability.

According to Moody’s estimates, the economic impact of the boycott has been modest and largely temporary. The only sectors that have been visibly impacted by the boycott are tourism, with visitor arrivals from the GCC countries that accounted for close to half of the total arrivals in 2016, falling by 40% and unlikely to recover in the foreseeable future, and transportation, namely the national carrier Qatar Airways, which has been blocked from flying to 18 destinations in the Middle East and has said earlier this year that it has made a “substantial loss” during the past financial year.

Rather than a direct economic impact, the main credit implication of the boycott through a permanent loss in tourism and transportation revenues and potential is that it will hamper the government’s economic diversification efforts. However, in Moody’s view, these constraints on economic diversification do not materially affect the sovereign’s credit profile.

Moreover, the effective mobilization of funds from the central bank’s reserves and the sovereign wealth fund’s foreign assets preserved financial and macroeconomic stability in the face of significant outflows from the Qatari banking system. While the interventions came at the cost of a material erosion in the central bank’s reserves buffers, they also demonstrate effective coordination and crisis management capacity among the public sector institutions including the central bank, the ministry of finance and the sovereign wealth fund.

The outflows were equivalent to $30 billion or 18% of GDP during the second half of 2017, as GCC clients repatriated their deposits and GCC banks withdrew funding. The foreign outflows stabilized towards the end of 2017 and about a third of the cumulative outflows has reversed in the first five months of 2018. This has allowed the central bank and the Qatar Investment Authority (QIA, the sovereign wealth fund) to move back some of their assets offshore. Meanwhile, the foreign exchange reserves of the central bank increased to $23.3 billion in May 2018 from $13.2 billion at the end of last year (excluding gold and SDRs), albeit still well below their $33.7 billion level before the boycott.

The demonstrated financial and institutional capacity to use the sovereign wealth fund’s (SWF) foreign assets mitigates Qatar’s external vulnerability stemming from the economy’s large external debt repayments in relation to the level of the central bank’s foreign exchange reserves. That being said the lack of transparency about the exact size of the QIA assets and their composition prevents a detailed assessment of Qatar’s financial capacity to stem potential balance of payments pressure.

On the fiscal side, the direct fiscal costs of the GCC blockade have so far been very small and limited to the funding of the “air bridge” during the first two months of the blockade (less than 0.1% of GDP). A more significant fiscal cost has been indirect due to the delayed implementation of planned new revenue measures, including utility tariff and public service fee hikes that were scheduled for mid-2017. These measures were put on hold to give the private sector additional room to adjust to the blockade, leading to an estimated loss of government revenue of 1.5-2.5% of GDP. However, this revenue shortfall was fully offset by lower capital expenditure. Moody’s expects that the delayed revenue measures will be implemented during 2018. Similarly, Moody’s expects that the 5% value-added tax, which the authorities were supposed to implement at the be beginning of 2018 and which would yield up to 0.9% of GDP in additional non-hydrocarbon revenue for the budget, will be implemented by early 2019, putting fiscal reform back on track.

Meanwhile, any revenue shortfalls this year will be more than offset by higher oil prices which the 2018 budget assumed at $45/barrel, most likely well below the average level in 2018 and underscoring the authorities’ prudent approach to budgeting.

Contingent liabilities that could potentially crystallize on the sovereign balance sheet in relation to the extended losses of Qatar Airways, which is fully owned by the QIA, would be comfortably absorbed by the SWF. Moody’s estimates that the SWF had assets worth close to 190% of GDP at the end of 2017, compared with 3.3% of GDP in Qatar Airways’ debt obligations, only a fraction of which would plausibly crystallize.

Rationale for Affirming the Rating at Aa3

Qatar’s Aa3 rating remains supported by a very large net asset position of the Qatari government, that Moody’s estimates at 137% of GDP at the end of 2017; exceptionally high levels of per-capita income ($61,282 in current US dollars and $124,529 on a purchasing power parity basis); and very large hydrocarbon reserves (including more than 140 years of natural gas production at the current rate).

Qatar’s rating is also supported by its moderate fiscal and external break-even oil prices, the oil price levels that would balance the government’s budget and the current account respectively. According to the IMF, Qatar’s fiscal breakeven price is around $47/barrel for 2018 (when income from the SWF assets is included in revenue), while its external breakeven price is $57/barrel, both below current oil price levels and in line with Moody’s medium-term assumptions (around $45-65/barrel).

Furthermore, Moody’s expects that the fiscal breakeven price will decline by up to $20 over the medium term as the government halves its capital spending after the 2022 FIFA World Cup and raises LNG production by close to 30% from the new gas development in the North Field during 2023-2024. As a result, Qatar’s government budget is likely to be broadly balanced or, in the medium term, in surplus, leading to a gradual decline in government debt from just under 50% of GDP in 2017 towards 40% of GDP early next decade.

What Could Move the Rating Up/Down

The stable outlook reflects Moody’s view that risks to Qatar’s credit profile are balanced. A sustained and material reduction in external vulnerabilities through a combination of a decrease in external debt and a re-building of foreign exchange reserves would likely prompt Moody’s to upgrade the rating, especially if also accompanied by improved transparency about the size and the composition of the government’s financial assets.

Conversely, an escalation of the regional tensions that would (1) threaten to disrupt Qatar’s hydrocarbon exports on a prolonged basis, (2) put material pressure on the government’s financial position, including through crystallization of wider public sector liabilities on the government’s balance sheet, and (3) lead to a further significant depletion of the external buffers would likely lead Moody’s to downgrade the rating. Furthermore, a material slowing or reversal of fiscal consolidation that would point to a sustained rise in the government’s debt burden would put downward pressure on the rating. (Moody’s 13.07)

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11.7 UAE: $8 Billion Tech Industry Presents Growth Opportunities for Chinese Businesses

With a thriving technology sector, deepening bilateral ties with China, and recent announcements by the UAE Cabinet to allow 100% foreign ownership in certain onshore industries, Dubai is an increasingly attractive trade and investment destination for Chinese investors looking for an opportunity in the city’s rapidly evolving tech industry – especially with the value of trade between UAE and China at almost $53.3 billion last year, according to the Ministry of Economy.

Valued at nearly $8 billion, the UAE’s domestic IT market is expected to grow at an average of 5% annually in the period between 2017 and 2022, reports the International Data Corporation (IDC). This, along with a high quality of life, strong educational opportunities, career growth prospects, and supportive business legislations are causing an increase in student migration and tourism from Chinese nationals to Dubai. According to the Dubai Statistic Centre, the number of Chinese visitors rose to 573,000 in the third quarter of 2017, up 49% from the same period in 2016 – highlighting a significant possibility to connect Dubai’s growing Chinese community to opportunities in the local tech sector.

As the region’s leading specialized technology and business community, Dubai Internet City (DIC) – whose partners include leading Chinese companies such as Huawei, UnionPay, China Telecom Middle East and Oceanblue Cloud – is at the forefront of this development.

According to Ammar Al Malik, Executive Director of Dubai Internet City: “China has long been one of the UAE’s most important international trading partners. As our local tech industry matures amid game-changing reforms in our trade and investment laws, we are confident that Chinese citizens will find a wealth of investment and employment opportunities to explore here in Dubai.”

He added: “The next few years will define Dubai’s journey to becoming a global powerhouse of innovation, supported by several government efforts that are driving the industry to the next stage of growth – from the roll-out of ultra-fast 5G mobile internet networks in 2019, to the announcement of the Dubai Blockchain Strategy, which aims to move half of all government transactions to the blockchain by 2021 – and we look forward to leveraging these opportunities in partnership with our Chinese counterparts.”

For global ICT infrastructure and smart device manufacturing giant Huawei, the UAE’s progressive tech policies are a key enabler in its drive to provide inclusive, intelligent solutions that create a more connected world.

Li Xiangyu (Spacelee), Vice President, Public Affairs and Communications, Huawei Middle East said: “At the heart of the Huawei ethos is our dedication to innovation and knowledge sharing, and we could not have asked for a better environment than the Emirates to fulfill these ideals. The UAE government, as well as our local partners and customers, have demonstrated that they share our relentless drive for innovation and exploration, and thanks to them we are making huge strides in our vision to bring digital to every person, home and organization for a fully connected, intelligent world. We are committed to assisting the UAE’s leadership in achieving the ambitious targets outlined in UAE Vision 2021 by bringing the world’s most cutting-edge technology to the country and continuing to invest in unearthing and developing local ICT talents, and we look forward to our continued collaboration for many years to come.”

According to Hang Wang, General Manager of UnionPay International Middle East, a global business focused on bank cards services: “China has been the largest trading partner of the UAE for three consecutive years. The economic and trade exchanges between China and UAE continues to grow, generating greater demands for cross-border payment. This has brought more opportunities for UnionPay in the UAE. UnionPay International will continue to strengthen collaboration with the major institutions in UAE, promoting the large-scale issuance of UnionPay cards in the UAE based on UnionPay’s extensive acceptance in the market, while also actively rolling out UnionPay innovative products and services including UnionPay mobile QuickPass and QR code payment, to build a safe and convenient payment bridge between China and UAE.”

Alexann Zhang, Founder and CEO of Oceanblue Cloud, a leading SD- WAN provider, believes Dubai is the destination of choice for international businesses looking to establish their regional head offices to expand their operations in the Middle East and North Africa region – a sentiment that is shared by Mr. Liu ChangHai, Managing Director of China Telecom (Africa and Middle East) Limited, who says their offices in Dubai Internet City have become “a major hub” for business development with partners and customers in the Middle East region since they first established the company in 2008.

Dubai’s comprehensive business infrastructure, coupled with the announcement of 100% foreign ownership laws, is expected to create significant growth opportunities for private firms as the UAE leverages its diversification efforts to focus on the development of non-oil sectors. Businesses can expect to find increased foreign investment within the country’s evolving tech industry, especially since the recent launch of the China New Era Technology Fund – a $15 billion fund aiming to invest or acquire firms across China and around the world – which would garner interest among businesses and in turn, influence sizeable investments in local projects. (AETOSWire 20.07)

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11.8 EGYPT: Egypt Moving Forward – IMF’s Key Challenges & Opportunities

The most important issues that face Egypt over the coming years are tied to a rapidly growing population, the modernization of its economy, and how best to ensure a modern social safety net to protect the most vulnerable in society. Below, IMF Mission Chief for Egypt Subir Lall discusses these three issues in detail.

What’s New at EDI – August 2018

August 1, 2018, 9:15 am

≫ Next: ISRAELI ECONOMY CONTINUES TO EXPAND

≪ Previous: Fortnightly, 25 July 2018

Hong Kong’s Financial Secretary and Invest Hong Kong Director General to Visit Israel

Paul Chan, Hong Kong’s Financial Secretary (equivalent to the Minister of the Finance) and Stephen Phillips, the Director General of Invest Hong Kong (InvestHK) will make a visit to Israel in early September joined by a delegation of government officials, local business people and investors. While in the country, Mr. Chan will deliver the keynote address at the 6^th Annual China Business Summit and at the DLD Tel Aviv Innovation Festival, one of Israel’s major innovation events. He will also visit with local companies interested in exploring opportunities in Hong Kong and China. The business delegation including HK’s Trade Development Council (HKTDC), HK’s Trade & Industry Department (TID) and various companies and investors from Hong Kong will visit various Israeli accelerators and companies as well as hold business matchmaking sessions to develop further business ties between the two locations. EDI is involved in planning selected aspects of the visit as part of the company’s responsibilities as the Israel representative of InvestHK.

Five State Marketing Trip Completed

The last week of June saw EDI, along with five colleagues from the International Business Group (IBG) travel to five U.S. states to market the groups’ export and investment promotion activities. IBG is composed of 22 companies servicing 60 markets across the globe. States included in this visit were Arkansas, Tennessee, Kentucky, Indiana and West Virginia. Meetings were held with state Departments of Commerce, Chambers of Commerce and World Trade Centers. EDI’s CEO Sherwin Pomerantz, who organized the visit, was joined by colleagues from Korea, India, Mexico, South Africa and the U.S. EDI is a founding member of IBG.

Special Event: Dealing with the New US-Israel Defense Pact

On Monday, July 2^nd EDI, in cooperation with BDO Ziv Haft and Fox Rothschild, hosted a seminar for Israeli defense sub-contractors on how to deal with the regulations attendant to the new US-Israel Defense Pact. Regulations that will come into play over the next few years will change the qualification requirements for local companies who provide manufacturing capability to major Israeli defense suppliers. The session, at BDO’s Tel Aviv headquarters covered the legal, financial and operational issues related to the agreement. Close to 100 company representatives were present at the event.

EDI Hosts Ukrainian Trade Mission

As authorized consultant in Israel to Ukraine Government’s Export Promotion Office, EDI hosting a trade mission from the Ukraine to Israel in July. 13 companies representing the IT and Furniture sectors were in Israel for three days to meet Israeli companies interested in doing business and exploring relationships with the Ukrainian firms. EDI handled all of the arrangements for B2B meetings and other aspects of the visit.

University of Illinois Mission to Israel

Mid-July saw EDI hosting a delegation from the University of Illinois looking to bolster cooperation between the agri-tech sectors in both locations. 15 representatives from the University were in Israel for this purpose and met with various entities active in Israel’s well-respected agritech sector. Simultaneously, representatives of the University’s technical colleges met with their counterparts in Israel to discuss future academic and industrial cooperation. EDI was responsible for arranging a number of meetings for the group in its role representing the interests of the University in Israel.

German Games Mission to Israel

In early September, 10 German companies with innovative technologies in the games sector will visit Israel to meet with potential joint venture partners. The recruitment in Germany is being handled by IBG partner AHP International of Berlin, while EDI is organizing the meeting schedule in Israel.

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ISRAELI ECONOMY CONTINUES TO EXPAND

August 21, 2018, 1:46 pm

≫ Next: Fortnightly, 5 September 2018

≪ Previous: What’s New at EDI – August 2018

Since its founding in 1948, Israel’s population has surged from 806,000 to 8.84 million, and the state has absorbed some 3.2 million immigrants over those years as well.

Economically, over the past 20 years, Israel’s governments have adhered to a policy of fiscal restraint that gives the nation credibility with foreign investors and lowers financial costs. Moody’s and S&P recently raised long range economic forecasts to “positive” with annual economic growth expected to surpass 3% for the foreseeable future.

Coupled with its responsible fiscal approach, the country has also become a world high tech power. In the 20-year period 1997-2017, 16,000 high-tech companies were set up, of which 8,000 are currently active. The nation has 505 cybersecurity companies, which have raised some $5.6 billion (by some accounts this represents 2/3 of worldwide investment into cybertech R&D over the last few years making Israel a major center of such development).. In addition, there are 1,487 life sciences companies operating here that have raised $13.5 billion.

According to data recently released by the IVC Research Center, over the course of its history, Israel has had $143 billion worth of exits, of which $132 billion were mergers and acquisitions and $11 billion were initial public offerings. Just this week Pepsico agreed to purchase Israel’s SodaStream for $3.2 billion in cash, among the largest buyouts in Israeli history. So the saga continues.

Israeli venture capital funds raised some $20 billion in 1997-2017 and the industry has some 1,800 female high-tech entrepreneurs, of which 490 are active CEOs and entrepreneurs. Add to that the 365 currently active foreign R&D centers in Israel as well as the 356 currently active Israeli incubators and accelerators and it becomes clear why the country is known far-and-wide as the Start-up Nation.

Israel had a gross domestic product (GDP) per capita of some $5,000 when the state was established in May 1948. The Gross Domestic Product per capita in Israel was US$38,427 in 2017, when adjusted for purchasing power parity (PPP). The GDP per Capita, in Israel, when adjusted for Purchasing Power Parity is equivalent to 187 percent of the world’s average. GDP per capita PPP in Israel averaged US$26,787 from 1990 until 2017, reaching an all-time high in 2017 against a record low of US$19,760 in 1990. Today’s GDP per capita today is, therefore, close to the median of other developed OECD countries, according to data compiled by the Bank of Israel.

Israel’s economy grew 3.4% in 2017, and has averaged 3.3% annual growth since 2000, higher than in many OECD countries, partly driven by strong population growth as well (Israel is one of the few countries in the West whose birth rate is well above replacement levels). The economies of OECD countries, by contrast, grew at an average rate of 2.4% in 2017, while growth in the US was 2.3% for the same period.

Israeli tech companies raised a record $5.2 billion in 2017 and there were $23 billion worth of company exits, defined as merger and acquisition deals and initial public offering of shares. As well, some 94 Israeli companies are listed on the NASDAQ exchange.

In spite of its smallness, (the country is about the size of the State of New Jersey) Israel has emerged as a regional economic power, and remains an attractive destination for exports from foreign countries

In 2017 Israel imported approximately US$55 billion worth of products.

-Consumer goods imports were US$13.7 billion (24% furniture & electronic equipment, 19% food and beverages, 16% clothing and footwear, and 14% transportation equipment).

-Raw Material imports were US$28.5 billion (36% for machines and the electronics industry with 17% for the chemical industry).

-Investment Goods imports were US$12.1 billion (70% machinery and equipment, 16% passenger cars and 13% trucks, pickups and buses).

Regarding current market potential, as consumers, Israelis respond to advertising and branding. Shopping is a popular pastime and Israelis are interested in purchasing quality items, even if that means paying a higher, albeit reasonable, price. After-sales services and warranties are also mandatory, as Israeli consumers consider warranties to be a guarantee of the quality of the product. Israelis have a high purchasing power that is partly limited by soaring housing prices in the country. Nonetheless, consumer price inflation remains below official targets (0.2% in 2017 while the official target was between 1-3%), as part of the Israeli government measures to cut costs of living, which in return favor internal market dynamics.

Israeli consumers also like new products. Israeli legislation promotes national products but Israeli consumers are also quite interested in online shopping. According to the Israel Internet Association, 75% of Israelis (95% of total Internet users) shop online, making them the most connected shoppers in the world. Furthermore, 79% of online Israeli shoppers have made purchases from foreign websites, according to a study conducted by PayPal and Ipsos.

In short, Israel remains an interesting and exciting market for continued development and it is in the interests of foreign exporters to be open minded about opportunities here.

For those interested in hearing more about how to tap into this growing market, feel free to join me for a webinar on Wednesday, September 12^th at 1600 GMT to hear more about this amazing place. For more information go to https://info.ibt.onl/webinar-grow-business-in-israel

Participation is free but advance registration is required.

Sherwin Pomerantz

President

Sherwin Pomerantz is president of Atid-EDI Ltd., an economic development consulting firm with 26 years’ experience in assisting overseas companies and public entities in their export promotion and foreign direct investment attraction efforts.

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Fortnightly, 5 September 2018

September 6, 2018, 7:45 am

≫ Next: Fortnightly, 20 September 2018

≪ Previous: ISRAELI ECONOMY CONTINUES TO EXPAND

5 September 2018
25 Elul 5778
25 Dhul Hijjah 1439

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel to Invest More than $123 Million in Research Universities
1.2 State of Israel Officially Worth NIS 17.6 Trillion

2: ISRAEL MARKET & BUSINESS NEWS

2.1  BIRD-F to Invest $2 Million in New Projects for First Responders
2.2  PepsiCo to Purchase SodaStream for $3.2 Billion
2.3  Pitchbook Names OurCrowd Most Active Venture Investor in Israel
2.4  Indegy Raises $18 Million to Accelerate Go-to-Market for its Industrial Cyber Security Portfolio
2.5  Sichuan Airlines Begins Tel Aviv – Chengdu Flights in September
2.6  Manikay Partners & Others Assume Control of the Tel Aviv Stock Exchange
2.7  Spotinst Raises $35 Million and Continues to be a Market Leader
2.8  Pagaya Raises $14 Million in Series B Funding
2.9  Tokyo Opens Israeli Startup Accelerator
2.10  prooV Named a Global Leader in Cloud Computing
2.11  Sky Invests $4 Million in Israeli VC Fund Remagine

3: REGIONAL PRIVATE SECTOR NEWS

3.1 Egypt’s Sisi at Signing of $18 Billion in Contracts with Chinese Companies

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1  GAM Installs Solar-Powered USB Phone-Charging Bus Stops in Amman
4.2  Cairo Reportedly the Most Polluted City on Earth
4.3  Greek Island Will Be Mediterranean’s First to Run on Renewable Energy

5: ARAB STATE DEVELOPMENTS

5.1 Average Lebanese Inflation Rose by an Annual 6.23% by July 2018
5.2 Jordanian Unemployment Slightly Up, But Drops Among Women

Arabian Gulf

5.3  Kuwait Said to Begin Work on 111 Kilometer Railway Project
5.4  UAE Online Spending Forecast to Reach $9.8 Billion by End of 2018
5.5  First Emirati-Built Satellite to Launch into Space on 29 October

North Africa

5.6  Egypt & Ethiopia Agree to Overcome Obstacles During Grand Renaissance Dam Negotiations
5.7  Egypt Considers Putting Limits to the Budget Deficit & Borrowing
5.8  Egypt’s Non-Oil Private Sector Grows for the Second Month in a Row
5.9  Egypt – EU Trade Reaches $13.4 Billion Over First 6 Months of 2018
5.10  Morocco’s Year-to-Date Budget Deficit is More Than MAD 20 Billion
5.11  Rising Imports Bring Morocco’s Trade Deficit up 8% Year-to-Date
5.12  World Bank Agrees to Help Morocco Reduce Debt to 60% GDP

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkey’s Foreign Trade Deficit Narrows 58% in August
6.2  Turkey Hikes Gas, Power Prices By Up To 14% As Lira Crisis Deepens
6.3  Turkey Could Start Drilling in Eastern Mediterranean this Fall
6.4  Turkish Automotive Sales Contracted 53% in August
6.5  Greece’s Supreme Court Repeals Wine Tax

7: GENERAL NEWS AND INTEREST

ISRAEL

7.1  Rosh Hashanah – the Jewish New Year
7.2  Fast of Gedaliya Marked on 12 September
7.3  Yom Kippur – Holiest Day in the Jewish Calendar – Falls on 18/19 September
7.4  Israel’s Muslim Community Grows By 2.5%, Marries Younger
7.5  Record Number of Ultra-Orthodox Schoolchildren to Study Core Curriculum
7.6  Technion & Hebrew University Ranked Among the World’s 100 Leading Universities

REGIONAL

7.7  Two Million Jordanian Students Head to Classrooms for Coming School Year
7.8  Islamic New Year Holiday Announced for UAE Public Sector
7.9  UAE Students Start New Academic Year
7.10  Egypt to See New Educational System in September

8: ISRAEL LIFE SCIENCE NEWS

8.1  FSD Pharma and SciCann Therapeutics Launch Clinical Research Program in Israel
8.2  NRGene to Offer the First Broad Soy Diversity & Haplotype Database
8.3  Alpha Tau in Final Stages of Raising Investment of Several Tens of Millions of Dollars
8.4  BlueWind Announces Positive Results of Implantable Tibial Nerve Neuromodulator
8.5  STERO Biotechs Secures Patent of CBD as Steroid Sparing Treatment
8.6  NovellusDx and Primetech Sign an Exclusive Dealer Agreement in Japan
8.7  Body Vision Medical Announces $8.5 Million in Funding
8.8  STK REGEV ‘Hybrid’ Fungicide, Now Registered in Argentina
8.9  NRGene and RCK to Develop DNA Tests for Medical Cannabis

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 CyberArk Launches SAP Certified Privileged Access Security Solution
9.2  Foresight Secures Additional Sale of QuadSight Prototype
9.3  Miami Dade College & Cyberbit Announce Opening of New Cyber Range Training Facility
9.4  mPrest Releases Underground Residential Distribution (URD) Cable Fleet Maintenance Optimization App
9.5  WhiteSource Integrates Its Open Source Security Solution With Fortify Software Security Center
9.6  Gazprom Space Systems & Gilat to Provide Broadband Connectivity Across Russia
9.7  Texas Advanced Computing Center Selects Mellanox HDR 200G InfiniBand
9.8  StePac Leads In Responsible Supply Chain Technology with Innovative Packaging
9.9  Minute Launches First Real-Time AI Video Analysis Platform for Live Streams Broadcasts
9.10  IAI – DOK-ING Collaboration on Robotic System NBC Agents Without Risking Human Lives
9.11  ColorChip to Showcase 100G-400G PAM4 Optical Transceivers for the 5G Network
9.12  Fieldbit and InfinityAR to Develop Software for Augmented Reality Smart Glasses
9.13  My Size Partners With FIT to Provide Innovative Measurement Solutions for Students

10: ISRAEL ECONOMIC STATISTICS

10.1  Israeli Startups Raised Nearly $300 Million in August
10.2  Israel Ranks 5th Worldwide in Per Capita Patents
10.3  Record Ben Gurion Airport Passenger Traffic Noted

11: IN DEPTH

11.1  LEBANON: Lebanon ‘B-/B’ Ratings Affirmed; Outlook Stable
11.2  IRAQ: Iraq Ratings Affirmed At ‘B-/B’; Outlook Stable
11.3  EGYPT: Moody’s Changes Outlook on Egypt’s Rating to Positive, Affirms B3 Rating
11.4  TUNISIA: IMF Reaches Staff Level Agreement on the Fourth Review
11.5  TURKEY: Moody’s Downgrades Turkey’s Ratings to Ba3 and Assigns Negative Outlook
11.6  TURKEY: Fitch Ratings Says Turkey Faces Lower Growth, Lengthy Forced Adjustment
11.7  GREECE: IMF Executive Board Concludes 2018 Article IV Consultation with Greece
11.8  GREECE: Moody’s Changed Greek Banking Outlook to Positive on Improving Asset Risk

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel to Invest More than $123 Million in Research Universities

The Israeli Council for Higher Education announced it had approved an investment of $123 million to fortify research programs in Israeli universities. The money will be invested over a five-year period, $24.7 million each year. The planned investment is 83% larger than the resources allocated as part of the previous five-year plan, which was based on an annual investment of $13.4 million. As part of the new plan, benefiting institutes will be required to match 25%-50% of the investment. 90% of the funds, some $110 million will be used for lab equipment. (Various 18.08)

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1.2 State of Israel Officially Worth NIS 17.6 Trillion

The State of Israel is officially worth more than 17 trillion shekels or NIS 17,638,763,277,054 to be precise, Finance Minister Moshe Kahlon announced on 14 August as he opened trading on the Tel Aviv Stock Exchange (TASE). To mark Israel’s 70th anniversary of independence earlier this year, the TASE conducted an initial estimate of the valuation the State of Israel would achieve if it were floated on the exchange. The valuation, using the methodology employed by the World Bank in a recent a survey of the valuations of 140 countries, found that Israel would be worth NIS 16 trillion – Israel was not included in the original World Bank survey. The valuation was then revised upward based on a questionnaire to the general public examining measuring human capital in the country. (Various 14.08)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 BIRD-F to Invest $2 Million in New Projects for First Responders

On 31 July, the Board of Governors of the Israel-U.S. Binational Industrial Research and Development (BIRD) Foundation announced the award of funding to two homeland security projects, selected by U.S. Department of Homeland Security (DHS) Science and Technology Directorate (S&T) and the Israeli Ministry of Public Security (MOPS), between U.S. and Israeli companies to advance technologies for first responders. In addition to the grants from BIRD, the projects will access private sector funding, boosting the total value of the two projects to approximately $4.5 million.

Projects submitted for consideration are reviewed by representatives of the U.S. Department of Homeland Security, the Israel Innovation Authority and experts from the Israel Ministry of Public Security. The projects approved include:

-ELTA Systems (Ashdod, Israel), a group and subsidiary of Israel Aircraft Industries, and TLC Solutions (St. Augustine, FL) will develop an advanced drone mounted search and rescue system for locating victims under ruins and in disaster areas by accurate location of their cellular phones.

-HiRiseTech (Petah Tikva, Israel) and Allstate Sprinkler Corp. (Bronx, NY) will develop a first responders emergency radio repeater system for existing high-rise buildings.

The BIRD Foundation promotes collaboration between U.S. and Israeli companies in various technological fields for the purpose of joint product development. The program funds technology collaborations between U.S. and Israeli partners that have significant commercial potential to meet the most pressing requirements of first responders. This joint research effort supports the development of Next Generation First Responder (NGFR) technology capabilities that will increase the safety and efficiency of all first responders (law enforcement, firefighters and emergency medical services). (BIRD 31.07)

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2.2 PepsiCo to Purchase SodaStream for $3.2 Billion

PepsiCo and SodaStream International announced that they have entered into an agreement under which PepsiCo has agreed to acquire all outstanding shares of SodaStream for $144 per share in cash, which represents a 32% premium to the 30-day volume weighted average price. PepsiCo’s strong distribution capabilities, global reach, R&D, design and marketing expertise, combined with SodaStream’s differentiated and unique product range will position SodaStream for further expansion and breakthrough innovation.

Under the terms of the agreement between PepsiCo and SodaStream, PepsiCo has agreed to acquire all of the outstanding shares of SodaStream International for $144 per share, in a transaction valued at $3.2 billion. The transaction will be funded with PepsiCo’s cash on hand. The acquisition has been unanimously approved by the Boards of Directors of both companies. The transaction is subject to a SodaStream shareholder vote, certain regulatory approvals and other customary conditions and closing is expected by January 2019. Goldman Sachs acted as financial advisor to PepsiCo in this transaction.

Airport City’s SodaStream is the #1 sparkling water brand in volume in the world and the leading manufacturer and distributor of Sparkling Water Makers. It enables consumers to easily transform ordinary tap water into sparkling water and flavored sparkling water in seconds. By making ordinary water fun and exciting to drink, SodaStream helps consumers drink more water. Sparkling Water Makers offer a highly differentiated and innovative solution to consumers of bottled and canned carbonated soft drinks. Their products promote health and wellness, are environmentally friendly, cost effective, customizable and fun to use. (PepsiCo 20.08)

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2.3 Pitchbook Names OurCrowd Most Active Venture Investor in Israel

OurCrowd, a leading global equity crowdfunding platform has been named the most active venture capital investor in Israel in a ranking published by Seattle-based market research company PitchBook Data. PitchBook examined the number of deals in Israel in which each venture capital firm took part in since the beginning of 2016. OurCrowd took part in over 30 deals during that period.

Other Israeli venture funds on the PitchBook list, many of which OurCrowd has invested alongside in include Magma Venture Partners, Pitango Venture Capital, and Vertex Ventures Israel, who all shared second place with 17 investments each. Next on the list were Jerusalem Venture Partners and San Francisco-based angel group Keiretsu Forum with 16 deals, Maniv Mobility Fund, in which OurCrowd partnered as a significant LP, life sciences-focused fund Pontifax, and Tel Aviv-based crowdfunding platform iAngels with 14 deals, Menlo Park-headquartered Bessemer Venture Partners, Israel-based StageOne Ventures and Tel Aviv-based Aleph Venture Capital with 13 deals. New York-headquartered venture capital firm OrbiMed Advisors LLC closed the list with 12 investments.

So far in 2018, Israeli startups have raised approximately $1.4 Billion Dollars in nearly 200 deals, which amount to about 68% of the total capital raised last year, according to PitchBook data. Among the largest investments made in Israel since the beginning of the year are Landa Digital Printing’s $300 million deal and Trax Image Recognition’s $125 million deal, both announced in June, and eToro Group Ltd.’s $100 million announced in March. (OurCrowd 06.08)

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2.4 Indegy Raises $18 Million to Accelerate Go-to-Market for its Industrial Cyber Security Portfolio

Indegy has closed an $18 million Series B round of financing led by Liberty Technology Venture Capital, a subsidiary of Liberty Media with participation from international energy and services firm Centrica plc, O.G. Tech Ventures and existing investors Shlomo Kramer, Magma Venture Partners, Vertex Ventures and Aspect Ventures. The funds will be used to accelerate growth and expand global go-to-market initiatives for the Indegy industrial cybersecurity suite which helps protect systems used in manufacturing, energy, water, pharmaceuticals, and other critical infrastructures from cyber-attacks. In conjunction with the financing, Indegy also announced the appointment of two new executives to its management team.

Tel Aviv’s Indegy, a leader in industrial cyber security, protects industrial control system (ICS) networks from cyber threats, malicious insiders and human error by providing visibility and control. The Indegy Industrial Cyber Security Suite arms security and operations teams with full visibility into ICS activity and threats by combining hybrid, policy-based monitoring and network anomaly detection with unique device integrity checks. The Indegy ICS Suite is deployed by manufacturing, pharmaceutical, energy, water and other industrial organizations around the world. (Indegy 28.08)

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2.5 Sichuan Airlines Begins Tel Aviv – Chengdu Flights in September

Sichuan Airlines is inaugurating a direct line between Tel Aviv and Chengdu, the capital of Sichuan Province in China, on 26 September. The airline, which will run two flights weekly, is making an interesting offer, whereby passengers can continue on a connecting flight from Chengdu to Beijing, Shanghai or Guangzhou at no extra cost. Ticket prices will start at $600 for tourist class and $1,400 for business class. The company is represented in Israel by TAL Aviation.

The flights will use Airbus 330A airliners and later Airbus A350s. Some of the company’s planes are colorfully designed, including decoration with the company’s panda bear logo. The flight time will be eight hours and 20 minutes. Flights will take off from Tel Aviv at 3:25 PM and land in Chengdu at 6:00 AM on the following day. The return flight from Chengdu will take off at 2:15 AM and land in Tel Aviv at 7:35 AM on the same day. The flights will have 277 tourist class seats and 24 business class seats.

There will now be three airlines operating direct flights between Tel Aviv and China: El Al Israel Airlines, Hainan Airlines and now Sichuan Airlines. Sichuan Airlines, founded in 1986, has a network of flights with over 270 Chinese and international destinations. The company’s fleet contains 130 airplanes, and it plans to add 50 more by the end of 2020. (Sichuan Airlines 28.08)

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2.6 Manikay Partners & Others Assume Control of the Tel Aviv Stock Exchange

In a deal closed on 28 August, the newly privatized Tel Aviv Stock Exchange (TASE) sold nearly 20% of the exchange to investment fund Manikay Partners and another 19% to four other foreign investors. The sale, announced in April, puts a value of $151 million on Israel’s stock exchange, which has struggled with declining trading volumes. The securities regulator said the deal would enable TASE to become a public company with a more diversified control of ownership and greater transparency of operations.

Specifically under the deal, Manikay will acquire 19.99% of the exchange while 18.8% will be sold to Sunsuper PTY, Moelis Australia Asset Management, Dalton Investments and Novo Nordisk Foundation. These four will hold 4.69% each. The Israel Security Authority said a trustee had been appointed for 32.9% of TASE’s shares, of which 31.7% will be sold through an initial public offering that is expected in 2019. Current TASE members — local and foreign banks — will keep 22.3% of the bourse’s ownership.

TASE, with 456 traded companies at a market value of $201 billion, demutualized last September and became a for-profit bourse and offered to buy out its shareholders. The Tel Aviv bourse aims to become competitive, cheaper and more efficient after around 200 de-listings over the past decade and a trading volume slump. In 2017, stock trading averaged $400 million a day, up slightly from 2016 on a rise in IPOs. Volume remained steady at an average of $407 million a day in the first half of 2018, according to TASE.

Manikay, a U.S. hedge fund with operations in London and Sydney, has been involved in a number of exchange-related transactions, including with the New York Stock Exchange, Chicago Board of Trade and the Sydney Future Exchange. The TASE Clearing House, the MAOF Clearing House and the TASE Nominee Company are fully owned by the TASE. (Various 27.08)

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2.7 Spotinst Raises $35 Million and Continues to be a Market Leader

Spotinst announced its $35 million raise as part of a Series-B funding round led by Highland. All existing investors including Intel Capital, Vertex Ventures, and Leaders Fund have participated, to support their AI based cloud workload management platform. Spotinst has raised approximately $52 million since its launch. Founded in 2015, Spotinst helps businesses to manage their compute infrastructure across different cloud providers, while also achieving savings of 80% on average on regular cloud computing costs.

Tel Aviv’s Spotinst allows companies to reliably run their mission-critical applications with a significant cost reduction (60-80% less). Spotinst provides high availability in the Amazon Spot Market, Microsoft low priority VMs, Google Preemptible VMs and Packet Bare. Spotinst is a SaaS optimization platform that delivers significant cost reduction while maintaining high availability and performance. Spotinst is a virtual cloud agnostic layer that functions as a multi-cloud enabler. They intelligently facilitate the balance between different infrastructure purchase options and offer line of smart infrastructure products that bring the public cloud experience to any hardware or facility. (Spotinst 28.08)

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2.8 Pagaya Raises $14 Million in Series B Funding

Pagaya announced a $14 million Series B funding round co-led by Oak HC/FT (a premier venture capital fund) and Harvey Golub, former Chairman and CEO of American Express. A diverse group of world-class investors participated in the round, including GF Investments, Siam Commercial Bank, Clal Insurance and Pagaya’s seed investor, Viola Ventures. Pagaya has successfully opened new investment markets for sophisticated institutional investors with its AI-based asset management. This funding fuels Pagaya’s scalable, tech-driven approach to asset management and will help further the development of its proprietary algorithm to enter new data-rich asset classes. Pagaya will also use the funding to grow its 20-person-strong investment team of high-caliber data scientists and AI specialists, build a global sales force and launch new investment strategies in the coming year.

With its technology, Pagaya manages institutional money by investing in market opportunities previously inaccessible to the asset management industry. The company has a diverse client base that spans banks, insurance companies, pension funds, asset managers and high net worth investors. Pagaya’s algorithm analyzes millions of data points to assess risk in different financial instruments, identify emerging alternative asset classes and generate an excess return in those sectors (such as the multitrillion-dollar consumer credit lending market) for institutional investors.

Founded in 2016, Tel Aviv’s Pagaya is a financial technology company reshaping the asset management space using machine learning and big data analytics to manage institutional money. With a focus on fixed income and alternative credit, Pagaya offers a variety of discretionary funds to institutional investors, including pension funds, insurance companies and banks. Pagaya’s unique technology platform, Pagaya Pulse, runs on a suite of artificial intelligence technologies and state-of-the-art algorithms to consistently deliver a high and scalable performance edge. (Pagaya 30.08)

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2.9 Tokyo Opens Israeli Startup Accelerator

Economic cooperation between Japan and Israel is being stepped up as the Japanese External Trade Organization (JETRO), a Japanese governmental agency, is opening a business center and accelerator program for Israeli startups. The center will support Israeli startups and mediate business cooperation between Japanese and Israeli companies. The JETRO center is focusing on support for Israeli companies in the founding stages and the expansion of their business to Japan.

The JETRO program is designed for Israeli startups interested in finding fruitful ground for cooperation with Japanese companies. The center’s personnel will assist with information about the Japanese market and in finding suitable companies for cooperation. In cases in which such a company is found, the center is likely to obtain support in establishing a presence for the Israeli company in Japan. The program will be operated by Jakore, which represents Japanese investors and companies, while also supporting Israeli startups in the Japanese market. (Globes 29.08)

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2.10 prooV Named a Global Leader in Cloud Computing

prooV has been named a 2018 Stratus Award winner by the Business Intelligence Group in their annual business award program. The organization sought to identify the companies, products and people that are offering unique solutions that take advantage of cloud technologies. prooV facilitates and streamlines the proof-of-concept (PoC) process for startups and enterprises, allowing them to configure, connect, and compare PoCs through remote and secure testing environments in the cloud. prooV compresses the often tedious and time-consuming practice of finding, testing and evaluating new solutions into mere weeks. With hundreds of startup technologies on its platform, in areas such as artificial intelligence, big data, cybersecurity and Internet of Things, prooV provides enterprises with a comprehensive view into the ideal technologies and related benchmarks to meet their business goals.

Herzliya Pituah’s prooV is the first PoC-as-a-Service platform that brings together global enterprises and startups/independent software vendors to discover, connect, execute and evaluate Proof-of-Concepts (PoCs) through remote, secure and data-rich testing environments. Founded by serial entrepreneurs who recognized the inefficiencies in the modern PoC process, prooV offers a radical new approach to testing, tracking and analyzing vendor solutions, accelerating the journey from RFP to PoC. (prooV 29.08)

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2.11 Sky Invests $4 Million in Israeli VC Fund Remagine

London based TV company Sky plc announced a $4 million commitment to Israeli venture capital fund Remagine Ventures, a newly launched fund based in Tel Aviv. The venture capital fund will focus on technology startups within tech, entertainment, data and commerce. Sky said that partnering with Remagine will give it more access into Israel’s dynamic and fast growing technology companies, which includes a strong pool of talent in computer vision and machine learning. Sky invests in companies to accelerate innovation, identify growth and achieve cost efficiencies through the adoption of new operating models.

Tel Aviv’s Remagine Ventures is a venture capital fund focused on technology investments at the intersection of entertainment, commerce & data, and is backed by some of the leading corporates in the media industry. The fund invests in early-stage startups, helps them refine product-market fit and accelerates time-to-market. Remagine Ventures covers the full spectrum of opportunity within the Israeli market – from nascent technologies to later-stage opportunities to facilitating commercial relationships between startups and its investors. (Sky 02.09)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Egypt’s Sisi at Signing of $18 Billion in Contracts with Chinese Companies

Egyptian President Abdel-Fattah El-Sisi was in Beijing on 2 September at the signing of a number of contracts with Chinese companies to implement development projects in Egypt with an investment worth of $18.3 billion. The contracts signed include the construction of the world’s biggest power plants in Al-Hamrawein region on Egypt’s Red Sea coast, which will be powered by clean coal technology, and with a production capacity of 6000 MW. The contracts include stage two of central operations in the new Administrative Capital, the construction of a petrochemical refinery plant in the Suez Canal zone, and a pumping and storage plant in Ataqa Mountain. They also include the construction of Shaodong Roi textile complex, and a Tai Chan plant for gypsum panels.

President El-Sisi is on a three-day official visit to China, heading a top level official delegation to attend The Forum on China–Africa Cooperation FOCAC 2018, which was held in Beijing on 3 September. Earlier on 2 September, the Egyptian President held a meeting with the CEO’s of major Chinese companies working in Egypt. Sis also told students at the Chinese Communist Party Academy that Egypt highly commends China for its success in construction and development, calling for the use of China’s expertise to achieve desired development in Egypt. (Ahram Online 02.09)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 GAM Installs Solar-Powered USB Phone-Charging Bus Stops in Amman

The Greater Amman Municipality (GAM) announced on 27 August the conclusion of the pilot phase of the solar-powered USB phone-charging bus stop project, coined in Arabic as “The Green Umbrellas” project. The pilot entails fitting four bus stops in the Zahran area in Amman with solar panels to power lighting and USB ports for commuters to charge their phones, GAM Mayor Shawarbeh said, adding that the project will expand to cover wider parts of the capital. The project, according to Shawarbeh, is also part of a wider development effort known as the “Smart City” agenda, which aims to enhance the quality of the services facilitated to residents of the capital. The off-grid phone charging bus stops were developed by the King Abdullah II Fund for Development in cooperation with the Inspirational Development Group (IDG).

IDG is a UK-based company that promotes conscious business and local development initiatives. Since 2009, IDG has been running summer courses for private and state school students through its Youth Leadership Development Program as well as training platforms for senior civil servants. In 2015, IDG declared its intentions to go launch a full-fledged service operation in Jordan. The group also operates regionally out of Dubai and Oman, among other places, and has been operating internationally out of their headquarters in London. (JT 28.08)

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4.2 Cairo Reportedly the Most Polluted City on Earth

Cairo ranked as the most polluted city on earth, according to a recent study by Eco Experts. The study classified world cities based on various types of obstruction, including air, light and noise pollution. According to the study, Cairo is the most toxic city, scoring in the bottom three for air, light and noise pollution, followed by Delhi, Beijing, Moscow, Istanbul, Guangzhou, Shanghai, Buenos Aires, Paris and Los Angeles. Zurich is the cleanest city in the world.

Egypt faces the black clouds annually following the harvesting rice season, in summer months. The black cloud is a result of burning huge amounts of rice straw in the cultivated land in the Nile Delta. Egypt’s Ministry of Environment also warned in a recent report that the percentage of air pollution has increased in Egypt over permitted limits, reaching 81% particularly from 2014 to 2017.

According to the WHO’s report, air pollution was responsible for the death of over 43,000 people in Egypt in 2012. A recent report from the United Nations Environment program in December, pointed out that rates of respiratory disease have increased, adding to the burden on the state’s already-ailing hospitals. Citing the World Bank, the report indicates that the Egyptian economy is taking a pummeling, with poor air quality knocking off at least 1% of the GDP annually. (DNE 02.09)

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4.3 Greek Island Will Be Mediterranean’s First to Run on Renewable Energy

A tiny Greek island is set to become the Mediterranean’s first to be powered by 100% sustainable solutions. At Tilos, technicians are finishing a summer project that will soon allow the isle to run exclusively off renewable energy. Scheduled to take effect later this year, the new system will power the entire island using high-tech batteries recharged with wind and solar power. During winter months only around 400 people live on the island, but during summer that number climbs to an upwards of 3,000, causing issues for its limited power supply. Tilos depends on other nearby islands for energy, which it gets from an underwater cable running from Kos and Nisiros.

The current system has been especially troublesome for summer tourism — Tilos’ main revenue source — as businesses regularly deal with long blackouts. Without electricity, hotel tenants must endure scorching temperatures without air conditioning, while restaurants have to discard spoiled food from warm refrigerators. Such blackouts have long forced Tilos’ businesses to use diesel generators, but now a massive 800-kilowatt wind turbine and a solar park will serve as consistent sources of energy for island residents.

Project TILOS — Technology Innovation for the Local Scale Optimum Integration of Battery Energy Storage — was mostly paid for by the European Union, which covered €11 million of the €13.7 million cost. Dozens of small islands across the EU continue struggling with limited power connections to the mainland, and the European Commission said it will use the Greek island’s new model as an example to replicate. (03.09 Pappas Post)

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5: ARAB STATE DEVELOPMENTS

5.1 Average Lebanese Inflation Rose by an Annual 6.23% by July 2018

According to the Central Administration of Statistics (CAS), Lebanon’s average inflation rate rose by 6.23% by July 2018 compared to the same period last year. The average costs of Housing and utilities (water, electricity, gas and other fuels) constituting a combined 28.4% of the Consumer Price Index or CPI, rose by 6.59% year-on-year (y-o-y) by July 2018. In details, Owner-occupied rental costs, which grasped 13.6% of this category, rose by 4.07% y-o-y. As for the average prices of Water, electricity, gas, and other fuels (11.8% of the Housing & utilities component), they increased by an annual 9.76% by July 2018. In turn, the average prices for Food and non-alcoholic beverages (constituting 20% of the CPI), Transportation (comprising 13.1% of the CPI), and Education costs (6.6% of CPI) registered yearly upticks of 4.68%, 8.39%, and 4.06% by July 2018. (CAS 24.08)

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5.2 Jordanian Unemployment Slightly Up, But Drops Among Women

The unemployment rate during the Q2/18 was 18.7%, according to the Department of Statistics (DoS) quarterly report on the unemployment rate in the Hashemite Kingdom. The figure entails a slight rise from the same period last year. The report pointed out that the unemployment rate for females during Q2/18 was 26.8%, constituting a decline of 7.1% compared with Q2/17. The progress was attributed to the programs implemented by the Ministry of Labour in cooperation with partners through intensive employment projects, especially in the productive sectors, in addition to increasing the integration of women in the local labor market, improving the work environment and increasing the number of nurseries in public and private sector institutions.

Labour Minister Murad said that the labor force survey, in its new approach, included a sample of about 16,000 families distributed across all the governorates of the Kingdom, representing urban and rural segments. The labor force survey is conducted in the middle of each quarter and provides data that reflects the reality of the entire quarter (April, May, June), where the respondent is asked whether he or she has had a job during the four weeks prior to the interview, according to the international recommendations adopted by Jordan, the minister added. He explained that the slight rise in the rate is linked to seasonal unemployment, as a result of changes in the labor market during the time span of the field survey, such as the change of economic activities and the entry of new graduates into the local market. (JT 04.09)

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►►Arabian Gulf

5.3 Kuwait Said to Begin Work on 111 Kilometer Railway Project

Work has reportedly started on a 111 km. railway project to connect Kuwait with the rest of the Gulf region. The first phase of the project will create a new line to Nuwaiseb on the Saudi border and a 153 km line linking Kuwait City with Boubyan Port. Phase one will cost an estimated $3 billion. The 2,100 km passenger and cargo network stretching through all six Gulf states from Kuwait to Oman has faced technical and bureaucratic obstacles, and stalled as state budgets tightened because of low oil prices. Bahrain has said it would not connect its network to a neighboring state, Saudi Arabia, until at least 2023. (AB 27.08)

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5.4 UAE Online Spending Forecast to Reach $9.8 Billion by End of 2018

Overall online spending continues to grow in the UAE and is forecast to reach AED36 billion ($9.8 billion) by the end of 2018, according to a joint report issued by PayPal and Ipsos. The Fourth Annual Cross-border Commerce report, which tracks online domestic and cross-border shopping habits of approximately 34,000 consumers in 31 countries, also revealed that 81% of adults in UAE shopped online in the past 12 months, up from 68% in 2016. According to the report, the increase in online spending is also forecast to continue, with almost half of online adults surveyed in the UAE stating they will increase their online spending in the next 12 months.

The report also revealed that cross-border online shopping is on the rise in the UAE with 61% of UAE online shoppers saying that they shopped online from websites in another country in the past 12 months – a growth of 33% from the previous year. In fact, 12% of online shoppers surveyed stated that they only shop online in stores and marketplaces located outside the UAE. Cross-border shopping has grown by an estimated AED1.6 billion since 2016, accounting for an estimated AED12.5 billion of all online spend in 2017.

With high rates of mobile penetration in the UAE, online shoppers are increasingly opting to make purchases on their mobile devices. Mobile spend is forecast to grow 26% between 2018 and 2019 to reach close to AED20 billion, with momentum expected to continue into 2020 with a further 25% growth. The report said clothing, footwear and apparel was the most common cross-border purchase category in the UAE in the past 12 months, followed by cosmetics and beauty products. (AB 01.09)

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5.5 First Emirati-Built Satellite to Launch into Space on 29 October

KhalifaSat, the first satellite fully built in the UAE by a team of Emirati engineers, will be launched into orbit on 29 October. Dubai Crown Prince Sheikh Hamdan said that the satellite will be launched from the Tanigashima Space Centre in Japan. Dr Mohamed Nasser Al Ahbabi, director-general of the UAE Space Agency, said last month that once the launch has taken place, the UAE will have 10 multi-purpose satellites, raising the UAE investment in the space sector to AED22 billion. (WAM 29.08)

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►►North Africa

5.6 Egypt & Ethiopia Agree to Overcome Obstacles During Grand Renaissance Dam Negotiations

Egypt and Ethiopia have agreed during fresh talks in Addis Ababa to overcome obstacles in negotiations over a disputed dam project Addis Ababa is building on the Nile River, which Cairo fears will diminish its water supplies. Egyptian Foreign Minister Shoukry and the country’s intelligence chief Kamel met with Ethiopia’s Prime Minister Ahmed in the Ethiopian capital on 28 August, where they delivered a message from Egyptian President El-Sisi to bolster bilateral relations and to push ahead with the decisions made by the leaders of the two nations on the Grand Renaissance Dam, Ethiopia’s $4 billion hydroelectric project.

During the talks, the officials discussed efforts to implement a 2015 agreement signed by Egypt, Ethiopia and Sudan over Nile water rights and addressed decisions made by the ministers of the three countries during talks in May, which broke months of deadlock. These decisions include setting up a scientific study group to consult the nations on the process of filling the reservoir of the 6,000-megawatt dam and that the leaders of the three nations will meet every six months for consultations. The two sides also stressed they aim to take steps to set up a proposed fund to invest in development projects in the three African nations and agreed to boost trade exchange and Egyptian investment in Addis Ababa. The two leaders are expected to meet in September on the sidelines of a China-Africa cooperation forum in Beijing. (Ahram Online 28.08)

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5.7 Egypt Considers Putting Limits to the Budget Deficit & Borrowing

Egypt is targeting a budget deficit of 8.4% of GDP for the 2018-19 fiscal year that ends in June, compared with 9.8% in the previous year, Finance Minister Maait told a news conference on 4 September. Egypt aims to reach an average interest rate on government debt instruments in the current 2018-2019 budget of about 14.7% compared with 18.5% in the 2017-2018 fiscal year.

On 3 September, Egypt cancelled three and seven-year treasury bond sales, an auction that had a total value of EGP 3.5 billion ($196 million), saying that the interest rates required were “not within the logical limits.” The economy has been battered by years of turmoil that began after mass protests in 2011 which forced President Mubarak to step down. But the country has shown signs of recovery in recent months amid tough reforms including cuts to energy subsidies implemented by the government of President Abdel Fattah al-Sisi as part of a $12 billion International Monetary Fund loan agreement. Speaking on the sidelines of the Euromoney conference in Cairo, Maait said that the government had not set a date for the issuance of Euro bonds, or even the size of the expected offering. (Reuters 04.09)

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5.8 Egypt’s Non-Oil Private Sector Grows for the Second Month in a Row

Egypt’s non-oil private sector business activity grew for a second straight month in August, driven partly by new orders, a new survey showed. The Emirates NBD Egypt Purchasing Manager’s Index (PMI) for the private sector excluding the oil industry rose to 50.5 from 50.3 in July. A reading below 50 indicates a contraction; above, an expansion. Egypt’s PMI has rarely risen above 50 in the last three years. The survey reported a rise in new orders, linked to strong demand from domestic and foreign markets.

The non-oil private sector was “beginning to see the protracted recovery we had projected would take hold in the new fiscal year,” it said. The economy has been struggling to recover since a 2011 uprising that scared away tourists and investors, two big sources of foreign currency. Egypt has enacted tough IMF-backed austerity measures aimed at increasing foreign investment and reviving its economy, including devaluing the Egyptian pound in November 2016. (Reuters 04.09)

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5.9 Egypt – EU Trade Reaches $13.4 Billion Over First 6 Months of 2018

Bilateral trade between Egypt and the European Union recorded $13.4 billion during the first six months of 2018, the Egyptian trade and industry minister Nassar stated. European investments in the Egyptian markets have reached $15.1 billion. The UK leads European investors in Egypt, with total investments of $5.3 billion, followed by Netherlands, Italy and France with investments amounting to $2.5 billion, $1.48 billion and $1.3 billion, respectively, Nassar announced.

By May 2017, EU financial assistance to Egypt amounted to over €1.3 billion in grants, with 45% of the figure targeting economic and social development, according to the European Commission. Last July, Egyptian Foreign Minister Shoukry participated in the seventh EU-Egypt Association Council, which was held for the first time since April 2010. The meeting discussed enhancing the partnership between Egypt and Europe in accordance with the association agreement signed between both parties, which details the cooperation priorities between Egypt and the EU for the coming three years. The association agreement includes the facilitation of trade between the two markets through the establishment of a free trade area. (Ahram Online 27.08)

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5.10 Morocco’s Year-to-Date Budget Deficit is More Than MAD 20 Billion

Morocco’s treasury faced a budget deficit of MAD 20.2 billion in the first seven months of 2018. The treasury’s spending and income created a larger deficit than the same period last year, when it was MAD 18.2 billion, the General Treasury of the Kingdom (TGR) reported in its July 2018 bulletin of statistics of public finances. The deficit reflected a negative balance of MAD 15.9 billion generated by the special treasury accounts (CST) and autonomously managed state institutions (SEGMA). The bulletin also showed that the government’s regular revenue for the period stood at MAD 158.9 billion, up from MAD 133.7 billion at the end of July 2017, an increase of 18.8%. The increase takes into account an exceptional payment of MAD 24 billion from a special trust account named “Special Account for GCC Countries Donations.” Apart from the special payment, regular revenue rose by 0.9%, caused by the increase in non-tax revenues by 202%, customs duties by 12.8%, and indirect taxes by 5.5%. The increase was tempered by a drop in direct taxes by 2.2% and registration and stamp duties by 1.8%.

General spending decreased by 4.7% to MAD 180.9 billion in the first seven months of 2018, due to a 27% decrease in the budgeted debt burden, combined with an increase in operating costs by 2.9% and investment expenditures by 3.1%, according to TGR’s bulletin. Spending commitments, including those not subject to prior approvals of spending approval like investments, amounted to MAD 307.5 billion in the period. The decrease of the budgeted debt burden is due to a 42.9% decline in principal repayments (MAD 17.7 billion instead of MAD 31 billion) and a 0.9% increase in debt interest (MAD 17.8 billion against MAD 17.7 billion), according to the same report.

Earlier this month, research group Fitch Solutions predicted Morocco’s budget deficit would decrease over the next 10 years. The group’s 2 August report stated, “Morocco’s current account deficit will narrow gradually over the coming decade thanks to strong exports of manufactured goods and tourism services.” At the same time, the kingdom has recently proposed measures that would increase its spending commitments. On 20 August, a ministerial council attended by King Mohammed VI approved a draft bill to conscript young Moroccans for a year of military service. If enacted, the bill could reduce the country’s tax base as young Moroccans leave the workforce for 12 months and would incur the cost of making payments at the completion of the year. (MWN 28.08)

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5.11 Rising Imports Bring Morocco’s Trade Deficit up 8% Year-to-Date

According to the Directorate of Studies and Financial Forecasting (DEPF) within the Ministry of Finance, the trade deficit growth is due to rises in both exports and imports, up by 11.2% and 9.8%, respectively. Exported goods totaled MAD 160 billion, a good performance of all sectors.

Morocco’s leading export sector, the automotive industry, achieved an export turnover of MAD 38.5 billion, up by 16.9%. The automotive sector was followed by agriculture and agri-food exports, up by 5% to 34.5 billion. Phosphates and derivatives exports increased by 15.1% to MAD 29.2 billion. Aeronautics exports rose by 19.8% to MAD 7.1 billion, while the electronic sector saw a 4.7% rise to MAD 5.6 billion. Textile and leather exports also saw an increase of 4.1% to MAD 22.9 billion. Export of pharmaceutical products increased by 7.9% to MAD 765 million.

In the first seven months of 2018, Morocco imported goods worth MAD 278.3 billion, up by 9.8% over the same period in 2017. Capital goods led the list of Morocco’s imports with an increase of 12.1% to MAD 68.7 billion. The increase is primarily due to Morocco’s buying of aircraft and other air vehicles or space parts (MAD 1.5 billion), and diodes, transistors and photosensitive devices (MAD 914 million).

Imports of semi-finished products increased by 4.4% to MAD 58.8 billion. Imports of copper wires, and bars, increased by 33.5%. Purchases of energy increased by 16.8% to MAD 45.6 billion, due to the particular increase in purchases of gas oils and fuel oils, up by 17.8% to MAD 22.6 billion. Purchases of food experienced a 7.5% rise to MAD 28.6 billion, covering an increase in the purchases of oilcake, corn and spices to MAD 727 million, MAD 412 million and MAD 361 million, respectively. (MWN 31.08)

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5.12 World Bank Agrees to Help Morocco Reduce Debt to 60% GDP

Morocco has signed an agreement with the World Bank to engage youth in business, create employment and reduce the debt to GDP ratio. The new partnership agreement, set to take effect January 2019, aims to address Morocco’s health, socio-economic and unemployment challenges. The World Bank has pledged to give Morocco a helping hand through a five-year plan to achieve improvements that will boost Morocco’s economy. The World Bank has completed its role in achieving the aimed results on solar power, sanitation, roads, social inclusion, and employment through its strategic relation with Morocco during the past few years. The new agreement intends to focus on both creating value and positioning the kingdom at the forefront on the international scene.

The new partnership framework aims to reduce Morocco’s public debt to 60% of Gross Domestic Product (GDP) from its current level at 82% (MAD 871.5 billion). Morocco’s unemployment rate is currently 10.5%, and the firm forecasted higher unemployment in the years to come. The continued unemployment is attributed to the government’s halting hiring for government jobs in a bid to reduce the public debt.

In the health sector, Morocco’s current goal is to expand health coverage to cover not only low-income people but to cover 90% of the population by 2020. The government is set to present a new development model, under King Mohammed VI’s high instructions, to strongly enhance, among others, health and employment opportunities. (MWN 01.09)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkey’s Foreign Trade Deficit Narrows 58% in August

Turkey’s foreign trade deficit in August fell 58% on a yearly basis, according to the trade ministry’s preliminary data on 1 September. Trade Minister Pekcan said in a statement that the trade deficit of $2.48 billion last month was the lowest monthly figure in the last nine years. In the same month, exports coverage ratio to imports reached 83.3%, the highest level over the past nine years. Turkish exports amounted to $12.4 billion in August, with a yearly fall of 6.5%, while the country’s imports declined by 22.4% to $14.8 billion. The nine-day holiday for Eid al-Adha last month played a role in the 6.5% decrease in exports due to the loss of four working days. (AA 02.09)

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6.2 Turkey Hikes Gas, Power Prices By Up To 14% As Lira Crisis Deepens

Turkey raised natural gas prices on 1 September by as much as 14%, while the energy regulator announced a similar increase in electricity costs as a deepening currency crisis stokes inflation. The lira has fallen 42% against the dollar this year, hit by concerns about President Erdogan’s grip on monetary policy and a worsening rift with the United States over a detained American Christian pastor. The sell-off has increased the cost of food and petrol and raised fears about the impact on the country’s wider economy and banks. Economists are particularly worried about the central bank’s inability to rein in inflation, which hit a 14-year high of nearly 16% in July.

Retail prices in Istanbul, Turkey’s biggest city, surged 2.23% month-on-month in August, for a year-on-year increase of 14.99%. The latest hikes in electricity and gas prices will directly increase inflation by 35 basis points, according to Reuters calculations.

Erdogan, self-described “enemy of interest rates”, wants to see lower borrowing costs to keep credit flowing, particularly to the construction sector. Investors, who see the economy heading for a hard landing, say decisive interest rate hikes are needed to put the brakes on inflation. Erdogan, who has appointed his son-in-law Berat Albayrak as finance minister, casts the lira’s slide as an economic attack on Turkey by Western governments, financiers and ratings agencies. He says high interest rates cause inflation — a stance at odds with orthodox economics. (Reuters 01.09)

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6.3 Turkey Could Start Drilling in Eastern Mediterranean this Fall

Turkish Foreign Minister Çavuşoğlu said on 3 September that Turkey could start drilling in the Eastern Mediterranean this fall, as the country has already purchased a platform. Çavuşoğlu said the Turkish Republic of Northern Cyprus (TRNC) has territorial waters and a continental shelf, which Turkey would take all measures to protect. The foreign minister also mentioned that Turkey had previously prevented the start of some drilling works in the Eastern Mediterranean. Çavuşoğlu added that he will also meet his Greek counterpart Nikos Kotzias in the Turkish province of Izmir and discuss the Cyprus issue. He said if the Greek Cypriot side continues taking unilateral steps, Turkey will start drilling activities.

Turkey has repeatedly warned the Greek Cypriot administration about its unilateral hydrocarbon-related research in the Eastern Mediterranean, saying Turkish Cypriots also have a right to the resources around the area. Cyprus has been divided since 1974, when a Greek Cypriot coup was followed by violence against the island’s Turks and Ankara’s intervention as a guarantor power. After two years of negotiations, the most recent attempt to reunify the long-divided Mediterranean island ended in failure in 2017. (AA 04.09)

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6.4 Turkish Automotive Sales Contracted 53% in August

Turkey’s passenger car and light commercial vehicle sales fell 53% from a year earlier to 34,346 vehicles in August, the Automotive Distributors Association (ODD) announced. In a monthly sector statement, the association said that the market lagged by 43.7% behind the last decade monthly average, which is composed of 60,951 units. While 26,976 passenger cars were sold in August by a 50.9% yearly decline, a total of 7,370 light commercial vehicles were sold by a 58.2% decrease compared to the same month of 2017. In the January – August period, sales decreased 21% year-on-year to 440,428 vehicles, the association added, with an average 18.5% contraction in the passenger car market. The shrinkage in the light commercial vehicle market was 28% in the first eight months of the year compared to the same period of 2017, according to ODD figures. In the January-August period, 114 electric cars and 2,858 hybrid cars were sold across Turkey. Turkey exports almost eight of 10 vehicles which are manufactured in the country. (AA 04.09)

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6.5 Greece’s Supreme Court Repeals Wine Tax

Greece’s top administrative court cancelled a widely contested excise tax on wine introduced by the government in 2016, the Greek Wine Federation (GWF) announced. The tax had been challenged at the Council of State by the Greek Wine Federation, the National Interprofessional Organization of Vine and Wine of Greece (EDOAO), and other wine associations at the start of 2016. The special consumption tax had been in place since January 2016 and sees €0.15 added to the cost of a 750 ml bottle of wine or €0.20 euros to a 1 liter bottle. The move was welcomed by the country’s wine industry. The court’s ruling, which has not been made public yet, means the tax will be automatically cancelled and no decision has to be issued by the finance ministry. (eKathimerini 04.09)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Rosh Hashanah – the Jewish New Year

Rosh Hashanah, commonly known as the Jewish New Year, is celebrated on the first and second days of the Hebrew month of Tishrei. This year that date falls on the afternoon of 9 September and continues until the evening of 11 September. In Hebrew, Rosh Hashanah literally means “first of the year.” The name Rosh Hashanah is not used in the Bible to discuss this holiday. The Bible refers to the holiday as Yom Ha-Zikaron (the day of remembrance) or Yom Truah (the day of the sounding of the shofar). The holiday is instituted in Leviticus 23:24 – 25. The shofar is a ram’s horn; the sounding of the shofar in the synagogue is one of the most important observances of this holiday. The Bible gives no specific reason for this practice, though one that has been suggested is that the shofar’s sound is a call to repentance. No work is permitted on Rosh Hashanah. Much of the day is spent in synagogue, where the regular daily liturgy is somewhat expanded. In fact, there is a special prayer book called the machzor used for Rosh Hashanah and Yom Kippur because of the extensive liturgical changes for these holidays. Religious services for the holiday focus on the concept of G-d’s sovereignty. One popular observance during this holiday is eating apples dipped in honey, reflecting the wish for a sweet new year.

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7.2 Fast of Gedaliya Marked on 12 September

The Fast of Gedaliya (or Tzom Gedaliya, falling on 3 Tishrei), follows Rosh Hashanah. This year it is observed on 12 September. It marks the assassination of Gedaliya ben Achikam and the exile of the small Jewish community that remained in Israel after the Destruction. When Nebuchadnezzar King of Babylonia, destroyed the Temple in Jerusalem in 586 BCE and exiled the Jewish people to Babylonia, he allowed an impoverished remnant to remain in the land and appointed Gedaliah Ben Achikam as their Governor. Many Jews who had fled to Moab, Ammon, Edom, and other neighboring lands returned to the land of Judea, tended the vineyards given to them by the king of Babylonia and enjoyed a new respite after their earlier oppression. However, political machinations led Yishmael Ben Netaniah, to assassinate Gedaliah. Yishmael murdered Gedaliah, together with most of the Jews who had joined him and numbers of Babylonians whom the Babylonian King had left with Gedaliah. The remaining Jews feared the vengeance of the Babylonian King and fled to Egypt. The surviving remnant of Jews was thus dispersed and the land remained desolate, until the Jewish polity was re-established in some 70 years’ time. The fast is observed from daybreak until the stars appear in the evening.

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7.3 Yom Kippur – Holiest Day in the Jewish Calendar – Falls on 18/19 September

On the evening of 18 September and until after sunset on 19 September, Israel and world Jewry will observe Yom Kippur, or the Day of Atonement. The holiest day on the Jewish calendar, falling on the tenth of Tishri, it is a day marked by fasting, prayer and penitence for one’s sins against their fellow man and G-d. Yom Kippur atones only for sins between man and G-d, not for sins against another person. To atone for sins against another person, you must first seek reconciliation with that person, righting the wrongs you committed against them if possible. That must all be done before Yom Kippur.

Yom Kippur is a complete Sabbath; no work can be performed on that day. It is a complete, 25-hour fast beginning before sunset on the evening before Yom Kippur and ending after nightfall on the day of Yom Kippur. The Talmud also specifies additional restrictions that are less well-known: washing and bathing, anointing one’s body (with cosmetics, deodorants, etc.), wearing leather shoes and engaging in sexual relations are all prohibited on Yom Kippur. As always, any of these restrictions can be lifted where a threat to life or health is involved. In fact, children under the age of nine and women in childbirth (from the time labor begins until three days after birth) are not permitted to fast, even if they want to. It is customary to wear white on the holiday, which symbolizes purity and calls to mind the promise that our sins shall be made as white as snow. The day long fast is widely observed even among Israel’s secular public and most of the country’s Jewish population attend all or part of the day’s synagogue services. The fast is concluded with a shofar blast and rejoicing.

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7.4 Israel’s Muslim Community Grows By 2.5%, Marries Younger

As of late 2017, the Muslim population in Israel stood at 1.562 million, representing 17.8% of the country’s general population. It was also an increase of 38,000 people in relation to the previous year, according to new census figures published by the Central Bureau of Statistics to mark the Muslim holiday Eid al-Adha (the Festival of Sacrifice). Similar to the previous three years, the Muslim population in Israel grew at an annual rate of 2.5% in 2017. While Muslim population growth has waned over the past two decades, it is still the fastest growing population sector in Israel. For the sake of comparison, the Jewish population grew by 1.7% in 2017; the Christian population grew by 2.2% and the Druze population saw 1.4% growth.

About half of Israel’s Muslim population resides in the country’s north; 35.6% in the northern district and 13.8% in the Haifa district. Meanwhile, 21.8% of the country’s Muslims live in the Jerusalem district, 16.6% in the southern district and 11% in the central district – of whom 1.1% reside in the Tel Aviv district. Among cities, the greatest concentration of Muslims is in Jerusalem (329,000 people), which is home to 21% of all Muslims in Israel, who comprise 36.5% of the city’s general population. The Muslim population is also relatively young – 34.4% (534,000 people) is under 14 years of age. Only 4% of the Muslim population (63,000 people) is over 65 years old.

Additionally, for the first time since the early 2000s, fertility rates (the average number of babies a woman is expected to have in her lifetime) among Muslim women in Israel rose to 3.37 babies. This increase followed a steady decline in fertility rates, from 4.74 babies in 2000 to 3.29 in 2016. Muslim men were also getting married sooner than their counterparts from other sectors of the population. In 2016, the average age for Muslim men marrying for the first time was 26.5 years old – compared to 27.8 among Jews, 30.1 among Christians and 28.6 among Druze. Following that trend, Muslim women marrying for the first time were on average 22.5 years old, while Jewish women were 25.9, Christian women were 26.2 and Druze women were 24.5. (CBS 21.08)

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7.5 Record Number of Ultra-Orthodox Schoolchildren to Study Core Curriculum

A record number of first- to eighth-grade schoolchildren from the ultra-Orthodox (Haredi) sector will be starting the 2018-2019 school year at institutions that teach core curriculum subjects in addition to Torah study. The number of pupils in Haredi public schools for this year stands at approximately 6,000.

In 2014, the Education Ministry established a track for Haredi public education, which in addition to intensive religious studies will include instruction in math, English, science, languages and history. Haredi public schools will be obligated to devote the same minimum number of hours to each core subject as secular or modern Orthodox public schools do. Education Ministry policies and programs, adjusted to meet the needs of the highly observant sector, will apply to all Haredi public schools, which will also be subject to close ministry oversight to ensure that instructional criteria are met.

In 2014, the first year that Haredi public education was made available, only 1,322 pupils were registered in these public schools. That number rose to 5,652 in the 2017-2018 school year. Despite the dramatic uptick in the number of Haredi families seeking core curriculum education for their children, they still comprise a small minority of the Haredi population as a whole. Some 235,000 ultra-Orthodox children currently attend Haredi institutions whose curricula do not include or devote less time to core subjects than Education Ministry regulations stipulate. (Various 01.09)

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7.6 Technion & Hebrew University Ranked Among the World’s 100 Leading Universities

After a year of decline, Israeli universities made a strong comeback in 2018 as both the Technion – Israel Institute of Technology and Hebrew University of Jerusalem made the list of leading 100 universities in the world. The Academic Ranking of World Universities was released by the Shanghai Ranking Consultancy firm. The Technion climbed the Shanghai rankings to 77th place after placing 93rd in 2017. The Hebrew University ranked in 95th place – a significant improvement to 2017 when it finished in the 100-150 range.

Since 2003, when the Shanghai index was launched, Hebrew University had ranked in the top 100 every year until 2017. The Weizmann Institute of Science ranked in the 100-150 range, similar to last year, while Tel Aviv University was in the 151-200 grouping of leading universities. Ben Gurion University of the Negev and Bar-Ilan University ranked in the 401-500 grouping. Among the criteria the Shanghai index takes into account are the number of Nobel Prize and other prestigious award winners, and the number of publications in top-tier journals. (Israel Hayom 17.08)

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*REGIONAL:

7.7 Two Million Jordanian Students Head to Classrooms for Coming School Year

On 2 September, two million Jordanian students headed to schools across the Hashemite Kingdom, including 200,000 first grade pupils, marking the start of the new scholastic year 2018/19. The Education Ministry had stepped up preparations for the new academic year despite the many challenges, notably the “large and natural rise” in the numbers of students and overcrowded classrooms, noting that over 130,000 Syrian refugee students are enrolled in the Kingdom’s schools. These usually put huge pressure on the Ministry of Education at the beginning of each academic year, prompting the ministry to run the two-shift system in some of the schools and charter more schools. Some 16 new schools have been built and 202 classrooms added in existing schools this year and will be ready to receive students for the new academic year. (AMMONNEWS 01.09)

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7.8 Islamic New Year Holiday Announced for UAE Public Sector

The UAE has announced that Thursday, 13 September will be observed as a holiday for the public sector for the Islamic New Year. Government workers will return to work on Sunday, 16 September. No announcement has yet been made regarding the UAE’s private sector.

The new year commemorates the arrival of the Prophet Mohammed in Medina after he fled from Mecca. Known as the Hijra, the migration from Makkah to Madinah marked the beginning of the Islamic era in 622. (Various 03.09)

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7.9 UAE Students Start New Academic Year

About 1.1 million students returned to school on 2 September at 616 public schools across the UAE, amid extensive preparations by the Ministry of Education to launch a trouble-free academic year. Hussain bin Ibrahim Al Hammadi, Minister of Education, confirmed that the ministry has completed all preparations to create an “attractive, encouraging learning environment”. The ministry, in cooperation with the Ministry of Infrastructure Development, has implemented a comprehensive plan for the maintenance of 23 schools and replacement of four old schools. Nearly 35 schools, under 15 years old, have also seen architectural, electrical, mechanical and health improvements. The ministry has also conducted a week of technical training for 26,000 teachers before the launch of the new academic year. (AB 02.09)

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7.10 Egypt to See New Educational System in September

Egyptian Minister of Education Shawky said that Egypt will see a new educational system on 22 September 2018 as promised by the ministry. According to Shawky, the new system will be applied on nearly 2.5 million students starting from 22 September. By 2030, Egypt will be seeing the graduation of a completely different generation of students. He added that about 128,000 teachers are being trained to adjust to the new system, noting that the change will not be limited to only the form of the book or the curricula, but also the content of the educational system, relying mainly on active learning.

Regarding using the tablet, secondary level students will be using it and about 1,800 schools will be connected to the private networks for tablet operation in collaboration with the Ministry of Communications to prepare for using it with the start of the new school year. He added that about 65 companies are working in this project. He also added that the tablets were imported and are already on their way to Egypt. They would be handed over starting from 1 September 2018.

Shawky pointed out that once Egypt announced its new educational system, its rank improved in the education quality index, moving from position number 137 to 100. The change in ranks is the result of the mere vision and idea. He noted that there is a cooperation protocol between the bank and the ministry in the field of sponsoring excellent students, noting that the bank plays a significant role in this regard. (DNE 29.08)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 FSD Pharma and SciCann Therapeutics Launch Clinical Research Program in Israel

Toronto, Ontario’s FSD Pharma announced the launch of a clinical research collaborative program in Israel, via its strategic R&D partner, SciCann Therapeutics. This comprehensive clinical research program will be executed through SciCann’s strategic alliance and collaboration agreement with Mor Research Applications (Mor) – the technology transfer office and commercial arm of Clalit Healthcare Services, Israel’s largest medical insurer and healthcare provider, which operates a network of 14 full scale hospitals throughout Israel, employs over 9,000 physicians and serves the healthcare needs of over 50% of Israel’s population. As announced previously, FSD Pharma has secured the exclusive licensing rights for the manufacturing and distribution of SciCann’s line of proprietary, patent-pending, cannabinoid-based and indication-specific products in Canada.

Under the strategic alliance agreement with Mor, FSD Pharma and SciCann will execute a series of rigorous, randomized, placebo-controlled clinical studies to demonstrate the safety and efficacy of these products, in order to bring to market advanced and innovative cannabinoid-based products that are backed up by solid clinical data achieved through the highest standards of rigorous and objective clinical research typical for the development process of pharmaceutical products.

SciCann Therapeutics is a Canadian-Israeli specialty pharmaceutical company, dedicated to the development and commercialization of novel and disruptive pharmaceutical products that target and modulate the endocannabinoid system. SciCann Therapeutics is active in the fields of oncology, pain management, neurodegenerative diseases and inflammatory disorders, and develops a line of proprietary products for the treatment of chosen life-threatening conditions that present a high level of unmet need. (FSD Pharma 16.08)

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8.2 NRGene to Offer the First Broad Soy Diversity & Haplotype Database

NRGene has constructed a comprehensive soy genome diversity-haplotype database based on results from GenoMAGIC, allowing commercial and academic researchers never-before-available insights into the genomic diversity within the soybean crop. The database contains de novo assemblies and all-to-all comparison of 34 varieties of soybean, a set of breeding germplasm covering the full range of maturity groups. This database is a fundamental resource for basic research, genetic resource management, and breeding of elite soy varieties. Scientists studying gene function can now analyze every experiment in the broader view of dozens of genomes rather than a single reference genome, as it is often done today. Breeders can now more accurately relate genetic diversity with field performance, thereby accelerating the breeding of more nutritious and hardier varieties that need fewer resources and less land to deliver higher yields.

NRGene, together with commercial partners, has chosen 31 lines relevant to global soy breeding. Using DeNovoMAGIC, NRGene assembled those 31 soy lines, which were then processed by GenoMAGIC to construct the first-ever comprehensive diversity and haplotype database of commercial soybeans. Using this integrated database of sequence information, NRGene has identified an unprecedented number of sequence variants across multiple genomes including structural variants, such as insertions and deletions as well as single and multiple nucleotide polymorphisms. All variants are dynamically positioned across all reference genomes. This is made possible through the GenoMAGIC system, which also allows for accurate and high-density sequence imputation from low density genotyping.

Ness Ziona’s NRGene is a genomic, big data company delivering cutting-edge software and algorithms to their clients to facilitate the modern genomics-based research that is revealing the function, complexity, and diversity of human, plant and animal genomes that supports the most advanced medical research and sophisticated breeding programs. NRGene tools have already been employed by some of the leading agribiotech companies worldwide, as well as the most influential research teams in academia. (NRGene 24.08)

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8.3 Alpha Tau in Final Stages of Raising Investment of Several Tens of Millions of Dollars

Alpha Tau Medical is in the last stages of raising an investment of several tens of millions of dollars, the company released. The round is expected to close soon. Alpha Tau raised $25 million to date. Alpha Tau uses alpha radiation to treat various types of solid tumors. The technique, called Alpha DaRT (Diffusing Alpha-emitters Radiation Therapy), targets cancer cells by inserting a seed containing Radium-224 atoms into the tumor. Radiation particles are then released when the radioactive substance decays inside the tumor, killing the surrounding cells.

Alpha Tau also announced its technology has been approved by the Massachusetts Radiation Control Program (RCP), enabling it to initiate clinical trials in cancer centers across the U.S. The company has already conducted early stage clinical trials in Israel and Europe. Alpha Tau is currently in the process of establishing a U.S. production facility, anticipating demand for the treatment. In January, Alpha Tau partnered with Japanese medtech company HekaBio K.K. to form a joint venture called Alpha Tau Medical K.K. The companies are testing the technology in Japan and planning to release radiation therapy equipment in the country as early as 2021.

Tel Aviv’s Alpha Tau Medical focuses on research, development and commercialization of Alpha DaRT (Diffusing Alpha-Emitters Radiation Therapy) for the treatment of solid cancer tumors. Alpha DaRT technology, initially developed at Tel Aviv University, was shown to be effective and safe for treating different types of cancer in multiple animal studies. The company is running its first clinical trial in several sites in the EU. (Alpha Tau 22.08)

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8.4 BlueWind Announces Positive Results of Implantable Tibial Nerve Neuromodulator

BlueWind Medical, developer of the RENOVA iStim, an innovative, leadless, miniature, wireless neurostimulation platform, for the treatment of multiple clinical indications, announced the publication of long-term clinical results of OPTIMIST follow-up study. BlueWind Medical is the only company today with long-term positive clinical data for implantable tibial stimulation for the treatment of overactive bladder (OAB).

The prospective study was conducted in four leading clinical centers in the UK and the Netherlands that evaluated the long-term performance and safety of the RENOVA iStim for the management of OverActive Bladder (OAB), including Urinary Urge Incontinence (UUI) and symptoms of Urgency Frequency (UF).

The OPTIMIST Follow-Up study is an extension of the previously published OPTIMIST six-month pilot study and included 20 of the 36 pilot study patients. The 20 patients that were available for long-term follow-up well represent the original pilot cohort based both on demographics and on clinical response.

The study demonstrated a sustained high responder rate over a 36-month follow-up period, comparable with response rates typical to sacral neuromodulation. Three years after implantation of the RENOVA iStim device, 75% of patients experienced at least a 50% long-term reduction in OAB symptoms. Patients experienced durable, long-term, effect of UUI relief in “leaks” (50% of patients) and in “large leaks” (80% of patients). No severe adverse events (SAE’s) were reported throughout the follow-up study.

Herzliya’s BlueWind Medical was founded in 2010 by Rainbow Medical. The company is developing a platform technology of miniature, wireless, neuro-stimulators that can be injected or implanted in a minimally invasive procedure to treat multiple indications. By putting patients’ needs first, BlueWind Medical’s team of experienced and dedicated engineers and researchers are creating a versatile and effective platform that will transform neuromodulation as we know it.

Herzliya’s Rainbow Medical is a unique private operational investment company that seeds and grows start-up companies developing breakthrough medical devices, addressing significant unmet market needs in a diverse range of medical fields. (BlueWind Medical 30.08)

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8.5 STERO Biotechs Secures Patent of CBD as Steroid Sparing Treatment

STERO Biotechs has received a notice of allowance and will be granted an official U.S. patent on October 2018, covering over 100 Autoimmune & chronic inflammatory diseases. The patent is for steroid sparing Cannabidiol (CBD)-based treatment that has the potential of minimizing the devastating and sometimes lethal effects of steroids, an essential therapy in many diseases. Clinical trials will begin in Q4/18 on the first indication with more indications planned in the pipeline.

There is currently an urgent clinical unmet need to lower the dosage and time of steroids administration. STERO has discovered that CBD will allow physicians to prescribe a lower dose of steroids while retaining their therapeutic effect and, by extension, lowering unwanted side effects. The product will also bring relief to those who are currently resistant to steroid treatment alone, known as steroid refractory.

Although steroids are one of the most commonly used treatments for a multitude of conditions, they are well known to cause a large number of mild to severe adverse effects, especially in cases of high dosage or long-term use. In a recent literature review, the most commonly reported adverse effects from long-term exposure were hypertension, cataract, sleep disturbances, cardiac conditions, fractures or osteoporosis, nausea, vomiting, and other gastrointestinal and metabolic issues such as hyperglycemia, weight gain and type 2 diabetes.

Bnei Brak’s STERO Biotechs, founded in 2017, is a clinical stage company committed to the research and development of novel and improved Cannabidiol (CBD) based treatment solutions that will potentially benefit millions of patients by reducing the side effects and the need of steroid therapy.

STERO has established an active partnership with one of its shareholders – MOR Research Applications, the tech transfer company of Clalit Health Services. Clalit is the largest HMO in Israel, with over 4.5 million members. Clalit operates 14 full scale hospitals specializing in all fields of medicine, as well as over 2000 community clinics with over 9000 physicians. The MOR-STERO partnership allows the company to reach vast numbers of patients and data. (STERO Biotechs 29.08)

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8.6 NovellusDx and Primetech Sign an Exclusive Dealer Agreement in Japan

NovellusDx and Japan’s Primetech Co. announced that Primetech will provide NovellusDx’ functional genomics assay “FACT – Functional Annotation for Cancer Treatment” as an exclusive dealer in Japan for the pre-clinical market with sales, marketing and research support / technical support in Japan. Today, genomic sequencing plays an ever-increasing role in cancer treatment, but the functional significance of most mutations found in a patient’s DNA is unknown and so is the effect drugs have on them. Japan is a huge, advanced market with the top research centers and pharma companies operating here. It is an honor for us to be able and help them.

Jerusalem’s NovellusDx’s mission is to provide functional information about mutations and their responses to drugs so that oncologists can treat patients with precision therapies and bio-pharmaceutical companies can develop drugs more effectively. The NovellusDx approach is to monitor the functional effects of mutations and observe the effects of drugs, drug combinations and drug candidates on the activity level caused by the mutations. (NovellusDx 03.09)

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8.7 Body Vision Medical Announces $8.5 Million in Funding

Body Vision Medical announced $8.5 million in funding. The proceeds will be used to accelerate the commercialization efforts of its FDA approved LungVision system in the U.S. and to extend its product line. The LungVision system introduces a novel real-time imaging tool to the bronchoscopy suite. Today, in order to diagnose small peripheral lesions, the pulmonologist has to use several different imaging modalities such as computerized tomography (CT), ultrasound (US) and fluoroscopy. Each of these modalities has advantages and disadvantages; however, even a combination of all of the above was unable to improve significantly a poor diagnostic yield of small peripheral lung lesions. For the first time, our fusion imaging platform enables the pulmonologist to use all the existing imaging modalities together, in real time, without changing or affecting the procedural flow. The LungVision system, together with our unique delivery device, enables the physician to plan the procedure, navigate to challenging locations and localize the lesion during biopsy. This complete solution will facilitate early stage diagnosis of lung cancer and, in addition, will pave the way for minimally invasive transcatheter therapeutics.”

Ramat HaSharon’s Body Vision Medical is a software and medical device company specializing in augmented real-time fusion imaging, artificial intelligence and intra-body navigation. The company was founded in 2014 to address the contemporary unfulfilled clinical need of early lung cancer diagnostics and treatment. (Body Vision Medical 04.09)

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8.8 STK REGEV ‘Hybrid’ Fungicide, Now Registered in Argentina

STK’s ‘hybrid’ fungicide STK REGEV is now registered in Argentina for peanuts, with future label extensions on potatoes, wine grapes, tomatoes, peppers, blueberries and tobacco. STK REGEV protects from and heals a variety of diseases, including Cercospora Arachidicola (early leaf spot), Cercosporidium Personatum (late leaf spot) for peanuts, Powdery mildew, Alternaria, Rust and Botritis for other crops. STK REGEV is the world first foliar ‘hybrid’ fungicide, and is currently used successfully in ten countries in various regions of the world, with plans for global expansion in 2019.

STK REGEV is a ready to use fungicide, used exactly as other fungicides, but with the added benefits of reduced chemical residues and much better resistance management due to its highly complex formulation of Tea Tree Oil and Difenoconazole. This ready to use fungicide serves as a ‘bridge,’ enabling farmers who have never used any biological product to try one, without having to mix, rotate or do anything differently, thereby expanding the use of biologicals products for sustainable agriculture. Field test data has shown STK REGEV performs as well or better than leading chemical fungicides. Only with REGEV, farmers will realize all the benefits of lower chemical load, reduced chemical residues and having a new tool for resistance management.

Founded in 1994, Petah Tikva’s STK is a bio-ag technology company, committed to food protection from field to fork. Their botanical-based solutions (BBS), a synergy of cutting-edge scientific research and technology, enhance the safety, yield and quality of multiple crops. STK helps growers, food companies and supermarkets deliver healthier and safer food to market. Their botanical and hybrid solutions are easily integrated into conventional spraying programs, helping to advance the Integrated Pest Management approach to food production. STK’s flagship product Timorex Gold is used to control a broad spectrum of diseases in diverse crops. (STK 04.09)

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8.9 NRGene and RCK to Develop DNA Tests for Medical Cannabis

RCK, licensed for cannabis cultivation, genetic research, and breeding in Israel, has joined forces with NRGene, the world leader in genome analysis, to develop a comprehensive set of DNA markers representing the broad diversity within commercial medicinal cannabis. The DNA markers will be used commercially for strain identification of cannabis plants grown for medical use. Each medical cannabis grower could obtain professional authentication of the strains grown. The same DNA marker set will also be used by RCK and NRGene for the discovery of key traits in cannabis and be utilized for more efficient breeding.

Ness Ziona’s NRGene is a genomic big data company delivering cutting-edge software and algorithms to reveal the complexity and diversity of humans, plants and animals for supporting the most advanced medical research and sophisticated breeding programs. NRGene tools have already been employed by some of the leading seed companies worldwide as well as the most influential research teams in academia.

Hof Ashkelon’s RCK is an Israeli medical cannabis company, licensed for cultivation, breeding and production, active in the Israeli cannabis ecosystem for more than two years. The company owns a unique facility designated for cultivation and for R&D, as well as over 60 certified cannabis strains and a proprietary cannabis-specific technology for enhancement of cannabis breeding. (NRGene 04.09)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 CyberArk Launches SAP Certified Privileged Access Security Solution

CyberArk announced the availability of its SAP-certified CyberArk Privileged Access Security Solution. The solution can strengthen and extend security across SAP environments, including SAP ERP systems, by protecting against privileged access-related risk and credential compromise. The CyberArk Privileged Access Security Solution achieved SAP certification as Integrated with SAP NetWeaver technology platform. It enables organizations to improve operational efficiencies and safeguard critical assets from external attackers and malicious insiders. With more than 90% of the Global 2000 relying on SAP applications to run their organizations, powerful credentials for these applications and systems are sought out by attackers to gain access to business-critical information and assets. This certification extends CyberArk’s existing SAP integrations, which are available to customers on the CyberArk Marketplace. SAP is also a new member of the C3 Alliance, CyberArk’s global technology partner program.

Petah Tikva’s CyberArk is the global leader in privileged access security, a critical layer of IT security to protect data, infrastructure and assets across the enterprise, in the cloud and throughout the DevOps pipeline. CyberArk delivers the industry’s most complete solution to reduce risk created by privileged credentials and secrets. The company is trusted by the world’s leading organizations, including more than 50% of the Fortune 100, to protect against external attackers and malicious insiders. (CyberArk 02.08)

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9.2 Foresight Secures Additional Sale of QuadSight Prototype

Foresight Autonomous Holdings announced the additional sale of a prototype of its breakthrough QuadSight quad-camera vision system. The QuadSight multi-camera vision solution targets the semi-autonomous and autonomous vehicle market and is designed to allow near-100% obstacle detection with near zero false alerts under any weather and lighting conditions. The stereoscopic technology system was ordered by the truck division of one of Europe’s largest vehicle manufacturers. Revenue from the prototype system sale is expected to total tens of thousands of dollars.

This is the second sale of QuadSight prototype system to a leading European original equipment manufacturer (OEM) demonstrating the company’s clear strategy to cooperate with leading European OEMs. Foresight believes that sales of QuadSight prototypes will strengthen its relations with potential customers. Customer satisfaction at the end of the evaluation process is expected to lead to a large order of QuadSight systems by the vehicle manufacturer for mass production.

Foresight regards QuadSight as the industry’s most accurate quad-camera vision system, offering exceptional obstacle detection for semi-autonomous and autonomous vehicle safety. Using proven, highly advanced image-processing algorithms, QuadSight uses four-camera technology that combines two pairs of stereoscopic infrared and daylight cameras. QuadSight is designed to achieve near-100% obstacle detection with near zero false alerts under any weather or lighting conditions – including complete darkness, rain, haze, fog and glare.

Ness Ziona’s Foresight Autonomous Holdings is engaged in the design, development and commercialization of stereo/quad-camera vision systems and V2X cellular-based solutions for the automotive industry. Foresight’s vision systems are based on 3D video analysis, advanced algorithms for image processing, and sensor fusion. The company, through its wholly owned subsidiary Foresight Automotive, Ltd., develops advanced systems for accident prevention which are designed to provide real-time information about the vehicle’s surroundings while in motion. (Foresight 28.08)

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9.3 Miami Dade College & Cyberbit Announce Opening of New Cyber Range Training Facility

Cyberbit and Miami Dade College (MDC) announced the opening of the MDC Cyber Range training facility at the new state-of-the-art Cybersecurity Center of the Americas at MDC. The only one of its kind in the region and powered by the Cyberbit Range platform, this cybersecurity training center will provide hands-on cybersecurity training to students, organizations and cybersecurity professionals, to fill the ever-increasing number of open cybersecurity positions.

Hands-on cyber range simulation is becoming the de-facto approach for cyber training. Cyberbit pioneered this approach, recently receiving a $30 million investment from Claridge Israel to accommodate the rising demand for its Cyberbit Range product. As the leading provider of cyber ranges, Cyberbit has led the charge in partnering with innovative higher education institutions to train skilled cyber experts. To-date, Cyberbit has partnered with dozens of higher education institutions, enterprises and service providers to open training facilities based on its Cyberbit Range technology. These ranges, operating in the U.S., Europe, Asia and Australia, provide students, cybersecurity practitioners and organizations with the cybersecurity training and resources they need to develop the skills required to combat today’s threats.

The MDC Cyber Range will support MDC’s important initiative to grow cybersecurity competency in Florida and help fill thousands of open cybersecurity positions in the region and nationwide. The college will expand cyber education available to students and prepare them for careers in one of the country’s fastest growing technical professions. In addition, the facility will offer hands-on training, certification and assessment for commercial and public-sector organizations in Florida.

Ra’anana’s Cyberbit provides a consolidated detection and response platform that protects an organization’s entire attack surface across IT, OT and IoT networks. Cyberbit products have been forged in the toughest environments on the globe and include: endpoint detection and response powered by behavioral analysis, security automation, orchestration and response (SOAR), ICS/SCADA security (OT security), and the world’s leading cyber range for simulated cyber training. Cyberbit is a subsidiary of Elbit Systems and has offices in Israel, the US, Europe, and Asia. (Cyberbit 22.08)

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9.4 mPrest Releases Underground Residential Distribution (URD) Cable Fleet Maintenance Optimization App

mPrest announced the release of its Underground Residential Distribution (URD) Cable Fleet Maintenance Optimization application, a new smart power system for hard to access, sensor-less URD cables that minimizes asset failure and decreases the frequency of power outages. URD cable fleet maintenance is a daunting and critical task – utilities maintain thousands of miles of URD cables, most of which were installed decades ago. Moreover, since these cables are sensor-less, utilities have limited visibility into their health condition. Furthermore, in many cases these cables may be buried directly in the ground, with no ducts; thus increasing their replacement costs. Lack of insight into cable survivability makes it difficult to prioritize maintenance and replacement activities, predict impending failures, and take proactive steps to prevent those failures.

mPrest’s new AI-driven maintenance optimization application takes a statistical approach and is based on troves of various data related to the URD cables. Several key influencers are analyzed in order for mPrest to create a smart, big data-driven plan for the utility entity, such as cable vendor, location, and other cable characteristics, installation date, soil type, humidity and more. mPrest’s URD Cable Fleet Maintenance Optimization system extracts URD cable segment data from platforms such as enterprise asset management, work and asset management, EAM and/or GIS. Using a self-learning model, it discovers key factors affecting the performance and survivability of URD cables, and predicts the probability of cable segment failure.

Petah Tikva’s mPrest is a global provider of mission-critical monitoring, control and big data analytics software. Leveraging the power of the Industrial IoT, mPrest’s integrative “system of systems” is a proven catalyst for digital business transformation. Their innovative management solutions have been deployed in next-gen applications for carrier service providers, system integrators, smart cities as well as IoE (Internet of Energy) applications for power utilities, defense and HLS. (mPrest 28.08)

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9.5 WhiteSource Integrates Its Open Source Security Solution With Fortify Software Security Center

WhiteSource announced the integration of its open source security solution with Fortify Software Security Center (SSC), the leading application security testing solution, providing users with full visibility and control over their software security risks. WhiteSource’s integration with Fortify SSC allows customers to view and monitor their open source security vulnerabilities from within their Fortify SSC application, enabling them to improve security management throughout the software development lifecycle with a comprehensive view of their software vulnerabilities in both their proprietary and open source code.

Open source usage is standard practice in today’s software development ecosystem. While organizations’ products are a combination of open source and proprietary code, application security tools like Static Analysis Security Testing (SAST) used for proprietary code cannot detect open source components with known vulnerabilities. Only Software Composition Analysis (SCA) tools can detect vulnerable open source components in real-time and provide remediation suggestions according to the impact on a product’s security.

The combination of SAST, DAST, and Software Composition Analysis (SCA) tools will offer companies unprecedented visibility into their software code, both proprietary and open source components, in order to detect all vulnerabilities in their products and address all their application security issues.

Bnei Brak’s WhiteSource is the leader in continuous open source security and license compliance management. Its vision is to empower businesses to develop better software by harnessing the power of open source. Industry leaders like Microsoft, IBM, and hundreds more trust WhiteSource to secure and manage the open source components in their software. (WhiteSource 23.08)

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9.6 Gazprom Space Systems & Gilat to Provide Broadband Connectivity Across Russia

Russia’s Gazprom Space Systems (GSS), international satellite operator and Gilat Satellite Networks signed a contract with an estimated value of $18 million to provide broadband connectivity across Russia. Gilat will deliver its’ multiservice platform and user terminals to operate over the new Yamal 601 Ka satellite. The companies also signed a Cooperation Agreement for joint development of communication projects such as IFC, and railway transport.

The Yamal 601 Ka satellite is expected to be launched in 2019 and will provide broadband coverage for both the European and Asian regions of Russia. The satellite’s 32 beams will be lighted up by Gilat’s two SkyEdge II-c gateways to be installed in the Central and Siberian Federal Districts. This first phase of the project consists of gateways for utilizing one-third of the satellite’s capacity and includes the delivery of tens of thousands of Gilat’s terminals with the advanced efficiency-driven DVB-S2X technology. An expansion of the project is expected when additional capacity will be required for further service.

Gilat’s highly efficient platform, supporting a broad portfolio of VSAT solutions, will enable GSS to provide high quality affordable broadband to various market segments. Gilat’s Scorpio VSATs will deliver consumer broadband to the most remote locations, while Gilat’s Capricorn VSATs will enable the rural regions to benefit from corporate connectivity and shared access.

Additionally, GSS and Gilat agreed to engage in further business cooperation including joint development to expand both regional and global coverage for fixed and mobile platforms, as reflected in the signed Cooperation Agreement. The Agreement calls for IFC coverage over Russia and abroad supported by multiple Ka and Ku satellites from GSS and other satellite operators, taking advantage of Gilat’s dual-band Ku/Ka antenna.

Petah Tikva’s Gilat Satellite Networks is a leading global provider of satellite-based broadband communications. With 30 years of experience, they design and manufacture cutting-edge ground segment equipment, and provide comprehensive solutions and end-to-end services, powered by their innovative technology. Delivering high value competitive solutions, our portfolio comprises of a cloud based VSAT network platform, high-speed modems, high performance on-the-move antennas and high efficiency, high power Solid State Amplifiers (SSPA) and Block Upconverters (BUC). (Gilat 29.08)

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9.7 Texas Advanced Computing Center Selects Mellanox HDR 200G InfiniBand

Mellanox Technologies announced that InfiniBand has been selected to accelerate the new large-scale supercomputer to be deployed at the Texas Advanced Computing Center (TACC). The system, named Frontera, will leverage InfiniBand to deliver the highest application performance, scalability and efficiency. The Frontera supercomputer will deliver approximately twice the performance compared to the current system at TACC, and is expected to be operational in early 2019. If installed today, Frontera would be ranked among the top 5 fastest supercomputers in the world.

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9.8 StePac Leads in Responsible Supply Chain Technology with Innovative Packaging

StePac is working closely with its partners to implement a comprehensive supply chain solution for the delivery of fresh cherries from farm-to-fork. The company has joined forces with Tadbik Ltd., Israel, to produce the next generation of modified atmosphere resealable lidding film. The new technology is engineered to extend the shelf life of fresh cherries in aesthetic and functional retail packaging as well as reduce waste.

In this collaboration, Tadbik created a “FreshLid” laminated film structure that is sealed to trays containing fresh produce and whose upper layer can be repeatedly peeled back for reuse. The companies then worked together to develop suitable condensation control properties and control film permeability to deliver optimal modified atmosphere compositions (MAP) for high value fresh produce items such as cherries. This innovative packaging will be marketed under the Xgo® line, StePac’s leading retail brand.

This packaging design incorporates multiple capabilities to effectively slow respiration and ageing processes, and to control humidity inside the packaging and extend fresh produce shelf life. Following research and trials at StePac’s post-harvest lab, the groundbreaking film was approved for shelf life extension of cherries.

Tefen’s StePac specializes in functional packaging for fresh produce. Its brands include the globally recognized Xtend, Xgo, Xflow and Xbloom modified atmosphere / modified humidity packaging solutions. The company is a wholly-owned subsidiary of Johnson Matthey PLC.

Petah Tikva’s Tadbik is a world leader of advanced packaging solutions including Flexible Packaging, Labels, RFID, packaging machinery and in-pack promotion for over 30 years. Tadbik maintains facilities in the USA and Israel with highly skilled in-house design and engineering teams. (StePac 30.08)

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9.9 Minute Launches First Real-Time AI Video Analysis Platform for Live Streams Broadcasts

Video optimization platform Minute announced a new product in their suite of video tools aimed at analyzing live broadcasts and streams in real-time. The company uses AI technology to monitor live stream broadcasts and automatically generate video previews in real-time to increase video engagement with consumers and, ultimately, video revenue. The company’s platform was recently used by the top broadcasters for 2018 World Cup Russia online coverage. During the live stream of the matches, the company successfully drove engagement and hundreds of millions of game views resulting in a 13% increase of new users to the live stream.

The platform is the first on the market to showcase a user-facing technology that increases the number of video views and creates a new video-based revenue stream. The company’s technology is currently deployed in dozens of sports, news and entertainment websites worldwide and demonstrates an increase in video profitability up to 37% based on program size. Minute has launched several products including Smart Video Preview, which generates the most effective five-second teasers that increase click-through-rate (CTR) by an average of 300%, and Top Videos, which automatically aggregates top performing video articles and presents internal video recommendations to the consumers.

Tel Aviv’s Minute is a pioneer in the field of video optimization. Having built creative technological innovations and providing efficient, practical tools for web-based publishers, Minute has significantly boosted profitability by enlivening video content with a breath taking and engaging user experience. (Minute 30.08)

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9.10 IAI – DOK-ING Collaboration on Robotic System NBC Agents Without Risking Human Lives

Israel Aerospace Industries (IAI) has signed a collaboration agreement with DOK-ING D.O.O (DOK-ING) from Croatia on manufacturing, marketing and sales of a robotic system to be used in high risk areas, including ones contaminated by chemical, biological and radioactive agents. The system comprises a unique dedicated vehicle, which features some of the world’s most advanced robotic capabilities. These capabilities allow it to perform its tasks efficiently and without risking human lives.

DOK-ING will provide to the collaboration the unique platform developed especially to withstand the extreme working environment including strong navigability and transportability in complex terrains. IAI will provide advanced robotic capabilities, algorithms for autonomous movement, broadband communication systems and command and control systems. In addition, special sensors for detecting and classifying contaminants will be embedded in the system including for radioactive radiation.

IAI is a world leader in both the defense and commercial markets, delivering state-of-the-art technologies and systems in all domains: air, space, land, sea, cyber, homeland security and ISR. Drawing on over 60 years’ experience developing and supplying innovative, cutting-edge systems for customers around the world, IAI tailors optimized solutions that respond to the unique security challenges facing each customer. (IAI 26.07)

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9.11 ColorChip to Showcase 100G-400G PAM4 Optical Transceivers for the 5G Network

ColorChip showcase a family of next generation PAM4 optical interconnects ranging from 100G to 400G, with reaches up to 40 km, at the CIOE 2018 exhibition in Shenzhen, China. Based on the company’s proprietary SystemOnGlass technology, ColorChip delivers 100G CWDM4 2km and 4WDM-10 10km QSFP28 solutions with highly integrated photonic optical engines, benefiting from a low part count and an industrialized manufacturing approach.

To support the massive use of fiber in fronthaul and backhaul networks, the evolving 5G infrastructure will require unparalleled volumes of high speed optical modules. ColorChip is well positioned to leverage existing 100G QSFP28 CWDM4 production lines, already proven and scaled for massive mega datacenter demand, to support the growing needs of the 5G market, with capacity ramping up to millions of units per year.

Yokneam’s ColorChip, established in 2001, is a technology innovator in the field of photonic integrated hybrids whose vision is to break open the optical interconnect bandwidth barrier with high-speed optical transceiver solutions to support the explosive bandwidth demand of the Datacom and Telecom markets. ColorChip leverages its fully owned, industrialized optics-based FAB dedicated to the production of PLC based SystemOnGlass optical engines, whose glass platform is the ideal medium for emerging PAM4 applications. (ColorChip 03.09)

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9.12 Fieldbit and InfinityAR to Develop Software for Augmented Reality Smart Glasses

Fieldbit and InfinityAR announced a strategic R&D alliance to jointly develop a vertically integrated solution for field service organizations that marries InfinityAR’s SLAM and Augmented Reality software engine with Fieldbit’s award-winning enterprise platform for remote assistance, collaboration and on-job knowledge capture. In particular, the integration of InfinityAR’s software engines will enable Fieldbit to optimize the compatibility of its AR-based field services application with the next generation of optical see-through smart glasses.

Fieldbit offers a real-time AR-based collaboration and knowledge capture platform for field services. Using Fieldbit software, service organizations can provide technicians with visual instructions or access to crucial information, including IoT data, exactly when it is needed and in the most precise and context-sensitive way. The integrated solution will take advantage of smart glasses hardware design, AR and SLAM algorithm capabilities for interaction with augmented information, thus enabling the most accurate superimposing of digital content in the field of view with precise position tracking of AR objects related to the user’s movement.

Ramat Gan’s InfinityAR‘s vision is about creating a new digital environment that will allow people to naturally interact with augmented content in their physical surroundings, all by creating a new Mixed Reality platform that will digitally enhance every person’s physical world. InfinityAR’s technology turns AR glasses into a powerful content augmentation platform with the most accurate inside-out Simultaneous Localization and Mapping (SLAM) solution, allowing application developers to bring unmatched mixed reality experiences.

Founded in 2014, Ra’anana’s Fieldbit is the leading provider of real-time augmented reality collaboration solutions for field service organization. Its enterprise cloud-based platform enables on-site service engineers to collaborate seamlessly with experts in the service center and to receive all the know-how and guidance they need to solve issues quickly. Fieldbit increases remote resolution and first-time fix rates, minimizing costly downtime and enhancing customer satisfaction. (Fieldbit 04.09)

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9.13 My Size Partners With FIT to Provide Innovative Measurement Solutions for Students

Airport City’s My Size is partnering with the Fashion Institute of Technology (FIT), an internationally recognized college for design, fashion, art, communications, and business in New York City, to provide its innovative mobile measurement solutions to students. Per the agreement, My Size will grant access to its Qsize and MySizeID apps for use within the institution’s fashion curriculum. Students will use Qsize to measure garments throughout the quality control process, measure body sizes with MySizeID and build a sizing chart to sync measurements with through the technology’s platform.

The MySizeId app is a turnkey solution that helps any merchant’s customers choose the appropriate apparel size for that specific brand, based on the shopper’s real measurements. My Size’s innovative technology enables consumers to measure themselves using their smartphone and then be matched with a brand-specific apparel item in their size. Once launched on any given e-commerce platform, store owners will be able to add the MySizeId app to their storefronts through a simple integration and provide their shoppers with a more personalized experience.

MySizeId can increase the sales of apparel retailers by reducing or even eliminating their customers’ uncertainties regarding size and fit. Based on My Size’s estimates, the MySizeId app can increase average order values by approximately 20%. MySizeId also addresses the industry’s $62 billion return problem by reducing return rates by approximately 30%. Furthermore, MySizeId enhances the customer experience, leading to greater brand loyalty. (My Size 04.09)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israeli Startups Raised Nearly $300 Million in August

According to IVC-ZAG, Israel’s startups have raised over $4 billion in the first eight months of 2018, well on course to beat last year’s record of $5.24 billion. Israeli startups raised nearly $300 million in July, according to press releases issued by companies that have completed financing rounds. The figure may be more as some companies prefer not to publicize the investments they have received.

This sum can be added to the more than $3.1 billion that Israeli startups raised in the first half of 2018, according to IVC-ZAG. The country’s startups also raised an estimated $650 million in July, bringing the amount raised by startups in the first two months of 2018 to over $4 billion, well on course to beat last year’s record of $5.24 billion.

August began sluggishly perhaps because of the summer vacation with the $32 million raised by AI personalized software company Dynamic Yield and the $33 million raised by cloud security company Twistlock, the only major financing rounds in the first half of the month. Public safety company Carbyne, in which former Prime Minister Barak is a major investor, raised $15 million. There was a flurry of financing rounds completed in the finals days of the month with device repair company Puls Technologies raising $50 million, cloud optimizer Spotinst raising $35 million, storage company Zadara raising $25 million and cybersecurity company Indegy raising $18 million. (IVC-ZAG 02.09)

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10.2 Israel Ranks 5th Worldwide in Per Capita Patents

Israel has been one of the leading countries in the past eighteen years in terms of number of international patents filed via the Patent Cooperation Treaty (PCT) in relation to population size. The peak came in 2000, when Israel was ranked third in the world for patents filed per capita according to the country of the inventor, after Finland and Sweden. Today, Israel ranks fifth, after Japan, Sweden, Switzerland and South Korea. Finland has dropped to sixth. The data are from a new report by the National Council for Research and Development in the Ministry of Science and Technology.

The report was prepared for the ministry by researchers at the Samuel Neaman Institute for National Policy Research. It examines patents filed under the PCT, that is, patents intended to protect an invention in the international market, and it strengthens the findings of a previous report compiled by the Samuel Neaman Institute for the Ministry of Science and Technology on scientific publications. As in patents, Israel’s standing in scientific papers published is very high, but its advantage is receding as other countries come to the fore.

Israelis are very inventive according to all of these measures, but the differences between the figures for patents with an Israeli inventor and patents with Israel ownership shows that Israelis are often inventors in the service of foreigners. According to the report, 30% of the Israeli patents are under foreign ownership. This is not necessarily a negative thing – foreign or international companies pay well for Israeli brains. Israeli ownership of foreign inventions, on the other hand, amounted to 9.7% in 2015. This figure, which has been fairly stable over the past decade, is rather low by international comparison. Among other things, it reflects the low number of Israeli-owned multinational companies, compared with countries of similar size, such as Switzerland, Belgium, Sweden, and Ireland which own relatively many international companies. (Globes 28.08)

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10.3 Record Ben Gurion Airport Passenger Traffic Noted

The end of August, just before the start of the school year and the major Jewish holidays, is the busiest time of year for passenger and airplane traffic at Ben Gurion Airport. The Israel Airports Authority believes that international passenger traffic will total 2.7 million in August, an all-time record, 10% more than in August 2017. Some 2.4 million passengers passed through the airport in July, up 10.6% from July 2017.

It is believed that the upward trend in passenger traffic will continue in September with over 2.2 million passengers on 14,000 flights, 17% more than in September 2017. Thousands of Israelis travel to Uman in Ukraine in September. The airlift to Ukraine will start on 5 September and continue until 9 September. Some 30,000 Hassidim are expected to travel to Uman on 133 flights between these dates.

The preferred destinations for the rest of the passengers in September are Greece, Turkey (an interim destination for connecting flights), Italy and Russia.

Passenger traffic will come to a halt on the eve of Yom Kippur, 18 September, with the final landing being at 13:40 (by El Al Israel Airlines) and the last takeoff at 13:55, after which Israel’s airspace will be closed. The first landing after Yom Kippur will be at 21:30 on 19 September and the first takeoff will be at 23:30 the same day. (Globes 28.08)

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11: IN DEPTH

11.1 LEBANON: Lebanon ‘B-/B’ Ratings Affirmed; Outlook Stable

On 31 August 2018, S&P Global Ratings affirmed its ‘B-/B’ long- and short-term foreign and local currency sovereign credit ratings on Lebanon. The outlook remains stable.

Outlook

The stable outlook reflects our expectation that continued deposit inflows to the financial system will remain sufficient to support the government’s borrowing requirements and the country’s external deficit over the next 12 months.

We could lower our ratings on Lebanon if:

-We saw the government was unable to access the international debt capital markets for an extended period, perhaps evidenced by further Banque du Liban (BdL) financial engineering transactions.

-The political and economic situation deteriorated, leading to deposit outflows or slower deposit growth rates and a level of foreign currency (FX) reserves that would challenge the country’s ability to meet its debt-servicing requirements.

-Confidence in the monetary financial institutions or currency peg weakened.

We could raise our ratings if Lebanon’s policymaking framework became more predictable and effective, boosting economic activity significantly more than our current forecasts, and improving the fiscal and external imbalances and the sustainability of public finances.

Rationale

The Lebanese government’s debt-servicing capacity depends largely on the domestic financial sector’s willingness and ability to add to its holdings of government debt, which in turn relies on bank deposit inflows, particularly from nonresidents, and also on financing from the central bank, BdL. This structural weakness constrains the ratings, as do Lebanon’s divided political environment and regional tensions. Institutional weaknesses have hindered economic outcomes and weakened public finances, as indicated by the consistently large fiscal deficits and the high and rising public debt levels. Lebanon’s net general government debt, which we estimate at 124% of GDP in 2018, is the third highest among all the sovereigns we rate, after Japan and Greece.

The ratings are supported by Lebanon’s external profile. The country’s liquid external assets (that is, FX reserves and financial sector assets held abroad) exceed total external debt. We anticipate, however, a gradually worsening profile as nonresident deposit inflows (largely from the Lebanese diaspora) continue to support the country’s large twin deficits but also add to the country’s external debt levels.

Institutional and Economic Profile: Deep sectarian divisions in the political system and high regional security risks

-We view Lebanon’s institutional and governance effectiveness as weak, reflecting both its highly divided domestic political system and the high-risk regional security environment.

-Political uncertainty emanating from delays in government formation following parliamentary elections in May, along with the prime minister’s temporary resignation in November 2017 and high geopolitical risks, will likely dampen investment and deposit flows in the near term.

-We expect growth to remain subdued, but gradually improve to 2.5% by 2021, supported by the government’s investment program and easing tensions in Syria.

We see long-term constraints on Lebanon’s institutional and economic profile, largely stemming from a divided political environment organized along confessional lines. There have been some positive developments in this area, however, including parliamentary elections in May 2018 (the first since 2009), the passing of two budgets in October 2017 and March 2018 (the first two since 2005), and presidential elections in November 2016 that ended the political vacuum of more than two years.

However, sectarian divisions and regional interference have obstructed stability and policymaking. The surprise, temporary resignation of Prime Minister Saad Hariri from Saudi Arabia in November 2017 was, in our view, evidence of the fragile political landscape and the ability of foreign governments to influence Lebanese politics. More recently, delays in the formation of a new government since the parliamentary elections in May reflect continued deadlock between political parties. We expect rising tensions between Saudi Arabia and Iran and between Israel and Iran/Hezbollah, along with continued conflict in Syria, to derail any push for material policy reforms and weigh on economic growth in the near term.

We project that the economy will grow by an average of 2.1% over 2018-2021, from an estimated 1.4% in 2017, far below the real GDP growth of 9.2% seen in 2007-2010. We believe that Lebanon’s traditional growth drivers – tourism, real estate, and construction – will remain weak as long as the Syrian conflict continues. Furthermore, political uncertainty and recently implemented tax measures affecting consumers and several economic sectors, including real estate and construction, will likely subdue investment in 2018. We nevertheless expect consumption growth to be partly supported by the increase in public sector wages in mid-2017.

Our growth forecasts assume some increases in public and private investment for the partial implementation of the government’s new Capital Investment Program (CIP), which was developed in conjunction with the World Bank. The government attracted international donor funding of around $11 billion (mostly in concessional debt) from the Cedre conference in April 2018 for infrastructure investment. As funding is contingent on structural reforms, including improving public finances, we expect disbursements to be very gradual and far lower than the pledged amounts. We also note that scaling up of public investment would lead to higher government debt without material fiscal and structural reforms.

We could see upside pressure to our growth forecasts if the situation in Syria normalizes sooner than expected, leading to the opening of the trade route between Jordan and Syria and reconstruction projects, which would support Lebanon’s goods and services exports. The government recently signed its first oil and gas exploration and production agreements for two offshore blocks with a consortium that consists of Total, Eni and Novatek. But we do not incorporate the effects of any potential discoveries into our economic or fiscal forecasts at this time.

While we project that real GDP will continue to increase on a headline basis, we estimate that trend growth in real GDP per capita (which we proxy by using 10-year weighted-average growth) will remain around negative 1.3% over 2012-2021, which is below that of peers with similar levels of development. This partly reflects the heavy burden imposed on Lebanon by the influx of refugees from the Syrian civil war, estimated at around 1.5 million, or close to 25% of Lebanon’s population.

We also expect external security risks to remain high. The Syrian crisis is in its eighth year, and Lebanon’s political, security, and economic trajectories will remain entwined with those of its larger neighbor. There is also increasing risk of escalating tensions between Hezbollah and Israel. Moreover, risks to Lebanese banks being impacted by possible additional U.S. sanctions against Hezbollah remain. Nevertheless, we do not expect the country’s banking industry to be destabilized or a return to civil war in our base-case scenario.

Lastly, in our view, there are substantial shortcomings and material gaps in the dissemination of macroeconomic data and reporting delays. The availability and quality of official external data are also limited, in our opinion.

Flexibility and Performance Profile: Very high debt burden, with debt-servicing capacity dependent on deposit inflows:

-We expect rising fiscal deficits will lead to increasing general government debt through 2021.

-We believe banking sector deposit growth in Lebanon will slow but remain sufficient in the near term to support the government’s debt-servicing capacity.

-We expect Lebanon’s liquid external assets to exceed external debt through 2021, but external financing needs are high and will continue rising.

Lebanon’s public finances and fiscal flexibility remain constrained by high spending pressures, including large and rising interest payments and transfers to the electricity company, Electricite du Liban, which have increased on the back of higher oil prices. Interest payments account for close to 50% of general government revenues in 2018, the highest ratio among our rated sovereigns. The government introduced public sector wage hikes in 2017, which are expected to be offset by broad tax increases including a 1% increase in the value-added tax to 11%, and a 2% hike in the corporation income tax to 17%, among others. Yet, the ratio of tax revenues to GDP remains low, at less than 15%, and tax evasion is rampant. We also expect the government to increase capital expenditures moderately over the forecast horizon in support of the CIP.

We expect Lebanon to face rising deficits averaging around 11% of GDP over 2018-2021. The deficit temporarily narrowed in 2017 to 7% of GDP, from 9.6% in 2016, mainly due to a one-time increase in government revenues of $775 million paid by domestic banks on revenues they accrued from the 2016 financial engineering operations of BdL.

As a result of the large financing needs, we see gross general government debt increasing to 156% of GDP by 2021, from an estimated 137% in 2017. In our calculation of gross general government debt, we net out government debt held by public entities, such as the National Social Security Fund and the National Institute for the Guarantee of Deposits, as per our sovereign criteria. While the proportion of FX-denominated debt to total government debt is high, at close to 40%, we note that nonresident holdings of government commercial debt are lower, at less than 15%.

Domestic banks support government debt-servicing in two ways. First, they buy Lebanese government debt directly. Banking-system claims on the public sector accounted for about 15% of total banking-system assets or about 40% of total government debt. Second, Lebanese banks buy certificates of deposit (CDs) issued by BdL, which in turn buys government debt. BdL held more than 50% of the government’s outstanding treasury bills (T-bills), which amounted to about 35% of total government debt on 31 March 2018. We understand that banks increasingly prefer to buy BdL CDs instead of T-bills directly, because of the higher interest rates on CDs and a higher risk weight assigned to the sovereign than BdL by the Banking Control Commission of Lebanon. BdL is, in effect, subsidizing government borrowing costs and accumulating liabilities, which could create vulnerabilities for BdL’s balance sheet over time.

BdL has conducted financial engineering operations since 2016, including swapping the dollar equivalent of government local currency T-bills it held on its account with newly issued Ministry of Finance Eurobonds of $1.7 billion in November 2017 and $5.5 billion in May 2018. We understand that these two Eurobond swap transactions were an accounting procedure and no FX flowed into Lebanon as a result of the initial transaction.

BdL has since sold $3 billion of the Eurobonds to domestic banks, with a residual unsold amount of $4.9 billion on its balance sheet, according to BdL. In our view, the residual amount is not readily available for FX operations, including the repayment of the government’s external debt, until it is issued to investors. It also constitutes a potential drain on gross FX reserves, should the government require FX funding. We therefore deduct this amount from our calculation of FX reserves. In our view, these unusual transactions underscore the challenges of meeting Lebanon’s high funding requirements and debt-servicing capacity could be threatened if investor confidence does not return.

We expect that the current account deficit will remain large, averaging about 21% of GDP over 2018-2021. The return of some political normalcy after a new government is formed and relatively higher oil prices will likely boost remittance and tourism inflows from the large Lebanese diaspora, particularly from those expatriates residing in the Gulf Cooperation Council states (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates). However, we expect a higher import bill, arising from both the rebound in oil prices and implementation of some investment projects, to offset the forecast growth in current account receipts.

While growth in nonresident and total deposits has provided a reliable source of funding for the current account and fiscal deficits over the years, inflows are sensitive to swings in confidence. The political crisis in November 2017 triggered deposit outflows of around $2.6 billion (1.5% of total deposits) and increased the deposit dollarization rate to more than 68%. Total customer deposit growth has also slipped to 2.8% (inflows of $3.3 billion) in the first six months of the year, compared with 8.2% ($4.9 billion) for the same period last year. However, we note that, similar to past episodes of volatility, such as after the 2005 assassination of Prime Minister Rafic Hariri and the 2006 war with Israel, withdrawals lasted for only a short period. In addition, they were in the low-single-digit percentages of total bank deposits and were more than compensated by returning inflows.

Although monetary conditions have stabilized since November and local currency deposits have risen on the back of higher interest rates on Lebanese pound-denominated deposits, pressures could rise again. We expect deposit inflows to become more volatile and susceptible to domestic and regional political events. This is against a backdrop of rising public debt and weak growth, as well as rising U.S. Federal Reserve interest rates and increasing volatility in emerging markets. Yet, despite our expectation of slower growth in deposits, we anticipate they will remain sufficient in the near term to meet financing needs.

BdL plays a material role in steering macroeconomic and financial policy. It encouraged foreign inflows back to the economy and increased central bank FX reserves through financial engineering operations conducted since 2016. Usable reserves (after deducting the monetary base and reserve requirements for resident FX deposits) stood at a comfortable nine months of current account payments as of 31 December 2017. However, the quality of the reserves is somewhat diminished, in our view, by offsetting liabilities in the form of FX deposits placed by domestic commercial banks in BdL. Given the high and rising level of short-term external debt, we expect Lebanon will face rising pressures on FX reserve requirements to maintain confidence in the currency peg. (S&P 31.08)

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11.2 IRAQ: Iraq Ratings Affirmed At ‘B-/B’; Outlook Stable

On 24 August 2018, S&P Global Ratings affirmed its ‘B-‘ long-term and ‘B’ short-term foreign and local currency sovereign credit ratings on Iraq. The outlook is stable.

Outlook

The stable outlook reflects our expectation that policy measures, within the IMF program, will contain the risks to Iraq’s fiscal performance. We could lower the rating if the government’s net debt or debt servicing costs were to rise sharply. This could occur if oil revenues were to fall further than expected, due to a sharper fall in oil prices and the government was unable to implement countermeasures. We do not expect to raise the ratings over the next 12 months, but we could if Iraq’s political and security situation improves meaningfully, along with its public finances.

Rationale

Our ratings on Iraq are constrained by the early stage of development of the country’s political institutions, domestic political tensions – including divisions between the Sunni, Shia and Kurdish ethnic and sectarian groups – as well as security risks associated with the presence of the Islamic State (IS).

Our ratings are underpinned by the assumption that the majority of Iraq’s oil output remains in areas firmly under the control of the federal government. Crucially, over 85% of Iraq’s oil fields and oil output are located in the south of the country, some distance from the areas formerly held by IS. Despite a significant hydrocarbon endowment, Iraq’s financial wealth remains low and economic activity weak, in our view. Monetary policy is largely ineffective given the weakness of the banking system. We expect the government’s debt stock to increase further over the period to 2021 as oil prices moderate again. The country’s external indebtedness is quite low, reducing external risks. However, we view external liquidity as relatively constrained, partly due to our exclusion of the monetary base from our calculation of the central bank’s usable reserves.

Institutional and Economic Profile: A volatile political environment and security risks hamper reform prospects:

Shiite cleric Muqtada al-Sadr is likely to play a central role in forming the country’s next government in the coming months. We expect the outcome of the May 2018 elections to have little impact on the fragmentation of political power that impedes critical political and economic reforms. Mr. al-Sadr’s electoral platform was relatively populist and his bloc’s policies may further constrain Iraq’s fiscal position. The low voter turnout (44%) in May, plus widespread protests that have occurred in the south and east of the country in July-August 2018, reflect public anger at poor government service provision (electricity and water shortages) and the perception of high levels of corruption.

We expect lackluster economic growth over 2018-2021.

Although Mr. al-Sadr’s bloc, Sairoon, did not secure a majority in the May election, it retained the highest number of votes following the recount – 54 of the 329 seats available. However, Mr. al-Sadr cannot be prime minister, since he did not run as a candidate. Mr. al-Sadr’s political alliance capitalized on voter disaffection, championing issues to improve the living conditions of the poor, and has linked up with secularists to battle corruption. He opposes both the presence of American troops and the heavy influence of Iran in the region.

The results of the vote recount were ratified by Iraq’s Supreme Federal Court on 19 August 2018, initiating a 90-day timeline for the formation of government (though this deadline has been missed in the past). Legislators must first elect a speaker, then the president, and finally the prime minister and cabinet. Negotiations are underway to form the government. We expect the incumbent prime minister, Mr. Haider al-Abadi, to retain his position due to an apparent lack of plausible alternatives and the backing of external stakeholders, notably the U.S. and Iran. Mr. al-Abadi’s Victory Alliance bloc obtained 42 seats following the elections, landing in third place behind a group of Iran-backed Shiite militia leaders (Mr. Hadi al-Ameri’s Fatah coalition), which won 48 seats. He currently heads a fragile caretaker government–after parliament failed to extend its term because of a lack of quorum in its final session–until the formation of a new one.

The threat of domestic conflict remains in Iraq. The government has thwarted two would-be states from emerging within its borders in recent years: an IS caliphate and an independent Kurdistan. However, risks of further political turmoil from both groups persist. In December 2017, the Iraqi government, supported by its international partners, recaptured areas under IS control. The Iraqi Kurdistan September 2017 referendum resulted in a 93% vote in favor of independence. However, shortly afterward, the Iraqi government took control of territory disputed by the Kurds, including Kirkuk province. The Kurdistan Regional Government’s (KRG’s) position has markedly weakened since the referendum, and it is highly unlikely to achieve independence. In our opinion, the more probable scenario is a curbing of its autonomy and loss of control of its oil production in exchange for fiscal transfers from the federal budget and a lifting of sanctions. In addition, we view the influence on Iraqi politics by external parties – including Iran, the U.S., and Turkish incursions into northern Iraq to confront the Kurdistan Workers’ Party (PKK) – as heightening the risk of war.

Furthermore, in our view, Iraq’s political and economic development is hampered by widespread corruption. The country scores among the world’s worst in terms of corruption perceptions and governance indicators. We believe that fighting corruption, the lingering presence of IS, and tensions with the KRG represent Iraq’s major political and security challenges in the near term. Strengthening governance, accountability, and transparency could help unlock Iraq’s economic potential.

Iraq has the world’s fourth-largest proven crude oil reserves and is the second-largest oil exporter in the Organization of Petroleum Exporting Countries (OPEC). Oil dominates the Iraqi economy, contributing about 40% of GDP, 90% of government revenues, and more than 95% of exports. The industry helps to support Iraq’s relatively low economic wealth levels, with per capita GDP at an estimated $5,500 in 2018.

We estimate real per capita GDP growth at 0.1% as a weighted average over 2012-2021, with population growth outstripping real GDP growth in our projections over 2017 – 2021. This growth rate is below that of peers that have similar wealth levels. Notwithstanding this, we expect overall GDP growth to pick up in 2019, as the November 2016 deal agreed with OPEC to reduce oil output ends, but to remain subdued at about 2% on average in 2018-2021, owing to the unstable political and security situation and weak non-oil growth. The oil sector was the main driver of real economic growth in 2015-2017 despite the OPEC deal. OPEC data, using secondary sources, suggest marginal increases in production to 4.53 million barrels per day (bpd) in June 2018, from 4.45 million bpd in 2017 and 4.39 million bpd in 2016. We expect oil production to continue climbing over our forecast period, reaching about 4.9 million bpd in 2021.

Depending on the timing of disbursements, economic activity should be somewhat supported by the $30 billion (14% of 2018 GDP) in pledges, loans, and investments attracted at a donor conference for Iraq in February 2018. The largest single pledges came from Turkey ($5 billion in credit) and the United Arab Emirates ($6 billion); Saudi Arabia, Qatar and Kuwait pledged $1.5 billion, $1 billion and $2 billion, respectively. However, Iraq may receive much less than the total pledged amount, as is often the case following such donor conferences. Separately, the U.S. agreed to provide more than $3 billion in loans and loan guarantees.

In our view, administrative shortcomings jeopardize the quality of Iraq’s national accounts data. For example, output in areas under the jurisdiction of the KRG cannot always be directly measured by the federal government.

Flexibility and Performance Profile: We expect lower oil prices to result in wider fiscal deficits and emerging current account deficits over the period to 2021

We expect average Brent oil prices of $65/bbl in 2018, $60/bbl in 2019, and $55/bbl in 2020 and beyond. The $5.4 billion IMF program has been a crucial support for Iraq’s fiscal situation and preserving the level of foreign reserves, and we expect its full disbursement over the three-year timeline.

We estimate that the general government fiscal deficit was closer to 2% of GDP in 2017, rather than our estimate of 4% in our last review. The current estimate is due to both higher-than-expected government revenues and lower expenditures. However, given the downward trend in our oil price assumptions, we expect revenues to decline over the period to 2021 and deficits to consequently widen. As a result, our projections for the fiscal performance over the period to 2021 have weakened compared with our earlier forecasts. We view the government’s revenue base as volatile due to its dependence on oil prices.

We assume the government will continue implementing fiscal consolidation measures supported by the IMF program. We note the government’s efforts to broaden the tax base, with customs revenues and tax collection expected to increase as the government increases its control over areas formerly occupied by IS. On the expenditure side, the government will attempt to contain non-oil primary spending, mostly by reducing the wage bill through natural attrition, controls over pension beneficiaries, and continued postponement of lower-priority non-oil investment. Still, we expect these measures to be insufficient to offset the decline in oil revenues. We view the government’s ability to raise revenues or lower expenditures as relatively limited. In addition, we think the country’s shortfall of basic services to the population and infrastructure will likely create lasting spending pressures.

The IMF program has been an important support to Iraq’s fiscal situation. It unlocked further budget financing from both official and unofficial creditors. Under its Standby Arrangement, which was approved in July 2016, the IMF has disbursed about $2.1 billion despite Iraq’s failure to meet all of the conditions under the program. We expect the full $5.4 billion will likely be disbursed over the program’s three-year timeline.

In addition, the Iraqi government successfully issued a $1 billion international bond with a 100% U.S. government guarantee in January 2017, and another $1 billion Eurobond without a guarantee in July 2017, its first independent bond since 2006. We estimate that more than 60% of government debt is in foreign currency, exposing the debt structure to exchange rate risks, should the authorities abandon the exchange rate peg.

Our estimate includes about $41 billion (20% of GDP) of unresolved external arrears to non-Paris Club creditors. Excluding this amount would bring the ratio down to 35%.

The IMF and World Bank pledges, and support from Iraq’s international partners, among other factors, have helped reduce the risk premium on Iraqi debt. Historically, most of the government’s domestic debt issuance has been taken up by Iraq’s commercial banks, led by the two largest state-owned banks, Rafidain Bank and Rasheed Bank. It has been funded by incremental deposit growth and, in the past, by repurchase operations with the Central Bank of Iraq (CBI). A large share of the banking sector’s balance sheet is exposed to the government, with 28% of banking sector assets attributed to government claims at end-2017. We project government net debt will average about 60% of GDP over 2018-2021. Our estimate of government liquid assets of about 9% of GDP largely comprises government deposits with domestic commercial banks. Iraq’s debt stock benefited from an 80% haircut that the government negotiated with its Paris Club creditors in 2003-2004.

The financial stability of domestic banks is uncertain, and we view the risk stemming from the financial sector as a moderate contingent liability for the government. The state-owned banks dominate the banking sector. Financial accounts audited to international standards are not available, but we believe that Rafidain Bank and Rasheed Bank are severely undercapitalized, with high non-performing loans across the whole sector.

Reporting on Iraq’s external data (balance of payments and international investment position data) is poor, which reduces the visibility of external risks. The CBI data likely underreport imports by a significant margin, since imports into the region of Iraqi Kurdistan are not included and imports at other entry points into Iraq are not systematically measured. We use the IMF’s data because we believe they provide a more accurate representation of Iraq’s external position.

We now estimate a small current account surplus of about 0.7% of GDP for 2017, compared with an estimate of a deficit of 5.6% of GDP at the time of our previous publication. The revision relates to stronger-than-expected oil revenues. We expect the current account deficit to widen over the period to 2021, informed by our oil price and production assumptions. We assess the concentrated nature of Iraq’s exports as exposing the country to material volatility in terms-of-trade movements.

We expect the Iraqi dinar’s exchange-rate peg to the U.S. dollar will remain in place over the next several years. While the peg has helped control inflation, it limits the CBI’s monetary flexibility, in our view. We consider CBI foreign exchange reserve coverage to be an important factor in maintaining confidence in the exchange-rate link. We have therefore deducted the monetary base from usable reserves, as we regard these reserves as to some extent encumbered by the level of the monetary base. Alongside the deduction of required bank reserves on resident foreign-currency deposits, our estimate of gross external financing needs as a percentage of current account receipts (CARs) and usable reserves has increased to about 110% over 2018-2021, from closer to 75% at the time of our last review.

We view the monetary policy transmission mechanism as weak. The banking sector in Iraq is still at a relatively early stage in its development, and does not fulfil the functions a banking sector normally would fulfil in more advanced economies, or to the same extent. For this reason, the monetary policy tools that rely on the banking sector, such as the reserve requirement and the provision of standing facilities, are of limited effectiveness in Iraq.

Iraq’s foreign exchange reserves increased to about $48 billion at end-2017, from about $45 billion in 2016, supported by the government’s Eurobond issuance and higher oil prices. We expect the central bank reserves to stay around this level over 2018-2021. We expect Iraq’s external debt to exceed external liquid assets by about 13% of CARs on average over the same period. We do not view Iraq as having extensive foreign exchange restrictions, following the removal – a condition of the IMF program – of the requirement to pay all obligations and debts to the government before transferring the proceeds of investments of investors, salaries, and other compensation of non-Iraqi employees from Iraq. (S&P 24.08)

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11.3 EGYPT: Moody’s Changes Outlook on Egypt’s Rating to Positive, Affirms B3 Rating

On 28 August, Moody’s Investors Service changed the outlook on the Government of Egypt’s long-term issuer ratings to positive from stable and has affirmed the B3 issuer ratings. At the same time, Moody’s has affirmed Egypt’s senior unsecured ratings at B3, and its senior unsecured MTN program rating at (P)B3.

Moody’s decision to change the outlook to positive reflects the continuing structural improvements in the fiscal and current account balances, resulting from the ongoing implementation of the home-grown IMF-backed reform program. Moreover, early signs of business environment reforms offer the prospect of a sustainable, inclusive growth path capable of improving competitiveness and absorbing the country’s rapidly expanding labor force.

The decision to affirm the B3 rating balances Egypt’s longstanding strengths — flowing in particular from its large and diverse economy — against the low-probability risk of sudden political upheaval that could have implications for the direction of policy, and very pronounced fiscal weakness, reflected in a high debt burden, low debt affordability and very large annual financing needs. In turn, such fiscal weakness creates high refinancing exposure in an increasingly turbulent global financial environment, notwithstanding a deep and stable domestic funding base in its large banking sector.

The foreign and local-currency bond and deposit ceilings remain unchanged. Specifically, the foreign-currency bond ceiling remains at B2, the foreign-currency deposit ceiling at Caa1, and the local-currency bond and deposit ceiling at Ba2. The short-term country ceilings for foreign-currency bonds and deposits remain unchanged at NP (Not Prime).

Ratings Rationale

Egypt’s credit profile presents a stark contrast between, on the one hand, an economy which is large and diverse in comparison to rating peers; and, on the other hand, high refinancing risk created by a high debt burden, and a very high interest burden, resulting in very large annual financing needs (although a substantial share will continue to be met by the domestic banking system).

Those latter features have dominated Moody’s assessment of Egypt’s credit profile in recent years. The country’s refinancing risk remains a key credit challenge for the sovereign in an increasingly turbulent global financial environment created by, among other things, the prospect of rising interest rates and shocks to global trade.

However, the substantial progress made by the government in implementing reforms agreed with the IMF has imparted a degree of financial stability not present earlier in the decade. Primary deficits have shrunk and the debt burden has begun to fall. Foreign exchange buffers have been rebuilt. The government is in the midst of an ambitious structural economic reform program. A degree of political stability has been achieved and seems likely to be sustained, increasing the likelihood that the general policy direction will be maintained.

If sustained, the authorities’ commitment to reform has the potential to impart to the credit profile a degree of resilience to economic and financing shocks, which could support a higher rating notwithstanding what are likely to remain high annual refinancing requirements.

Rationale for the Positive Outlook

Sustained Fiscal Reform Implementation Supports a Lasting Shift to Primary Fiscal Surpluses and Offers the Prospect of Lower Refinancing Risk

The government of Egypt’s continued implementation of fiscal reforms offers the prospect of a return to sustained primary surpluses starting from the fiscal year ending June 2019 (FY 2018/19) after almost 20 years of persistent deficits. The nature of the reforms is such that government expenditure should become more efficient and predictable through economic and commodity price cycles. A resulting sustained and rapid downward trend in the debt burden would diminish Egypt’s elevated refinancing risks.

In addition to the implementation of the value added tax in 2016 and the increase in the tax rate to 14% from 13% in July 2017, the enactment of the civil service law will continue to contribute to containing the public sector wage bill.

Moreover, the government’s fiscal consolidation strategy is supported by a comprehensive energy subsidy reform agreed under the IMF program. Moody’s expects that the energy subsidy bill will fall to below 1% of GDP by fiscal 2020 from 4.1% of GDP in fiscal 2017. These savings will be partly offset by increased cash transfers to lower-income and more vulnerable households, which should help maintain public support for reforms and result in better controlled and more effective government spending.

In the fuel segment, the government reached cost recoveries in the range of 70-80% as of July 2018 from about 30% in 2013, after several rounds of price hikes. The achievement of full cost recovery by the end of fiscal 2019 and the adoption of an automatic fuel price adjustment mechanism as currently planned by the government will, if implemented, further shield the budget execution from future oil price volatility.

Overall, with fiscal reforms combined with high nominal GDP growth, Moody’s projects that debt burden, while remaining elevated, will decline to around 82% of GDP by the turn of the decade, from around 86% in FY 2018/19 and a peak of 103.5% of GDP in fiscal 2017.

Structural Reforms Point to Lower External Vulnerabilities

Continued success in implementing planned economic and monetary reforms should lower Egypt’s vulnerability to a shift in external economic and financing conditions. Egypt’s foreign exchange reserve buffer improved to 6.5 months of import cover as of March 2018. A shift in the sources of financing of Egypt’s external payment needs towards foreign direct investment, rather than external debt, would further bolster the external position.

Following the flotation of the Egyptian pound in November 2016, the currency depreciated by 50% against the US dollar in nominal terms and by over 30% in real effective terms. While inflation increased substantially as a result, price competitiveness has materially improved. The central bank’s conduct of monetary policy is enhancing policy credibility and anchoring inflation expectations, as shown in the subsequent decline in inflation. As a result, Moody’s expects Egypt to maintain significant price competitiveness gains, in turn reducing the risk of material external imbalances building up, while the flexible exchange rate acts as shock absorption mechanism against external shocks.

Combined with renewed natural gas exports from the Zohr field starting in 2019, Moody’s expects that the current account balance will hover around 2.5%-3.0% of GDP in the next few years, compared with 6% or more in the last two. The almost complete repayment of arrears to International Oil Companies (IOCs) and new investment commitments of almost $10 billion annually over the next four years in the energy sector increase the prospect of new discoveries and contribute to fostering Egypt’s role as a regional energy hub, which would further strengthen Egypt’s external position.

Reforms Also Point to Higher, Sustainable Growth

The continued implementation of economic and fiscal reforms should sustain GDP growth at higher rates, converging toward 6%. This level would help absorb the country’s rapidly expanding labor force, notwithstanding significant remaining structural labor market rigidities.

Measures such as the implementation of the investment and bankruptcy laws and an improved land allocation mechanism have contributed to improving Egypt’s competitiveness in the World Economic Forum’s ranking over the past year and should foster investment, including foreign direct investment, in non-energy sectors, such as tourism, agro-processing and manufacturing. The implementation of large infrastructure projects, such as the New Administrative Capital City led by state-owned Economic Authorities, will also contribute to fostering growth and employment in the construction sector.

Rationale for the B3 Rating Affirmation

Moody’s decision to affirm the B3 ratings at this juncture balances Egypt’s credit strengths including its large and diversified economy, and robust and rising growth potential that provide a high degree of resilience to economic shocks, against persistently weak fiscal indicators in comparison with peers, in particular debt affordability. Moody’s expects interest payments on debt to continue to absorb 30%-40% of revenue over the next few years, albeit to a declining degree, which significantly constrains fiscal flexibility. According to Moody’s, very weak debt affordability will maintain the government’s annual gross financing needs at very high levels, of about 30%-40% of GDP.

Weak debt affordability in turn constrains the prospects of significantly lengthening the average maturity of the domestic debt stock, which is currently very short at about two years. The combination of a high debt stock, low debt affordability and short average maturity points to heightened sensitivity of Egypt’s fiscal strength to a potential shock to borrowing costs.

However, Moody’s believes that the adjustment in the real exchange rate achieved in late 2016 and the re-establishment of the foreign exchange reserve buffer in excess of upcoming external maturities have improved Egypt’s resiliency to a possible increase in external financing costs, including via a depreciation of the exchange rate linked to capital outflows.

On the domestic financing side, Egypt benefits from a deep and stable domestic funding base in its large banking sector, with an established track record of financing support to the government, including in times of stress.

The B3 ratings also capture the risk of sudden political upheaval that would have credit negative implications for the direction of policy. That said, Moody’s believes that a combination of factors, including the measures taken by the government to distribute the proceeds of strong growth more effectively and provide jobs to a large and fast-rising number of new entrants in the labor force, have lowered the risk of reform reversal over the next few years.

What Could Change the Rating Up

An upgrade would most likely be driven by Moody’s heightened confidence in two areas. First, that the government’s commitment to fiscal prudence and to structural economic reform will be sustained through fluctuations in the economic environment. Second, that the country’s susceptibility to external financing shocks will remain manageable, including through the maintenance of adequate external buffers.

To that end, over the remainder of this year and at least into the first part of 2019, Moody’s will monitor the government’s progress in achieving planned fiscal, monetary and economic reforms; its success in sustaining external investor confidence as reflected in trends in foreign reserves and foreign direct investment; and the social acceptance of the government’s reform program and the absence of pressures that could eventually halt or reverse economic and fiscal reforms.

What Could Move the Rating Down

The positive outlook signals that a downgrade is currently very unlikely. However, a stalling or reversal in reform commitment, with negative repercussions on the pace of fiscal consolidation and debt reduction would likely prompt a change in the rating outlook to stable. The emergence of more severe external or domestic liquidity pressures that result in significantly higher borrowing costs and in a further reduction in debt affordability would likely also put downward pressure on the rating, as would renewed and lasting social and political instability or a material deterioration in the security situation. (Moody’s 28.08)

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11.4 TUNISIA: IMF Reaches Staff Level Agreement on the Fourth Review

An International Monetary Fund (IMF) staff team visited Tunisia from 15 – 31 August to discuss the authorities’ policy plans under the Fourth Review of Tunisia’s economic reform program supported by a four-year IMF Extended Fund Facility (EFF) arrangement. At the end of the visit the IMF issued the following statement:

“The Tunisian authorities and the IMF team reached a staff-level agreement on the policies needed to complete the fourth review of Tunisia’s EFF. The Tunisian authorities emphasized their intention to continue to act decisively to contain the budget deficit, which would allow the IMF’s Executive Board to consider the Fourth Review at the end of September. Completion of the review would make available SDR 177 million (about $257 million), bringing total disbursements under the EFF to about $1.5 billion.

“There are some encouraging signs that economic activity is picking up. The Tunisian economy grew 2.6% (year-on-year) in the first half of this year, with robust performance in agriculture, tourism and services. The number of tourists visiting Tunisia since the start of the year is the highest since 2010. The authorities’ commitment to reducing fiscal imbalances is also bearing fruit. The execution of the budget in the first six months of 2018 is consistent with achieving a significant deficit reduction this year. Containing deficits will help reduce Tunisia’s high public debt that burdens the economy and future generations.

“Although growing, the economy remains too dependent on consumption and imports. Investment has again been weak this year. Unemployment among the young and women, especially those who are well-educated, remains very high. Additional economic reforms, which include strengthening governance and enforcement in the government’s anti-corruption fight, are necessary to overcome investor reluctance and build confidence. These efforts will help unleash the potential of private sector and generate more opportunity and jobs for all Tunisians.

“Long-standing economic imbalances continue to pose significant risks to the Tunisian economy. Inflation declined marginally in July, but at 7.5%, it remains considerably higher than in previous years. Money and credit have continued to increase rapidly and the dinar has depreciated further, which will likely create new inflationary pressures in the months ahead. Moreover, the expected improvement in the current account deficit has been delayed: imports are still too high relative to exports and other inflows of foreign currency. Foreign exchange reserves are therefore still below levels commonly seen in other emerging-market economies.

“In addition, Tunisia’s external environment is witnessing new challenges. Oil prices are significantly higher than projected at the beginning of the year and international financial markets have become more volatile. Risk premia for a broad range of emerging markets have increased.

“Staying the course on reducing the fiscal deficit this year and next is critical to stabilize debt and reduce excessive demand for imports given the recent increase in global oil prices. It will remain particularly important to pursue reforms of untargeted energy subsidies, manage carefully the public wage bill, and put the public and private pension funds on a sustainable basis. These steps will help to contain expenditure that disproportionately benefits the better-off. They will also make more resources available for public investment, which will boost growth and jobs, to the benefit of the young and the unemployed. The IMF team welcomes the government’s intention to further increase social spending, which it views as critical to protect the poor and vulnerable in the period ahead.

“The Central Bank of Tunisia is right to remain vigilant, as the recent decline in inflation could be temporary. If inflation were to pick up again in the months ahead, additional increases in interest rates would be necessary to anchor inflation expectations and maintain economic stability.

“The IMF team met with the Minister of Finance Chalghoum, Minister of Investment Laâdhari, Minister of Major Reforms Rajhi, and Central Bank Governor El Abassi as well as their staff. It also had discussions with representatives of the private sector, civil society, and the diplomatic community.” (IMF 31.08)

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11.5 TURKEY: Moody’s Downgrades Turkey’s Ratings to Ba3 and Assigns Negative Outlook

On 17 August, Moody’s Investors Service downgraded the Government of Turkey’s long-term issuer ratings to Ba3 from Ba2 and changed its rating outlook to negative, concluding the review for downgrade that was initiated on 1 June 2018. The senior unsecured bond ratings and senior unsecured shelf ratings have also been downgraded to Ba3 and (P)Ba3 respectively.

Concurrently, Moody’s has downgraded to Ba3 from Ba2 the senior unsecured bond rating of Hazine Mustesarligi Varlik Kiralama A.S., a special purpose vehicle wholly owned by the Republic of Turkey from which the Turkish Treasury issues sukuk lease certificates, and changed its rating outlook to negative.

The key driver for today’s downgrade is the continuing weakening of Turkey’s public institutions and the related reduction in the predictability of Turkish policy making. That weakening is exemplified by heightened concerns over the independence of the central bank, and by the lack of a clear and credible plan to address the underlying causes of the recent financial distress, notwithstanding recent statements by the government. The tighter financial conditions and weaker exchange rate, associated with high and rising external financing risks, are likely to fuel inflation further and undermine growth, and the risk of a balance of payments crisis continues to rise.

In a related decision, Moody’s lowered Turkey’s long-term country ceilings: the foreign currency bond ceiling to Ba2 from Baa3; its foreign currency deposit ceiling to B1 from Ba3; and its local currency bond and deposit ceilings to Ba1 from Baa2. The short-term foreign currency bond ceiling was also lowered to Not Prime (NP) from Prime-3 (P-3) and the short-term foreign currency deposit ceiling remains unchanged at Not Prime (NP). Ceilings generally act as the maximum ratings that can be assigned to a domestic issuer in Turkey, including structured finance securities backed by Turkish receivables. The decision to narrow the gap between the ceilings and the government bond rating is informed by Moody’s view of weakening institutional strength.

Ratings Rationale

Rationale for the Downgrade to Ba3

The key driver for the rating downgrade is the further weakening of Turkey’s public institutions and the related reduction in the predictability of Turkish policy making. When Moody’s placed Turkey’s Ba2 rating on review for downgrade on 1 June, the rating agency stated that the outcome of the review would mainly rest on the coherence and predictability of the policies pursued by the government and the extent to which the policy framework would restore adequate financing of Turkey’s large external borrowing requirements.

Since then, financial stress has increased further, most visibly in the sharp depreciation of the Turkish Lira, which has now lost close to 40% of its value against the US dollar since the start of the year. Consumer price inflation has reached 15.85% in July, up by more than 5% since the start of the year and the highest inflation rate since December 2003. Domestic funding conditions have deteriorated with bond yields on the government’s domestic securities reaching above 20% in mid-August. While Turkish banks have so far managed to maintain access to the international inter-bank markets for funding, the tightening financing conditions and the weakening Lira will further increase pressure on domestic borrowers with foreign-currency debt.

Moody’s view of a further decline in the predictability and effectiveness of economic policy making is exemplified by concerns over the central bank’s independence. This particularly follows the centralization of powers at the presidency level following the elections in June with the president now having the sole responsibility for appointing the central bank governor, deputy governor and other members of the country’s Monetary Policy Committee. Since the elections, the central bank has refrained from raising policy rates despite significantly increasing its inflation forecasts for this year and next. The discrepancy between the central bank’s inflation forecasts and targets and its unwillingness to pursue an appropriate policy to achieve those targets further undermines the central bank’s credibility. While it has provided some breathing space to the domestic banks by lowering their reserve requirements, in Moody’s view this is a short-term measure that does not address the underlying pressures the banking sector faces, nor does it address the mounting inflationary pressures.

Similarly, Moody’s considers that the lack of or delays in formulating a comprehensive and effective economic plan to address the underlying causes of the recent financial stress is a clear indication for declining policy predictability and effectiveness. The government has outlined the broad objectives of its medium-term economic plan, including its intention to gradually slow down the over-heating economy by tightening fiscal policy, and bringing inflation back to single-digit rates. However, so far these objectives have not been underpinned by detailed measures with clear timelines of implementation. Turkey’s external funding needs remain significant, and the risk of a balance of payments crisis continues to rise.

Rationale for Assigning Negative Outlook

In Moody’s view, the probability that the Turkish authorities will manage to engineer a “soft landing” of the economy is declining in the context of weakened institutions and increasing tensions with the US. Therefore, the risk of continued financial stress is significant, with potentially further negative implications for Turkish banks and corporates that have large external funding needs. Such a negative scenario would further increase the risk of a prolonged period of acute economic and financial volatility, which ultimately would weigh further on the credit risk profile of the government.

Against these significant credit risks, Moody’s will continue to balance the inherent credit strengths of the country, including a large and diversified economy and a still relatively strong fiscal position. The government’s debt burden remains moderate by global standards. Moody’s also notes that Turkey has successfully managed previous serious economic and financial shocks.

What Could Change the Rating Down/Up

Moody’s would likely downgrade Turkey’s rating if the currency crisis deepened further and the country proved unable to pursue a combination of fiscal and monetary policies that would be effective in easing external funding pressures and in engineering a rebalancing of the economy that would ease inflationary pressures and position the country on a sustainable growth path.

Given the negative outlook, a positive rating action is currently highly unlikely. The rating could be stabilized if the Turkish authorities presented a coherent and effective economic plan in the near term that involves a material fiscal and monetary policy tightening to induce an orderly slowdown of the economy, leading in turn to lower inflation and inflation expectations as well as a reduction in the size of the current account deficit. Significant external financial support would likely act as a supportive factor to the rating.

The conditions which led to today’s actions also weigh on the country’s structured finance transactions, financial and non-financial corporates and sub-sovereign entities. The reviews on impacted domestic issuers, which started in June 2018, are still ongoing. In addition to assessing the impact of the sovereign action and ceiling changes on these issuers, as part of these reviews, Moody’s is analyzing their exposure to the prevalent refinancing environment, as well as to its expectation of challenging economic conditions in the country, and potential further volatility in the financial markets. The rating conclusions of those reviews will be communicated to the market separately once these various credit aspects have been fully analyzed. (Moody’s 17.08)

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11.6 TURKEY: Fitch Ratings Says Turkey Faces Lower Growth, Lengthy Forced Adjustment

On 04 September 2018, Fitch Ratings said the lira’s sharp fall will force a rebalancing of Turkey’s economy through lower growth and a narrowing of the current account deficit. We have cut our growth forecasts for 2018-2020, and see significant and widespread downside risks.

We now expect real GDP to increase by 3.8% in 2018 and 1.2% in 2019, with a quarterly contraction projected for the final three quarters of 2018. These rates of economic growth are 0.7pp and 2.4pp lower, respectively, than our assumptions when we downgraded Turkey’s sovereign rating to ‘BB’/Negative on 13 July 2018. We expect that growth will recover somewhat in 2020, to 3.9%, but will remain below the trend rate. Our forecasts are subject to considerable uncertainty. Risks to our baseline scenario are primarily to the downside and include policy missteps, heightened financial stress in the private sector, geopolitical tensions and potential capital flight.

Our revised forecasts assume that the authorities will continue taking short-term measures to support the lira and that the Central Bank of the Republic of Turkey will raise rates, but that these will be insufficient to lower the rate of inflation to single digits until at least end-2020. The central bank said on 3 September that its “monetary stance will be adjusted” when it meets later in September, after data showed annual consumer price inflation was 17.9% in August.

We expect tougher external conditions and tighter domestic policy to underpin the near-term adjustment to the economy. However, as we have previously stated, the absence of a more timely and complete policy response and uncertainty about the authorities’ tolerance for a prolonged period of low growth add to market concerns about the credibility of economic policy. We continue to view capital controls or an IMF program as unlikely.

The early signs of external adjustment are emerging, such as the narrowing in the visible trade deficit in July. We forecast the current account deficit to narrow to 3.9% of GDP this year and 1.7% in 2019, as currency weakness and the significant economic slowdown pull down imports and boost exports. Net trade and tourism (visitor numbers rose 29% yoy in H1/18) will provide some support for growth.

Our lower growth forecasts result in some fiscal deterioration compared to our previous baseline. We now forecast Turkey’s general government deficit to widen to 3.2% of GDP this year and 3.6% next year, before narrowing to 2.9% in 2020. This compares with our July forecasts of 2.9% for 2018 and 2.5% for both 2019 and 2020. The impact is almost entirely through lower government revenue.

Indeed, our GDP and deficit forecasts do not incorporate any potential attempt to cushion the impact to growth through fiscal stimulus. Additional spending could put further pressure on Turkey’s sovereign credit profile, as low government debt and a record of relative fiscal discipline provide key support for the rating. (Fitch 04.09)

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11.7 GREECE: IMF Executive Board Concludes 2018 Article IV Consultation with Greece

On July 27, 2018, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Greece.

Following a deep and protracted contraction, growth has finally returned to Greece. The large macroeconomic stabilization effort, structural reforms, and a better external environment contributed to an increase in real GDP of 1.4% in 2017, helped also by substantial support from European partners, which secured medium-term sustainability and restored market access. However, stock legacy issues persist, as unemployment remains high and public and private balance sheets remain impaired.

The recovery is projected to strengthen in the near-term, with growth expected to reach 2% this year and 2.4% in 2019, and with unemployment declining as the output gap closes. However, external and domestic risks are tilted to the downside, including from slower trading partner growth, tighter global financial conditions, regional instability, the domestic political calendar, and risks of reform fatigue. Moreover, in the long term, population aging is expected to weigh down on potential growth, increasing the need to foster productivity.

Executive Board Assessment

Executive Directors commended the authorities for important reforms and policy choices in recent years that have largely eliminated fiscal and current account imbalances, stabilized the financial sector, reduced unemployment and restored growth. These substantial efforts, along with welcome debt relief by European partners, have put Greece on a path to successfully exit the European Stability Mechanism-supported program in August 2018.

While a recovery is underway, Directors stressed that significant crisis legacies and social pressures remain, and the risks to the outlook remain on the downside. To address these issues, they encouraged further efforts to rebalance fiscal policy, strengthen bank balance sheets, and reform product and labor markets to boost sustainable and inclusive growth.

Directors agreed that, given the significant adjustment to date, Greece does not require further fiscal consolidation, while also noting that achieving the high primary balance targets comes at a cost to growth, including through high taxes and constrained social and investment spending. They supported a shift to a more growth-friendly and inclusive fiscal policy mix, and welcomed the authorities’ commitment to fully implement the pre-legislated fiscal package in 2019 and 2020. Directors called for further fiscal rebalancing to reduce direct taxes and increase targeted social spending to support growth and reduce still-high poverty.

Directors urged the authorities to accelerate efforts to address high non-performing loans (NPLs) and restore lending. In this regard, they encouraged banks to step up use of the strengthened financial sector legislative and regulatory frameworks that have created a better environment for addressing high non-performing exposures, including through the development of a secondary market for non-performing loans. A number of Directors also encouraged the authorities to set more ambitious NPL targets. Directors called for building-up of capital buffers, further steps to mitigate liquidity and funding risks, and stronger bank internal governance. They supported gradual relaxation of exchange restrictions in line with the milestone-based roadmap and taking due account of banks’ liquidity.

Directors noted that in the context of limited macroeconomic policy space, further structural reform efforts are needed to boost productivity, competitiveness and social inclusion. Despite important progress, Greece continues to score lower than peers in competitiveness indicators and lags its peers in liberalizing most service sector professions. Directors urged the authorities to further improve the business environment, aiming to foster competition in product markets and preserving labor market flexibility – through a prudent minimum wage policy and preserving reforms to collective bargaining. These reforms would help ensure competitiveness and preserve the momentum of employment recovery.

Directors underscored the importance of further public sector efficiency improvements and strengthened governance, noting, in particular, the shortcomings in tax enforcement. In addition to efforts in public revenue administration, Directors encouraged the authorities to provide adequate protection from liability of public officials, to implement the Anti-Corruption Action Plan with a focus on improving data collection and transparency, and to take measures to modernize the judiciary. They also emphasized the need to protect achieved gains in the quality of official statistics by defending the statistical agency against any efforts to undermine its credibility, guaranteeing its professional independence, and addressing remaining shortcomings in reporting.

Directors welcomed the debt relief measures granted by European partners and the improvement in debt sustainability over the medium term. They concurred that this relief, combined with a large cash buffer, will facilitate medium-term market access. A number of Directors considered that, over the longer term, these measures will significantly reduce gross financing needs. Many others, however, cautioned that long-term sustainability remains uncertain and emphasized the need for realistic assumptions for primary balance targets and growth projections. Directors welcomed the continued commitment of Greece’s European partners to support the country in the future, including through further debt relief, if needed.

Directors looked forward to close engagement between the authorities and the Fund under the post-program monitoring framework. (IMF 31.07)

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11.8 GREECE: Moody’s Changed Greek Banking Outlook to Positive on Improving Asset Risk

On 30 July, Moody’s Investors Service changed its outlook on the Greek banking system to positive from stable on expectations that banks’ funding and asset risk will improve over the next 12 to 18 months, amid an improving but still challenging operating environment. Moody’s expects the Greek economy to maintain its positive momentum over the outlook period, contingent on the government remaining committed to structural reforms in order to attract more foreign investment. The rating agency projects GDP growth of 2% this year and 2.2% in 2019, supported by a strong increase in exports and services including tourism.

“Problem loans will gradually decline from very high levels as Greek banks benefit from improved loan recovery laws,” said Nondas Nicolaides, a Vice President and Senior Credit Officer at Moody’s. Moody’s expects problem loans to remain elevated, but banks will likely meet the targets committed to the regulator reducing their non-performing exposures (NPEs) to around 35% of gross loans by the end of 2019.

The rating agency said that Greek banks have comfortable regulatory capital levels, with a common equity Tier 1 (CET1) ratio for the system of around 15.8% in March 2018, although sizeable Deferred Tax Assets (DTAs) continue to undermine the quality of such capital.

Greek banks’ dependence on central bank funding and emergency liquidity assistance (ELA) is declining, with ELA likely to be fully eliminated in coming months, as banks regain access to the interbank repo and covered bond markets and deposits gradually increase.

Most Greek banks are likely to remain marginally profitable through 2019, as credit and operating costs remain low. However, net interest margins will remain pressured as banks continue to deleverage and run down their loan balances through write offs and sales of NPEs. (Moody’s 30.07)

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Fortnightly, 20 September 2018

September 20, 2018, 5:42 am

≫ Next: What’s New at EDI – October 2018

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20 September 2018
11 Tishrei 5779
10 Muharram 1439

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel to Fund Foodtech Incubator in the Galilee
1.2 Israel Awarded Best Anti-Bribery Ranking by Transparency International

2: ISRAEL MARKET & BUSINESS NEWS

2.1  Tel Aviv to Host 2019 Eurovision Song Contest
2.2  Haagen-Dazs Coming to Israel
2.3  Israel Aerospace Takes Delivery of First Arrow 3 Canister
2.4  Intel Collaborates With Overwolf to Establish $7 Million Fund for Apps for Core Gamers
2.5  BreezoMeter Closes Series B Fundraising with $7.75 Million
2.6  EU Fund Invests $20 Million in Israeli High-Tech
2.7  TAP Air Portugal to Launch Tel Aviv – Lisbon Flights
2.8  Newsight Imaging Named a Cool Vendor in Novel Sensors by Gartner
2.9  Ituran Closes Acquisition of Road Track Holdings
2.10  DarioHealth Closes on $10.345 Million Through Private Placement Offering
2.11  Setoo Closes €8 Million Series A Funding Round with AXA

3: REGIONAL PRIVATE SECTOR NEWS

3.1  MenaITech First in Region to Implement Virtual Sign Language Avatar
3.2  Andersen Global Continues Expansion in Middle East with Zalloum & Laswi Law Firm
3.3  Excite Medical Installs DRX9000 and DRX9000C Back Pain Treatment Units in Third Major City in Iraq
3.4  Gulftainer Signs 50 Year, $600 Million Concession Agreement with Delaware’s Port of Wilmington
3.5  Russia’s Kalashnikov Eyes UAE Market for Electric Bikes & Cars
3.6  The UAE Weight Loss Market – $1.12 Billion Outlook to 2023
3.7  Northwestern Memorial Hospital Signs Agreement with the UAE
3.8  Middle East’s First Nutella Cafe Opens in Dubai
3.9  Hampton by Hilton Expands International Presence with First Property in Middle East
3.10  Dubai’s Coffee Planet Signs Deal to Expand Into Oman
3.11  Perma-Pipe International Holdings Announces Major Contract Award in Saudi Arabia

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1  Dubai’s RTA Starts Driverless Vehicle Trial in Sustainable City
4.2  Egypt Signs Deal With Spain’s TSK to Build Solar Park in Kom Ombo, Aswan
4.3  Greece to Increase Its Wind Energy Capacity By 50%

5: ARAB STATE DEVELOPMENTS

5.1  Lebanon’s Trade Deficit Widens to $10.14 Billion by July 2018
5.2  Lebanon’s Industrial Exports Grew by 4.43% y-o-y to $1.26 Billion in First Half of 2018
5.3  Lebanon’s Balance of Payments Registered a $757.2 Million Deficit in July 2018
5.4  Amman Publishes New Draft Income Tax Law Legislation
5.5  Jordanian Exports Increase by 3.1% & Imports Decrease by 2.5% During H1/18
5.6  Jordan Sees 18.7% Unemployment Rate During Q2/18
5.7  Jordan Issued 16,000 Flexible Construction Work Permits for Syrian Refugees in 2017
5.8  Amman Abolishes Sales Tax on Some Fresh Foods
5.9  Germany to Provide Jordan with $133.4 Million in Funds for Vital Projects
5.10  Low Priced and Damaged Imported Cars Pose Risks to Drivers in Iraq
5.11  Finland to Reopen Embassy in Baghdad

Arabian Gulf

5.12  Gulf States’ Defense Spending to Hit Record High Amid Ongoing Regional Conflict
5.13  Bahrain Said to Raise $500 Million as it Awaits Support from Arabian Gulf Allies
5.14  UAE to Introduce Retirement Visa for Expats & Takes Other Steps As Well
5.15  Saudi Private Sector Growth ‘Weakest On Record’ So Far in 2018

North Africa

5.16  Egypt’s Headline and Core Inflation Rise in August
5.17  Al-Sisi Approves Changes to Egypt’s Customs Laws
5.18  US to Release $1.2 Billion in Military Aid to Egypt
5.19  Egypt & US Sign $65 Million Grant for Infrastructure in Rural Areas
5.20  Egypt to Establish Seven Technology Innovation Hubs at Universities
5.21  Egypt’s Natural Gas Output Reaches 6.6 bcf/d
5.22  Egypt Invests EGP 77 Billion in Transportation Sector
5.23  Morocco Ranks 123rd in World Human Development Index

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkey’s Budget Sees $11.4 Billion Deficit in First Eight Months of 2018
6.2  Egypt & Cyprus Sign Agreement to Construct Gas Pipeline Worth $800 Million
6.3  Cyprus Inflation Reaches 2.5% in August 2018
6.4  Cyprus’ Economy Expands by 3.9% in Second Quarter
6.5  Cyprus’ Trade Deficit Shrinks by 6.5% in First Seven Months on Export Surge
6.6  Cypriot Tourism Revenue Up During First Six Months of 2018
6.7  Cyprus the 7th Most Visited Country Per Capita

7: GENERAL NEWS AND INTEREST

ISRAEL

7.1  Israel’s Population More Than 8.9 Million on Eve of Jewish New Year 5779
7.2  Sukkot Holiday Celebrated
7.3  Shemini Atzeret/ Simchat Torah Celebrated

REGIONAL

7.4  World Bank Report: Lebanon Education Public Expenditure Review 2017
7.5  Illiteracy Rate in Jordan Stood at 5.2% in 2017
7.6  UAE Judo Contest Back on After it Lifts Ban on Israeli Flag
7.7  English Language to be Taught in Egyptian Kindergartens for the First Time
7.8  Morocco Introduces Law to Combat Violence Against Women

8: ISRAEL LIFE SCIENCE NEWS

8.1  Leviticus Cardio Successfully Completes Third Chronic Animal Study
8.2  Nucleix’ Positive Clinical Results for Lung EpiCheck in Lung Cancer Early Detection
8.3  Carevature Medical’s Dreal Decompression System is Safer for Patients
8.4  Cannabics Pharmaceuticals Granted Patent in Israel for Its Core Technology
8.5  Hebrew University Research Team Paves Way to Cure for Acute Leukemia
8.6  Alpha Tau Medical Raises $29 Million for Cancer Therapy
8.7  XACT Robotics Receives CE Mark for Its Robotics Navigation System
8.8  Sheba Medical Bolsters Patient Safety Practices with MedAware’s Medication Safety Platform
8.9  Teva Announces U.S. Approval of AJOVYTM Injection for Anti-CGRP Treatment
8.10  Cannabics Receives Positive Results in Cannabinoid-anticancer Drug Development
8.11  Anlit’s Technology Ensures Long-life Probiotics in a Flavorful Chewy Supplement

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Fleetonomy Launches AI-Based Next Generation Fleet Management Platform
9.2  SecBI Partners With Intelligent Wave to Bring Autonomous Investigation Technology to Japan
9.3  PureSec Debuts Free Serverless Protection Library to Help Harden Serverless Security
9.4  Altair & Ethertronics Announce High-Performance Small Antenna Technology
9.5  Nova’s Materials Metrology Solution Selected for 5nm Technology Node
9.6  D-ID Officially Launches Product for Protection Against Face Recognition
9.7  NanoLock Security Selected to Prestigious Thales CYBER@Station F Program
9.8  Cyber Security Startup Pcysys Unveils PenTera 2.0, Delivering the Power of 1,000 Ethical Hackers
9.9  eyeSight’s Computer Vision Capabilities Are Now Available in NTT DOCOMO’s dtab Compact
9.10  WhiteSource Now Available on Amazon AWS Marketplace
9.11  Karamba Security Selected as an Auto-ISAC Strategic Partner
9.12  Habana Labs Announces World’s Highest Performance AI Inference Processor

10: ISRAEL ECONOMIC STATISTICS

10.1  Israel’s Inflation Rate Rises by Only 0.1% in August
10.2  Israeli Exports Expected to Reach $54.5 Billion by Year’s End
10.3  Foreign Exchange Reserves at the Bank of Israel at $116 Billion
10.4  Record Year for Tourism in Israel
10.5  Israel’s Fiscal Deficit Reaches 2.5% of GDP
10.6  Bank of Israel Report on Prices of Common Banking Services for Households
10.7  Israeli Housing Starts Increase for First Time in 18 months

11: IN DEPTH

11.1  ISRAEL: Israeli Gas Is Almost Ashore, But Challenges Remain
11.2  LEBANON: Small Lebanese Craft Brewers Introduce Big New Tastes in Beer
11.3  EGYPT: Egypt Announces Massive Budget to Develop Sinai
11.4  EGYPT: Bumpy Road Ahead for Egypt’s First Female Coptic Governor
11.5  EGYPT: Is ‘The Wedding’ a New Beginning for LGBTQ Cinema in Egypt?
11.6  TURKEY: Surging Inflation Tightens Circle Around Turkish Economy

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel to Fund Foodtech Incubator in the Galilee

Israel’s Innovation Authority (IIA), the Israeli government’s innovation investment arm, announced its intention to establish a foodtech-focused incubator in Tzfat, in the northern Galilee. The IIA said it intends to invest more than $28 million over an eight-year period of the initiative. Companies selected to participate will receive financing of up to $1.4 million. The IIA operates 18 tech incubators in Israel.

In April, the Israeli government announced it will allocate $27 million to establish foodtech research and activity in Kiryat Shmona. The plan is part of an economic development scheme, called ii2020, that will see the establishment of seven dedicated tech hubs in areas of the country that are remote from Tel Aviv.

There are currently more than 250 foodtech startups operating in Israel. The sector saw two major exits so far in 2018, with the recent acquisition of home water carbonator company SodaStream International for $3.2 billion by PepsiCo. and the May acquisition of flavor and fragrance company Frutarom Industries by NYSE-listed Flavors & Fragrances Inc. (IFF) for $7.1 billion. Frutarom itself announced it was launching a food tech innovation lab in April.

Israeli food and beverage manufacturer Strauss Group, operates a foodtech accelerator, The Kitchen, in the central port city Ashdod. In August, The Kitchen announced that it was commissioned by Swiss flavor and fragrance company Givaudan to scout Israeli food technologies and startups for potential investments and acquisitions. (IsraAg 08.09)

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1.2 Israel Awarded Best Anti-Bribery Ranking by Transparency International

Israel has received a high mark for its enforcement of laws against international bribery offenses. The Transparency International organization has for the first time given Israel the best rating in its index for corruption in international transactions. The ranking constitutes recognition of Israel as a country actively countering corruption in the international business arena. In 2015, Israel received the lowest ranking in this category.

Israel was awarded the highest ranking because of its recent stepped-up enforcement and large number of investigations against Israeli companies and businesspeople for bribery of public servants in foreign countries in which they operate. Bribing a foreign public servant has been listed in Israeli law as an offense for a decade (since 2008), but the law enforcement authorities have taken action in such cases only in the past two years. Enforcement has reached a peak in recent months with breakthroughs taking place in three out of five investigations.

Among other things, Transparency International’s report is based on the auditing procedures conducted for Israel by a working group for prevention of corruption in international transactions of OECD, which was successfully concluded in November 2017. Representatives of the organization visited Israel, and the Israeli branch of Transparency International presented to them the measures being taken in Israel to combat bribery of foreign public servants.

The report noted the stepped-up enforcement and improvement in international cooperation in enforcement of laws against bribery of foreign public servants; measures taken by the Tax Authority and the Money Laundering and Terror Financing Prohibition Authority; and increased awareness of offenses of bribery of foreign public servants and criminal responsibility of corporations in the public and business sectors. Other countries sharing Israel’s high rating include the US, Germany, UK, Italy, Switzerland and Norway. (Globes 12.09)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Tel Aviv to Host 2019 Eurovision Song Contest

Tel Aviv has been selected as the host city for the 64th Eurovision Song Contest in 2019, the European Broadcasting Union has announced. The decision was taken by the Eurovision Song Contest (ESC) Reference Group (the Contest’s steering committee) after Israeli public broadcaster KAN was asked to present at least two potential candidate cities. The Eurovision Song Contest semi-finals will take place in Tel Aviv on 14 and 16 May, with the final on 19 May at the Expo Tel Aviv (International Convention Centre). It is believed that the organizers were not enthusiastic about holding the event in Jerusalem because of limitations being placed on rehearsals during the Sabbath.

Last year’s competition, hosted in Lisbon, Portugal, saw Israel’s Netta Barzilai crowned the winner with “Toy”; the chart-topping dance track. Netta’s victory means Israel will host the contest for a third time having previously staged the Eurovision Song Contest in Jerusalem in 1979 and 1999. Israel has participated 42 times since its first appearance in 1973. (Globes 13.09)

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2.2 Haagen-Dazs Coming to Israel

Israel’s Antitrust Authority is allowing Osem-Nestle, one of the two main players in the Israeli ice cream market, to distribute Haagen Dazs brand ice cream, owned by General Mills. Following this approval, Osem-Nestle subsidiary Noga Ice Cream, which manufactures and distributes Nestle ice cream, will begin exclusive distribution of Haagen Dazs ice cream in Israel. The Antitrust Authority decided to approve the agreement because the market share added by General Mills to Osem-Nestle is “insignificant,” amounting to only a few percentages. Even if a competitor is removed from the market as a result of the arrangement, this competitor’s business is not enough to have a significant effect on competition in the market, the Antitrust Authority said. (KT 05.09)

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2.3 Israel Aerospace Takes Delivery of First Arrow 3 Canister

Israel Aerospace Industries has taken delivery of it first Arrow 3 anti-ballistic missile canister from its Mississippi-based subsidiary Stark. Attending the ceremony were Mississippi Governor Phil Bryant and several members of the Mississippi Congressional Delegation along with senior officials of the Israeli Ministry of Defense (IMOD). Stark was recently chosen to manufacture canisters for the Arrow-3, an integral component to the latest generation of missile defense systems developed by IAI and deployed by the IMOD to the IAF.

The Arrow Weapon System (AWS) is the upper tier long range defense system against ballistic missiles threats and is the world’s first operational, national missile defense system. IAI is the prime contractor for AWS and responsible for Arrow 2&3 interceptors development, production and system integration. The Arrow-3 interceptor capabilities defend against longer range, higher altitude (exo-atmospheric) and precise ballistic missile engagements. The combined interception capabilities of the Arrow-2 and Arrow-3 will enhance Israel’s missile defense shields. (Globes 05.09)

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2.4 Intel Collaborates With Overwolf to Establish $7 Million Fund for Apps & Mods for Core Gamers

Overwolf is announcing a partnership with Intel Corporation to expand development opportunities for the PC gaming community. Through the collaboration, a development fund is being created for developers working on game applications, modifications, or game services that enhance the experience of today’s PC games. Overwolf designed the fund’s evaluation process to be simple and fast so that developers can focus 100% of their efforts on making the best possible application, mod or game extension.

Tel Aviv’s Overwolf‘s mission is to improve gaming experiences for gamers worldwide through useful, effective in-game apps and tools. Working with developers, Overwolf enables new game features and overlays which ‘should always have been there’ to be implemented effectively and swiftly, bringing new value to millions of players. Overwolf’s partners include OP.GG, NVIDIA, Cloud9, Team Liquid, Riot Games, Logitech and others. (Overwolf 06.09)

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2.5 BreezoMeter Closes Series B Fundraising with $7.75 Million

BreezoMeter completed a series B funding, totaling $7.75 Million, led by Goldacre and Entré Capital. In 2014, BreezoMeter was the first company to introduce location-based and real-time air quality data, available via API, to businesses. Since then the company has landed major partnerships in the smart home, medical, automotive and lifestyle industries and has received investments totaling $12.5m.

Goldacre, an innovative family office investment house that forms part of the Noé Group’s £2bn asset management business, co-led the investment with Entré Capital, a leading international venture capital firm. Also participating were Idinvest Partners, a European leader in financing small and medium-sized enterprises with almost €8 billion under management; and HELLA Ventures, the venture capital arm of HELLA, one of the leading automotive suppliers for lighting technology and electronics with more than 40,000 employees in some 35 countries. Also joining the funding round were AxessVentures, and Plug ‘n’ Play Ventures from Silicon Valley.

Idinvest Partners’ and HELLA Ventures’ investments are part of BreezoMeter’s strategy to expand in the mobility market. The funding round will enable BreezoMeter to further develop its smart cities solutions, already being used by companies like Cisco, Faurecia and others, and to expand its offering by utilizing proprietary spatial interpolation algorithms to integrate low-cost sensors data. This addition of small sensor data, to the already robust 1.8 TB of data that is processed hourly, will enable a higher resolution of air quality data in urban areas, down to just 30 meters.

Idinvest Partners’ expansive network will support BreezoMeter’s expansion in the European and Asian markets, while AirShield, HELLA Ventures’ automotive solution for in-cabin air pollution monitoring, will integrate with BreezoMeter’s outdoor air quality data, and will address the health risks drivers and passengers face as a consequence of pollution.

Haifa’s BreezoMeter, the world leader in location-based, real-time air quality data, addresses air pollution in a way that can help billions of people worldwide improve their health. Combining data from governmental sensors, satellites, weather, transportation and other sources, the BreezoMeter APIs give businesses the tools to increase user engagement and sales, and positively impact lives with accurate, relevant, and intuitive data, which easily integrates into products relating to smart homes, fitness and lifestyle, cosmetics, automotive and health technologies. (BreezoMeter 13.09)

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2.6 EU Fund Invests $20 Million in Israeli High-Tech

The European Investment Fund (EIF) today announced a $20 million investment in Israel, the European Union’s (EU) first in Israeli high tech, is part of the InnoFin program in the framework of the European Horizon 2020 R&D program. EIF is joining a group of investors recruited by the ICV fund; EIF will be an anchor investor. ICV is raising its third fund, ICV III, which is likely to reach $75 million. ICV focuses on investments in startups at the early stages, and has already begun considering new investments. ICV III will invest in seed stage and early stage companies in software, hardware, infrastructure, and innovation. The fund is focusing on increasing its efficient use of resources and on the transition to industrial innovation.

Israel is a partner in the framework European program through a €1.1 billion investment by the Israel Innovation Authority by means of the Israel-Europe Directorate for Research & Innovation (ISERD). One of the important advantages of Israel’s participation in this program is the entry and involvement of European financial institutions in Israel. This involvement includes investments in venture capital funds and the use of financial tools for realizing the innovation vision, such as guarantees for local banks giving Israeli companies the opportunity to develop and grow.

EIF is part of the European Investment Bank (EIB) group. It supports small and medium-sized businesses in Europe through assistance in financing. EIF develops venture capital and growth funds, guarantees, and other tools focused on these market segments. (Globes 13.09)

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2.7 TAP Air Portugal to Launch Tel Aviv – Lisbon Flights

Portuguese national carrier TAP Air Portugal is to launch daily Tel Aviv – Lisbon flights starting 1 April 2019. El Al Israel Airlines unit Sun D’Or currently operates two weekly flights between Tel Aviv and Portugal and Arkia Airlines and Israir Airlines and Tourism operate on the route on a seasonal basis. TAP is represented by Open Sky in Israel. The new route is part of TAP’s worldwide expansion including new routes from Lisbon to Dublin and Basel.

TAP will operate Airbus A321 168-seat aircraft on the new Tel Aviv – Lisbon route. The daily flights will take off from Tel Aviv at 5.25am and arrive in Lisbon at 9.00am local time. Lisbon flights will leave at 14:20 and land in Tel Aviv at 21:30. Return ticket fares currently being advertised on TAP’s website start from €236 for Tel Aviv – Lisbon – Tel Aviv (hand luggage only). (Various 12.09)

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2.8 Newsight Imaging Named a Cool Vendor in Novel Sensors by Gartner

Newsight Imaging has been named a Cool Vendor by leading analyst firm Gartner. Newsight Imaging was selected in the 5 September 2018 report entitled, “Cool Vendors in Novel Sensors.” Newsight believes this recognition is due to its innovative approach and Time-of-Flight solution (enhanced-Time-of-Flight), delivering range and accuracy to applications. Gartner points out that the report recognizes “three sensors with recent technology breakthroughs and design innovations, providing technology product managers with a new perspective about using sensors to advance future products and services.” Every year, Gartner issues an annual report that recognizes innovative vendors, their products and technology.

Ness Ziona’s Newsight Imaging develops advanced CMOS image sensor chips, providing 3D solutions for high volume markets. The chip’s sensor is manufactured using CMOS technology with ultra-high sensitivity pixels, replacing more expensive CCD sensors and other camera modules in LiDAR applications for robotics, automotive (ADAS and Car safety), drones and in markets as mobile depth cameras, AR/VR, Industry 4.0 and barcode scanners. (Newsight Imaging 14.09)

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2.9 Ituran Closes Acquisition of Road Track Holdings

Ituran Location and Control has closed its previously announced acquisition of the majority of the shares of Road Track Holding S.L (Road Track), a telematics’ company operating primarily in the Latin American region. Ituran will consolidate 81.3% of Road Track’s financial results into its own. The combined business has approximately 1.8 million subscribers with a revenue run-rate approaching $400 million.

Azor’s Ituran is a leader in the emerging mobility technology field, providing value-added location-based services, including a full suite of services for the connected-car. Ituran offers Stolen Vehicle Recovery, fleet management as well as mobile asset location, management & control services for vehicles, cargo and personal security. Ituran is also the largest OEM telematics provider in Latin America. Its products and applications are used by customers in over 20 countries. Established in 1995, Ituran has over 3,400 employees worldwide, with offices globally, including Israel, Brazil, Argentina, Ecuador, Colombia, Mexico and the US. (Ituran 14.09)

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2.10 DarioHealth Closes on $10.345 Million Through Private Placement Offering

DarioHealth Corp. has closed on a private placement offering with institutional and private investors for the sale of shares of the Company’s common stock and shares of the Company’s newly designated Series D convertible preferred stock. As a part of this private placement, which raised $10,345,000 in the aggregate before expenses and placement agent fees, the Company issued 4,266,800 shares of common stock at a price per share of $0.90 and 1,806,923 shares of Series D convertible preferred stock at a price per share of $3.60, plus warrants to purchase up to an aggregate of 9,195,604 shares of common stock at an exercise price of $1.25 per share.

The private placement was managed by the Company with the assistance of A.G.P./Alliance Global Partners, which acted as the placement agent for a portion of the offering.

Caesarea’s DarioHealth Corp. is a leading global digital health company serving its users with dynamic mobile health solutions. In today’s day and age, knowledge of health and treatment is being democratized, and people deserve to know everything about their own health and have the best tools to manage their condition. DarioHealth employs a revolutionary approach whereby harnessing big data and a novel method for chronic disease data management, empowering people to analyze and personalize self-diabetes management in a totally new way without having the disease slow them down. (DarioHealth 14.09)

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2.11 Setoo Closes €8 Million Series A Funding Round with AXA

Setoo has closed an €8 million (±$9.3 million) Series A funding round, bringing the total amount raised to date to €10.3 million (±$12 million). The main investor in this and the seed round is Kamet, AXA’s Insurtech startup studio. Setoo is by empowering e-businesses, which understand their consumer best, to quickly and easily build and integrate tailor-made, simple insurance products that are automatically embedded into the customer journey. E-businesses benefit from one-click underwriting directly on their digital assets and providing personalized protection with automatic compensation for their consumers. By using these super targeted products, e-businesses such as e-commerce sites and online travel agents (OTAs) are able to meet their specific business goals, whether they are looking to delight their customers, generate new revenue streams, or differentiate within their crowded markets.

The highly scalable platform covers risks that relate to exogenous events that could ruin the customer journey. For example, an OTA selling connecting flights from multiple airlines can provide insurance to cover for missed flight connections if preceding flights are delayed or cancelled. In these situations, Setoo sends an automated SMS to the consumer on behalf of the OTA, explaining that a full refund has been provided and offering alternative flight suggestions. In another scenario, a tour operator selling ski holidays could insure against lack of snow, fully automating payment and removing the hassle of the claims process for the customer. To provide this service, Setoo opted to use the Managing General Agent (MGA) model, so the company is licensed by the FCA to distribute products on behalf of insurers in the EU. Insurance companies that partner with Setoo benefit from working with the brands employing some of the best marketers in the world, who design and distribute new protections that are highly consumer-centric and innovative.

Tel Aviv’s Insurance and protection-as-a-service platform Setoo turns insurance into a powerful business accelerator. Drawing on Setoo’s strong insurance expertise, e-businesses are supported to deliver personalized insurance solutions, which generate new revenue streams by transforming the customer experience. Setoo has headquarters in London and a research and development center in Tel Aviv. (Setoo 18.09)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 MenaITech First in Region to Implement Virtual Sign Language Avatar

Jordan’s largest provider of human capital information systems – MenaITech along with Mind Rockets, a Jordan-based startup creating assistive technologies, developed a solution for deaf and hard of hearing employees. Through this collaboration, MenaITech users can have access to a virtual sign-language interpreter that translates on-screen content to sign language.

The system translates text on MenaITech’s website and MenaME platform – the employee and manager self-service gateway, to sign language for users who are deaf or hard of hearing, which allows users to access HR services such as leave and vacation requests, attendance and departure records, salary-slips and can easily manage their HR functions from anywhere in the world. MenaITech is the first HCIS company in the region to provide this feature to its clients and the general public.

Mind Rockets system has been implemented on MenaITech’s MenaME, which allows users to access HR services such as leave and vacation requests, attendance and departure records, salary-slips and other core HR functions. With Mind Rockets services, employees who are deaf or hard of hearing can easily manage their HR functions from anywhere in the world. (MenalTech 10.09)

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3.2 Andersen Global Continues Expansion in Middle East with Zalloum & Laswi Law Firm

Zalloum & Laswi, a prominent law firm with a presence in Amman, Jordan, has signed a Collaboration Agreement with Andersen Global, an international association of tax and law firms. Initially established in 1993 as a law office, Zalloum & Laswi later became a full-fledged law firm and now has more than 20 professionals. The collaboration broadens Andersen Global’s presence internationally and is a significant development for the practice in the Middle East.

Zalloum & Laswi provides in-depth knowledge on a wide range of legal issues to a variety of clients, but typically mid to large sized Jordanian corporations or foreign corporations that require representation in Jordan. The firm’s practice areas include banking and finance, civil law, contracts, foreign investment, intellectual property rights, international trade and cross-border issues, corporate and commercial law, criminal law, litigation and dispute resolution, mergers & acquisitions, and real estate. Andersen Global is an international association of legally separate, independent member firms comprised of tax and legal professionals around the world. (Andersen Global 12.09)

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3.3 Excite Medical Installs DRX9000 and DRX9000C Back Pain Treatment Units in Third Major City in Iraq

Tampa, Florida’s Excite Medical installed a DRX9000 and a DRX9000C in Baghdad, which becomes the third city in Iraq to offer its technology. The American Private Medical Centers, which made the latest purchase have locations in Sulaimanyia (North Iraq), Baghdad and the Babylon. The DRX9000 installation in Iraq is the third country in recent years that Excite Medical has accomplished in the Middle East. The Middle East has been a fast growing market for Excite Medical with DRX9000 systems in the Palestinian Authority, Jordan, Iraq, Kuwait, Cyprus, Turkey, Egypt and Saudi Arabia.

Excite Medical has built a solid reputation in the international market by delivering 100% of the time and providing complete support to its clients regardless of their location. The DRX9000, Excite Medical’s flagship product, currently has over a million fans on Facebook and has become the most popular non-surgical, drug free treatment for back pain. (Excite Medical 17.09)

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3.4 Gulftainer Signs 50 Year, $600 Million Concession Agreement with Delaware’s Port of Wilmington

Gulftainer, the world’s largest privately-owned independent port operator and logistics company based in the United Arab Emirates, finalized a 50 year concession agreement with the state of Delaware to operate and develop the Port of Wilmington, significantly expanding the company’s global footprint and reach. The agreement, signed by Gulftainer’s subsidiary GT USA, will see an expected investment of up to $600 million in the port to upgrade and expand the terminal and to turn it into one of the largest facilities of its kind on the Eastern Seaboard. The port deal represents the largest operation ever run by a UAE company in the United States, as well as the largest investment ever by a private UAE company in the country.

The 50-year concession follows a year of negotiations and a thorough evaluation of Gulftainer’s capabilities globally, including in the United States, where it operates the Canaveral Cargo Terminal in Port Canaveral, Fla., and provides services to the U.S. Armed Forces as well as the U.S. space industry. The Delaware concession agreement completes a preliminary agreement between Gulftainer and the state of Delaware, as well as the completion of a formal review by the Committee on Foreign Investment in the United States (CFIUS), granting Gulftainer exclusive rights to manage the port.

Gulftainer plans to invest up to $600 million in the port, including $400 million on a new 1.2 million TEU (twenty-foot equivalent units) container facility at DuPont’s former Edgemoor site, which was acquired by the Diamond State Port Corporation in 2016. (Gulftainer 19.09)

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3.5 Russia’s Kalashnikov Eyes UAE Market for Electric Bikes & Cars

Russia’s Kalashnikov Concern will start supplying electric motorcycles and cars to the UAE under an agreement with Mawarid Holding. Kalashnikov stated that the deliveries are scheduled this year and in 2019. In particular, these are electric motorcycle UM-1 and electric car UV-4.”

It was reported earlier that Kalashnikov had inked a memorandum of cooperation with Mawarid Holding, the manufacturing and investment company based in the UAE. Kalashnikov Concern is Russia’s largest manufacturer of a wide range of small arms. Civilian products include hunting guns, sport rifles, tools. The corporation exports its arms to more than 20 countries, TASS reported. (AB 07.09)

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3.6 The UAE Weight Loss Market – $1.12 Billion Outlook to 2023

The “UAE Weight Loss Market: Industry Trends, Share, Size, Growth, Opportunity and Forecast 2018-2023” report by ResearchAndMarkets.com was worth $ 718 Million in 2017. The researchers expect this market to exceed $ 1,124 Million by 2023, exhibiting a CAGR of around 7.8% during 2017-2023.

The prevalence of overweight and obesity have been increasing rapidly in the UAE and are currently one of the highest in the world. Rising incomes and urbanization in the UAE has resulted in a lifestyle which is very modern, fast paced and technology driven resulting in reduced physical activity and an increasing consumption of unhealthy food.

Dietary habits in the region have changed over the past few decades as a result of a strong proliferation of fast food joints, restaurants, online food delivery options, cafes, takeaways, etc. making processed foods, snacks and high sugar products easily available for consumers.

The temperature in the region is also extremely high for most of the year, resulting in limited outdoor activities such as sports, cycling, jogging, etc. Consumers generally stay indoors and use cars to travel even short distances. Moreover, the traditional dress in the region which involves wearing of loose, flowing garments such as the dish-dash or abayas also represents a driving factor, as unlike western dresses such as jeans or t-shirts, the excess weight gained goes comparatively unnoticed.

The weight loss market has been segmented on the basis of diet which mainly includes supplements, meals and beverages. Supplements currently represent the largest segment. Based on the equipment, the market has been segregated into fitness equipment and surgical equipment. Fitness equipment currently account for the larger share. (R&M 08.09)

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3.7 Northwestern Memorial Hospital Signs Agreement with the UAE

Chicago’s Northwestern Memorial Hospital has been selected as a preferred provider of exceptional medical care for patients from the United Arab Emirates (UAE). Northwestern Medicine joins a select network of leading US hospitals, including Mayo Clinic, Johns Hopkins Medicine, and Cleveland Clinic, that will provide specialized care to citizens of the UAE. As a preferred provider, Northwestern Medicine will provide advanced medical care to Emirati patients while also collaborating with their personal physicians to ensure continuity of care when the patients return to the UAE. Northwestern Medicine will also consult with counterparts in the UAE and share knowledge to strengthen the country’s hospital and healthcare system.

Northwestern Medicine has long been a destination for patients from the UAE, as well as from other locations around the globe. To support global patients, Northwestern Medicine established its international health program. Northwestern Medicine International Health coordinates exceptional and compassionate healthcare while providing patients and their traveling companions with culturally sensitive and comprehensive services from the initial consultation through treatment and recovery. The program also arranges communication between the patient’s personal physician and Northwestern Medicine specialists, as well assisting with travel arrangements, appointment coordination, translation, worship, dietary needs and more. (NMH 06.09)

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3.8 Middle East’s First Nutella Cafe Opens in Dubai

Global confectionary company Ferrero has opened the Middle East’s first Nutella Café at Dubai International Airport (DXB). Passengers at the airport will now be able to enjoy the celebrated hazelnut spread as part of an array of grab-and-go desserts, including mini pancakes, sharable muffins, crepes, waffles and choux. Travelers visiting the café can also customize a Nutella jar featuring their names.

While the café is Nutella’s first ever standalone brand, Italian restaurant and store Eataly at the Dubai Mall also features a Nutella Bar. It serves crepes, cookies and breads boastings the spread. The mall also has a separate Nutella-themed food truck, also serving desserts revolving around the hazelnut spread. In June this year, Ferrero also announced it will open a Nutella Café at near Union Square by the end of 2018. It will feature Nutella-inspired desserts and specialty espresso beverages. The first Nutella Café opened in May last year in Chicago. (AB 16.09)

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3.9 Hampton by Hilton Expands International Presence with First Property in Middle East

Hilton’s Hampton by Hilton, the global hotel, made its Middle East debut with the opening of Hampton by Hilton Dubai Airport, marking the largest property in Hampton’s global portfolio. The contemporary 420 room hotel is located near the Dubai International Airport and the Dubai Airport Freezone Authority (DAFZA). Hampton by Hilton Dubai Airport also features a state-of-the-art rooftop gym with panoramic views of the Dubai skyline, a large infinity pool and a fully licensed bar.

Globally recognized for its unmatched approach to hospitality and friendly, caring service culture known as ‘Hamptonality’, Hampton aims to serve the region’s growing demand for mid-market hotels – particularly among millennial travelers, who are increasingly prioritizing value in their search for accommodation. A recent survey of just over 1,000 respondents conducted by Hilton in partnership with YouGov found that when choosing between two destinations, almost half (44%) of UAE travelers were likely to base their decision on overall travel cost. (Hilton 05.09)

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3.10 Dubai’s Coffee Planet Signs Deal to Expand Into Oman

Coffee Planet has signed a franchise agreement with Royal Management that will see 11 outlets of the brand open across Oman. The Dubai-based concept, known for its specialty Arabica coffee, already has stores in both the UAE and Pakistan, with branches also planned in Saudi Arabia. Royal Management is a newly-formed F&B trading entity based in Oman. The outlet designs will be based on Coffee Planet’s new branding which launched last year which merges modern Dubai with traditional Arabia. (AB 13.09)

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3.11 Perma-Pipe International Holdings Announces Major Contract Award in Saudi Arabia

Niles, Illinois’ Perma-Pipe International Holdings announced its subsidiary Perma-Pipe Saudi Arabia has been awarded a significant contract in excess of $15 million by Italy’s Saipem for the provision of a thermal insulation system, field joints and a leak detection system for two 55 kms (110 kms in total), 30 inch diameter, low sulfur fuel oil lines for Kuwait Oil Company’s (KOC) New Refinery Project in Kuwait. The project will utilize Perma-Pipe’s Xtru-Therm insulation system, a spray-applied polyurethane foam jacketed with a high-density polyethylene casing. Perma-Pipe will also be involved with the field joint systems, as well as being responsible for the supply, installation, and commissioning of a leak detection system for the insulated pipelines. The project will begin execution in Perma-Pipe’s facilities in Q4/18 and will be completed in mid-2019. Perma-Pipe International Holdings is a global leader in pre-insulated piping and leak detection systems for oil and gas gathering, district heating and cooling, and other applications. (Perma-Pipe 10.09)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Dubai’s RTA Starts Driverless Vehicle Trial in Sustainable City

Dubai’s Roads and Transport Authority (RTA) announced it has recently embarked on phase 4 of the Driverless Vehicles Project on a track extending 1,250 meters. The step is a part of RTA’s efforts to boost the Dubai Government strategy to raise the share of autonomous transport to as much as 25% of public transport means by 2030. The smart vehicle, which was manufactured by EasyMile Company, can accommodate eight riders. It travels on short distances on pre-programmed routes under multi-user environments. It moves on virtual tracks that can be configured easily to make abrupt changes to meet demand. The latest trial run is part of an agreement signed recently with Diamond Developers Company, the developer of the Sustainable City project.

The vehicle has electric powered batteries that can operate for eight hours and can travel at a speed of 20km/h. It can detect any object within 40 meters, and slow down automatically when an object appears within two meters. The vehicle comes to a complete stop when the object approaches less than two meters. (AB 05.09)

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4.2 Egypt Signs Deal With Spain’s TSK to Build Solar Park in Kom Ombo, Aswan

Egypt’s New and Renewable Energy Authority and the Spanish energy giant TSK Grupo signed a contract to set up a 26 MW photovoltaic plant, also known as a solar park, in Kom Ombo in Aswan, Upper Egypt, valued at a total of €20 million. The plant will be built over an area of 500,000 square meters. It is expected to produce 53,000 MW annually [equivalent to 12,000 tonnes of fuel]. Utilizing solar power will prevent the emission of about 30,000 tonnes of carbon dioxide. It should be completed by mid-2019.

The project will be funded by the French Agency for Development through a soft loan of €40 million, with the rest of the loan to be channeled into financing other energy projects in Egypt. The agreement is part of a strategy by Egypt’s New & Renewable Energy Authority and Electricity Ministry to diversify energy sources, increase renewable energy use, and reduce the consumption of traditional energy. The move is also part of Egypt’s renewable energy plan to produce 20% of all energy production through renewable sources by 2022, and 37% by 2035. (MENA 13.09)

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4.3 Greece to Increase Its Wind Energy Capacity By 50%

According to the findings of “Wind Energy in Europe: Outlook to 2022″ report, Greece is about to see an increase of 1,300 MW in the period between 2018 and 2022, an increase of 50% compared to the country’s capacity at the end of last year. The president of the Hellenic Wind Energy Scientific Association (ELETAEN) released an announcement, following the publication of the report, saying that “Greece needs to multiply its efforts and to exceed significantly the current estimate for new wind power installations in the near future, if the country wants to remain on the road of green energy.” The report said that 2019 is expected to be a record year for new wind energy installations, with Germany remaining the leading country regarding the production of energy generated by wind. (GR 17.09)

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Trade Deficit Widens to $10.14 Billion by July 2018

Lebanon’s trade deficit widened by 8.54% to $10.14B by July 2018 as a result of a 8.19% increase in imports to $11.90B, which outweighed the 6.23% rise in exports to $1.76B. In terms of imports, the mineral products with a weight of (21.75%) saw an increase of 19.86% year-on-year (Y-O-Y) to stand at $2.59B by July 2018. Moreover, products of the chemical industries (11.18%) and machinery and electrical instruments (10.47%) rose by 8.49% and 9.68% to reach $1.33B and $1.25B, by July 2018. Lebanon imported products from China with 10% and Italy and the US with a similar 8%. In terms of exports, Pearls, precious stones and metals (24.37%) also increased by 18.65% to reach $428M. The Base metals and articles of base metals (14.18%) rose by 34.36% y-o-y to $249M. On the contrary, prepared foodstuffs like beverage and tobacco (13.65%) saw a decrease by 11.94% to stand at $240M by July 2018. Lebanon’s top export destinations are UAE and South Africa with 13% and 9%, respectively of total exports value. (MoT 17.09)

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5.2 Lebanon’s Industrial Exports Grew by 4.43% y-o-y to $1.26 Billion in First Half of 2018

According to the Lebanese Ministry of Industry, the total value of industrial exports increased by an annual 4.43% to reach $1.26B in H1/18. In term of imports, the total value of imports of industrial machinery and equipment during the first half of the year 2018 amounted $150.9M, recording a year-on-year (y-o-y) increase of 31% during the same period in 2017. Imports of industrial machinery and equipment climbed by a yearly 6.76%, to settle at $23.7M in June 2018. Imports of machines used in packaging (26.16% of total imports), ranked first with a total value of $6.2M, where Lebanon imported 72.58% from Germany alone. In turn, imports of machines for food industry took the second place, amounting to $2.6M, with 34.62% imported from Italy.

In June 2018, total industrial exports registered a yearly 6.38% decline, to stand at $186.3M. The main exported products were base metals and articles of base metal (constituting 17.07% of total exports) with a total of $31.79M, of which 19.5% were imported by Turkey. In fact, this category showed a 26.7% annual increase in June 2018. Exports of base metals and articles of base metal exported to Spain went from $616M in June 2017 to $4.24M in June 2018 and as metal exports to Greece rose from $1.21M to $3.04M over the same period. Machinery and electrical equipment (16.10% of total exports) came second, totaling $29.98M, of which 9.67% were imported by Egypt. However, it is worth mentioning that exports of machinery and electrical equipment witnessed a significant 38.6% y-o-y decrease in June 2018. The decrease came about as Lebanon’s exports of machinery and electrical equipment to Iraq and Kuwait dropped from $9.26M and $3.15M to $2.66M and $1.81M, respectively. Products of the chemical industries (15.05% of total exports) came in the third place recording an increase of 8.40% to stand at $28.03M, with United Arab Emirates importing 17.84% of this category. Prepared foodstuffs and tobacco (14.64% of total exports) followed, with a total value of $27.27M and dropped by 28.3%. Overall, the primary importers of Lebanese industrial products in June 2018 were: the UAE, KSA, and Syria with each grasping a stake of 13.7%, 7.41%, and 7.40% of total exports, respectively. (MoI 13.09)

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5.3 Lebanon’s Balance of Payments Registered a $757.2 Million Deficit in July 2018

According to the Central Bank of Lebanon, Lebanon’s Balance of Payments (BoP) witnessed a deficit of $757.2m in July 2018 compared to $1.01b deficit recorded during the same period in 2017. The Net Foreign Assets (NFA) of BDL rose by $2.46b while those of commercial banks slipped by $3.22b by June 2018 Moreover, the BoP recorded a monthly deficit of $548.9m in July 2018 alone, compared to a surplus of $100.2m in July 2018. In fact, the NFAs of BDL recorded an increase of $258.5m, while the commercial banks’ NFAs declined by $807.3m in July 2018. ((CBL 09.09)

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5.4 Amman Publishes New Draft Income Tax Law Legislation

The government on 11 September released the draft law amending the 2018 Income Tax Law on the Legislation and Opinion Bureau’s website, where it will remain published for the following 10 days to receive comments and complete the dialogue on it. The cabinet will also take suggestions and comments about the draft law into consideration, before endorsing it and refer it to the Lower House of Parliament in accordance with the constitution. (Petra 11.09)

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5.5 Jordanian Exports Increase by 3.1% & Imports Decrease by 2.5% During H1/18

The statistical data issued by the Department of Statistics indicate that the value of total exports reached JD.2549.7 million during the first half 2018, marking an increase of 2% compared with the same period of 2017. Meanwhile, the national exports value reached JD.2142.0 million during the first half of 2018, or an increase of 3.1% compared with the same period of 2017. The value of re-exports reached JD 407.7 million during the first half of 2018 which indicates a decrease by (3.3%) as compared with the same period of 2017. The imports value reached JD.6851.9 million during the first half of 2018, thus decreasing by (2.5%) compared with the same period of 2017.

The deficit in the trade balance reached JD.4302.2 million therefore; the deficit has decreased during the first half of 2018 by 5% compared with the same period of 2017. The imports coverage by total exports has become 37.2% during the first half of 2018 while it was 35.5% for the same period of 2017, which means an increase by 1.7%. (DoS 29.09)

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5.6 Jordan Sees 18.7% Unemployment Rate During Q2/18

Jordan’s Department of Statistics issued its quarterly report on the Unemployment Rate for the second quarter of 2018. The results show that the unemployment rate has reached (18.7%) during the second quarter of 2018, representing an increase by 0.7% over Q2/17. The Unemployment Rate for men has reached 16.6% during the second quarter of 2018 against 26.8% for women. It becomes clear that the unemployment rate has increased for males by 3.2% and decreased for females by 7.1% compared with Q2/17. (DoS 04.09)

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5.7 Jordan Issued 16,000 Flexible Construction Work Permits for Syrian Refugees in 2017

Over 16,000 flexible working permits for Syrian refugees employed in the construction sector have been issued over the past year, Jordan’s Ministry of Labour announced during a workshop organized by the International Labour Organisation (ILO). The newly issued permits come as the result of an agreement signed by the Labour Ministry, the General Federation of Trade Unions (GFTU) and the ILO in late August 2017, which aimed at organizing the work of Syrian refugees in the construction sector in Jordan through the issuance of work permits that allow employees to move from one employer to another.

Having applied the system successfully within the agriculture and construction fields, the Labour Ministry is now looking forward to including sectors such as manufacturing and hospitality under the same approach. However, the contractual mechanisms within such sectors are different, and work is still underway in order to further facilitate the access of Syrian refugee workers to other fields. There is a need to maintain the balance between refugee, migrant and Jordanian workers in the target sectors.

The ILO highlighted that obtaining a work permit is the first step for a refugee to obtain decent working conditions, as most Syrian refugees working within the informal sector cannot complain about delayed wages, long working hours or any other violations. (JT 16.09)

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5.8 Amman Abolishes Sales Tax on Some Fresh Foods

On 12 September, the Jordanian cabinet decided to abolish a 10% sales tax on fresh foods (vegetables and fruits) and reduce it on some other agricultural products to 4%. The government said the decision was part of a comprehensive review of the tax system and aims to protect the poor and limited-income classes. In its weekly session, the Cabinet also gave the go-ahead for the incorporation of a private firm to support the Kingdom’s exports. The non-profit company will be owned by the government and the private sector, represented by the chambers of industry and trade, investment banks and other investment entities, which will finance the working capital of the company. (AMMONNEWS 12.09)

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5.9 Germany to Provide Jordan with $133.4 Million in Funds for Vital Projects

Jordan on 10 September announced signing three agreements with Germany worth $133.4 million to fund projects in water and education fields in the kingdom. As part of Germany’s pledges to aid Jordan in 2018, the agreements consist of $23.2 million as grant for the kingdom, while the other amount of $110.2 million will be easy loans. The agreements were signed by Jordan’s Minister of Planning and International Cooperation Kawar and officials from the German Construction Bank.

According to official Jordanian statistics, Germany is the second largest donor for the kingdom. Last year, Germany announced providing financial aid of up to $696.1 million for Jordan. The aid included funding vital projects and humanitarian aid for Syrian refugees in the kingdom. (AMMONNEWS 10.09)

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5.10 Low Priced and Damaged Imported Cars Pose Risks to Drivers in Iraq

Thousands of bad quality, overturned or water-damaged US cars have been imported to the Kurdistan Region over the past two years due to the facilitations made by the KRG to car traders in a bid to increase revenues at customs points. According to statistics produced by the Ministry of Trade & Industry, 451,337 cars have been imported to the Kurdistan Region over the past five-and-a-half years.

Car importations fell dramatically after 2013 due to the financial crisis. For example, 126,000 cars were imported to the Kurdistan Region in 2013, but only 35,000 in 2016. But this trade in the first half of this year increased by 30% compared to the first half of last year. According to the Trade Ministry, 75% of cars imported to the Kurdistan Region will eventually be re-exported to Iraqi cities. Some car dealerships only import cars to Iraqi cities.

US insurance companies won’t cover water-damaged cars or cars that have their airbags blown up in car accidents there, where car insurance is required. Many then sold as scraped cars. But the KRG has dismissed claims it has been facilitating the importation of sunken or other bad quality cars. These cars are first transported to the United Arab Emirates, but the Emirates’ government doesn’t allow these cars to be used there due to their condition. (IBN 31.08)

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5.11 Finland to Reopen Embassy in Baghdad

Finland is preparing to reopen its embassy in Baghdad. Finland has not had diplomatic personnel in Baghdad since 1991. Since 2006, Finland’s official representative for Iraq has been a Roving Ambassador based in Helsinki. According to a statement from the Finnish Ministry for Foreign Affairs, the reopening of the embassy will promote the development of broad bilateral relations and commercial cooperation. At present, 14 EU member states are permanently represented in Baghdad at an ambassadorial level. (Finnish Foreign Ministry 04.09)

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►►Arabian Gulf

5.12 Gulf States’ Defense Spending to Hit Record High Amid Ongoing Regional Conflict

The Gulf Cooperation Council (GCC) member states are forecast to spend over $100 billion on their defense capabilities for the first time next year, with increasing budgets in Saudi Arabia and the United Arab Emirates (UAE) driving growth between 2018 and 2027. Across the Gulf states comprising the GCC (Saudi Arabia, UAE, Kuwait, Qatar, Bahrain and Oman), defense budgets are expected to reach record highs next year, with increases in spending primary focused on modernizing and expanding military force structure and improving readiness in response to continuing regional instability.

Jane’s Defence Budgets data says that despite predicted fluctuations in the growth rate, defense spending will continue to increase over the next five years, reaching around $117 billion by 2023. In total, the states of the GCC are expected to spend around $86 billion on defense equipment over the next five years. GCC defense budgets have risen as a percentage of GDP over recent years, but even more significantly are also rising as a share of government spending; highlighting the importance placed on enhancing military capabilities.

A major driving factor in defense procurement plans has been the increase in operational activity by GCC militaries in places such as Iraq, Libya, Syria and Yemen. Such actions have led to an increase in spending on the development of expeditionary and intelligence gathering capabilities, as well as the bolstering of combat aircraft fleets.

Despite accounting for just 5% of global defense spending, the GCC is responsible for almost a quarter of all imports of defense equipment – importing assets worth approximately $56 billion between 2014 and 2018. North America and Europe provide about 95% of all equipment acquired by Gulf states. The US alone has accounted for about half of all exports to the GCC in the last five years. However, despite the prevalence of equipment from these sources, other suppliers – ranging from Australia to China and Turkey – are increasing their market presence. The downturn in oil prices in 2014 and 2015 made cost an important factor, while export controls from some key suppliers have prevented the transfer of desired equipment.

Both the UAE and Saudi Arabia aim to improve their own defense industrial bases to improve self-sufficiency and ensure the security of supply for their own militaries. They also intend to leverage this capability to boost exports of locally made defense equipment, with the UAE already exporting its Nimr protected vehicle to countries including Algeria and Turkmenistan. (Jane’s Defence Budgets 06.09)

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5.13 Bahrain Said to Raise $500 Million as it Awaits Support from Arabian Gulf Allies

Bahrain has raised $500 million from a private placement of bonds with five regional banks, giving the island kingdom much needed relief as it negotiates crucial financial support with its Arabian Gulf allies. The bonds were placed with Bank ABC, Emirates NBD, Kuwait Finance House, Noor Bank and Sharjah Islamic Bank.

A sell-off in emerging-market assets is prompting some countries to avoid the scrutiny of international bond investors, with cash-strapped Ukraine raising $725 million in Eurobonds from a private placement last month. For Bahrain, the funds also give officials time to agree on the details of the aid package with Saudi Arabia, the United Arab Emirates and Kuwait.

Bahrain’s economy, the smallest in the Gulf Cooperation Council, has been hit hard by the slump in oil prices in 2014. With rising public debt and low foreign-exchange reserves, investors say the kingdom needs support to avert a currency devaluation that could reverberate across the region. The talks are making progress on a multi-year program that would involve spending cuts and measures to increase non-oil revenue. The kingdom scrapped plans to tap the international bond market in March, opting instead to raise $1 billion in Islamic debt. The privately-placed notes were priced at 330 basis points above three-year midswaps. (AB 05.09)

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5.14 UAE to Introduce Retirement Visa for Expats & Takes Other Steps As Well

The UAE is to introduce a new five-year visa for expat retirees aged over 55 years, one of four significant decisions announced by the government on 17 September.

Retired expats aged over 55 can avail of the new visa once they fulfil one of three criteria: own a real estate investment of AED2 million, or has financial savings of not less than AED1 million, or has proof of income above AED20,000 per month. Chaired by Sheikh Mohammed, UAE prime minister, the cabinet adopted the plan to introduce the new visa from next year.

There was also good news for industries with a 29% reduction in electricity charges announced for large factories, with a 10% to 22% reduction on electricity charges for small and medium-sized factories. In addition, the council announced that there would be a waiving of the service connection fees for new factories. A new reduced tariff for electricity consumption for the industrial sector will be introduced in Q4/18. The cabinet also approved the launch of the ‘one-day court’ system to contribute to speeding up of rulings in minor criminal offences.

The cabinet also adopted the unified national standards for public and private hospitals, which provide guidelines for health care professionals and hospital design, as well as other standards for medicines, patients’ rights, and patients’ families. (AB 16.09)

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5.15 Saudi Private Sector Growth ‘Weakest On Record’ So Far in 2018

Growth in Saudi Arabia’ non-oil private sector has slowed to its lowest rate on record so far in 2018, according to the latest Emirates NBD Purchasing Managers’ Index (PMI). While the growth of the private sector rose in the last three months compared to the first five months of 2018, it is the slowest on record for the first eight months of any year since the survey started. The survey, which is sponsored by Emirates NBD and produced by IHS Markit, contains data collected from a monthly survey of business conditions in the country’s private sector.

The kingdom’s headline PMI rose to 55.1 in August from 54.9 in July on stronger output and new orders, but the rate of growth for January through August this year is weaker when compared to the same period in 2017. Employment growth in Saudi Arabia was also the slowest in three months, with average selling prices falling for the second month in a row as companies offered promotions to stimulate demand. Export orders increased only marginally in August, with some companies noting that domestic demand was supported largely by promotional activity. This is further reflected in the output price index, which revealed a drop in average selling prices for the second month in a row in August, despite higher input costs. While 17% of firms surveyed were optimistic about their future output, expecting it to rise in 2019, the percentage is slightly lower than in July. (AB 05.09)

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►►North Africa

5.16 Egypt’s Headline and Core Inflation Rise in August

Egypt’s annual urban consumer inflation, or headline inflation, rose to 14.2% in August from 13.5% in July, statistics agency CAPMAS said on 10 September, as subsidy cuts continued to take a toll on the economy. Headline inflation had jumped in June to reach 14.4% due in part to price hikes to energy and transport, before dropping back in July. Egypt’s core inflation edged up to 8.83% year-on-year in August from 8.54% in July, the Central Bank of Egypt (CBE) said. This is the second month in a row that the core inflation stands at single digits since the economic reform was initiated.

The slight rebound in August was due to the direct or indirect impact of subsidy cuts and was broadly in line with expectations. It reinforced expectations that the Central Bank of Egypt would keep interest rates steady.

Egypt’s inflation surged in 2017 on the back of economic reforms tied to a $12 billion International Monetary Fund (IMF) loan program signed in 2016, though prices eased earlier this year. The reform program that Egypt signed with the IMF includes deep cuts to energy subsidies and tax hikes. Prices had also been lifted by the import-dependent country floating its pound currency in November 2016, with inflation hitting a high of 33% in July 2017.

The major difference between headline and core inflation is that the latter excludes components in the headline inflation that exhibit high volatility from month to month such as food and energy products whose prices can be easily affected by external factors outside the economy. (Ahram Online 10.09)

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5.17 Al-Sisi Approves Changes to Egypt’s Customs Laws

On 11 September, President Abdel Fattah Al-Sisi approved changes to customs duties on a variety of items. The new changes included setting a 20% tariff on all imports by hotels and tourism businesses, in addition to tariff increases between 5 to 40% on several other items, while import duties rose to 60% from 20%. Some of the most prominent changes where the 35% reduction in customs on natural gas vehicles, in addition to the reduction on Hybrid vehicles, using both electric and gasoline engines, down to 30% to encourage the use of gasoline as an alternative, while fully electric vehicles are to be exempted. Moreover, the amendments included imposing a 10% duty on all items that were sent abroad for maintenance and repairs and were re-imported back into Egypt.

Additionally, 2% customs is to be applied on the raw materials and accessories required for the production of infant formula. Furthermore, clothes, electronics, pet foods, and some other food items are also getting increasingly more expensive as tariffs on them rose to 40%.

On the other hand, there is to be a 110% reduction in the inbound tax for products that contain 30 to 40% with domestic components, while the discount rate will be 115% for products with 40 to 60% with domestic content, and 120% for over 60% local parts between of 30 to 40%, and the tax rate will be reduced by 115% if the rate of domestic manufacturing is more than 40% and over 60%. (EN 11.09)

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5.18 US to Release $1.2 Billion in Military Aid to Egypt

US Secretary of State Mike Pompeo has authorized the release of $1.2 billion in U.S. military assistance to Egypt. On 7 September, the State Department said it is notifying Congress that Pompeo has signed national security waivers allowing the money known as foreign military financing, or FMF, to be spent. Congress has 15 days to weigh in on the waivers, which were signed on 21 August.

The money includes $1 billion for the current 2018 budget year and $195 million appropriated for 2017 that would have had to have been returned to the Treasury had it not been spent by 30 September. (AP 08.09)

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5.19 Egypt & US Sign $65 Million Grant for Infrastructure in Rural Areas

Egypt and the United States signed a $65 million grant to support infrastructure in the country. Egyptian Minister Nasr signed the agreement for the grant with Sherry Carlin, the USAID Mission Director in Egypt. Nasr said the agreement affirms the strategic relationship between Egypt and the US, as well as economic cooperation between the two countries.

She mentioned that the deal comes following orders by Egyptian President El-Sisi on meeting the needs of citizens through infrastructure development, where 1.1 million people in the most vulnerable part of Upper Egypt’s rural areas would benefit. The Upper Egypt governorates include Assiut, Sohag, Qena, Luxor, Aswan, Beni Suef, and Minya. The infrastructure upgrade will include water treatment, as well as adding sanitation lines in rural areas.

The USAID-funded Workforce Improvement and Skills Enhancement (WISE) is cooperating with the Ministry of Education and Technical Cooperation to launch a portal for technical education schools to facilitate people joining the labor market in various governorates. WISE is currently working in five governorates in collaboration with the private sector to determine the workforce needs, while preparing students to join the workforce, and connecting them with potential employers.

Since 2016, the USAID’s project to improve the skills and job-readiness of technical students has secured employment for nearly 7,000 and internships for over 5,350 students. More than 24,000 students have benefited from career guidance sessions and over 21,000 students received training in entrepreneurship. This project is part of the $30 billion that the America has invested in Egypt through USAID since 1978. (USAID 10.09)

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5.20 Egypt to Establish Seven Technology Innovation Hubs at Universities

Egypt’s Ministry of Communications and Information Technology it would establish seven technology innovation hubs at Egyptian universities in cooperation with the country’s Higher Education and Scientific Research Ministry. Minister of Communications and Information Technology Talaat stressed his ministry’s keenness on sponsoring talented youth and converting innovative ideas to products and services. This move comes within the framework of the ministry’s efforts to expand its development programs nationwide and promote innovation within Egyptian universities. (Ahram Online 08.09)

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5.21 Egypt’s Natural Gas Output Reaches 6.6 bcf/d

Egypt has boosted its natural gas output to record 6.6 billion cubic feet per day (bcf/d) upon the news that Eni had succeeded in boosting Zohr’s production to 2 bcf/d. Minister of Petroleum Tarek El Molla said that the increase was thanks to the efforts of all oil and gas employees and government workers. Zohr’s total natural gas in place is estimated at around 850 billion cubic meters, which may double the country’s total gas reserves.

Eni, which started production at the Zohr field in December 2017, announced that the field’s output is set to plateau at 2.7 bcf/d in 2019. Zohr’s production increased due to starting the fifth production unit (T4), which is supported by the eight gas producers as well as a new 218-km subsea pipeline. (Reuters 09.09)

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5.22 Egypt Invests EGP 77 Billion in Transportation Sector

Egyptian Minister of Planning Hala El-Saeed announced that the total investments directed to the transportation sector in the sustainable development plan amounted to EGP 77 billion in 2018-2019 fiscal year, compared to EGP 65.7 billion in the previous fiscal year which ended on 30 June 2018. The increase in investments directed toward this sector is due to its importance as a key player and main catalyst in the economic and social development of the country. Transportation networks such as railways, land routes and navigational channels are the lifelines of current economic and social activity that promote prosperity. The output of the transportation sector represents an important input in the production of many sectors, such as trade, manufacturing and extractive industries.

The plan aims to increase the growth rate of the transportation sector to 4.1% for fiscal year 2018-2019, compared to a growth rate of 3.2% in FY 2017-2018, and it is expected to increase to 7.5% by FY 2021-2022, as outlined in the statement. In addition, the plan targets the transportation sector to contribute to the economic growth by 3.6% in fiscal year 2018-2019 to 4.4% in 2020. The cost of implementing development measures for the sector in the Ministry of Transport and its affiliates amounts to about EGP 40.7 billion for fiscal year 2018-2019, with investments accounting for 58% of the cost. Reforms targeting the railway network constitute 33% of the total cost of the program, followed by the expansion of the underground metro which makes up 21% of the budget. (Ahram Online 06.09)

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5.23 Morocco Ranks 123rd in World Human Development Index

The United Nations Development Programme (UNDP) published its 2018 update on 14 September, presenting HDI values for 189 countries around the world, including 20 Arab countries, classified in four human development tiers. The UNDP’s statistics, which are based on 2017 data, showed that 59 countries ranked “very high” in human development, 53 “high,” 39 in “medium,” and 38 in “low.”

Morocco ranked “medium” in human development group with an HDI of 0.667 out of 1 (0.598 for women and 0.713 for men) after Egypt (ranked 115), the PA (ranked 119) and Iraq (ranked 120). Algeria ranked 85th with “high” levels of human development with an HDI of 0.754. Lebanon (80); Tunisia (95); Jordan (95); and, despite its conflict, Libya (105) also ranked “high.” However, Morocco’s HDI increased from 0.458 in 1990 to 0.667 in 2017, with an average annual HDI growth of 1.13% between 2010 and 2017—a rate much higher than the average in Arab states (0.51).

Morocco’s life expectancy at birth was 76.1 years (77.2 for women and 74.9 for men), higher than the average index in Arab states (71.5) and in Europe and Central Asia (73.4). Life expectancy at birth in countries with “very high” human development was 79.5 years. The average number of years of schooling held by people aged 25 and older in Morocco was 5.5 years (4.5 for women and 6.5 for men). The number was less than the average in Arab countries (7 years) and slightly more than the average country with “low” human development (4.7).

Gross national income (GNI) per capita, which also impacted the HDI in Morocco, was $7,340 per year. Women’s GNI per capita in Morocco is very low at $3,197 per year compared to men’s at $11,561. Morocco’s GNI per capita is lower than the average in Egypt ($10,355), Tunisia ($10,275) and Libya ($11,100). (UNDP 17.09)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkey’s Budget Sees $11.4 Billion Deficit in First Eight Months of 2018

Turkey’s central government budget balance posted a deficit of TL 50.8 billion ($11.4 billion) from January to August, the Treasury and Finance Ministry announced. This was a 102% year-on-year increase in budget gap. The country’s budget revenues totaled TL 485.7 billion ($109 billion) in the first eight months of this year, up nearly 19% year-on-year, data showed. During the same period, budget expenditures rose 23.7% to TL 536.5 billion ($120.6 billion) – marking a TL 50.8 billion ($11.4 billion) deficit.

The budget balance, excluding interest payments, saw a deficit of TL 559.4 million ($125.7 million) from January to August. Official figures showed that tax revenues rose 19.4% to reach TL 410.1 billion ($92.2 billion), while interest payments were TL 50.2 billion ($11.3 billion) over the same period.

In August, the budget balance also saw a deficit of TL 5.8 billion ($976 million). Last month Turkey’s budget revenues totaled to TL 70.3 billion ($11.8 billion), up 23.3% on a yearly basis, according to official data. Budget expenditures in August were TL 76.1 billion ($12.8 billion), a rise of around 32% annually. Excluding interest payments, the central government budget balance saw a surplus of TL 2.5 billion ($412 million) last month. The average U.S. dollar/Turkish Lira exchange rate in August was 5.94, while one dollar was trading for TL 4.46 on average in the first eight months of this year. (AA 17.09)

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6.2 Egypt & Cyprus Sign Agreement to Construct Gas Pipeline Worth $800 Million

Egypt and Cyprus signed an agreement on 19 September to construct a direct marine pipeline to transfer natural gas from the Cypriot Aphrodite field to Egypt and then to be re-exported to different markets, statement by the Egyptian petroleum ministry read. In May, it was estimated that the planned pipeline connecting Cyprus’ Aphrodite gas field to Egypt’s liquefied natural gas (LNG) facilities will cost around $800 million. Egypt considers this agreement to be among the main foundations in supporting the economic relations between the two countries and is an important step in maximizing the benefit of the discoveries of the Cypriot gas fields. The new deal will encourage further research exploration activities in the region and will contribute to further support joint cooperation in the field of gas and oil between the two countries. (Various 19.09)

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6.3 Cyprus Inflation Reaches 2.5% in August 2018

Inflation is on the rise in Cyprus amid hikes in fuel prices with the annual rate reaching 2.5% last month, almost 1% compared to last year until August. According to government figures, inflation from January to August in 2018 rose 0.9% compared to the same period in the previous year. In August 2018, the Consumer Price Index went up by 0.66 to reach 100.98 units, compared to 100.32 in the previous month.

Authorities have being on the receiving end of criticism for failing to act in shifting energy solutions towards clean energy. Last month’s biggest fluctuations compared to August 2017 were recorded in Electricity and Petroleum products with increases of 13.1% and 12.9% respectively. Both domains have drawn interest in the media recently, with authorities being on the receiving end of criticism for failing to act in shifting energy solutions towards clean energy.

Cyprus had the highest increase in household electricity prices in national currency between the first half of 2016 and the first half of 2017. Agricultural products also registered a 6.6% price increase compared to July 2018. (CyStat 06.09)

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6.4 Cyprus’ Economy Expands by 3.9% in Second Quarter

The economy expanded in the second quarter of this year 3.9% compared to the same period of 2017, Cystat said on 10 September. Compared to the first quarter, economic output rose in April to June 0.8% in real terms. The seasonally adjusted growth rate in the second quarter was also 3.9%. The increased economic output resulted from a better performance of the hospitality sector, retail and wholesale trade, construction, manufacturing, professional, scientific and technical activities and administrative and support service activities. The impact of the financial and insurance service sector on growth was negative. (Cystat 10.09)

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6.5 Cyprus’ Trade Deficit Shrinks by 6.5% in First Seven Months on Export Surge

Cyprus’s trade deficit shrank by 6.5% in the first seven months, to €2.4b, mainly on a strong increase in exports which outstripped imports, the statistical service Cystat said. Total exports rose 54%, to €2.8b, year compared with the respective period last year. Total imports rose 18%, to €5.2b. The value of exports and imports excluding ships and aircraft was €1.7b and €3b respectively in the first seven months of 2018, compared to €1.3b and €3.6b the previous year. Exports to and imports from other European Union members rose in January to July an annual 7.4% and 8.6% to €715.4m and €3.1b respectively. Those from third countries rose 81%, to €916.8m, and €552.8m. (CyStat 12.09)

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6.6 Cypriot Tourism Revenue Up During First Six Months of 2018

The Cyprus Tourism Organisation (CTO) announced revenue from tourism in Cyprus was up by 4% or €38.5 million on an annual basis in the first half of this year compared with the first six months of 2017, despite a drop in the per capita expenditure of tourists, while in June alone revenue was up by 3%. CTO also stressed the need to “decisively deal” with challenges which have an impact in the experience offered to tourists in Cyprus such as noise pollution, lack of taste in presentation, illegal alterations in facades of buildings, tasteless signs, touting problems, profiteering, and matters pertaining to cleanliness and orderliness.

On the basis of the findings of the Passenger Survey, revenue from tourism in June 2018 was €357.7 million compared to €347.2 million in June last year recording an increase of 3%. For the period of January – June 2018 revenue from tourism is estimated to be €1,034.9 million compared to €996.4 million at the same period of last year, recording an increase of 3.9%. The per capita expenditure of tourists in June 2018 came to €699.88 compared to €734.89 in June 2017, recording a drop of 4.8%.

The per capita expenditure of tourists in the first six months of 2018 reached €629.04 compared to €680.95 at the same period of last year, recording a drop of 7.6%. The per capita / per day expenditure of tourists for the first half of this year recorded a drop of 4.4% down from €75.66 in the first six months of last year to €72.30. According to the CTO the accommodation and catering services index has also recorded an increase of 10.5% in the first half of 2018 compared with the same period of 2017. (CAN 07.09)

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6.7 Cyprus the 7th Most Visited Country Per Capita

With three visitors per inhabitant, Cyprus is among the most visited countries in the world, a new study by online magazine TravelMag has found. Numbers for visitor arrivals used for the survey were taken from a report released by the United Nations World Tourism Organisation (UNWTO). With 6,600 visitors per 1,000 residents arriving in Iceland each year, that country emerged on top. Malta was in second place with 5,300 visitors, while the Bahamas completed the top three spots with 3,800 visitors. Cyprus is number seven, with 3,000 tourists for every 1,000 residents. It is higher ranked than Greece which had 2,400 and is in 11th place.

In absolute numbers, France was the top destination worldwide, with 86.9 million visitors, followed by Spain (81.8 million). The UK has seen a big increase in tourism thanks to the pound sterling’s drop in value after Brexit, but still only sees 569 visitors per 1,000 inhabitants. At the other end of the spectrum Somalia, Yemen and Libya are the least visited counties, with less than one visitor per 1,000 residents. China is the top spender, followed by the USA and Germany. (CM 19.09)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Israel’s Population More Than 8.9 Million on Eve of Jewish New Year 5779

The Central Bureau of Statistics announced on the eve of Jewish New Year 5779 that Israel’s population has passed 8.9 million people. In addition, there are an estimated 166,000 foreign non-residents living in Israel. The population has grown by 1.9% or 162,000 over the past year to 8,907,000. Over the year, 175,000 babies were born, 29,000 people immigrated to Israel and 43,000 people died.

The Central Bureau of Statistics projects that Israel’s population will reach 10 million by 2024, 15 million by 2048 and 20 million by 2065. Some 6,625,000 Israelis are Jewish (74.4%), 1,864,000 are Arabs (20.9%), while 418,000 (4.7%) belong other religions and communities. (CBS 06.09)

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7.2 Sukkot Holiday Celebrated

The Jewish festival of Sukkot begins at sunset on Sunday, 23 September until nightfall on 30 September (in Israel). The festival ends on day later outside of Israel. The holiday begins on the Hebrew date of 15 Tishrei, the fifth day after Yom Kippur. The word “Sukkot” means “booths” and refers to the temporary dwellings that Jews are commanded to live in during this holiday. The commandment to “dwell” in a sukkah can be fulfilled by simply eating all of one’s meals there or by actually living in the sukkah as much as possible, including sleeping in it. The holiday commemorates the forty-year period during which the children of Israel were wandering in the desert, living in temporary shelters. There are intermediate days during the week, which begins and ends with a holiday, referred to as Chol Ha-Mo’ed.

Another observance related to Sukkot involves what are known as the Four Species (arba minim in Hebrew) or the lulav and etrog. Jews are commanded to take these four plants and use them to “rejoice before the L-rd.” The four species in question are an etrog (a citrus fruit native to Israel), a palm branch (in Hebrew, lulav), two willow branches (arava) and three myrtle branches (hadas). The six branches are bound together and referred to collectively as the lulav. The etrog is held separately. With these four species in hand, one recites a blessing and waves the species in all six directions (east, south, west, north, up and down, symbolizing the fact that G-d is everywhere).

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7.3 Shemini Atzeret/ Simchat Torah Celebrated

On 30 September 1 October, or 22 Tishri, the day after the seventh day of Sukkot, is the holiday Shemini Atzeret. In Israel, Shemini Atzeret is also the holiday of Simchat Torah. Outside of Israel, where extra days of holidays are held, only the second day of Shemini Atzeret is Simchat Torah.

These two holidays are commonly thought of as part of Sukkot, but that is technically incorrect; Shemini Atzeret is a holiday in its own right and does not involve some of the special observances of Sukkot. Shemini Atzeret literally means “the assembly of the eighth (day).” Rabbinic literature explains the holiday this way: our Creator is like a host, who invites us as visitors for a limited time, but when the time comes for us to leave, He has enjoyed himself so much that He asks us to stay another day. Another related explanation: Sukkot is a holiday intended for all of mankind, but when Sukkot is over, the Creator invites the Jewish people to stay for an extra day, for a more intimate celebration.

Simchat Torah means “Rejoicing in the Torah.” This holiday marks the completion of the annual cycle of weekly Torah readings. Each week in synagogue we publicly read a few chapters from the Torah, starting with Genesis Ch. 1 and working around to Deuteronomy 34. On Simchat Torah, the last Torah portion is read, then proceeds immediately to the first chapter of Genesis, reminding us that the Torah is a circle, and never ends.

This completion of the readings is a time of great celebration. There are processions around the synagogue carrying Torah scrolls and plenty of high-spirited singing and dancing in the synagogue with the torahs. As many people as possible are given the honor of an aliyah (reciting a blessing over the Torah reading); in fact, even children are called for an aliyah blessing on Simchat Torah. In addition, as many people as possible are given the honor of carrying a Torah scroll in these processions. Shemini Atzeret and Simchat Torah are holidays on which work is not permitted.

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*REGIONAL:

7.4 World Bank Report: Lebanon Education Public Expenditure Review 2017

According to the World Bank’s Lebanon Education Public Expenditure Review 2017, Lebanon enjoys high literacy rates (98%) and enrollment with minimal to no gender discrimination. Moreover, the net enrollment rate (NER) for primary education has been constant throughout 2006-13; however, NER for secondary education is of serious concern. Since 2006, the primary NERs have also gone up from 88.4% to 93.2% in 2012. The NER in secondary education, however, is a concern because it declined from 68.7% in 2007 to 67.5% in 2012. (WB 09.09)

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7.5 Illiteracy Rate in Jordan Stood at 5.2% in 2017

Illiteracy rate in Jordan stood at 5.2% in 2017, Education Minister Azmi Mahafzah said on 8 September, citing official figures from the Department of Statistics. Mahafzah noted that the ministry opened 139 centers for the eradication of illiteracy in 2017, of which 119 were for women and 20 for men. He added that these centers attracted 1,517 women and 306 men. The ministry, in cooperation with UNICEF, implements a cognitive program for the children aged 9 to 12 who did not have the opportunity to join regular education, noting that the program was launched in 2017 through 110 centers and attracted 3,538 students. (JT 08.09)

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7.6 UAE Judo Contest Back on After it Lifts Ban on Israeli Flag

A judo competition set to be held in the United Arab Emirates was reinstated recently after the Gulf country agreed to allow the Israeli judo team to display its flag and for its competitors to sing the national anthem. Set to take place between 25 – 27 October, the Abu Dhabi Grand Slam was suspended in July after the International Judo Federation (IJF) announced that both the UAE and Tunisia would be barred from hosting international tournaments if they could not guarantee equal treatment for Israeli competitors. During last year’s competition in Abu Dhabi, Israeli athletes were not allowed to display Israeli symbols, and competed under the IJF flag. Gulf countries have long refused to recognize Israel, but in recent years there have been signs of quiet rapprochement, particularly since President Trump took office. (Various 06.09)

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7.7 English Language to be Taught in Egyptian Kindergartens for the First Time

Minister of Education Tarek Shawky recently stated that the English language will be taught in kindergarten for the first time in Egypt. The English language will be taught as a separate subject from other subjects like science and mathematics, as kindergarten in all of Egypt’s public schools use Arabic as the primary language in teaching. Shawky said that the aim of the new education system is to ensure that the students master the Arabic language well and to acquire the basics of the English language before studying science and mathematics in English in the first year of elementary school. A third language will also be introduced beginning from the first year of elementary education.

The new curriculums are based on four standards: teaching the child who they are, learning about the world around them and how the world works along with developing methods of communication and respect for others. The Ministry of Education has already completed developing the new curriculum for kindergarten and the updated books, which are completely owned by the ministry, are ready to be distributed.

Since the new education system also incorporates technology, the Ministry of Education cooperated with the Ministry of Communications to deliver internet access to 2180 schools out of a target of 2382 schools. The Ministry of Education is also preparing to receive over one million tablets from Samsung for the new academic year to replace the old system with new digital devices. (Various 11.09)

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7.8 Morocco Introduces Law to Combat Violence Against Women

A law to combat violence against women in Morocco entered into force 12 September, following years of heated debate and after thousands called for action in a recent gang-rape case. For the first time women in Morocco have legal protection from “acts considered forms of harassment, aggression, sexual exploitation or ill treatment”. The new law also paves the way for victims of violence to be offered support. The law drafted five years ago, was adopted by parliament this February, following lengthy debate. But the law has been deemed inadequate by some, with the former women’s minister Nouzha Skalli arguing it fails to take into account “international definitions” of violence against women. She has highlighted the example of marital rape, which is not criminalized under the new legislation.

Activists criticized the new law as it fails to protect women from forced marriages, according to the advocacy group Girls Not Brides, 16% of girls are married before the age of 18 in Morocco, where they are allowed to wed with judicial consent. Morocco only overhauled a law that let rapists escape punishment if they married their victims in 2017. The change followed the suicide of a 16-year-old girl who was forced to marry her rapist.

In Morocco, media and rights groups regularly raise the alarm about endemic violence against women. More than 40% of women said they had been “victims of an act of violence at least once”, abuse came in form of physical, psychological, sexual or economic, in a survey carried out by Morocco’s High Commission for Planning which surveyed those living in towns and aged between 18 and 64. (AFP 13.09)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Leviticus Cardio Successfully Completes Third Chronic Animal Study

Leviticus Cardio, inventors of the versatile transcutaneous Coplanar Energy Transfer (CET) system for use with implanted left ventricular assist devices (LVADs), announces the successful completion of a 90-day preclinical chronic animal study to evaluate its CET technology in combination with a commercial heart pump. The trial was conducted at a renowned animal facility operated by the Catholic University of Leuven, in Belgium. This study marked the third successful trial of the Leviticus CET used in conjunction with a commercial heart pump. This important achievement paves the way for first in human (FIH), expected in a matter of months.

The successful completion of this third long-term chronic trial utilizing the Jarvik 2000 LVAD pump coupled with the Leviticus wireless CET system, demonstrates the desired versatility that addresses an increasing patient population suffering from advanced heart failure. Besides the stability of the system, the excellent outcomes on chronic animal tissue interactions are particularly notable.

Founded in 2008, Petah Tikva’s Leviticus Cardio is a medical device company dedicated to improving the clinical outcome for patients with an implanted left ventricular assist device (LVAD) for the treatment of impaired cardiac function. The Company has received funding from The Trendlines Group, Israel’s foremost seed- and early-stage investment group, a consortium of acclaimed cardiovascular physicians, private investors and Israel’s Innovation Authority (previously, the Office of the Chief Scientist of the Ministry of Economy). (Leviticus Cardio 06.09)

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8.2 Nucleix’ Positive Clinical Results for Lung EpiCheck in Lung Cancer Early Detection

Nucleix announced positive results from a clinical study designed to evaluate its innovative Lung EpiCheck, a blood test for early detection of lung cancer. The results will be presented at the IASLC 19th World Conference on Lung Cancer in Toronto, Ontario.

In the study, blood was prospectively collected from 20 centers and 3 biobanks in Europe and Israel. The samples were used for detection of lung cancer with the Lung EpiCheck blood test. Lung EpiCheck was validated on this independent test set comprising 181 lung cancer cases and 141 current or former smoker controls. Results show specificity of 91% and a sensitivity of 74% with an Area Under the Curve (AUC) of 89%. These results demonstrated similar performance to the preceding training set results from 102 lung cancer cases and 265 current or former smoker controls.

In particular, in the non-small-cell lung carcinoma group (n=162), the most prevalent type of lung cancer affecting about 85% of lung cancer patients, Lung EpiCheck was able to identify correctly approximately 70% of patients. With a correct identification of 59% of stage I patients, 77% of stage II, 76% of stage III and 83% of stage IV patients. In the small cell lung cancer group (n=13), Lung EpiCheck was able to identify correctly 92% of the patients, with a sensitivity of 100% in the limited stage, and 86% at the extensive stage.

Rehovot’s Nucleix develops, manufactures and markets innovative, non-invasive, molecular cancer diagnostic tests. Its highly sensitive and specific tests are based on identification of subtle changes in methylation patterns. Nucleix’s technology is based on a combination of a new biochemical assay in conjunction with sophisticated algorithms. (Nucleix 06.09)

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8.3 Carevature Medical’s Dreal Decompression System is Safer for Patients

According to a recent article in the International Journal of Spine Surgery, advanced decompression innovator Carevature’s Dreal device yields significantly better results in incidental dural tears, with 87% improvement compared to high-speed drills and Kerrison Rongeurs (0.4% vs. 2.91%; p<0.01); and 80% improvement compared to ultrasonic bone cutters (0.4% vs. 1.95%; p<0.01). This data demonstrates the Dreal’s marked advantages in reducing natural risk of neural element injury. The results are attributed to the device’s unique curved and shielded tip design, which requires only a very limited number of passes to remove the target pathology.

Rehovot’s Carevature Medical, a privately-held medical device company, is dedicated to developing advanced orthopedic surgery solutions. Carevature is currently marketing its flagship line of products for spinal indications, Dreal: the first and only curved device powerful enough to efficiently cut bone, and small enough for use in all sections of the spine. Over 800 patients worldwide have been treated with the Dreal, with outstanding safety and recovery results. (Carevature 05.09)

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8.4 Cannabics Pharmaceuticals Granted Patent in Israel for Its Core Technology

Cannabics Pharmaceuticals has been granted its patent for its core technology by the Israeli Patent Office. This patent encompasses the systems and methods required to produce data on the interaction between different cannabinoids and cancer cells. This technology enables screening the effects of a multitude of compounds derived from the cannabis plant on cancer cell lines and biopsies. This technology will facilitate the development of more accurate cannabinoid compounds designated for specific cancers and specific genetic profile of patients, at the same time serving as supportive data for cannabinoid-based treatments.

The company has recently upgraded its R&D lab to further develop the technology imbedded in this patent and to pave the way for a better understanding of the biological relations between cannabinoids and cancer, and has created a vast library of cannabinoid compounds which constitutes thousands of samples, all being tested as treatments on dozens of types of cancers in an automated fashion.

Cannabics Pharmaceuticals is a United States public company that has developed a platform which leverages novel drug-screening tools and artificial intelligence to develop cannabinoid-based therapies for cancer that are more precise to a patient’s genetic profile. By developing tools to assess effectiveness on a personalized basis, Cannabics is helping to move medical cannabinoids into the future of cancer therapy. The company’s R&D is based in Tel Aviv, where it is licensed by the Ministry of Health to conduct scientific and clinical research on cannabinoid formulations and Cancer. (Cannabics Pharmaceuticals 05.09)

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8.5 Hebrew University Research Team Paves Way to Cure for Acute Leukemia

Acute myeloid leukemia is one of the most aggressive cancers. While other cancers have benefitted from new treatments, there has been no encouraging news for most leukemia patients for the past 40 years. Until now. A research team at the Hebrew University of Jerusalem (HU)’s Faculty of Medicine have developed a new biological drug with a cure rate of 50% for lab mice with acute leukemia.

To date, most of the biological cancer drugs used to treat leukemia target only individual leukemic cell proteins. However, during “targeted therapy” treatments, leukemic cells quickly activate their other proteins to block the drug. The result is drug-resistant leukemic cells which quickly regrow and renew the disease. However, the new drug developed by the team functions like a cluster bomb. It attacks several leukemic proteins at once, making it difficult for the leukemia cells to activate other proteins that can evade the therapy. Further, this single molecule drug accomplishes the work of three or four separate drugs, reducing cancer patients need to be exposed to several therapies and to deal with their often unbearable side-effects. Additionally promising, is the new drug’s ability to eradicate leukemia stem cells. This has long been the big challenge in cancer therapy and one of the main reasons that scientists have been unable to cure acute leukemia.

BioTheryX recently bought the rights to this promising drug from HU’s technology transfer company Yissum. Together with the research team, they are now applying for FDA approval for phase I clinical studies. (MFA 24.08)

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8.6 Alpha Tau Medical Raises $29 Million for Cancer Therapy

Alpha Tau Medical has secured $29 million in private financing. The funding round was led by Shavit Capital, an Israeli private equity firm that specializes in funding late-stage investments, with participation from leading global equity crowdfunding platform OurCrowd, and Medison Ventures, the venture capital arm of Medison Pharma. Additional private investors included Sir Ronald Cohen and Alan Patricof, the founders of Apax Partners.

The company is engaged in a number of clinical trials worldwide to determine whether the treatment would be effective for different cancers including pancreatic cancer, breast cancer, and prostate cancer. The new round of funding will be invaluable to explore the full potential of the Alpha DaRT as a cancer treatment for clinical trials worldwide, as well as establish global production facilities for the radioactive DaRT seeds to meet local distribution demand.

Founded in 2016, Tel Aviv’s Alpha Tau Medical is focusing on R&D and commercialization of its breakthrough cancer treatment, Alpha DaRT. Originally invented in 2003 at Tel Aviv University, the company collaborates with key cancer physicians and researchers worldwide to investigate the Alpha DaRT as a treatment for various indications. (Alpha Tau Medical 05.09)

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8.7 XACT Robotics Receives CE Mark for Its Robotics Navigation System

XACT Robotics announced that it has received CE Mark approval for its robotics navigation and steering system for image-guided percutaneous procedures, such as ablations and biopsies. The Company also announced that it has raised $5 million in round C investment. The funds will mainly be used for the launch and operation of seven Centers of Excellence in the US, Europe and Israel, where the Company expects that hundreds of clinical procedures will be conducted within the next 12 months with the XACT robotic navigation and steering system. The first Center of Excellence has already been launched earlier this year at the Hadassah Medical Center in Jerusalem, Israel, where the first cases were successfully completed as part of a clinical trial in a study using XACT’s novel system to target lesions.

The XACT robotics system is currently approved and being used for CT-guided percutaneous procedures in the abdomen. Later this year, the system’s application is expected to be expanded for use in additional clinical centers and with other imaging modalities, such as Cone-Beam CT and Fluoroscopy, and for additional indications, including spinal and lung procedures.

Founded in 2013, Caesarea’s XACT Robotics is a pioneer in robotic navigation and steering solutions for percutaneous image-guided procedures. The XACT image guided robotic navigation and steering system accurately and systematically accesses any target anywhere in the body, in any clinical setting, and with all imaging modalities. (XACT Robotics 13.09)

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8.8 Sheba Medical Bolsters Patient Safety Practices with MedAware’s Medication Safety Platform

MedAware announced the results of the implementation of its flagship medication safety platform at Sheba Medical Center. In stark contrast to traditional rules-based approaches, MedAware leverages big data analytics and machine learning algorithms to flag potential dangerous medication outliers to the learned profiles of the patient, physician, or institution, with high accuracy and low alert fatigue.

On average, MedAware flags one warning, per department, per day, for a total of approximately 50 unique interventions at the hospital daily. Due to the low alert burden and high accuracy of these clinical interventions, Sheba’s providers always pay attention to MedAware’s warnings, and as a result, typically choose to revise their prescriptions when they are notified of such risks. This has resulted in unprecedentedly high physician acceptance rates, safer patient care, and improved clinical outcomes.

MedAware’s systematic and data-driven approach protects physicians and their patients both at the point of order entry and throughout the duration of treatment. In Sheba’s initial results with MedAware, 39% of potentially dangerous medications were flagged by the software during the medication ordering process, while 61% were generated later, following a change in the patient’s clinical status that rendered one of the active medications as unsafe. In the majority of these cases, physicians adjusted the prescription as a result of MedAware’s warning.

Ra’anana’s MedAware is transforming patient safety through AI-empowered clinical decision support solutions. By continuously mining data gathered from electronic health records and prescription drug claims, MedAware’s flagship solution accurately detects potentially dangerous medications that are in conflict with the profiles of the patient, physician or institution. The company’s unique, real-time approach warns providers against point of order entry errors and evolving adverse drug events, identifies patient specific risk factors, such as opioid dependency and highlights gaps in care. MedAware’s system improves patient safety and significantly reduces avoidable risks and costs each day. (MedAware 12.09)

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8.9 Teva Announces U.S. Approval of AJOVYTM Injection for Anti-CGRP Treatment

Teva Pharmaceutical Industries announced that the U.S. FDA has approved AJOVYTM (fremanezumab-vfrm) injection for the preventive treatment of migraine in adults. AJOVY, a humanized monoclonal antibody that binds to calcitonin gene-related peptide (CGRP) ligand and blocks its binding to the receptor, is the first and only anti-CGRP treatment for the prevention of migraine with quarterly (675 mg) and monthly (225 mg) dosing options. AJOVY was evaluated in two Phase III, placebo-controlled clinical trials that enrolled patients with disabling migraine and was studied as both a stand-alone preventive treatment and in combination with oral preventive treatments. In these trials, patients experienced a reduction in monthly migraine days during a 12-week period. The most common adverse reactions were injection site reactions.

AJOVY is indicated for the preventive treatment of migraine in adults. AJOVY is available as a 225 mg/1.5mL single dose injection in a prefilled syringe with two dosing options – 225 mg monthly administered as one subcutaneous injection, or 675 mg every three months (quarterly), administered as three subcutaneous injections. AJOVY can be administered in office by a healthcare professional or at home by a patient or caregiver. No starting dose is required to begin treatment.

Headquartered in Israel, Teva Pharmaceutical Industries is a global leader in generic medicines, with innovative treatments in select areas, including CNS, pain and respiratory. Teva delivers high-quality generic products and medicines in nearly every therapeutic area to address unmet patient needs. Teva has an established presence in generics, specialty, OTC and API, building on more than a century-old legacy, with a fully integrated R&D function, strong operational base and global infrastructure and scale. (Teva 15.09)

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8.10 Cannabics Receives Positive Results in Cannabinoid-anticancer Drug Development

Cannabics Pharmaceuticals has received encouraging results in its preclinical study showing one of its proprietary cannabinoid compounds causing higher rate of cancer cell death compared to traditional chemotherapy. Cannabics is rapidly expanding its database of cancer and cannabinoids and established a library of cannabinoid compounds to explore the biological versatility and entourage effect. Recently the company has been granted a patent in Israel on its core technology of screening the effectiveness of cannabis compounds on human biopsies. The research and development center, in Israel, has leveraged its capabilities and accomplished the implementation of the patented technology. Cannabics is focusing on natural cannabinoids and its R&D open its doors for collaboration in the discovery of new anticancer compounds.

Cannabics Pharmaceuticals is a U.S public company that has developed a platform which leverages novel drug-screening tools and artificial intelligence to develop cannabinoid-based therapies for cancer that are more precise to a patient’s genetic profile. By developing tools to assess effectiveness on a personalized basis, Cannabics is helping to move cannabinoids into the future of cancer therapy. The company’s R&D is based in Israel, where it is licensed by the Ministry of Health to conduct scientific and clinical research on cannabinoid formulations and Cancer. (Cannabics Pharmaceuticals 14.09)

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8.11 Anlit’s Technology Ensures Long-life Probiotics in a Flavorful Chewy Supplement

Anlit launched ProBites LLP, a long-life probiotic chew supplement line in a variety of flavors. Anlit will present the new supplement alongside other functional gummies and chews at the Convention on Pharmaceutical Ingredients (CPhI) in October in Madrid.

The inherent sensitivity of probiotics raises two key challenges of maintaining stability and extending shelf life in the development of an effective supplement. Until recently, solutions have been limited. Anlit developed an innovative technology it calls ‘ProBites LLP, Long-Life Probiotic’ – that allows for the high stability of live bacteria in ambient conditions, to be incorporated into a flavorful format for the whole family and is easy to enjoy whether at home or on-the-go. Anlit’s R&D team characterized all the factors that could negatively impact the stability of live bacteria in a food matrix, including moisture, and others. The team isolated each potential barrier and crafted a specific solution to overcome them. The result addresses these issues with the comprehensive solution of the new ProBites LLP, while maintaining great flavor and optimum functionality of the probiotic. The new technology is an excellent carrier of a variety of probiotic strains.

Granot’s Anlit, a subsidiary of Maabarot Products, Israel – a public company traded on the TASE — is an innovative developer and manufacturer of a broad range of dietary supplements for children and adults. Anlit products are gluten-free and nut-free. All products are GMP, FSSC, ISO 9001:2000 and HACCP compliant, as well as kosher and halal certified. (Anlit 17.09)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Fleetonomy Launches AI-Based Next Generation Fleet Management Platform

Fleetonomy has secured $3 million led by Vertex Ventures, followed by Kardan Ventures and VectoIQ in seed funding to expand their technology development. Fleetonomy’s platform is already deployed with top-tier automakers, car rental companies and other fleet operators, helping them reduce operational costs, optimize fleet operations, and create new revenue streams through its automated, end-to-end fleet management solution.

Fleetonomy’s Fleet Management platform blends machine learning, advanced algorithms and AI to analyze key data and provide implementable insights that assist fleet operators with making strategic decisions to maximize inventory management, maintenance, and customer preferences. Fleetonomy is currently deployed in the US, UK and Germany, and is planning to expand to additional markets in the coming year.

Tel Aviv’s Fleetonomy provides a cloud-based, end-to-end fleet management solution for automakers, car rental companies, and smart mobility operators designed to maximize fleet operation efficiency, reduce operational costs, and create new revenue streams based on new smart mobility services. Combining AI, machine learning, and big data algorithms, Fleetonomy’s platform provides actionable insights that help fleet owners make better day-to-day decisions regarding inventory management, meeting customer preferences, maintenance and more. The Fleetonomy platform serves as the bridge to manage a variety of fleets including both autonomous and non-autonomous vehicles. (Fleetonomy 05.09)

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9.2 SecBI Partners With Intelligent Wave to Bring Autonomous Investigation Technology to Japan

SecBI announced a partnership with Tokyo-based reseller Intelligent Wave Inc. (IWI) to offer SecBI’s Autonomous Investigation technology to organizations and enterprises throughout Japan. The collaboration answers the need for enterprises to uncover malicious communications within minutes, even for the most sophisticated and stealthy attacks. SecBI’s Autonomous Investigation technology is based on unsupervised machine learning that analyzes network traffic to automate the detection and investigation of complex and stealthy cybersecurity threats without the need to deploy additional sensors. Its ability to instantly discover and map out the full scope of an attack accelerates and optimizes response and mitigation. Security analysts are presented with complete attack narratives including actionable information, giving them visibility of all users, devices and infection points involved in an attack, with a clear path for remediation.

Tel Aviv’s SecBI has developed a revolutionary approach to network traffic analysis (NTA) to deliver automated threat detection and investigation for security operations centers (SOCs) and managed security service providers (MSSPs). Their value is best understood in contrast to solutions that generate sporadic alerts and anomalies requiring manual correlation and investigation. Their Autonomous Investigation technology incorporates machine learning to uncover the full scope on every suspicious incident, including all affected entities within minutes. Without the need to deploy special appliances or agents, the solution can be deployed on premise or in the cloud, and is currently used by financial institutions, telecoms, retailers, and manufacturing enterprises worldwide. (SecBI 05.09)

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9.3 PureSec Debuts Free Serverless Protection Library to Help Harden Serverless Security

PureSec has released a free serverless security protection library for AWS Lambda functions that enables developers to harden the behavior of serverless runtimes and immunize functions against unwanted and potentially malicious behavior. The security library, dubbed “FunctionShield”, is easily installed as a code dependency and provides developers with the ability to define simple yet extremely powerful protections in code.

There have been numerous cases in recent years where malicious actors created bogus packages that look authentic, or infected existing open source packages with code that leaks sensitive data such as credentials or environment variables. “FunctionShield” equips developers with the ability to easily define strict security controls on serverless functions by addressing 3 common use-cases.

As the global leader in serverless architectures security, Tel Aviv’s PureSec enables its customers to build and maintain secure and reliable serverless applications. The company’s end-to-end serverless security solution is the industry’s first and most comprehensive Serverless Security Runtime Environment (SSRE). (PureSec 05.09)

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9.4 Altair & Ethertronics Announce High-Performance Small Antenna Technology

Altair Semiconductor and San Diego’s Ethertronics (a subsidiary of AVX), a leader in high performance antenna system solutions, announced a new small antenna technology, which will be demonstrated within a new cellular IoT wearable concept at Mobile World Congress Americas. The technology is a significant breakthrough that combines Ethertronics’ ultra-small antenna with Altair’s ALT1250 dual-mode Cat-M1/NB-IoT chipset algorithms to reduce the size of cellular wearable devices without sacrificing performance.

The ALT1250 is the market’s most highly integrated dual-mode Cat-M1/NB-IoT chipset, with lowest power consumption and enabling longest battery life. It includes GNSS location positioning, a RF front-end supporting all commercial LTE bands within a single hardware design, a hardware-based security framework and an internal application subsystem.

Hod HaSharon’s Altair Semiconductor, a subsidiary of Sony Semiconductor Solutions Corporation, is a leading provider of LTE chipsets. Altair’s portfolio covers the complete spectrum of cellular 4G market needs, from supercharged video-centric applications all the way to ultra-low power, low cost IoT and M2M. Altair has shipped millions of LTE chipsets to date, commercially deployed on the world’s most advanced LTE networks including Verizon Wireless, AT&T, Softbank and KT (Korea Telecom). (Altair Semiconductor 05.09)

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9.5 Nova’s Materials Metrology Solution Selected for 5nm Technology Node

Nova announced that a major foundry recently placed an order for its VeraFlex advanced X-Ray metrology solution for 5nm technology node. Nova’s solution utilizes X-ray Photoelectron Spectroscopy (XPS) to simultaneously measure composition and thickness of complex film stacks through the fabrication process. The integration of these film stacks is significantly more complicated than previous nodes both in terms of the materials used and their multi-layer composition, requiring sophisticated process control to minimize device variation. The VeraFlex product portfolio provides the requisite sensitivity and precision needed for these challenging measurements. As a result of this selection, Nova expects more than $12 million in aggregate business from this customer across 2018 and 2019.

Rehovot’s Nova is a leading innovator and key provider of metrology solutions for advanced process control used in semiconductor manufacturing. Nova delivers continuous innovation by providing state-of-the-art high-performance metrology solutions for effective process control throughout the semiconductor fabrication lifecycle. Nova’s product portfolio, which combines high-precision hardware and cutting-edge software, provides its customers with deep insight into the development and production of the most advanced semiconductor devices. (Nova 05.09)

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9.6 D-ID Officially Launches Product for Protection Against Face Recognition

Tel Aviv’s D-ID has officially announced its initial product launch onstage at TechCrunch Disrupt San Francisco 2018. The company has developed a solution that protects photos and videos of organizations from face recognition, while keeping them similar to the human eye. D-ID’s technology is being sold as both a SaaS and On-Premise solution. The company serves organizations that store photos and videos of employees, customers or citizens. Almost all organizations store this data. The initial verticals for D-ID include cloud storage providers, social networks, financial institutions, health management organizations and governments that want to protect their biometric databases.

Data privacy regulations like the European Union’s General Data Protection Regulation (GDPR), which became enforceable in May 2018 address face images as personal sensitive information and require companies to protects this data or risk heavy fines and lawsuits. D-ID enables companies to comply with regulations, prevent crippling fines, strengthen their consumers’ trust and most important, to guarantee privacy and data protection. The company’s approach to digitally manipulating images renders images unreadable by the machine learning tools that are used to identify an individual, but are imperceptible to the human eye. (D-ID 11.09)

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9.7 NanoLock Security Selected to Prestigious Thales CYBER@Station F Program

NanoLock Security announced its selection into the prestigious CYBER@Station F program by Thales. Through a rigorous selection process, Thales chose NanoLock based on the company’s ironclad, CPU-agnostic, lightweight edge and IoT device protection, embedded to cloud security and management, strong intellectual property and extensive partner relationships in the U.S. and Japan. Thales is a global leader in digital security and with its integration with Gemalto is driving enterprise security, including encryption, cloud security services as well as securing and connecting IoT devices.

NanoLock’s CPU and OS agnostic approach ensures all connected and IoT devices are protected as well as the cloud managing those devices, regardless of available processor power, energy consumption and even if the CPU is inevitably hacked. The NanoLock platform guarantees device-to-cloud integrity and mutual protection during regular operations and firmware-over-the-air (FOTA) updates, from the production line and through and after the device’s end of life.

Nitzanei Oz’s NanoLock Security was founded in 2016 by seasoned industry executives and formed around the founders’ and senior management’s deep understanding of how to manage and secure the new generation of connected and IoT devices. The company provides the industry’s only lightweight, unbreakable, low-cost security and management solution for connected and IoT devices. Using virtually zero computing or power resources, NanoLock Security protects firmware and sensitive information stored on connected and IoT devices, preventing attacks ranging from ransomware to malicious manipulation of stored code. (NanoLock 13.09)

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9.8 Cyber Security Startup Pcysys Unveils PenTera 2.0, Delivering the Power of 1,000 Ethical Hackers

Pcysys has unveiled its flagship platform, PenTera 2.0, to address the increasing need for a threat-oriented, cybersecurity validation solution. Focused on the “inside” threat, PenTera changes the rules of the game by addressing the many pitfalls of manual pen-testing – namely, that it is labor and time-intensive, inconsistent, and represents a point-in-time snapshot. The platform enables businesses to continuously validate their security defenses against the latest Advanced Persistent Threats (APT) and consistently enforce security policies across the organization.

PenTera’s features include Business disruption alerts: When a sequence of vulnerabilities and human errors could lead to a business application exploitation, the company is alerted with prioritized remedies to defend against this “game over” scenario.

Petah Tikva’s Pcysys delivers an automated Penetration-Testing platform that assesses and reduces corporate cybersecurity risks. By applying the hacker’s perspective, our software identifies, analyzes and remediates cyber defense vulnerabilities. Security officers and service providers around the world use Pcysys to perform continuous machine-based penetration tests and improve their immunity against cyber attacks across their organizational networks. (Pcysys 13.09)

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9.9 eyeSight’s Computer Vision Capabilities Are Now Available in NTT DOCOMO’s dtab Compact

eyeSight Technologies announced that it has collaborated with NTT DOCOMO, INC., Japan’s leading mobile operator with over 76 million subscriptions in Japan. The collaboration brings eyeSight’s market-leading sensing capabilities to NTT DOCOMO’s dtab Compact d-02K tablet, augmenting the existing interface with natural touch-free interaction capabilities. eyeSight’s technology allows dtab Compact users to enjoy a new level of natural communication with their device in a way that is responsive to their actions. With simple hand movements, users can control different app functions with greater comfort and simplicity. eyeSight’s sensing technology utilizes the existing built-in camera of the dtab Compact d-02K tablet to enrich the user experience. NTT DOCOMO’s dtab Compact d-02K tablet features eyeSight’s technology in various supported apps and is currently commercially available throughout Japan.

Herzliya’s eyeSight is the leading provider of embedded Computer Vision and AI solutions, bringing user awareness and gesture recognition technologies to a variety of devices and industries. The company’s technology improves daily life experiences in the home, the car, and with other consumer electronics using intelligent interactions that are responsive to the presence of users and their actions. With eyeSight’s technology devices now “see” and “understand” their users, unlocking a world of enhanced user experiences. (eyeSight 13.09)

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9.10 WhiteSource Now Available on Amazon AWS Marketplace

WhiteSource announced it has expanded its collaboration with Amazon Web Services (AWS) and is now available on AWS Marketplace. This allows AWS customers to easily discover and subscribe to WhiteSource through AWS marketplace which features a select group of companies that are members of the AWS Partner Network (APN). This partnership joins a string of collaborations between WhiteSource and Amazon, including recent integrations with Amazon’s new build service, AWS CodeBuild and Amazon Elastic Container Registry (ECR), Amazon’s Docker container registry.

WhiteSource helps businesses to better secure and manage the open source components in their software. It automates the entire process of open source components selection, approval and tracking, including detection and remediation of vulnerable open source components in real-time.

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9.11 Karamba Security Selected as an Auto-ISAC Strategic Partner

Karamba Security has been selected by the Automotive-Information Sharing and Analysis Center (Auto-ISAC) to join the organization’s Strategic Partnership Program. As a strategic partner, Karamba Security will provide the Auto-ISAC and its members research analysis on attack activity and forensics data of such attacks against electronic control units (ECUs) to keep autonomous and connected vehicles secure. Karamba will regularly share findings from threat analysis tools in an aggregated and anonymized way with the Auto-ISAC. These shareable insights will help vehicle OEMs and Tier-1 suppliers secure ECUs from hackers. Automotive cyberattacks occur when hackers compromise externally connected ECUs and send commands to safety ECUs, compromising driver, passenger and cargo safety. Keeping the community updated on vulnerabilities in vehicle connected ECUs (telematics control units (TCUs), gateway, infotainment, ADAS, CAN bus external connectivity, etc.) provides actionable mitigation steps to reduce risk.

Hod HaSharon’s Karamba Security provides industry-leading automotive cybersecurity solutions for autonomous and connected cars. Its Autonomous Security software products, including Carwall and SafeCAN, provide end-to-end in-vehicle cybersecurity for the endpoints and the internal messaging bus. Karamba Security’s award-winning solutions prevent cyberattacks with zero false positives and secure communications, including OTA updates, with negligible performance impact. Karamba is engaged with 17 OEM and tier-1 customers and received numerous industry awards. (Karamba Security 17.09)

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9.12 Habana Labs Announces World’s Highest Performance AI Inference Processor

Habana Labs announced it is officially out of stealth mode and is sampling its first AI processor to select customers. A PCIe card based on its Goya HL-1000 processor delivers 15,000 images/second throughput on the ResNet-50 inference benchmark, with 1.3 milliseconds latency, while consuming only 100 watts of power. Habana Labs’ AI processors offer one to three orders of magnitude better performance than solutions commonly deployed in data centers today. Designed to process various AI inferencing workloads such as image recognition, neural machine translation, sentiment analysis, recommender systems and many other applications, Habana Labs’ Goya platform has been designed from the ground up for deep learning inference. It incorporates a fully programmable Tensor Processing Core (TPC) along with development tools, libraries and a compiler, which collectively deliver a comprehensive, high performance and power efficient platform.

Habana Labs’ SynapseAI software stack analyzes the trained model input and optimizes it for inferencing efficiently on the Goya processor. The software includes a rich kernel library and its toolchain is open for adding proprietary kernels by customers, as it interfaces seamlessly with popular deep learning neural-network frameworks such as TensorFlow and ONNX.

A fabless semiconductor company located in Tel Aviv, Habana Labs was founded in 2016 to unlock the true potential of AI by providing an order of magnitude improvements in processing performance, cost and power consumption. The company set out to develop AI processors from the ground up, optimized for the specific needs of training deep neural networks and for inference deployment in production environments. (Habana Labs 17.09)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israel’s Inflation Rate Rises by Only 0.1% in August

The Central Bureau of Statistics announced that Israel’s Consumer Price Index (CPI) for August rose by only 0.1%, below the 0.2-0.3% predicted by economists. This means prices have risen by 1.2% over the past 12 months. Prices of entertainment and culture rose 2.1% in August, home rentals rose 0.2% and housing costs rose 0.4%. Prices of fresh fruit and vegetables fell 2.5% in August, clothing and footwear fell 1.7% and communications fell 1.2%.

However, the Home Price Index rose 0.3% in July after rising 0.9% in May-June. This will be a disappointment to the Ministry of Finance, which has pledged to halt the rise in home prices over the past decade, which has made it difficult for young people to afford their own home. However, the Ministry of Finance will be able to take comfort from the fact that home prices have fallen 0.5% over the past 12 months. Housing prices in July rose 0.5% in Tel Aviv, 0.4% in Jerusalem, 2.0% in the north, 0.1% in central Israel but fell 0.1% in the south and 0.6% in Haifa. (CBS 14.09)

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10.2 Israeli Exports Expected to Reach $54.5 Billion by Year’s End

Israeli exports are expected to reach $54.5 billion in 2018, representing a 2.3% growth from last year, a report by the Economy and Industry Ministry said. The report noted that Europe was Israel’s largest export market with a 37% share. North America is the country’s second-largest export market, making up 28% of all exports, with the Asian market third, with 26%. Smaller export markets include Africa, Latin America and other nations. According to the report, exports to Asia have grown by 18% since 2017.

Exports to China, in particular, have soared, reaching $2.8 billion in the first half of 2018 – up 73% from the same period last year. Exports to India between January and June have grown by 7.1% compared to 2017, reaching $1.15 billion. Japan also proved to be a growing market for Israeli products this year, with exports so far reaching $640 million – a 58.7% rise from the same period last year. China, India and Japan have all be defined by the government as priority export markets.

Exports to Latin America grew by 13.8% in the first six months of 2018, with Argentina, Brazil, Paraguay and Uruguay – countries with which Israel signed free trade zone agreements in recent years – leading the trend. The government has set a goal of crossing the $120 billion-mark in exports by 2020, after crossing the $100 billion mark in 2017. (MoEI 17.09)

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10.3 Foreign Exchange Reserves at the Bank of Israel at $116 Billion

Israel’s foreign exchange reserves at the end of August 2018 stood at $116 billion, an increase of $223 million from their level at the end of the previous month. The reserves represent 31.6% of GDP. The increase was the result of foreign exchange purchases by the Bank of Israel totaling $173 million, all of which were part of the purchase program intended to offset the effects of natural gas production on the exchange rate. Also contributing was a revaluation that increased the reserves by approximately $262 million and private sector transfers of approximately $61 million. In contrast, the increase was offset by government transfers to abroad totaling about $273 million. (BoI 06.09)

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10.4 Record Year for Tourism in Israel

Over 4 million tourists arrived in Israel over the last 12 months, of whom 3.9 million stayed at least one night. The figure represents a 20% increase over the previous year. The Hebrew month of Iyar set a new record with 429,300 tourists. Revenues from tourism increased to about $5.7 billion. Surprisingly, tourism from Poland rose by 115% over the previous year. The steady increase in the number of tourists arriving in Israel continues with 22 consecutive months of unprecedented numbers of tourists visiting Israel – an all-time high. The tourism industry continues to establish itself as a major growth engine for Israel’s economy. (MoT 07.09)

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10.5 Israel’s Fiscal Deficit Reaches 2.5% of GDP

According to the Ministry of Finance, Israel’s fiscal deficit over the past twelve months has risen to 2.5% of GDP. Last month, the cumulative deficit amounted to 1.7% of GDP, but the Ministry of Finance warned that it expected the deficit to grow. The Ministry of Finance said that the trend of growth in the deficit figure would continue in the coming months because of exceptionally high tax revenues in September-October last year. The deficit target in the state budget is 2.9%, but the deficit is forecast to reach 3.2% or more by November, and to be at the target level or higher at the end of the year.

This deficit report reflects a trend seen since the beginning of this year: a halt in growth in state revenues and rapidly rising expenditure. By August, spending by government ministries had grown by 7.1%, which compares with planned growth of just 4%. Spending by civilian ministries grew by 7.5% (compared with a planned 5.3%), while defense and security spending grew by 5.6%, instead of shrinking by 0.5% as planned. The main reason for the growth in spending is that government ministries are working according to a two-year budget, and budget performance is more than 100%.

Tax collection has grown by only 1.7% so far this year, although if one-time revenue items are excluded from the figures for August 2017, revenue growth is higher, and close to the average of the past few years. (MoF 06.09)

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10.6 Bank of Israel Report on Prices of Common Banking Services for Households

The Supervisor of Banks at the Bank of Israel submitted the Semiannual Report on Prices of Common Banking Services for Households to the Knesset’s Economic Affairs Committee. The report is based on banks’ and credit card companies’ reports of actual income from fees charged during the full year of 2017.

The average monthly cost for managing a current account and maintaining a credit card for an individual customer account, in the full year of 2017, was approximately NIS 24.6, a slight decline of approximately 1% compared with NIS 24.8 in 2016.

During the past seven years (2011–2017) there was a decline of approximately 16% in the average total monthly cost for a household and private banking account. This cost is made up of the cost of a current account, which declined by about 35%, and the cost of credit cards, which increased by about 27%, an increase that derives mainly from the trend of growth in the number of cards held by customers in a single account.

In 2017, several guidelines went into effect, resulting in an additional reduction in fees in respect of banking services. Within this framework, beginning from 1 November 2017, the fees for all services provided by direct channels were reduced vis-à-vis the fees charged for teller-executed transactions. The Banking Supervision Department’s goal with this requirement is to ensure that banking corporations’ savings from increased efficiency are rolled over to consumers and to encourage the public to switch to using advanced digital tools. (BoI 12.0)

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10.7 Israeli Housing Starts Increase for First Time in 18 months

There were 11,228 building starts for apartments in Israel in the second quarter of 2018, according to the Central Bureau of Statistics. This represents a rise of 12.9% from the 9,945 homes started in the first quarter of 2018 and the first time in 18 months that housing starts have risen in consecutive quarters. However, the number of housing starts in the second quarter of 2018 was 12.2% below the number of housing starts in the corresponding quarter of 2017. (CBS 17.09)

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11: IN DEPTH

11.1 ISRAEL: Israeli Gas Is Almost Ashore, But Challenges Remain

Simon Henderson posted in The Washington Institute for Near East Policy on 7 September that environmental concerns, uncertainty over export routes and future security risks overshadow the latest progress in bringing the Leviathan field online.

Watched over by a small group of environmental protestors camped on the beach at Dor, engineers are putting the final touches on a pipeline for Israel’s Leviathan offshore natural gas reservoir. Located between Tel Aviv and Haifa, the line will connect to a network that already transports gas from the smaller Tamar field to power stations and industrial plants across Israel. Thirty miles to the east, other engineers are working on a line that will cross into Jordan, with Leviathan gas predicted to generate most of the kingdom’s electricity from 2020.

Various other alternatives for Israeli gas have been discussed, including a possible undersea line to Cyprus, Greece and Italy, but the imminent Leviathan routes are the most promising options for the foreseeable future. Smaller fields in Israel’s offshore exclusive economic zone may be developed as well, but they are far below Leviathan’s scale, while exploration to the north is limited by the lack of a recognized maritime border with Lebanon. Now that full exploitation of Leviathan finally seems like a reality, what export options does it present, and what obstacles may yet arise to thwart them?

Leviathan’s Current Status

Although Israel’s gas reserves are small in global terms, the numbers associated with Leviathan could be a game changer in the Levant. Noble Energy, the U.S. company that discovered the field in 2010, described it earlier this week as an “amazing reservoir.” It is estimated to contain more than 22 trillion cubic feet of gas. To put this figure in perspective, the Tamar field contains only 10 tcf yet still manages to provide around 60% of Israel’s electricity and will do so for many years.

Thus, when Leviathan comes online, it will enable Israel to become a gas exporter. Pipelines from Leviathan, which lies nearly eighty miles offshore and 6,000 feet deep, have already been laid, awaiting connection to a production platform currently being completed in Texas. The platform’s framework is due to be towed across the Atlantic soon, leaving at the end of November and arriving early next year. Once in position around six miles offshore, it will be mounted with processing units to clean and dry the gas before it reaches shore.

Controversy

Despite its prospects of providing energy security, the development of Israel’s gas reserves has been marked by lively political and public debate. Originally, Leviathan was planned to come on-stream in 2017. Initial concerns about Noble’s dominance in the gas sector were alleviated when the company sold off some of its interests in other fields and reduced its stake in the Tamar field. Its Israeli partners, including Delek, have also raised political controversy, with opponents alleging that the consortium was negotiating too high a price for the gas.

Meanwhile, green campaigners – including the campers at Dor and another couple thousand protestors who reportedly gathered in central Tel Aviv on 1 September 1 – claim that placing a gas platform so close to shore is dangerous because condensate extracted in the cleaning process could spill into local waters. Instead, they advocate a floating facility located directly above Leviathan. Yet their arguments are seemingly outweighed by a combination of engineering and security considerations: some believe the condensate risk is exaggerated and will be minimized by safety measures; the planned platform is much more practical than a floating installation and needs to be close to shore before the seabed drops steeply; and a near-shore platform can be better defended from missiles and seaborne threats. For example, Hamas rockets landed near Dor during the 2014 Gaza war and Hezbollah’s huge arsenal of missiles in Lebanon is even closer.

Another concern is that the platform will be visible from shore, particularly for some people living in the upscale coastal hill town of Zichron Yaakov. But residents have lived there for decades with a similarly close view of the coal-fired Hadera power station and its four giant chimneys. That station is expected to shut down in four years; a more representative view of Israel’s energy future is the gas-fired Hagit power station, which can also be seen from Zichron Yaakov but nestles unobtrusively in the hills to the east.

Reworking Old Pipelines

Since developing Leviathan only makes economic sense if Israel can export much of its gas, securing routes to Jordan and Egypt is vital. Using existing pipelines avoids the expense of laying new ones or building a liquefied natural gas export plant on the coast, which would prompt environmental concerns of its own. The portion of the line extending to Jordan will be new, but it will use the right of way already established by the old line from Kirkuk to Haifa, which exported Iraqi oil between 1935 and 1948 – the reason why a refinery, now Israel’s biggest, was built in Haifa.

Once in Jordan, the flow from Leviathan will connect with the old Arab Gas Pipeline, which carried supplies from Egypt to Jordan, Syria and Lebanon until 2013, when political chaos in Cairo disrupted exports. The plan now seems to hinge on sending Leviathan gas to Egypt via this circuitous route, down to the Gulf of Aqaba and up through the Sinai Peninsula. Reversing the pumps and rehabilitating the pipe is far cheaper than building a new one.

Another potential twist is the proposal to send Israeli gas from Tamar (and, later, Leviathan) to Egypt along the old East Mediterranean Gas Pipeline, which was used to send supplies from al-Arish to Ashkelon up until 2013. On 30 August, Delek chief executive Asaf Bartfeld stated that “negotiations on the purchase of the EMG pipeline continue.” On 5 September, Noble chairman David Stover stated that “work is going on solidifying the access into Egypt,” and that “updates and news” would be available on that effort “shortly.”

Future Challenges

The disruption of Egypt’s gas flows to Israel and Jordan after the Mubarak regime’s ouster is a reminder that emerging energy arrangements in the region are always subject to political risks. Israel has since become one of Jordan’s most reliable suppliers, and according to Noble, Egypt’s recent offshore discoveries have not dented its seemingly inexhaustible domestic demand for gas. Yet public opinion in both countries remains very negative toward Israel, and gas cooperation is a frequent target of this resentment.

Egypt’s current government seems quite willing to buy Israeli gas, but the presumed route for such supplies – northern Sinai – is still a security concern. The Sinai portion of the pipeline was plagued by jihadist attacks five years ago, and while Cairo claims to have renewed counterterrorism efforts there, it needs to show long-term success.

Israel’s ongoing tensions with Hamas and Hezbollah could likewise erupt in a fresh round of hostilities at any time. Israeli missile defenses have been able to stave off major infrastructure damage in previous rounds, but they could be overwhelmed in future conflicts by more (or more-accurate) projectiles.

Nevertheless, the Leviathan project at last seems to be coming together. From the U.S. perspective, an additional cause for celebration is that it combines American business and technology with Washington’s quiet diplomatic efforts to help regional partners work together.

Simon Henderson is the Baker Fellow and director of the Bernstein Program on Gulf and Energy Policy at The Washington Institute. (TWI 07.09)

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11.2 LEBANON: Small Lebanese Craft Brewers Introduce Big New Tastes in Beer

Sam Brennan posted in Al-Monitor on 17 September that micro and craft breweries are paving the way for locally made Lebanese beer by working around the lack of traditional ingredients and doing what they can to avoid contributing to the Lebanon’s persistent environmental problems. Lebanese brewmasters are introducing new takes on an old drink.

After being dormant for thousands of years, beer culture is returning to Lebanon. Lebanese brewers, pursuing their passion of carving out a space for the ancient drink in their homeland, have overcome the lack of traditional ingredients, including hops and malt, by incorporating locally grown fruits and spices. They are also embracing an environmentally friendly ethos in combating a deficiency in such basic materials as glass bottles.

Lebanon’s new take on an old drink was on display at the Beirut International Beer Event, BIBE 2018, held in mid-September at an open-air hippodrome near the trendy Badaro neighborhood in the nation’s capital. The young festival, in its second iteration this year, brought together beer lovers and beer makers from around the world. It also showcased some of the best craft breweries and microbreweries Lebanon has to offer.

Saying that beer has a long history in Lebanon and the Middle East would be a gross understatement. Archaeologists recently discovered the remains of a 13,000-year-old brewery belonging to the nomadic Natufian people, who lived in the high mountains of Lebanon and the Anti-Lebanon. The site is today in northern Israel.

Despite such auspicious origins, beer experienced a 10,000-year “slump” in Lebanon, with wine becoming the drink of choice for many locals. In 2006, there were more than 30 wineries in the country and only one local brewery. Over the last decade, however, Lebanese brewers have sought to revive the fortunes of the long-lost beverage. “Beer was invented in the Middle East, [but] this knowledge was lost to time and history,” Kamal Fayad, the managing partner at 961 Beer, one of Lebanon’s largest craft breweries, said at his stall at BIBE. “[Brewers] have come back to do something new, again.”

Fayad’s 961 was the forerunner on Lebanon’s craft brewery scene. Launched in 2006, it was little more than a labor of love, with enthusiasts creating beers in a garage to sell at their neighborhood bars. That passion turned into a trend, and by 2011, 961 was exporting beer from its brewery in the seaside city of Jdeideh to places around the world. It also now contributes to 15% of Lebanon’s beer consumption.

Paul Choueiry, a craft beer designer with Barley N’ Hops, an Ireland-based importer selling its wares at BIBE in anticipation of opening a microbrewery in Lebanon, has also experimented with local ingredients. Setting up shop in his birthplace, Zahle, in the Beqaa Valley, Choueiry had planned to homebrew a milk stout, but after scouring myriad stores, he could not find lactose, the ingredient that puts the “milk” in milk stout. Refusing to admit defeat, Choueiry noticed that a lot of dark beers have an aroma of carob, the pea-shaped Mediterranean fruit often made into a sweet powder. Lacking traditional ingredients, Choueiry used what he had, and a rich chocolaty carob stout was born.

The ingenuity displayed by Lebanon’s brewers uniquely reflects the problems with beer production in the country. “It is still very difficult to do beer in Lebanon, not because of a lack of knowledge, but because the raw material is not available,” Fayad said. He noted that quality malt, one of the four key ingredients in beer, doesn’t exist in the country. The lack of materials also extends to subsidiary items, like glass bottles. With no glass factories in Lebanon producing beer bottles, microbreweries have to import them. Not only does this increase costs, but it also creates a tremendous amount of waste, which irks the environmentally aware entrepreneurs.

Sam Brennan is a Beirut-based freelance journalist who writes on culture, technology and politics. (Al-Monitor 17.09)

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11.3 EGYPT: Egypt Announces Massive Budget to Develop Sinai

Menna A. Farouk posted on 6 September in Al-Monitor that the Egyptian government announced a plan to develop the Sinai Peninsula, with the aim to eliminate terrorism that is widespread in this volatile area.

The Egyptian government announced on 28 August a massive budget worth EGP 275 billion ($15.4 billion) to carry out developmental projects in the Sinai Peninsula until 2022, as part of efforts aimed at fighting an Islamist insurgency in that unstable part of the country and improving living standards for its residents.

In the government announcement, Minister of Planning Hala el-Saeed said that the Egyptian government is planning to establish fish farms spanning an area of 15,590 feddans (16,179 acres) in the Suez Canal area, construct a natural lake and an industrial zone in Port Said, and build about 10 roads at a total length of 1,339 kilometers (8332 miles) in the Sinai Peninsula.

The planned projects also include the building of a number of residential units, 15 hospitals and health units, and the establishment and upgrading of 53 schools, a university and an educational institute in Sinai, according to the planning minister.

Saeed said a total of 54 water supply projects would be carried out in the North Sinai governorate, adding that al-Arish and Sharm el-Sheikh airports, in addition to the industrial zone for glass and marble in central Sinai, would be developed and upgraded. A total of 400,000 feddans of land would also be reclaimed in the North Sinai governorate, and electricity networks along the roads in the governorate’s towns would be installed, he added. Economists and security experts widely praised the plan, saying it would enable the state to create an integrated urban community in that turbulent area — a matter that would greatly help eliminate terrorism.

Hassan el-Haywan, an economist and a professor of economics at Ain Shams University, said such an enormous plan has a very significant security dimension. “Securing Sinai would only be achieved through comprehensive development. If you want to end terrorism, you create job opportunities and achieve development. That is the only way out,” he told Al-Monitor.

Haywan also said the government is planning to attract people to the province by establishing proper infrastructure and offering necessary services. The move aims to increase the population of the Sinai Peninsula to stand at 3 million residents by 2022 and 8 million residents by 2052, instead of the existing half a million. “Having more people in the Sinai Peninsula would for sure help move ahead with the development process,” he added.

Ahmed el-Shami, an economist and a professor of feasibility studies at Cairo University, also lauded the plan, saying it would not only help put an end to terrorism in the Sinai Peninsula but would also result in huge revenues for the government because that region is full of natural resources. “Sinai is rich with natural resources and raw materials, which make it a very attractive destination for investors and for carrying out projects in various economic sectors, including tourism, agriculture and industry,” Shami told Al-Monitor. He referred to the great potentials of the marble and cement industries as well as quarries and the agriculture sector in Sinai.

Shami said most of the allocated budget would be directed to infrastructure, which is the basis for the launch of any developmental projects. He added that the geographical location of Sinai links it with the Suez Canal developmental projects. “That is why moving ahead with developmental projects in the Suez Canal would positively affect development in Sinai, as it will create job opportunities for its people as well as encourage more people to live there,” he added. However, Shami added that the budget allocated to development in Sinai is still not enough, highlighting that the state has to allocate about EGP 600 billion ($33.7 billion) to achieve development there.

Amr Ammar — a security expert and geostrategic researcher — said that the developmental plan in Sinai cannot be accomplished in just four years, and he expects development to take years. “When the security crises in Syria, Yemen and Libya ease, development in Sinai can move forward,” Ammar told Al-Monitor. However, Ammar said that such a developmental plan comes as part of a wider state strategy to defend Egypt’s borders against extremists. “The state is creating a strong urban community that can act as a defensive wall against any regional threats targeting the Sinai Peninsula,” Ammar added.

Menna A. Farouk, a journalist and an editor at The Egyptian Gazette, writes about social, political and cultural issues, including press freedom, immigration and religious reforms among other topics. (Al-Monitor 06.09)

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11.4 EGYPT: Bumpy Road Ahead for Egypt’s First Female Coptic Governor

Menna A. Farouk posted Al-Monitor on 4 September 4 that women’s rights activists and Christian figures rejoiced as Egypt appointed its first Coptic Christian woman as governor, but not everyone in the city of Damietta was delighted with the appointment.

The appointment of Manal Awad, the first Christian woman to hold the position of governor in Egypt, reflects an unprecedented state willingness to empower Christians and appoint them in leading government posts. Former member of Egyptian parliament Gamal Assad said the Egyptian leadership’s attitude toward Christians has dramatically changed under the reign of Egyptian President Abdel Fattah al-Sisi.

Assad added that there will have to be community support to any initiatives or decisions that are made in the interests of Christians in Egypt. “The new Christian governor in Damietta is going to be under threat because there are still followers of the Muslim Brotherhood group out there, and they are of course opposing the appointment of any Christian in a leading post,” he told Al-Monitor.

Assad recalled demonstrations by thousands of Muslims in 2011 following the appointment of a Christian man as governor of the Upper Egyptian city of Qena. “The demonstrations revealed how the Egyptian society was in total rejection of having a Christian in a leading post. That is why genuine community backing is very crucial,” he added.

Awad, who has a Ph.D. in natural sciences from the University of Alexandria, is the second Egyptian woman to hold the post of governor in Egypt. Nadia Abdu was Egypt’s first woman to assume office as governor when she was appointed to the Nile Delta governorate of Beheira.

Activists and Christian figures described Awad’s appointment as unprecedented and promising for both women and Christians in Egypt. Randa Fakhr El Deen, executive director of the NGOs’ Union Against Harmful Practices on Women and Children, said that the appointment signals a change of attitude from the Egyptian government toward Christians. Egyptian Christian women hold leading posts in Egypt nowadays, including current Minister of Migration Nabila Makram Ebeid. “It is a dream coming true for many Christian women in Egypt and a very encouraging gesture that would inspire them to pursue their aspirations in holding leading posts in the country,” Deen told Al-Monitor.

Deen said that Awad would nevertheless face uphill challenges during her tenure in office due to a societal misperception that women and Christians should not lead a Muslim community. “It is not just about the fact that she is a woman. She is also Christian and that would put a lot of challenges before Governor Awad with the existence of extremists and religious people who think that Christians should not take over leadership posts,” she added.

Shortly after her appointment, Awad held a meeting with the heads of the governorate’s directorates to follow up on the work mechanisms at each of them. During the meeting, she asserted the necessity to exert all-out efforts to serve, meet the needs of citizens, develop work at each directorate, and follow up with field visits on all the governorate’s conditions.

Awad was appointed deputy governor of Giza in 2015 and worked on community service and environmental development. In that role, she was responsible for the development of informal settlements in the Giza governorate. Awad was able to obtain a large number of grants and funding from international organizations to develop informal settlements and carry out several projects in the city. She was also under-secretary for the Veterinary Serum and Vaccine Research Institute at the Ministry of Agriculture.

Egypt has the largest Christian community in the Middle East, representing about 10% of the Egyptian population — which currently stands at about 95 million. The country’s Christians have long accused the government of persecution, negligence and marginalization. Christians were also targeted in several attacks by Islamist extremists.

Nevertheless, Sisi showed a very different approach toward the Christian community by visiting the Coptic Orthodox Church several times and urging the government to restore churches that were torched and destroyed during the era of ousted President Mohammed Morsi.

In 2016, the Egyptian parliament approved a law that sought to ease restrictions on building churches. In April this year, the Cabinet approved the legalization of unlicensed churches in order to make it easier for Christians to practice their religious rituals.

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11.5 EGYPT: Is ‘The Wedding’ a New Beginning for LGBTQ Cinema in Egypt?

Youssra el-Sharkawy posted in Al-Monitor on 4 September that film director Sam Abbas’ “The Wedding,” which tells the story of a gay man forced into a heterosexual marriage, will be screened privately and by invitation only in the Middle East, making the already controversial movie even more controversial.

A man and a woman are together in bed in a dimly lit bedroom. He remains motionless and distant, engrossed by something on his laptop, as she snuggles against him, trying to attract his attention. This is the opening scene of the trailer of “The Wedding,” the forthcoming movie by the Egyptian American director Sam Abbas. It foreshadows the marital disaster to come.

Abbas’ film features the story of Rami, a homosexual Egyptian Muslim played by Abbas, who is forced to marry Sara, played by Nikohl Boosheri. The movie is scheduled for a November release, but the trailer, posted 23 August on various movie sites, has already caused a stir. “The Wedding” has also made international headlines in various industry magazines as the first Egyptian queer movie, although a number of other Egyptian films have addressed homosexuality since the 1970s.

Abbas, who also wrote the screenplay, told Al-Monitor that the film is meant to lend support to homosexuals living in conservative societies, sending the message that they are not alone. “I would really hope that people who have watched the film walk away with the understanding that life is too short to have a double life,” Abbas said. “That’s how I felt, and that’s why I made this movie.”

“The Wedding” is the first movie produced by ArabQ, the newly established Alexandria-based film company dedicated to supporting LGBTQ rights. Abbas and an Egyptian producer who has chosen to remain anonymous co-own the company, which they are positioning as producing feature films as well as documentaries focusing on the LGBTQ community. It is required that all projects have a self-identified queer, gay, lesbian, bisexual or transgender director or lead producer.

Locating ArabQ in Egypt is likely to pose some challenges because of the country’s conservatism and opposition to homosexuality. A 2013 survey by the Pew Research Center showed that 95% of Egyptians believe that society should not be accepting of homosexuality. This attitude also prevailed among overwhelming majorities in other predominantly Muslim countries, including 97% in Jordan, 94% in Tunisia and 93% in the Palestinian territories.

The Egyptian government has periodically cracked down on homosexuals as well as people advocating gay rights. In 2017, authorities arrested seven people on charges of debauchery after they raised a rainbow flag during a performance by the Lebanese rock group Mashrou’ Leila. Earlier this year in Alexandria, police arrested 10 other people for alleged “debauchery,” a term used to describe gay and transgender people or anyone suspected of homosexuality.

Abbas decided nonetheless to base his company in Alexandria, announcing this decision at the 2018 Berlin International Film Festival in February. “I was born in Alexandria!,” Abbas exclaimed. “I guess we’ll see if the company will face challenges, but following the launch we received many unsolicited scripts.”

Abbas told Al-Monitor that screenings of “The Wedding” in the Middle East will be private and by invitation only. The countries where the screenings will be held won’t be announced until after the film’s official release. Some critics have suggested that the private screenings give the impression of confirming that the movie contravenes social norms. Very few have seen the actual movie.

“Promoting freedom is a good idea to be adopted by a film production company, but promoting only ‘homosexual cinema’ is something weird,” the critic Tarek el-Shennawy said to Al-Monitor. According to Shennawy, ArabQ will not only face religious, ethical and social opposition but also legal challenges. “There is a difference between ‘discussing’ and ‘promoting’ LGTBQ cinema,” Shennawy told Al-Monitor. “Egyptian society is very conservative, and promoting [gay] cinema won’t be accepted by society. Various Egyptian films have taken up the question of same-sex relationships, but in different ways. I’m against closing the door and saying that society won’t accept [any discussion of] the topic. Homosexuality exists in the entire world, and everybody knows about it. The question is how to discuss it.”

As noted, Egyptian film directors have addressed the issue of homosexuality since the 1970s. The post-1973 period was an era of greater ideological and artistic freedoms under President Anwar Sadat, as he wanted to open Egypt’s doors to private investment following the 1973 war with Israel. Despite the relative permissiveness of the era, however, most filmmakers only dealt with homosexuality gingerly or briefly or presented it as a “disease” or a mental illness to be treated. Only a few films showed homosexuals as ordinary members of society.

Among them, 1973’s “Hamam el-Malatily” (The Malatily Bathhouse), directed by Salah Abou Seif, the pioneer of realism in Egyptian cinema, is one of the few to daringly discuss homosexuality without judgment. Its sexually explicit scenes caused the film to be banned throughout the late 1970s and 1980s. It was finally screened in cinemas with the sex scenes and nudity removed. It is still banned from Egyptian TV.

In Samir Seif’s 1977 “Cat on Fire” — an adaptation of the Tennessee Williams play “Cat on a Hot Tin Roof” — homosexuality is one of the issues contributing to the unhappy household depicted, but there are no overt scenes of the gay relationship. In “Alexandria … Why?” (1978), Egypt’s legendary director Youssef Chahine briefly focuses on a rich Egyptian man who has an affair with a British soldier.

In the 2000s, same-sex relationships became more openly discussed in Egyptian cinema. The 2006 “Yacoubian Building,” directed by Marawan Hamed and based on Alaa el-Aswani’s novel of the same name, features a journalist, played by Khaled el-Sawy, who is ultimately killed by his gay lover. The movie was not only controversial, but also a box office success.

Hany Fawzi’s 2013 “Asrar A’elya” (Family Secrets) also sparked controversy. Based on a true story, it deals with an 18 year old who was sexually abused by his older brother throughout childhood. The main character refuses to accept his homosexuality and seeks “normalcy” throughout the film.

Youssra el-Sharkawy, an Egyptian feature writer and columnist, covers cultural issues, human rights, women’s empowerment and social problems. Her work has appeared in various local and international news outlets. (Al-Monitor 04.09)

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11.6 TURKEY: Surging Inflation Tightens Circle Around Turkish Economy

Al-Monitor posted on 5 September that Turkey’s soaring inflation, exacerbated by a fresh spike in August, is stoking apprehension over the country’s economic future and appears to strengthen the prospect of an intervention by the International Monetary Fund (IMF). The August figures, released on 3 September, brought year-on-year inflation to 18% in consumer prices and 32% in producer prices. Except for Argentina, such rates are unseen among Turkey’s emerging-economy peers, in many of which inflation is not even in double digits.

The price hikes are unlikely to abate in the coming months, with consumer inflation expected to hit at least 20% at the year-end. The ballooning problem owes much to structural reasons, which highlights the need for sounder diagnoses and long-term remedies. Two key factors are pushing inflation to the creeping 20% level: the rising prices of agricultural products and food, and the dramatic depreciation of the Turkish lira.

Turkey used to have a self-sufficient agricultural sector, but ill-advised policies and neglect of the sector have resulted in annual imports of $9 billion to cover the food gap at home. The deficit in the food supply is a key reason for the surge in inflation. In fresh vegetables and fruits, for instance, year-on-year inflation stands at a staggering 38%.

Price increases in another crucial rubric — energy products — have exceeded 21%. Turkey is heavily reliant on foreign energy supplies, and atop the increase in global energy prices, it has seen its currency depreciate 55% this year. With the price of the dollar rising 78% since the beginning of the year, the prices of energy products have shot up despite certain subsidies.

In durable consumer goods such as cars, domestic appliances and furniture, prices rose between 5% and 6% in August, bringing year-on-year inflation to 30%. The domestic production of durable goods relies heavily on imported inputs; hence, production costs have soared due to the extraordinary increase in foreign-exchange prices. In other words, the price increases in this category stem directly from the slump of the lira. In its latest inflation report, the Central Bank itself notes that “widespread price hikes in durable and other basic goods have continued as a result of foreign-exchange rate effects.”

In another important point, the bank notes, “Producer-driven cost pressures on consumer prices increased considerably in August.” Producers hiked their prices 6.6% in August, bringing the year-on-year rate to 32%. Obviously, this stems also from the increased prices of foreign exchange, as Turkey’s industry relies heavily on imported energy and inputs. With their costs on the rise, producers are hiking prices, forcing retailers to follow suit. This trend is expected to continue in the coming months, given that the gap between producer and consumer inflations is no less than 14%age points, signaling an avalanche of prospective price hikes should consumers sustain demand.

The Central Bank appears equally pessimistic, noting that the rise in energy prices is expected to continue in September. Though the bank speaks specifically of energy prices, its projection could be taken as a general one given that foreign exchange rates show no sign of letting up. The dollar, which traded for about 6.6 liras on 3 September as the inflation figures were released, hit up to 6.75 liras the following day.

No doubt, the mounting inflation is further upsetting income distribution. For some 19 million Turks who are either wage earners in the private sector or public employees, inflation means a drastic decrease in real income as they stand no chance of pay hikes matching the inflation rate. More than 10 million pensioners face the same prospect of relative impoverishment.

Yields on the Turkish lira, meanwhile, remain below the inflation rate, which not surprisingly has led Turks to keep their savings mostly in foreign exchange rather than in lira deposits. Ankara may pretend to not understand this, but the slumping lira and the rising inflation continue to make foreign exchange a refuge for savings. To boost the attractiveness of the local currency, yields on the lira should increase, but Ankara remains reluctant to hike interest rates, making futile efforts to curb the rise of foreign exchange through verbal interventions only.

After the release of the August inflation data, which sparked concerns of a new currency shock, the Central Bank pledged to “take the necessary actions to support price stability,” adding that “monetary stance will be adjusted at the September Monetary Policy Committee meeting in view of the latest developments.”

If the statement is to be taken as a signal of a rate hike, one cannot help but wonder why the bank opts to wait 10 days instead of acting immediately. Hence, many have come to see such statements as a transient wave breaker against the rise of foreign exchange that serves nothing but to erode the credibility of the bank.

So, how to stop the hemorrhage of the lira? Are Ankara’s diagnoses and treatments correct? Hiking interest rates is the way to prop up the lira, but President Erdogan has a well-known aversion to rate hikes, which, he believes, will plunge the economy into stagnation. Ahead of local elections in March 2019, he needs a growing and not a stagnating economy.

Yet the prevailing conditions are already bringing about stagnation and even contraction. Domestic consumption is shrinking, investment projects are being shelved, company equities are melting against the rising foreign exchange prices, loan repayment capacities are weakening and banks are piling pressure on indebted companies. This means a decline in production capacities and company closures that will eventually lead to contraction.

On 4 September, international credit rating agency Fitch cut its 2019 growth forecast for Turkey to 1.2%. Pointing to “considerable uncertainty” for the Turkish economy, the agency cited risks that include “policy missteps, heightened financial stress in the private sector, geopolitical tensions and potential capital flight.”

Turkey needs to secure $230 billion — or roughly $20 million per month — in external funds to roll over its economy in the next 12 months. Such gloomy assessments by Fitch and similar agencies indicate that securing those funds is becoming more difficult and costlier for Turkey. The tightening circle is pushing the country in the direction of the IMF, but whether or when the Erdogan regime will acquiesce to this option remains a big question mark.

Mustafa Sonmez is a Turkish economist and writer. He has worked as an economic commentator and editor for more than 30 years and authored some 30 books on the Turkish economy, media and the Kurdish question. (Al-Monitor 05.09)

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What’s New at EDI – October 2018

October 1, 2018, 1:42 pm

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≪ Previous: Fortnightly, 20 September 2018

Hong Kong’s Financial Secretary and Invest Hong Kong Director General Visit Israel

Mr. Paul Chan Mo-po, Hong Kong’s Financial Secretary and Stephen Phillips, the Director General of Invest Hong Kong (InvestHK) made a visit to Israel in early September joined by a delegation of government personnel, local business people and investors. While in the country, Mr. Chan delivered the keynote address at the 6^th Annual China Business Summit in Tel Aviv. The delegation also participated in DLD Tel Aviv, one of Israel’s major innovation events, and visited with local companies interested in exploring opportunities in China. EDI was heavily involved in planning portions of the visit as part of the company’s responsibilities as the Israel consultant office of InvestHK.

German Games Mission to Israel

In early September, 10 German companies with innovative technologies in the games sector visited Israel to meet with potential joint venture partners. The recruitment in Germany was handled by IBG partner AHP International of Berlin, while EDI organized much of the meeting schedule in Israel.

Illinois Companies to Exhibit at WETEX 2018 in Dubai

Four Illinois companies in the water and cleantech energy sectors will participate in Dubai’s WATEX 2018 exhibition scheduled for October 23-25. Over the three days of the show, the companies will meet with local importers and distributors interested in considering representing these Illinois companies in the region. EDI, representing the trade and investment promotion interests of Illinois in the Middle East, will organize pre-arranged meetings at the show and will be present there to administer the booth and meetings.

Invest Hong Kong Associate Director General to Visit Israel

In mid-November, Associate Director General of Invest Hong Kong, Charles Ng, will visit Israel on a follow-on trip after the visit earlier this fall of the Director General and Hong Kong’s Financial Secretary. Ng will spend time meeting with those Israeli companies and organizations who are sincerely interested in considering opening offices in Hong Kong.

Ukraine Food Mission to Israel

In late November, the Ukraine Export Promotion Office will organize a mission to Israel of Ukrainian food producers seeking business opportunities in Israel. EDI has been selected to handle all aspects of the mission including the scheduling of individual appointments, site visits, social interactions with Israelis and informational seminars about doing business in Israel.

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Fortnightly, 3 October 2018

October 3, 2018, 7:56 am

≫ Next: Fortnightly, 17 October 2018

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3 October 2018
24 Tishrei 5779
23 Muharram 1439

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel’s First Electric Passenger Train Departs from Jerusalem

2: ISRAEL MARKET & BUSINESS NEWS

2.1  Freightos Raises $44.4 Million Series C led by Singapore Exchange
2.2  Elbit Wins $173 Million Contract to Supply Naval Weapon Stations to an Asia-Pacific Country
2.3  BrandTotal Raises $6 Million in Series A Round to Expand Rollout of Agile Marketing Platform
2.4  Grubhub Announces Acquisition of Tapingo
2.5  India’s Flipkart to Acquire Israeli Retail Analytics Startup Upstream Commerce
2.6  Snyk Raises $22 Million in Series B Funding
2.7  Fraud Prevention Technology Leader Forter Raises $50 Million
2.8  Source Defense Raises $10 Million
2.9  SoftWheel Announces Investment by Mitsubishi Corporation
2.10  CTERA Raises $30 Million in Growth Funding to Power Global Expansion
2.11  IAI’s BEDEK Aviation Group Named Official Maintenance Supplier by Hainan Group’s Airlines
2.12  IAI and Effective Space Agree to Technological and Financial Cooperation

3: REGIONAL PRIVATE SECTOR NEWS

3.1  Myki Raises $4 Million in Series A Funding
3.2  WellRight Partners with Manzil Healthcare Services to Bring Programs to the Middle East
3.3  Monami Tech Closes $1 Million Offering from US-Based Investors
3.4  Cairo Angels Announces Investment in Buseet

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Israel’s Industrial Air Pollution Drops Significantly Over the Past Year

5: ARAB STATE DEVELOPMENTS

5.1 Average Lebanese Inflation Rose by an Annual 6.29% by August 2018

Arabian Gulf

5.2  UAE Approves $16.4 Billion Budget for 2019 With No Deficit
5.3  Dubai Retains Ranking as World’s Fourth Most Visited City
5.4  Saudi Inflation Forecast to Rise During the Remainder of 2018
5.5  Saudi Arabia Plans 10% Increase in Spending to Spur Economic Growth
5.6  Saudi Arabia’s High-Speed Rail Project Launches at 300 km per Hour

North Africa

5.7  Egypt to Receive 56,000 Tank Rounds as Part of $99 Million US Arms Deal
5.8  Egypt Railways Signs Historic Deal for 1,300 Train Carriages in Major Revamp
5.9  Egypt Strains to Keep Up With Rising Corn Demand
5.10  Fraser Institute Ranks Morocco 115th in the World in Economic Freedom

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkey’s Foreign Trade Deficit Down 59% Due To Shrinking Imports
6.2  Study Says Greece Ranks Very Low in Economic Freedom
6.3  Greek Primary Budget Surplus Higher Than Target for January – August Period

7: GENERAL NEWS AND INTEREST

ISRAEL

7.1 Number of Women in Senior IDF Roles Continues to Climb

8: ISRAEL LIFE SCIENCE NEWS

8.1  MeMed Raises Over $70 Million to Advance Pioneering Point-Of-Care Platform
8.2  Medtronic to Acquire Mazor Robotics
8.3  CathWorks FFRangio Trial Meets Primary Endpoint and Exceeds Performance Goals
8.4  TransEnterix Acquires Assets and IP from MST – Medical Surgery Technologies
8.5  Venus Medtech Announces Agreement to Acquire Keystone Heart
8.6  Teva Announces Exclusive First-to-File Launch of a Generic Version of Cialis in the US
8.7  INSIGHTEC’s MR-Guided Focused Ultrasound Treatment Now Covered By Medicare in 25 States
8.8  Body Vision Medical Announces the Release of LungVision
8.9  Gamida Cell Files for $69 Million NASDAQ IPO

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 MissingLink.ai Launches to Accelerate Deep Learning Progress
9.2  Mellanox InfiniBand to Accelerate U.S. Department of Energy’s New Supercomputer
9.3  Octopai Named a Gartner Cool Vendor in Data Science and Machine Learning
9.4  Camtek Receives a Multiple Systems Order of $4.5 Million from a Major OSAT
9.5  AudioCodes to Deliver End-to-End Voice Quality Monitoring of Microsoft Teams
9.6  Arbe Robotics Wins the Most Exciting Start-up Silver Award at AutoSens Awards 2018
9.7  Tactile Mobility Launches Tactile Sensing for Driving With $9 Million Raised
9.8  Cyberbit & CloudRange Cyber Announce the First Cyber Range “As a Service” in North America
9.9  ColorChip to Showcase Family of Next-Generation PAM4 200G/400G Optical Transceivers
9.10  Morphisec Announces Interoperability with RSA NetWitness Platform
9.11  Telrad Partnership with OmniPoint to Provide Services to Wireless Internet Providers Nationwide
9.12  SafeRide Launches CAN Optimizer, Enhancing Cloud Anomaly Detection Capabilities
9.13  Vayyar Imaging is Bridging the Gap between LiDar and Radar
9.14  Valeo Selects Vayyar Imaging to Implement Life-Saving Technology in Automotive Vehicles
9.15  Karamba Security Introduces ThreatHive Solution for Cybersecurity Vulnerabilities
9.16  Ethernity Networks Releases the 100G ACE-NIC100 FPGA-Based Smart NIC

10: ISRAEL ECONOMIC STATISTICS

10.1 Israeli Startups Raised Nearly $500 Million in September
10.2 Israel Ranked 6th Internationally for Health Care Efficiency

11: IN DEPTH

11.1  ISRAEL: Israel’s International Investment Position, Second Quarter 2018
11.2  ISRAEL: Foreign Trade, Export & Import of Goods for August 2018
11.3  JORDAN: Jordan ‘B+/B’ Ratings Affirmed; Outlook Remains Stable
11.4  UAE: IMF Staff Completes 2018 Article IV Mission to the United Arab Emirates
11.5  SAUDI ARABIA: The Gray Zone of Social Reforms in Saudi Arabia
11.6  TUNISIA: IMF Executive Board Completes Fourth Review Under EFF Arrangement for Tunisia
11.7  ALGERIA: Algeria’s Succession Crisis: Plenty of Divisions, but No One Conquers
11.8  TURKEY: Moody’s Lowers Country Ceiling on Foreign Currency Bank Deposits to B2
11.9  TURKEY: Medicine Shortages Leaving Turks Desperate for Help
11.10  TURKEY: Turkey Downsizes Economic Growth Outlook as Crisis Bites
11.11  CYPRUS: Cyprus Aims to Export Gas Via Egypt

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel’s First Electric Passenger Train Departs from Jerusalem

On 25 September, the first-ever electric passenger train left Jerusalem’s Yitzhak Navon Station this morning with 400 passengers on board. The Jerusalem-Tel Aviv fast rail link was launched although for the time being trains are only running between Jerusalem and Ben Gurion airport, where passengers must change to a diesel train to continue their journey. Estimates are that it will be another 3-6 months before electrification is completed on the section of line between Ben Gurion airport and Tel Aviv’s Haganah station. When completed the train journey between Jerusalem and Tel Aviv will take 28 minutes.

Israel Railways only obtained safety approval for the line two days before after Israel Police and the Fire and Rescue Services completed an emergency drill deep in one of the tunnels near Jerusalem. For the time being there is only one train in each direction per hour with the frequency increasing to every 15 minutes when the line is fully operational. Passengers can only travel on the trains by obtaining a voucher in advance via the internet or phone. Jerusalem residents can travel for free. (Globes 25.09)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Freightos Raises $44.4 Million Series C led by Singapore Exchange

Freightos has raised a $44.4 million Series C led by Singapore Exchange. Returning investors including General Electric Ventures (the lead investor of Freightos’ Series B extension last year), ICV and Aleph also participated in the round, which brings Freightos’ total funding so far to $94.4 million. While its online freight marketplace will continue to be Freightos’ flagship product, the company also wants to find ways to make the industry more efficient by building a global digital infrastructure.

Launched in 2016 as a price comparison service for freight forwarders – the agents that organize shipments from a supplier or manufacturer to their final destination – Jerusalem’s Freightos now also lets users book, manage and track shipments with more than 1,200 logistics providers. Freightos processes more than one million instant freight quote requests each month using its patent-pending routing and pricing engines. Its database of global shipping rates also underpins the Freightos Baltic Index (FBX), an industry-specific index created to provide more pricing transparency. (Freightos 21.09)

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2.2 Elbit Wins $173 Million Contract to Supply Naval Weapon Stations to an Asia-Pacific Country

Elbit Systems was awarded an approximately $173 million contract to provide Naval Remote Controlled Weapon Stations (RCWS) to the Navy and Coast Guard of an Asia-Pacific country. The contract will be performed over a five-year period. Under the contract, Elbit Systems will provide lightweight, fully stabilized dual-axis Naval RCWS to be installed onboard a wide range of vessels. The Naval RCWS to be provided feature a 12.7mm machine gun and ammunition, Elbit Systems’ advanced fire control system and the Company’s modular electro-optic suite.

Haifa’s Elbit Systems is an international high technology company engaged in a wide range of defense, homeland security and commercial programs throughout the world. The Company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance (“C4ISR”), unmanned aircraft systems, advanced electro-optics, electro-optic space systems, EW suites, signal intelligence systems, data links and communications systems, radios and cyber-based systems. (Elbit Systems 20.09)

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2.3 BrandTotal Raises $6 Million in Series A Round to Expand Rollout of Agile Marketing Platform

BrandTotal, a New York and Tel Aviv based company whose agile marketing platform harnesses artificial intelligence, cyber security techniques and data science to empower brand marketers with competitive data and actionable insights by revealing the digital marketing activities of their top competitors, announced the closing of a $6 million round of funding, bringing their total venture funding to $8 million.

International venture capital firm Flint Capital led the Series A funding round. Glilot Capital Partners and Keshet Dick Clark Productions also joined the funding in early 2018. Both were participants in BrandTotal’s $2 million seed investment round, which closed July 2017. The Series A funding caps off an event filled summer for BrandTotal, announcing a partnership with Microsoft via Microsoft’s Dynamics 365, being selected to Oracle’s Startup Cloud Accelerator and having presented at Morgan Stanley’s prestigious Innovation Summit. Funds from the Series A Round will be used to expand sales, marketing and data science efforts via BrandTotal’s new offices in New York as well as internationally.

Launched in June 2017, BrandTotal’s agile marketing intelligence platform is a SaaS-based solution that harnesses AI, cyber security techniques and data science to distill actionable insights. The technology was developed to provide brand marketers with valuable competitive intelligence about the digital marketing landscape within their industry. Through campaign aggregation, BrandTotal’s technology detects creatives across various digital channels and clusters them into campaigns for analysis. Using signal detection, the platform identifies trends and outliers between brands within the industry-wide competitive landscape. (BrandTotal 25.09)

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2.4 Grubhub Announces Acquisition of Tapingo

Chicago’s Grubhub, the US’ leading online and mobile food-ordering and delivery marketplace, today announced it has entered into an agreement to acquire Tapingo, a leading platform for campus food ordering. With over 150 college campus partners, Tapingo enables tens of thousands of order-ahead transactions per day for more than half a million active diners at on-campus cafes, restaurants, and cashier-less stores. The combination of Tapingo’s network with Grubhub’s restaurant marketplace and delivery capabilities will bring greater convenience to students and help campus restaurants capitalize on pickup and delivery orders.

Grubhub has entered into a definitive agreement to acquire Tapingo for approximately $150 million, subject to standard closing conditions. The transaction is expected to close in the fourth quarter of 2018. Grubhub will discuss the financial impact of the expected acquisition on its third quarter earnings call. Kirkland & Ellis LLP and Fischer Behar Chen Well Orion & Co served as legal counsel to Grubhub in connection with the acquisition. Herzog, Fox & Neeman and Silicon Legal Strategy served as legal counsel and JMP Securities LLC served as a financial advisor to Tapingo.

Tapingo’s U.S. and Israel based teams have built a technology platform custom designed for campus use, with direct integration into college meal plans and point-of-sale (POS) systems, ensuring seamless order-taking and accurate, up-to-the-minute transparency on wait times for diners. The Tapingo platform also streamlines operations and increases in-store efficiency for campus restaurant partners – including Taco Bell, Chipotle, Chick-fil-A, Panda Express and Jamba Juice – and powers partnerships with Aramark and Sodexo, the leading providers of food services and facilities management nationwide.

Tapingo provides world-class mobile solutions designed to improve the retail process for consumers and merchants. Blending its proprietary ordering technology with operational expertise, Tapingo allows operators to benefit from increased volume and efficiency while better serving customers. As the leading commerce app on campus, Tapingo serves students in more than 150 colleges, universities and professional campuses across the U.S., processing tens of thousands of transactions daily on its platform. (Grubhub 25.09)

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2.5 India’s Flipkart to Acquire Israeli Retail Analytics Startup Upstream Commerce

Indian electronic retailer Flipkart is acquiring Israel-based retail analytics provider Upstream Commerce. Financial terms were not disclosed, but pundits value the deal at between $40 to $50 million. Flipkart, founded in 2007 and headquartered in Bengaluru, India, is the country’s e-commerce leader, with over 100 million registered users, over 100,000 sellers and over 80 million products on offer. The company reported revenues of $3.07 billion for the fiscal year ended March 2017. In August, Walmart completed its $16 billion acquisition of a 77% stake in Flipkart.

Founded in 2010, Upstream is based in both Tel Aviv and New York. The company offers online retailers a pricing and product analytics service. Upstream raised around $6 million in total equity to date. Investors including Israeli venture capital firm YL Ventures, Moscow-based Bright Capital, and Los Gatos, California-based Webb Investment Network. Upstream’s team will continue to operate from Israel. Israel-based law firm Shibolet & Co. represented Flipkart. Israel-based Glusman & Co. represented Upstream. (Various 26.09)

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2.6 Snyk Raises $22 Million in Series B Funding

Snyk announced their $22 million, series B fundraising. The Series B fundraising was led by Accel, with participation from GV and existing investors Boldstart Ventures, Heavybit and others. This round comes less than 7 months after their previous one, in order to support our rapid growth and expand their developer-first offering.

Over 160,000 developers use Snyk to find, fix and monitor for vulnerable libraries. Snyk now protects over 140,000 repositories on source code management platforms such as GitHub, Bitbucket and GitLab. These developers are downloading Snyk’s CLI at a rate of 100,000 downloads/week, integrating into their CI and other processes. Being an open platform that developers automate and integrate with, over 5,000,000 calls to Snyk’s API were made in the last month! Snyk’s goal is to automate vulnerability remediation so that issues are actually fixed on an ongoing basis – Snyk opens 10,000 fix pull requests and applies over 580,000 patches each month!

Snyk’s mission is to help developers use open source code and stay secure. The use of open source is booming, but security is a key concern. Snyk’s unique developer focused product enables developers and enterprise security to continuously find & fix vulnerable dependencies without slowing down, with seamless integration into Dev & DevOps workflows. Snyk is adopted by over 100,000 developers, has multiple enterprise customers (such as Google, New Relic, ASOS and others) and is experiencing rapid growth. Snyk was founded in 2015 and is headquartered in London with offices in Israel and the US. (Snyk 25.09)

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2.7 Fraud Prevention Technology Leader Forter Raises $50 Million

Forter secured $50 million in Series D financing. The funding round was led by March Capital Partners with participation from Salesforce Ventures and previous investors Sequoia Capital, New Enterprise Associates (NEA) and Scale Venture Partners.

E-commerce merchants find that by joining the Forter Merchant Network they are fighting fraud together. Forter not only removes the burden of fraud but also improves the user experience for their customers, reduces friction and false declines, and drives revenue creation. The company leverages sophisticated machine learning technologies, enhanced by human domain expertise, Israeli military intelligence and continuous research, to create a robust and ever-expanding identity database, already covering more than 180 million U.S. shoppers. Today, with Forter’s powerful data network effect, over 95% of transactions processed by the company are completed by consumers who interacted with the network before. This growing network continues to power a coalition of retailers against fraud. This includes Fortune 500 retailers, leading travel companies and fast-growing digital disruptors throughout the U.S., Europe, and Asia.

Tel Aviv’s Forter is the leading e-commerce fraud prevention company that protects merchants during each stage of the customer lifecycle. The company’s identity-based fraud prevention solution detects instances of fraud and abuse beyond transactions in real-time, such as attempts at account takeover and return abuse. A team of world-class analysts constantly update Forter’s machine learning solutions with cutting-edge insights and research, ensuring the proprietary algorithms adapt to the latest fraud trends in real-time. As a result, Forter is trusted by Fortune 500 companies, online travel businesses, and fast-growing digital disrupters to deliver exceptional accuracy, a smoother user experience and elevated sales at a much lower cost. (Forter 26.09)

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2.8 Source Defense Raises $10 Million

Source Defense has completed a $10 million Series A funding round. Venture capital firms investing in the round include Palo Alto, California-based Allegis Capital LLC (AllegisCyber), Tokyo-based Global Brain Corp., Connecticut Innovations and existing investor Jerusalem Venture Partners (JVP). Source Defense has also announced the opening of two new offices: The company’s new US headquarters in Stamford, Connecticut and a second R&D center in Rosh HaAyin. The company intends to launch an intensive hiring campaign in both locations.

Founded in 2014 and based in Rosh HaAyin, Source Defense develops cloud-based software for automatically monitoring and detecting vulnerabilities on third-party applications used on websites. Source Defense provides a fully automated solution that controls the access and permissions of all third parties operating on a website. This ensures compliance with customer data privacy and eliminates the potential for compromised third-party tools to skim payment information or other valuable data while reducing labor-intensive management. (Source Defense26.09)

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2.9 SoftWheel Announces Investment by Mitsubishi Corporation

SoftWheel announced that Mitsubishi Corporation, Japan’s largest trading and investment company, has joined SoftWheel’s latest investment round.

Established in 2011, SoftWheel is a technology company headquartered in Tel Aviv, Israel. SoftWheel develops cutting edge systems for the automotive industry, enabling the fusion of the drivetrain, suspension, e-motor, steering, and brakes into the vehicle’s wheel. Its innovative technology enables significant reduction in space, weight, and energy consumption of vehicle platforms for EV, hybrid, and autonomous vehicles.

SoftWheel is also active in the personal mobility sector, providing in-wheel technology for wheelchair and bikes. SoftWheel’s system reduces pain for wheelchair riders and increases their comfort, significantly improving the daily riding experience. SoftWheel is active in North America and Europe and is providing its wheelchair technology to American veterans through its partnership with Ki Mobility and to the general U.S. market through Numotion. As medical devices, SoftWheel’s wheels, which are clinically proven to provide benefits and are FDA and CE approved, are reimbursed in select global markets. (SoftWheel 27.09)

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2.10 CTERA Raises $30 Million in Growth Funding to Power Global Expansion

CTERA Networks has secured a $30 million Series D growth equity funding round. The round was led by Red Dot Capital Partners, a Temasek Holdings backed growth fund, with the support of new investor Singtel Innov8 and with the participation of all existing shareholders: Benchmark Capital, Bessemer Venture Partners, Cisco, Venrock, Vintage Investment Partners and Viola Group. The new investment will be used for the expansion of CTERA’s global sales and delivery organization, with an emphasis on growth in Asia, and particularly in Southeast Asia and Singapore. In addition, it will be used to power the continued development of CTERA’s patented file services technology.

This funding round follows a year of record results for CTERA, in which the company has more than doubled its enterprise software subscription revenue, signed strategic reselling agreements with IBM and HPE, and continued to add world-leading organizations to its customer base. These include McDonald’s, WPP Plc and the U.S. Department of Defense, as well as global top-5 banks, insurance companies, global advertising groups and defense organizations.

Trusted by Fortune 100, government organizations and leading service providers, Petah Tikva’s CTERA provides the only cyber-hardened and completely unified file sharing and data protection platform that allows enterprise IT to address the full continuum of global file services from the cloud infrastructure of their choice. CTERA is leading the digital transformation of enterprises to cloud-enabled file services, with millions of corporate users and tens of thousands of cloud-enabled offices worldwide. (CTERA 02.10)

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2.11 IAI’s BEDEK Aviation Group Named Official Maintenance Supplier by Hainan Group’s Airlines

Israel Aerospace Industries’ BEDEK Aviation Group has recently entered an official supplier agreement with HNA Group from China. Under the agreement, BEDEK’s Engine Division will serve as the maintenance and overhaul center for the V2500 engines of HNA Group’s airlines. The engines will be sent to BEDEK by the customers and returned to China following servicing. The signing of the agreement, which is estimated at tens of millions of dollars a year, was held at HNA Group headquarters in Haikou.

BEDEK has acquired worldwide reputation as a leading supplier of comprehensive services for passenger and cargo airplanes. Its customers include aircraft lease companies, airlines, aircraft manufacturers and cargo shippers. BEDEK’s modern facility provides a complete range of maintenance and overhaul services catered for wide and narrow body aircraft. Recent years have seen significant developments in engine maintenance with BEDEK’s Engine Division providing “leasing” services to aircraft engines. The new agreement with HNA Group is an important breakthrough and vote of confidence in the quality of service provided by BEDEK Aviation Group. (IAI 26.09)

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2.12 IAI and Effective Space Agree to Technological and Financial Cooperation

Israel Aerospace Industries (IAI) and Effective Space announced that they have signed a term sheet for cooperation, including both technological and financial partnerships. Under the agreement, Effective Space will appoint IAI as the primary contractor of its SPACE DRONE spacecraft, while IAI will work to complete the necessary approvals for equity investment in Effective Space. The term sheet follows more than a year of cooperation, during which both companies have been jointly working on the SPACE DRONE spacecraft design.

Effective Space is pioneering a new era in last-mile logistics in space that will see its SPACE DRONETM spacecraft fleet deployed to provide auxiliary services to space assets. Initial services to be provided by Effective Space will be life-extension for satellites in Geosynchronous Earth Orbit. The company’s first contract, signed in 2017 with an international satellite operator, will see two SPACE DRONE spacecraft launched in 2020 to extend the life of two existing satellites, and is expected to generate revenues of more than $100 million.

The design of the SPACE DRONE spacecraft is a result of decades of experience in the field of small satellites. ‘Phase One’ services will see the spacecraft dock with existing satellites in Geosynchronous Earth Orbit that are reaching the end of their normal life expectancy. The SPACE DRONE spacecraft will provide station-keeping and attitude-control, relocation, deorbiting, orbit and inclination correction, and is capable of providing up to 15 years of overall life-extension service.

Tel Aviv’s Effective Space, founded in 2013, has raised $15 million from investment funds in previous rounds of financing. Effective Space is developing a unique, small spacecraft to extend the life of satellites in orbit, based on the vision to provide logistics services in the rapidly growing space economy. To this end, it has developed a unique and patented technology for rendezvous and docking to satellites in space through a small spacecraft called SPACE DRONE. (IAI 12.09)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Myki Raises $4 Million in Series A Funding

Beirut’s Myki has raised $4 million in a Series A round led by Dubai-based VC BECO Capital with participation from Beirut-based LEAP Ventures and B&Y Venture Partners, all of which are returning investors. This strategic funding will allow Myki to expand its US operations to tackle decentralized identity management in the enterprise space. Myki targets three user verticals:

-“Myki Password Manager & Authenticator” for consumers is a mobile application that allows users to seamlessly and securely store and manage passwords, credit cards, ID cards and secure notes. Myki allows users to login to accounts using biometric authentication such as touch ID and Face ID.

-Myki’s enterprise offering “Myki for Teams” gives administrators full visibility and control over their company’s access management.

-“Myki for Managed Service Providers” is a web portal that allows MSPs to manage the passwords of their clients in a secure, streamlined and scalable manner.

After having officially launched on the TechCrunch Disrupt Battlefield stage in September 2016, Myki has amassed global recognition and has been named one of the “Best Free Password Managers of 2018” by PCMag, and made the list of Apple’s ‘Most Powerful Password Managers’. Back in May, on the TechCrunch Disrupt Berlin stage, Myki announced a major partnership with self-sovereign identity application Blockpass – combining the power of identity sovereignty and cloudless password security that is Myki. In late 2016, the startup received a seed investment from BECO Capital, which Jebara said they will use to accelerate product development and go-to-market time. With over 250,000 users worldwide and a rapidly-growing user base, Myki is well positioned to address the security and identity management needs and concerns of consumers and businesses alike. (ArabNet 05.09)

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3.2 WellRight Partners with Manzil Healthcare Services to Bring Programs to the Middle East

Chicago’s WellRight, a leading provider of corporate wellness programs, announced their partnership with Manzil Healthcare Services in UAE. Manzil is an internationally accredited home healthcare and disease management company providing individualized care for patients in the comfort of their own environment. Manzil is adding the WellRight App to their wellness program offerings for corporate employers, insurance companies, and its own employees. The programs and services – including health risk assessments, nutrition, ergonomics, fitness, and wellness coaching – created by Manzil will reduce employee sick days, claims costs, and health premiums while improving employee health risk profiles, staff productivity, and retention. (WellRight 24.09)

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3.3 Monami Tech Closes $1 Million Offering from US-Based Investors

Monami Tech, a UAE-based Fintech payments startup, has successfully closed a seed funding of $1 million. This is the first tranche of a total Series A round which is expected to raise over $3 million over the next three months. This round was led by PGH Holdings, an investment vehicle led by renowned American payments innovator Henry Helgeson – the Founder and CEO of Cayan – in addition to Paul Vienneau – the CTO of Cayan – and Greg Cohen – the President of Paya, former President of ETA, and CRO of Cayan.

Founded in UAE in 2016, Monami Tech specializes in helping financial services companies leverage the benefits of digital technology to enhance customer experience by focusing on the delivery of the following pillars of value: increasing revenue, reducing risk, and increasing efficiency in operations. Aiming to reinforce current operations and capabilities in the region, Monami Tech will be using this cross-border investment to ramp up sales and marketing efforts as expansion plans in the Middle East gain momentum. Monami Tech is also planning to announce expansion across the GCC including Bahrain and Saudi Arabia in the near future. The company recently announced its partnership with Al Hail ORIX Finance PSC for the deployment of its technology for SAMA’s business and consumer lending project. (ArabNet 10.09)

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3.4 Cairo Angels Announces Investment in Buseet

Cairo Angels, a global network of angel investors focused on supporting start-up opportunities in Egypt, the Middle East and Africa, announced its investment in Buseet. Founded in 2016, Buseet is a Transport Tech start-up operating in Cairo and Dubai. Buseet provides an easy to use, comfortable and cost-effective technology solution to the everyday commute of thousands of customers. Buseet is the first bus fleet based Transport Tech start-up founded in Egypt.

After successfully joining Dubai’s prestigious start-up Bootcamp in 2017, the company is expanding operations to Dubai in 2018. Buseet plans to use investment to increase its product offering and to grow to other markets in the MENA region. The Cairo Angels investment is part of a seed investment round that includes 500 start-ups and other international angel investors from Singapore and the Gulf. The company is now well capitalized to grab a significant stake in this fast growing sector.

The Cairo Angels is Egypt’s first formal network of angel investors and is headquartered in Cairo, Egypt with operations in London, UK covering the European region and Dubai, UAE covering the GCC region. The Cairo Angels invests in and supports start-ups and early stage, high growth businesses across the Middle East and Africa. The Cairo Angels is a founding member of MAIN, a network of the leading angel investment networks in the MENA region. (DNE 25.09)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Israel’s Industrial Air Pollution Drops Significantly Over the Past Year

There has been a significant and continued reduction in industrial air pollution in 2017, Israel’s Environmental Protection Ministry announced on 2 October, although some pollution levels are still poor compared to Israel’s European neighbors. According to the ministry, since 2012 there have been reductions ranging from 8% to 62% in air pollutant emissions, primarily as a result of emission restrictions imposed by the ministry following the implementation of the 2011 Clean Air Law and the increased use in natural gas, rather than coal, to produce electricity.

The key reasons behind the reduction in pollution, the report says, lie in significant decreases in emissions in key regions, including a decrease of 500 tons of emissions in the Haifa Bay and Mishor Rotem areas following the closure of factories belonging to Haifa Chemicals. The ministry admits, however, that Israel still has a long way to go in terms of per capita nitrogen and sulfur oxide emissions compared to the country’s European Union neighbors. The primary cause behind the oxide emissions are the coal-fired power plants in Hadera and Ashkelon, which are operating without advanced pollution-reducing facilities.

Emissions of cancer-causing air pollutants, or pollutants suspected of being carcinogenic, rose slightly by 1% during 2017, but have decreased overall by 44% since 2012. The slight increase last year was primarily due to increased asphalt factory emissions.

Off-shore emissions from the Tamar natural-gas field, located 80 km. off the shore of Haifa, are expected to decrease by 98% in Q1/19 after the conclusion of construction work on pollution-reducing facilities at Israel’s only operational gas field. Due to its distance from the Israeli coast, its current emissions have a negligible impact on air quality onshore. The Leviathan gas field, situated 130 km. from Haifa, is due to become operational by the end of 2019 but is not expected to produce pollutant emissions as the treatment of the natural gas will take place within a closed system. (JP 02.10)

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5: ARAB STATE DEVELOPMENTS

5.1 Average Lebanese Inflation Rose by an Annual 6.29% by August 2018

According to the Central Administration of Statistics (CAS), Lebanon’s average inflation rate rose by 6.29% by August 2018 compared to the same period last year as all 13 components of the Consumer Price Index (CPI) posted average yearly upturns. The average costs of Housing and utilities (water, electricity, gas and other fuels) constituting a combined 28.4% of the Consumer Price Index or CPI, rose by 6.85% year-on-year (y-o-y) by August 2018. Owner-occupied rental costs, which comprise 13.6% of this category, rose by 4.11% y-o-y. As for the average prices of water, electricity, gas, and other fuels (11.8% of the housing & utilities component), they increased by an annual 10.36% by August 2018. The average prices for food and non-alcoholic beverages (constituting 20% of the CPI), transportation (13.1% of the CPI), and education costs (6.6% of CPI) registered yearly upticks of 4.80%, 8.76%, and 4.07% by August 2018. (CAS 23.09)

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►►Arabian Gulf

5.2 UAE Approves $16.4 Billion Budget for 2019 With No Deficit

The UAE approved a budget of $16.4b (AED60.3b) for 2019, an increase of 18% on last year. The UAE cabinet said 42.3% of the budget for the next year was allocated to the community development programs, 17% to the education system and 7.3% to develop the health sector and provide medical services. The UAE also approved a $49 billion (AED180b) budget for the next three years, with a significant portion amount going towards education and social development. UAE Prime Minister Sheikh Mohammed said 59% of the three-year budget would be allocated to education and social development. The UAE cabinet also approved a Federal Law regulating space sector, which Sheikh Mohammed said would “open the sector for investments, research and cooperation” from the private sector. (AB 30.09)

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5.3 Dubai Retains Ranking as World’s Fourth Most Visited City

Dubai has retained its ranking as the fourth most visited city in the world for the fourth straight year, according to Mastercard’s Global Destination Cities Index (GDCI) 2018. The city welcomed 15.79 million overnight visitors last year and with a projected growth rate of 5.5%, the emirate is expected to witness another year of steady expansion in 2018. Only Bangkok, London and Paris were ahead of Dubai in the global list.

Dubai also topped the list of global cities with the highest international overnight visitor spend for the third year in a row, with total international visitor spending of $29.7 billion in 2017, ahead of Saudi Arabia’s Mecca ($18.45 billion) and London ($17.45 billion). Abu Dhabi was also named the fastest growing city in the Middle East and Africa, with a compound annual growth rate (CAGR) of 18.21% between 2009 and 2017 in overnight visitor arrivals. The UAE’s capital city was also among the top 10 global cities that experienced the strongest growth in international arrivals in the Mastercard study. The GDCI expanded this year to look at 162 cities across the world. (AB 25.09)

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5.4 Saudi Inflation Forecast to Rise During the Remainder of 2018

Saudi inflation was unchanged between July and August but is expected to rise over the rest of this year as underlying price pressures pick up, according to analysts Capital Economics. The prediction was made after new figures showed consumer prices in Saudi Arabia rose by 2.2% year-on-year in August. That was unchanged from July, while inflation remained below its recent peak of 3% in January, when the introduction of a new value-added tax (VAT) and a raft of administered price hikes caused inflation to spike.

Analysis of the data showed that price pressures across the major price categories were broadly the same in August as they were in July. Food inflation – which accounts for around 20% of the country’s consumer price index basket – edged down last month, from 6.7% to 6.6%. Apparel inflation fell deeper into negative territory, taking it below its recent trough in April. Restaurants and hotels inflation hit a fresh five-year high, rising from 7.6% in July to 8.4% in August compared to the year-earlier period. (AB 26.09)

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5.5 Saudi Arabia Plans 10% Increase in Spending to Spur Economic Growth

Saudi Arabia plans to increase spending next year more than initially forecast as authorities take advantage of higher oil prices to spur economic growth and reduce unemployment. Public spending is expected to reach 1.106 trillion riyals ($295 billion) in 2019, 100 billion riyals ($27b) more than the government had projected last year, Finance Minister Mohammed Al-Jadaan said. Authorities expect spending to rise to 1.170 trillion riyals by 2021, he said, citing initial estimates.

The world’s biggest oil exporter is grappling with an economic slowdown that followed the collapse of crude prices in 2014. Measures to reduce the budget deficit and raise non-oil revenue weighed on business sentiment, pushing the unemployment rate among Saudi nationals to its highest level in more than a decade. Much of next year’s expected economic growth will be led by the oil industry, which is unlikely to create a significant number of jobs. Hence, the labor market will remain one of the largest economic challenges.”

The government expects GDP to expand 2.1% this year after contracting 0.9% in 2017. Growth, however, will stay below 2.5% through 2021, estimates show. That compares with an average of 4% between 2000 and 2014, according to IMF data.

The government believes revenue is expected to rise to 978 billion riyals in 2019 from 882 billion in 2018, while 2020 revenue is estimated to reach 1.005 trillion riyals, rising to 1.045 trillion riyals a year later. The budget deficit is seen narrowing to 3.7% of GDP in 2021 from 5% this year, while public debt is projected to increase to 25% of GDP from 20% in 2018

To reduce unemployment among Saudi nationals, the kingdom’s non-oil economy needs to expand between 3 and 4% a year, he said. That level is unlikely to be achieved before 2022, according to IMF projections. (AB 30.09)

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5.6 Saudi Arabia’s High-Speed Rail Project Launches at 300 km. per Hour

Saudi King Salman on 25 September inaugurated a high-speed railway linking Mecca and Medina, Islam’s holiest cities, described by local officials as the biggest transportation project in the region. The Haramain High-Speed Rail system will transport Muslim pilgrims, as well as regular travelers, 450 kilometers (280 miles) between the two cities via the Red Sea port of Jeddah in two hours. Thirty-five passenger trains capable of travelling at speeds of 300 kilometers per hour will slash the travel time from several hours to 120 minutes. The rail project, dogged by several delays, was built at a cost of more than $16 billion.

In 2011, Saudi Arabia signed a deal for a Spanish consortium to build the rail track, supply 35 high-speed trains and handle a 12-year maintenance contract. The kingdom is boosting its infrastructure spending and expanding its railways, including with a $22.5 billion metro system under construction in the capital Riyadh, as it seeks to diversify its oil-dependent economy. The annual hajj pilgrimage, which is to be held in September next year, attracts more than two million Muslims to the Mecca region. (AFP/Riyadh 26.09)

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►►North Africa

5.7 Egypt to Receive 56,000 Tank Rounds as Part of $99 Million US Arms Deal

The Defense Security Cooperation Agency (DSCA) announced that the Egyptian government has requested to buy forty-six thousand (46,000) 120 MM Target Practice-Tracer (M831A1) and 120 MM Target Practice, Cone Stabilized ,Discarding Sabot- (M865) rounds and (10,000) 120 MM 4th-Generation Kinetic Energy –Tungsten (KE-W) A4 Armor-Piercing Fin-Stabilized Discarding Sabot with Tracer (APFSDS – T) rounds. The estimated cost is $99 million and Egypt is going to use the rounds to maintain a strategic munitions inventory for its M1A1 tank fleet and to combat the activity of the IS affiliated group of ‘Sinai Province’ in North Sinai. On the implementation steps of the deal, the sale will involve multiple trips to Egypt with up to six US government and contractor representatives over a period of up to five years.

The deal also included (4,500) 120MM Insensitive Munitions High Explosive with Tracer (IM HE-T) tank rounds, in addition to U.S. government and contractor engineering and logistics support services. For nearly 15 years, Egypt has been producing this type of ammunition under a current co-production agreement with US, the main aim of the (APFSDS-T) rounds is to replace older model120MM KE-W, KE-W Al, and KE-W A2 ammunition.

During the recent years, Egypt has sought to diversify its ammunition sources as a way to safeguard its supply of arms and military equipment. It depended on several countries such as France, however Russia has represented a significant arms supplier, with a host of major agreements having been signed. Russia returned to be a powerful supplier of ammunition in Egypt, especially in the wake of a visit paid to the Moscow by Egyptian President al-Sisi in 2014, during this visit the two countries signed arms deals worth approximately $3.5 billion that aimed to upgrade the Egyptian missiles systems through the acquisition by Egypt of Russian S300 anti-aircraft missiles. Egypt is expected to receive through a deal with Russia 50 MIG 29 fighters in different batches, delivered on an annual basis over several years, the deal came after Russian President Putin’s meeting with Sisi in February 2014. Beside the supply of MIG 29, Egypt is expected to receive from Russia MIG 35 and Su-30 fighter jets with goals to improve the performance of the Egyptian Air Force. (ES 19.09)

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5.8 Egypt Railways Signs Historic Deal for 1,300 Train Carriages in Major Revamp

Egyptian National Railways signed a deal on 25 September with the Russian-Hungarian consortium Transmashholding to import and manufacture 1,300 new railway carriages, the largest deal in the history of Egypt’s railways. The signing ceremony was attended by Prime Minister Madbouly, Minister of State for Military Production Al- Assar, Minister of Transport Arafat, as well as the Russian and Hungarian ambassadors in Cairo. Speaking at a press conference following the ceremony, Arafat said the deal, worth €1.2 billion, includes 800 air-conditioned train carriages. The first batch of train carriages will be delivered after 14 months, the minister said. The deal is an implementation of the government’s directives to develop all elements of the railways system. (MENA 25.09)

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5.9 Egypt Strains to Keep Up With Rising Corn Demand

Egypt is making a valiant effort to boost its domestic food production, but continues to struggle to keep up with demand caused by its rapidly growing population and changing consumer tastes. Corn production is expected to jump 6.25%, to 6.8 million tonnes in the 2018/19 season, and area planted to corn is expected to rise by 50,000 hectares to 850,000 hectares from last year, the USDA estimates. But those gains fall well short of meeting expected total corn consumption of 16.1 million tonnes for 2018/19, as the country’s population expands at a rate of 2.5% per annum. Imports, projected to rise 1% from last year to 9.5 million tonnes, will continue to make up the shortfall. Argentina, Ukraine and the US are Egypt’s top suppliers of imported corn. Egypt’s struggle with corn supplies mirrors situations with other major crops, including wheat and cotton, both of which the country once produced in much higher quantities.

Looking further ahead, Egypt’s corn domestic consumption will likely continue to grow as the country develops its poultry and dairy sectors. The USDA expects Egypt’s poultry industry to grow 2-3% annually, backed by commercial-producer consolidation and an increased need for chicken feed. Egyptian consumers are also showing a growing appetite for fresh dairy products, driving dairy industry growth of 3-4% per annum. Egypt will have to make great strides in corn production to keep up with increased domestic consumption now and into the future. (GRC 23.09)

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5.10 Fraser Institute Ranks Morocco 115th in the World in Economic Freedom

On 25 September, Fraser Institute has ranked Morocco 115th in its annual report on economic freedom among 162 countries. Morocco led the North African and ranked in the third quartile in economic freedom, with a rate of 6.37 out of 10, followed by Tunisia (121st), Mauritania (136th), and Egypt (147th). Algeria (159th) and Libya (161st) were among the 10 lowest-rated countries. Although Morocco’s economic freedom score has dipped since 2010, the most recent score is an increased by 0.01 from the previous year, moving the country up one ranking from 116th.

The Fraser Institute’s report showed that Morocco’s economic freedom has increased from 1990 to 2016. Morocco scored 4.29 in 1990 and ranked 71th. Morocco’s economic freedom score then increased to 5.93 (ranked 86th) in 2000 and to 6.41 (ranked 104th) in 2010. Morocco scored 5.93 in size of government and was ranked 111th worldwide. The North African country scored 5.40 in legal system and property rights (ranked 68th), 7.22 in sound money (ranked 118th), 6.93 in freedom to trade internationally (ranked 95th), and 6.35 in regulation (ranked 130th).

At the African continent level, Morocco ranked 13th after Mauritius (first in Africa and 8th in the world), Rwanda (40th), Botswana (44th), Uganda (46th), Kenya (61th), Tanzania (79th), South Africa (94th), Zambia (97th), Ghana (98th), Liberia (100th), Namibia (113th), and Nigeria (118th). Among Arab countries, Morocco ranked 9th after Bahrain (30th), the UAE (37th), Qatar (38th), Jordan (42nd), Lebanon (74th), Oman (89th), Kuwait (90th) and Saudi Arabia (103rd). (Fraser 29.09)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkey’s Foreign Trade Deficit Down 59% Due To Shrinking Imports

Turkey’s foreign trade deficit saw an annual fall of 59% in August, the country’s statistical authority announced TUIK on 28 September. Turkey’s imports decreased by 22.7% year-on-year to $14.8 billion in August while exports fell 6.5% to $12.4 billion. From January to August, Turkey’s foreign trade balance showed a deficit of $49.2 billion, while the amount was $45.7 billion over the same period last year. In August, the country’s foreign trade deficit amounted to $2.4 billion, down from $5.9 billion in the same month last year.

In August 2018, the top country for Turkey’s imports was Russia with $1.55 billion, followed by China with $1.44 billion, Germany with $1.27 billion and the U.S. with $920 million. The main market for Turkish exports was Germany with $1.12 billion, followed by the U.K. with $900 million, Iraq with $648 million and the U.S. with $637 million. Over the past five years, the highest export-to-import ratio on a yearly basis was recorded in 2016 with 71.8%, while Turkey’s foreign trade deficit has fallen from $99.8 billion in 2013 to $76.8 billion in 2017. (TUIK 28.09)

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6.2 Study Says Greece Ranks Very Low in Economic Freedom

Greece ranks 108th among 162 countries and is placed in the third category in terms of indicators of economic freedom, a study by the Fraser Institute shows. Specifically, the study by the Canadian think tank places Greece in the same place (108th) with China and Swaziland this year. At the same time, it finds the country in the lowest position among all EU member states, as well as out of all countries of Southeast Europe.

The degree of economic freedom is calculated on the basis of institutions and policies implemented by each country in five areas: the size of the state, the rule of law, access to a strong currency, freedom in international trade, and the regulatory environment in bank credit and entrepreneurship.

Looking at the sub-indices, Greece, which has a total rating of 6.46 out of 10, has a mere score of 4.38 in the size of government and 5.78 in the legal system and ownership rights. It is characteristic that among the EU member states, the first country that ranks above Greece is Croatia in 75th place. In comparison with non-EU countries of Southeastern Europe, Greece is in worst position than Bosnia-Herzegovina which ranks 98th, 10 places higher. It is also indicative that Romania is in 20th place, Albania is 34th and Bulgaria 46th.

The countries with the best performance in all five indices globally remain the same as last year. Hong Kong is again at the top of the index with a score of 8.97 out of 10, followed by Singapore (8.84), New Zealand (8.49), Switzerland (8.39) and Ireland (8.07). Venezuela ranks at the very bottom of the 162 countries. The Fraser Institute is the top think tank in Canada for the 10th straight year and ranks in the top 25 among all think tanks worldwide. (Various 25.09)

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6.3 Greek Primary Budget Surplus Higher Than Target for January – August Period

The Greek state budget showed a primary surplus of €3.157 billion ($3.718 billion) in the January-August period, down from a primary surplus of €3.544 billion ($4,174 billion) in the same period last year, but up from a budget target for a surplus of €917 million ($1,080 billion). The Greek Finance Ministry said that the state budget (general government) showed a deficit of €1.220 billion in the eight-month period, down from a budget target for a shortfall of €3.384 billion and a deficit of €1.271 billion last year.

More specifically, budget revenue exceeded targets in the categories of: special category income tax (5.1%), property taxes (5.8%), direct taxes (8.4%), VAT on oil products (8.8%), other transaction taxes (6.9%), vehicle registration stamp (14.3%), other special consumption taxes (0.8%), indirect taxes (20.5%), EU receipts (23.3%) and other non-tax revenue (8.9%). On the other hand, budget revenue fell short of targets in the categories: income tax (0.6%), corporate tax (23.7%), other indirect taxes (93.0%), special consumption tax on energy products (0.7%), and privatization revenue (9.1%). The Public Investment Program revenue was €1.435 billion ($1,690 billion), down €166 million ($195 million) from targets. (A.M.N.A. 24.09)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Number of Women in Senior IDF Roles Continues to Climb

A record number of women are reaching senior ranks in the Israeli military and in the past few years, the number of women appointed to roles at the ranks of lieutenant colonel, colonel and brigadier general has risen by 20 to 30%. It is thought that within the next three years, at least one more woman would be promoted to the rank of major general, and possibly two.

According to IDF figures, there are currently seven women serving at the rank of brigadier general – the third-highest rank in the Israeli military – which is the highest number of women serving at this rank in the history of the IDF. As recently as 2013, there were only three women serving at the rank of brigadier general, the year when Orna Barbivai made history by becoming the first woman to be promoted to major general. Barbivai was put in charge of the IDF’s Personnel Directorate.

In 2018, there were 36 women serving at the rank of colonel. To compare, in 2013 there were only 24 women serving at the rank of colonel. Women have also made advances at the rank of lieutenant colonel, with 326 women serving at that rank in 2018 compared to 291 in 2013.

The issue of women’s military service has been a matter of public debate for some time, particularly when it comes to the question of opening combat roles to women. Some 90% of all positions in the IDF are now open to women and the remaining 10% are mostly combat positions in elite units. Senior IDF officials explain that the general trend in the country’s military is to promote women and bring them into as many professions as possible. However, they say, in some cases, women turn down offers of promotion, frequently because of family responsibilities. (IH 02.10)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 MeMed Raises Over $70 Million to Advance Pioneering Point-Of-Care Platform

MeMed announced on 20 September that it raised over $70 million from new and existing investors including Ping An Global Voyager Fund, Foxconn, Caesarea Medical Holdings, Clal Insurance, Phoenix Insurance, OurCrowd, Social Capital, WTI, Horizons Ventures and others. MeMed will use the funds to advance three projects: the market adoption of MeMed BV, an immune-system based test for distinguishing between bacterial and viral infections; the completion of the development, upscale manufacturing and clearance of MeMed Key, a point-of-care (POC) protein measurement platform and expand its pipeline of innovative tests that integrate machine learning and immune-based measurements to tackle big clinical challenges. Last year, MeMed secured a $9.2 million contract by the Defense Threat Reduction Agency (DTRA), a branch of the US Department of Defense (DoD) to improve clinical applications of its technology.

Haifa’s MeMed‘s .mission is to translate the complex signals of our immune system into simple diagnostic insights that transform the treatment of infectious and inflammatory diseases – at the right place and the right time. Over nearly a decade, MeMed has developed and validated a pioneering immune-based protein signature called MeMed BV for distinguishing between bacterial and viral infections – an indispensable tool in the fight against resistant strains of bacteria. (MeMed 20.09)

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8.2 Medtronic to Acquire Mazor Robotics

Dublin’s Medtronic, a global leader in medical technology, and Mazor Robotics announced the companies have entered into a definitive merger agreement under which Medtronic will acquire all outstanding ordinary shares of Mazor for $58.50 per American Depository Share, or $29.25 (104.80 ILS) per ordinary share, in cash, for a total of approximately $1.64 billion, or $1.34 billion net of Medtronic’s existing stake in Mazor and cash acquired. The boards of directors of both companies have unanimously approved the transaction. Medtronic’s acquisition of Mazor strengthens Medtronic’s position as a global leader in enabling technologies for spine surgery, and drives Mazor Robotics’ vision to bring its core technology to the forefront of the global market.

Mazor‘s proprietary core platform technology, including the Mazor X Robotic Guidance System (Mazor X), and the Renaissance® Surgical-Guidance System (Renaissance), are transforming spinal surgery from freehand procedures to accurate, state-of-the-art, guided procedures. By combining Medtronic’s market-leading spine implants, navigation, and intra-operative imaging technology with Mazor’s robotic-assisted surgery (RAS) systems, Medtronic intends to offer a fully-integrated procedural solution for surgical planning, execution and confirmation.

Caesarea’s Mazor Robotics, founded in 2001, pioneered the application of robotics technology and guidance for use during spinal procedures, and is the market segment’s leader. In 2011, the Company introduced the Renaissance system and in 2016 launched the next generation Mazor X system. To date, more than 200 Mazor systems are in clinical use on four continents and have guided the placement of more than 250,000 implants during some 40,000 procedures, enabling minimally-invasive spine surgery to become standard procedure in many hospitals. Mazor’s core technology has received more than 15 U.S. FDA clearances and has been the subject of more than 60 publications, leading the spine robotics market on the evidence front. Mazor is the holder of more than fifty patents worldwide. (Medtronic 20.09)

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8.3 CathWorks FFRangio Trial Meets Primary Endpoint and Exceeds Performance Goals

The journal Circulation published results from the CathWorks FFRangio FAST-FFR clinical trial in an article titled Accuracy of Fractional Flow Reserve Derived From Coronary Angiography. The FAST-FFR trial demonstrated that the sensitivity and specificity of the CathWorks FFRangio System were 93.5% and 91.2%, respectively, both of which exceeded the trial’s pre-specified performance goals. The diagnostic accuracy was 92% overall, and remained high when considering only FFR values in the critical zone between 0.75 and 0.85. As a result, the trial concluded that the CathWorks System has the promise to substantially increase physiologic coronary lesion assessment in the cath lab, potentially leading to improved patient outcomes.

The CathWorks FFRangio System is a non-invasive FFR platform that quickly and precisely delivers objective multi-vessel physiologic measurements to cost-effectively optimize and confirm intra-procedural percutaneous coronary intervention (PCI) therapy decisions. It is designed to deliver the objective FFR guidance needed to optimize PCI therapy decisions for every patient. The FAST-FFR trial was rigorous. CathWorks FFRangio System data was measured by 19 on-site cath-lab clinicians blinded to the invasive FFR measurements. Angiograms were acquired by dozens of operators at ten hospitals using all four of the major angiography systems (Siemens, Phillips, Canon, and GE). In addition, a majority of subjects were overweight or obese, and 20% had calcified lesions. In the presence of all of these real-world conditions, CathWorks FFRangio accuracy was still very high. The CathWorks FFRangio System is in development and is not yet FDA-cleared.

Kfar Saba’s CathWorks is a medical technology company focused on applying its advanced computational science platform to optimize PCI therapy decisions and elevate coronary angiography from visual assessment to an objective FFR-based decision-making tool for physicians. FFR-guided PCI decision-making is proven to provide significant clinical benefits for patients with coronary artery disease and economic benefits for patients and payers. The company’s focus is specifically on bringing the CathWorks FFRangio System to market to provide quick, precise, and objective intra-procedural FFR guidance that is practical for every case. (CathWorks 25.09)

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8.4 TransEnterix Acquires Assets and IP from MST – Medical Surgery Technologies

Research Triangle Park, N.C.’s TransEnterix, a medical device company that is digitizing the interface between surgeons and patients to improve minimally invasive surgery, has acquired substantially all of the assets of MST Medical Surgery Technologies (MST), an Israel medical technology company, in a cash and stock transaction with a total consideration. MST is a leader in the field of surgical technology, having developed a software-based image analytics platform powered by advanced visualization, scene recognition, artificial intelligence, machine learning and data analytics. The addition of MST’s technology, IP portfolio, and R&D team supports and accelerates TransEnterix’s vision to leverage its Senhance Surgical System to deliver digital laparoscopy, thereby increasing control in the surgical environment and reducing surgical variability.

TransEnterix acquired from MST substantially all of its assets, which includes technology and intellectual property, and will transfer MST’s Israeli-based R&D team to a newly formed subsidiary, TransEnterix Israel, Ltd. The transaction will be financed with a combination of cash and stock, delivered in two separate tranches. At the closing of the transaction, MST will receive approximately $5.8 million in cash and 3,150,000 shares of TransEnterix common stock. The second tranche of $6.6 million, payable in cash or stock, is to be paid within one year of closing. The timing and form of payment of the second tranche is at TransEnterix’s sole discretion. (TransEnterix 24.09)

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8.5 Venus Medtech Announces Agreement to Acquire Keystone Heart

Venus Medtech (Hangzhou), the preeminent Chinese transcatheter heart valve company, has signed an agreement to acquire Keystone Heart. The acquisition gives Venus Medtech international rights to TriGUARD 3, the first Cerebral Embolic Protection Device designed to provide complete coverage to all brain regions for patients undergoing cardiac procedures.

Keystone Heart is currently enrolling patients in the REFLECT trial in the US to evaluate TriGUARD 3, anticipating enrollment completion in the early part of Q1/19 and FDA review in the first half of 2019. CE mark approval for Europe is anticipated by the end of this year. The merger is expected to close in Q4/18, subject to customary closing conditions.

TriGUARD 3 is designed to help interventional cardiologists and electrophysiologists protect the brain during cardiovascular procedures. During these cardiovascular procedures, debris from the aortic valve, ascending aorta and other sources may embolize and cause cerebral infarction. Embolic brain lesions resulting from these procedures may lead to potentially devastating outcomes — stroke, dementia and cognitive decline. Moderate to mild brain injuries, which are caused by new lesions in the brain, can affect the patient’s processing speed, executive function, and fundamental skills such as memory, language, and balance. These lesions may be related to changes in the way your brain functions or processes information, and lesions in the brain stem can impact basic body functions such as breathing, swallowing, heart rate, blood pressure, consciousness, and whether one is awake or fatigued. The location of these lesions determines the damage and clinical symptoms, and where a lesion may occur is unpredictable. The TriGUARD 3 Cerebral Embolic Protection Device is designed to cover all three major cerebral branches to minimize the risk of brain damage during cardiovascular procedures.

Caesarea’s Keystone Heart is a medical device company developing and manufacturing cerebral embolic protection devices intended to reduce the risk of brain embolization associated with cardiovascular procedures. The company is focused on protecting the brain from emboli to reduce the risk of brain infarcts during TAVR, atrial fibrillation ablation and other cardiovascular procedures. The TriGUARD 3 product pipeline is designed to help interventional cardiologists, electrophysiologists and cardiac surgeons preserve brain reserve while performing these procedures. (Keystone Heart 25.09)

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8.6 Teva Announces Exclusive First-to-File Launch of a Generic Version of Cialis in the US

Teva Pharmaceutical Industries announced the exclusive first-to-file launch of a generic version of Cialis®1 (tadalafil) tablets (2.5 mg, 5 mg, 10 mg, 20 mg) in the U.S. Tadalafil tablets are a phosphodiesterase 5 (PDE5) inhibitor indicated for the treatment of erectile dysfunction (ED), the signs and symptoms of benign prostatic hyperplasia (BPH), and both ED and the signs and symptoms of BPH (ED/BPH).

With over 550 generic medicines available, Teva has the largest portfolio of FDA-approved generic products on the market and holds the leading position in first-to-file opportunities, with over 100 pending first-to-files in the U.S. Currently, one in seven generic prescriptions dispensed in the U.S. is filled with a Teva generic product.

Teva Pharmaceutical Industries is a global leader in generic medicines, with innovative treatments in select areas, including CNS, pain and respiratory. Teva delivers high-quality generic products and medicines in nearly every therapeutic area to address unmet patient needs. They have an established presence in generics, specialty, OTC and API, building on more than a century-old legacy, with a fully integrated R&D function, strong operational base and global infrastructure and scale. Headquartered in Israel, with production and research facilities around the globe, we employ 45,000 professionals, committed to improving the lives of millions of patients. (Teva 27.09)

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8.7 INSIGHTEC’s MR-Guided Focused Ultrasound Treatment Now Covered By Medicare in 25 States

INSIGHTEC announced Medicare benefit coverage by CGS Medicare and Palmetto GBA for MR-guided focused ultrasound (MRgFUS) for the treatment of essential tremor (ET). This brings the total number of states who cover the Neuravive treatment for medication-refractory ET to 25. With this announcement, patients are now covered in Alabama, Georgia, North Carolina, South Carolina, Tennessee, Virginia, West Virginia, Kentucky and Ohio. Earlier this year, INSIGHTEC announced Medicare coverage for the procedure in Connecticut, Maine, New Hampshire, Rhode Island, Vermont, New York, Massachusetts, Illinois, Wisconsin, Minnesota, Indiana, Iowa, Kansas, Nebraska, Michigan and Missouri.

In the United States, MR-guided focused ultrasound for the treatment of ET is available at the following institutions: Stanford University Medical Center (CA), Sperling Medical Group (FL), University of Maryland School of Medicine (MD), Brigham and Women’s Hospital (MA), Mayo Clinic (MN), Weill Cornell Medical College (NY), NYU Langone Medical Center (NY), The Ohio State University Wexner Medical Center (OH), Penn Medicine (PA), UVA Health System (VA) and Swedish Neuroscience Institute (WA).

Haifa’s INSIGHTEC is a global medical technology innovator transforming patient lives through incisionless brain surgery using MR-guided focused ultrasound. The company’s award-winning Exablate Neuro is used by neurosurgeons to perform the Neuravive treatment to deliver immediate and durable tremor relief for essential tremor patients. Research for future applications in the neuroscience space is underway in partnership with leading academic and medical institutions. (INSIGHTEC 01.10)

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8.8 Body Vision Medical Announces the Release of LungVision

Body Vision Medical announced the launch of its groundbreaking LungVision platform at the CHEST conference, San Antonio, TX. Body Vision provides a tool which has changed the way peripheral nodules are approached. Its unique technology creates augmented reality with the ability to see fluoroscopically invisible lesions and the pathways under the live fluoro, while tracking a patient breathing. Once the technology has guided the doctors to the lesion, they confirm the lesion’s relationship to the airway with radial-EBUS. They then use their off-the-shelf biopsy instruments via the LungVision catheter. The augmented fluoro image, integrated with the radial EBUS images, allows tissue samples with continuous real-time confirmation of location.

Ramat HaSharon’s Body Vision Medical is a software and medical device company specializing in lung cancer diagnostics, augmented real-time imaging, artificial intelligence, and intra-body navigation. The company was founded in 2014 to address the contemporary unfulfilled clinical need of early lung cancer diagnostics. (Body Vision Medical 01.10)

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8.9 Gamida Cell Files for $69 Million NASDAQ IPO

Gamida Cell has filed for a $69 million initial public offering on NASDAQ on 28 September under the ticker GMDA. No pricing terms were disclosed. The company previously filed confidently in June. BMO Capital Markets and RBC Capital Markets are joint bookrunners for the IPO.

Gamida Cell develops therapies for rare genetic conditions like sickle cell anemia, and also for blood cancers and malignant tumors. The company is currently in phase 3 clinical trials for its lead product NiCord, a graft intended to act as a universal bone marrow transplant solution for patients who cannot find a matching donor. The technology is also under phase 1 development in patients with relapsed or refractory B-cell lymphoma and multiple myeloma. In July, NiCord received orphan drug designation from the U.S. FDA.

Jerusalem’s Gamida Cell is a leader in the development of cellular and immune therapeutics, committed to changing the treatment paradigm for patients with cancer and rare genetic diseases. Their world-class scientists are harnessing epigenetic science to develop a broad platform technology that provides a safe and effective way to expand functional cells in culture to create curative treatments for patients. (Gamida Cell 02.10)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 MissingLink.ai Launches to Accelerate Deep Learning Progress

MissingLink.ai has launched as a comprehensive deep learning lifecycle management platform allowing data scientists and engineers to significantly shorten the time it takes to train and deliver effective business outcomes. MissingLink was born out of a desire to allow teams of data scientists and engineers to spend their time solving world-changing problems instead of doing menial tasks.

With MissingLink, data teams can get started with 3 lines of code: Setting up an experiment requires tedious work including log parsing, copying data, managing machines, running experiments manually and logging the analysis. With MissingLink, just three lines of code lets you effortlessly integrate code, data and existing infrastructure. While AI is one of the most cutting-edge fields in computer science, the industry is still using the same old tools like file systems. MissingLink offers a version-aware data store, eliminating the need to copy files and only syncing changes to data, resulting in reduced load time and easy data exploration. Data engineers at companies including Aidoc, Nanit and Way2VAT have been in production with MissingLink.ai for the past 12-18 months and are already experiencing faster results, higher quality outputs and easier management of deep learning work.

Tel Aviv’s MissingLink.ai is a powerful deep learning platform that helps data engineers streamline and automate the entire deep learning cycle: data, code, experiments and resources. It eliminates the grunt work and significantly shortens the time it takes to train and deliver effective models. MissingLink.ai is used by data engineers at companies including Aidoc, Nanit and Way2VAT. MissingLink is a part of Samsung NEXT. (MissingLink.ai 25.09)

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9.2 Mellanox InfiniBand to Accelerate U.S. Department of Energy’s New Supercomputer

Mellanox Technologies announced that InfiniBand has been chosen to accelerate the U.S. Department of Energy’s (DOE) National Renewable Energy Laboratory’s (NREL) new supercomputer. The new 8 Petaflop system named “Eagle” will consist of more than 2100 nodes and deliver 3 times the performance compared to NREL’s current supercomputing platform. Eagle will be put into production in January 2019.

Yokneam’s Mellanox Technologies is a leading supplier of end-to-end InfiniBand and Ethernet smart interconnect solutions and services for servers and storage. Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability. Mellanox offers a choice of fast interconnect products: adapters, switches, software and silicon that accelerate application runtime and maximize business results for a wide range of markets including high performance computing, enterprise data centers, Web 2.0, cloud, storage and financial services. (Mellanox 24.09)

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9.3 Octopai Named a Gartner Cool Vendor in Data Science and Machine Learning

Octopai has been recognized in Gartner’s September 2018 “Cool Vendors in Data Science and Machine Learning” report as one of 5 Cool Vendors. According to Gartner, “Data and analytics leaders should engage with vendors in areas such as data management, unstructured data analysis and model operationalization.” According to the report, “as citizen data science, enabled by augmented analytics, dramatically increases the volume of models created, discipline in data management and operationalization becomes even more critical….Data and analytics leaders are seeking technologies with innovative approaches to ensuring the fundamentals of data science and machine learning. They are looking to both startups and megavendors to provide support for handling the tasks outside the flashier work of data scientists: data management, governance and machine learning operationalization.”

Octopai’s automation enables data and analytics leaders to centralize metadata for analytics, rationalize it and provide consistent data interpretations across multi-vendor environments. Octopai’s technology solves the difficult problem of interpreting non-meaningful data names to create data trust even when third party data is involved, thereby enabling users to understand the data journey in seconds rather than the weeks or months it traditionally takes to manually reverse engineer such processes. Octopai’s SaaS solution is extremely simple to use and can be up and running within a day on AWS, Azure or a private cloud.

Rosh HaAyin’s Octopai is a centralized, cross-platform metadata management automation solution that enables data and analytics teams to quickly and precisely discover and govern shared metadata. Utilizing machine learning, Octopai automates metadata management dramatically increasing productivity and trust, shortening time to market, and reducing risks associated with erroneous data. (Octopai 25.09)

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9.4 Camtek Receives a Multiple Systems Order of $4.5 Million from a Major OSAT

Camtek announced that it received an order from a tier-one OSAT (Outsourced Semiconductor Assembly and Test). The order received is for Camtek’s latest high-throughput 2D inspection system. The tools are expected to be installed in Q4/18.

Migdal HaEmek’s Camtek is a leading manufacturer of metrology and inspection equipment and a provider of software solutions serving the Advanced Packaging, Memory, CMOS Image Sensors, MEMS, RF and other segments in the Semiconductors industry. Camtek provides dedicated solutions and crucial yield-enhancement data, enabling manufacturers to improve yield and drive down their production costs. (Camtek 25.09)

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9.5 AudioCodes to Deliver End-to-End Voice Quality Monitoring of Microsoft Teams

AudioCodes has worked with Microsoft to deliver end-to-end voice quality monitoring for Microsoft Teams environments. The new monitoring capabilities are facilitated by AudioCodes’ Microsoft-certified Mediant session border controllers (SBCs) in collaboration with the One Voice Operations Center (OVOC), both components of the AudioCodes One Voice for Microsoft 365 portfolio of products and solutions for Microsoft voice implementations.

AudioCodes was one of the first vendors whose session border controllers (SBCs) were certified for Direct Routing functionality, enabling seamless PSTN and SIP trunk voice connectivity for Teams environments. Support for Direct Routing means that AudioCodes SBCs connect directly to the Teams Front End servers giving them end-to-end visibility into Teams calls. Call quality information is extracted from Microsoft reports, combined with relevant parameters collected from SIP trunks and reported to the One Voice Operations Center (OVOC) centralized network and monitoring tool. OVOC analyzes the call quality information to help network administrators identify trends and troubleshoot issues which could result in service-affecting problems. AudioCodes also plans to support Microsoft’s Event Hub API in the future, which will enable quality monitoring of calls between individual Teams clients.

Lod’s AudioCodes is a leading vendor of advanced voice networking and media processing solutions for the digital workplace. AudioCodes enables enterprises and service providers to build and operate all-IP voice networks for unified communications, contact centers, and hosted business services. AudioCodes offers a broad range of innovative products, solutions and services that are used by large multi-national enterprises and leading tier-1 operators around the world. (AudioCodes 25.09)

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9.6 Arbe Robotics Wins the Most Exciting Start-up Silver Award at AutoSens Awards 2018

Arbe Robotics was named a Silver Award winner for the Most Exciting Start-up award at AutoSens Awards 2018. Part of the international AutoSens Vehicle Perception Conference and Exhibition, the Awards, now in their second year, were judged by a world-class panel drawn from original equipment manufacturers (OEMs), tier one and two suppliers, industry organizations, and academia to assure a robust process.

Tel Aviv’s Arbe Robotics is the world’s first company to demonstrate ultra-high-resolution 4D imaging radar with post processing and Simultaneous Localization and Mapping (SLAM). It is disrupting autonomous vehicle sensor development by bridging the gap between radar and optics with its proprietary imaging solution that provides optic sensor resolution with the reliability and maturity of radar technology for all levels of vehicle autonomy. The company was founded in 2015 and is backed by 360 Capital Partners, Canaan Partners Israel, iAngels, Maniv Mobility, OurCrowd, O.G. Tech Ventures and Taya Ventures. (Arbe Robotics 26.09)

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9.7 Tactile Mobility Launches Tactile Sensing for Driving With $9 Million Raised

Tactile Mobility announced the official launch of its tactile sensing and data analytics platform. The launch includes the announcement of five paid POCs, additional funds which bring the company’s total funding to $9 million. Tactile Mobility is pioneering the tactile sensing space with its unique software which collects “first order” data using a vehicle’s built in, non-visual sensors including wheel speed, wheel angle, RPM, paddles position, gear position, and then analyze it to yield actionable insights in real-time.

These actionable insights, are subsequently fed back to the vehicle’s on-board computers, where it is used to make better driving decisions. Concurrently, the data collected is anonymized and uploaded from the vehicles to the cloud, where big data analysis is applied to create crowd-sourced mapping that is critical for enabling an accurate, continually updated overview of road conditions.

Tactile Mobility’s mapping service has been launched by the city of Haifa and the company has already collected over ten million kilometers of road data across four continents with plans to roll out in several other cities in the coming months. In addition, the company has signed paid Proof of Concepts (POCs) with five major OEMs, one of which is Ford. Two Request for Proposals (RFPs) were also signed with major European OEMs.

Haifa’s Tactile Mobility [formerly Mobiwize] is the world’s leading tactile sensing technology and data provider, enabling actionable insights for autonomous vehicles, municipalities, insurers and fleet managers. Tactile Mobility’s unique technology collects “first principle”, crucial, real-time data generated from cars’ sensors and turns it into actionable insights such as road quality, tire grip, vehicle weight and other vehicle- and road-specific models. Insights provided by Tactile Mobility greatly enhance vehicle intelligence and the ride safety, efficiency and experience. (Tactile Mobility 26.09)

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9.8 Cyberbit & CloudRange Cyber Announce the First Cyber Range “As a Service” in North America

Cyberbit and Nashville, Tennessee’s CloudRange Cyber, a pioneer in cybersecurity simulation training, announced the launch of CloudRange’s Cyber Attack Simulation Training Platform as a Service (CASTaaS) – the first cyber range offering available through the IT channel in North America. With the new CloudRange service, cybersecurity technology manufacturers, managed security service providers (MSSPs), value-added resellers (VARs), and technology distributors can offer their customers advanced, simulated cybersecurity training powered by the Cyberbit Range platform – the world’s leading cyber simulation platform. CloudRange provides the first consumption-based cyber range for enterprises and MSSPs. Organizations can now take advantage of the most advanced cybersecurity training available while bypassing the need to invest in cyber range infrastructure, technology, trainers and administrators, thereby reducing capital expenditures.

CloudRange selected Cyberbit based on the company’s unique ability to provide hyper-realistic simulation. The Cyberbit Range platform can emulate each customer’s specific network environment by using industry leading cybersecurity technologies including IBM QRadar, Micro Focus ArcSight, Splunk, Palo Alto Networks and Checkpoint. Customers can train security teams, assess candidates, onboard new hires, and improve cybersecurity team skills on a customizable virtual network environment that mirrors their own. CloudRange, powered by Cyberbit, offers a complete training platform with unlimited simulated attack scenarios with sessions that are recorded for playback and assessment.

Ra’anana’s Cyberbit provides a consolidated detection and response platform that protects an organization’s entire attack surface across IT, OT and IoT networks. Cyberbit products have been forged in the toughest environments on the globe and include: endpoint detection and response powered by behavioral analysis, security automation, orchestration and response (SOAR), ICS/SCADA security (OT security), and the world’s leading cyber range for simulated cyber training. Since founded in mid-2015 Cyberbit’s products were rapidly adopted by enterprises, governments, academic institutions and MSSPs around the world. Cyberbit is a subsidiary of Elbit Systems. (Cyberbit 27.09)

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9.9 ColorChip to Showcase Family of Next-Generation PAM4 200G/400G Optical Transceivers

ColorChip will be presenting a family of next generation PAM4 optical interconnects ranging from 100G to 400G at the 2018 Open Compute Project (OCP) Regional Summit in Amsterdam, Netherlands. ColorChip’s PAM4-based 200G and 400G optical interconnects, expected to be commercially available by the end of the year, offer high-speed and energy-efficient solutions that are robust by design and production ready. Based on proprietary SystemOnGlass technology, ColorChip’s multi-generational optical engine platform has been refined over several generations of transceivers and can truly cater to the pressing challenges of massive data flows worldwide.

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9.10 Morphisec Announces Interoperability with RSA NetWitness Platform

Morphisec announced that RSA has certified the interoperability between Morphisec’s Endpoint Threat Prevention platform and RSA NetWitness Platform. Enterprises with RSA NetWitness deployed can now integrate valuable, real-time threat intelligence and threat prevention data collected by Morphisec directly into their workflows for added visibility and to prioritize incident response.

Enterprises are increasingly under attack by sophisticated threats that bypass their other security controls. Morphisec’s innovative Moving Target Defense technology dynamically morphs the memory environment, stopping all known and unknown advanced threats, such as APTs, zero-days, ransomware, evasive fileless attacks, supply chain hacks and browser-based exploits. Attempted attacks are logged and the full attack fingerprint plus incident response details are immediately visible in NetWitness. Moreover, Morphisec only logs real attacks, helping security personnel cut through the noise of false positives and irrelevant data so they can prioritize an effective response strategy.

Beer Sheva’s Morphisec offers an entirely new level of innovation to customers in its Endpoint Threat Prevention platform, delivering protection against the most advanced cyberattacks. The company’s patented Moving Target Defense technology prevents threats others can’t, including APTs, zero-days, ransomware, evasive fileless attacks and web-borne exploits. Morphisec provides a crucial, small-footprint memory-defense layer that easily deploys into a company’s existing security infrastructure to form a simple, highly effective, cost-efficient prevention stack that is truly disruptive to today’s existing cybersecurity model. (Morphisec 01.10)

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9.11 Telrad Partnership with OmniPoint to Provide Services to Wireless Internet Providers Nationwide

Telrad Networks announced its partnership with OmniPoint Technology, to provide Over-The-Top (OTT) Media Services to wireless Internet service providers (WISPs) nationwide. The OTT service, developed by OmniPoint, enables WISPs around the United States to offer this value-added service to increase revenues, while enabling end customers to cut the cord from traditional, big name cable and TV providers and save money each month. Together, OmniPoint and Telrad will be offering the OTT media services to operators with a white labelling option so they can brand and resell the service as their own.

OmniPoint Technology is leveraging Telrad’s LTE solution for the delivery of internet services to previously underserved subscribers in Virginia, New York, Maryland, Massachusetts and soon in Pennsylvania. OmniPoint selected Telrad after a rigorous competition between three major market players.

Lod’s Telrad Networks is a global provider of innovative LTE telecom solutions, boasting over 300 4G-deployments in 100 countries. Telrad stands at the forefront of the technology evolution of next-generation TD-LTE solutions in the sub-6 GHz market. Since 1951, the company has been a recognized pioneer in the telecom industry, facilitating the connectivity needs of millions of end-users through operators, ISPs and enterprises around the world. (OmniPoint 01.10)

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9.12 SafeRide Launches CAN Optimizer, Enhancing Cloud Anomaly Detection Capabilities

SafeRide Technologies announced the launch of its CAN Optimizer solution, to be demonstrated this week at the Paris Motor Show. While uploading raw CAN data to the cloud enables advanced anomaly detection capabilities, the process consumes a significant amount of bandwidth. SafeRide’s CAN Optimizer dramatically decreases the bandwidth needed to do so by providing 98 – 99% reduction in data size, with a typical lossless compression ratio more than 15 times better than other compression algorithms that are currently on the market. This will greatly benefit OEMs and fleet managers by further helping to uncover unknown cybersecurity vulnerabilities, identifying malfunctions before they happen, and even detecting misuse and abuse of vehicles.

Tel Aviv’s SafeRide Technologies is the provider of vSentry, the industry-leading multi-layer cybersecurity solution for connected and autonomous vehicles that combines state-of-the-art deterministic security solution with a groundbreaking AI profiling and anomaly detection technology to provide future-proof security. SafeRide provides OEMs, fleet operators and automotive suppliers early detection and prevention of cyberattacks and helps to avoid financial damage, prevent reputation loss and save lives. (SafeRide 01.10)

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9.13 Vayyar Imaging is Bridging the Gap between LiDar and Radar

Vayyar Imaging announced the launch of its new Automotive Evaluation Kit (EVK), representing a significant leap forward in the application of radar technology. The company’s new sensor kit delivers the world’s most advanced System on a Chip (SOC) for mmWave 3D imaging to the automotive industry. With this new sensor kit, Vayyar brings point cloud technology to radar, increasing radar’s resolution and capabilities, while reducing costs and minimizing the need for other sensors within the vehicle.

Vayyar’s new automotive sensor kit includes Vayyar’s 77-81Ghz ASIC, including 48 transceivers on a chip with internal DSP. It includes a sophisticated array of antennas and a USB interface. The company’s powerful sensors reduce the overall cost and number of sensors needed for the vehicle, resulting in a better driving experience and increasing the possibilities for in-car sensor capabilities for tier 1 customers and original equipment manufacturers (OEMs).

Yehud’s Vayyar Imaging is a leading company in changing global markets for imaging and sensing with its cutting edge 3D imaging sensor technology. Vayyar’s exclusive sensors quickly and easily look into objects or any defined volume and detect even the slightest anomalies and movements to bring highly sophisticated imaging capabilities to your fingertips. Utilizing a state-of-the-art embedded chip and advanced imaging algorithms, Vayyar’s mission is to help people worldwide improve their health, safety and quality of life using mobile, low-cost and safe 3D imaging sensors. (Vayyar Imaging 02.10)

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9.14 Valeo Selects Vayyar Imaging to Implement Life-Saving Technology in Automotive Vehicles

Vayyar Imaging announced from the Paris Motor Show it will provide France’s Valeo, a leading automotive supplier, with its advanced automotive sensors to enhance infant passenger safety in vehicles. Vayyar’s highly-sophisticated radar sensors enable Valeo to monitor infants’ breathing and trigger an alert in the case of emergency, including if an infant has been left inside a vehicle alone. Through this partnership, the companies will work together toward mass production readiness to radically change the standard of safety in the automotive industry.

Unique in their field, Vayyar’s sensors consolidate multiple antennas and multi-transceiver radar capabilities to identify the respiration patterns of an infant and alert upon the detection of any anomalies. Unlike other technologies, these sensors work in any light condition and beyond the line of sight to constantly monitor and provide real-time updates on an infant’s health status.

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9.15 Karamba Security Introduces ThreatHive Solution for Cybersecurity Vulnerabilities

Karamba Security announced ThreatHive, which provides automobile OEMs and Tier-1 suppliers a view of actual, online attacks on their ECUs during development. This service offering enhances Karamba’s ECU protection portfolio with Automotive Threat Intelligence, giving the automotive security industry a platform for early discovery of security vulnerabilities. Karamba Security’s ThreatHive implements a worldwide set of hosted automotive ECUs in simulation of a “car-like” environment. These ECU software images are automatically monitored to expose automobile attack patterns, tools, and vulnerabilities in the ECU’s operating system, configuration, and code. The real attacks on the ECU during the development lifecycle provide actionable insights into security vulnerabilities, including industry software (like OS, development tools, and common libraries) that benefit the automotive security community.

By utilizing hackers’ crowd effect, attacking the ECU software hosted in the honeypots, Karamba Security’s offering expedites vulnerabilities discovery, and reduces OEMs’ and Tier-1 suppliers’ investment in penetration testing during product acceptance tests, in a narrow time window, which may limit vulnerabilities discovery. The findings from the threat analysis tool are shared in an aggregated and anonymized way to help vehicle OEMs and Tier-1 suppliers secure ECUs from hackers, as part of Karamba Security’s strategic partnership with US Auto-ISAC.

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9.16 Ethernity Networks Releases the 100G ACE-NIC100 FPGA-Based Smart NIC

Ethernity Networks has launched the ACE-NIC100, its second-generation Smart NIC, offering 100Gbps data processing and security offload. The flexible ACE-NIC100 comes with 10G, 25G, 40G, and 100G interface configurations and includes an all-programmable FPGA equipped with Ethernity’s proven patented ENET Flow Processor firmware. This enables support for high bandwidth applications over COTS servers to enable the next-generation network edge, mobile 5G, advanced business and security services, and the telco cloud. With its carrier-class ENET Flow Processor firmware, the ACE-NIC100 can support complete Carrier Ethernet Switch Router (CESR) offload with hierarchical QoS, performance monitoring, tunneling, IPSec functionality, and much more. This allows high capacity deterministic performance for virtualized networking appliances such as vSwitch (OVS), vRouter, vCPE, vEPC, and vBRAS/vBNG.

The ACE-NIC100 is the newest addition to Ethernity’s complete networking solution, which includes programmable FPGA-based hardware, patented ENET Flow Processor firmware, and the comprehensive ENET Software Suite. While the product’s rich set of networking features are designed to meet the needs of most telco providers, additional customizations are available per customer.

Lod’s Ethernity Networks is a leading innovator of network data processing technology and products. Mounted on low-cost COTS FPGAs and with a rich set of networking features, Ethernity’s ACE-NIC smart network adapters, ENET SoCs, and network appliances offer best-in-class all-programmable platforms for the fixed and mobile telecom, enterprise security, and data center markets. Their complete offering, incorporating hardware, FPGA firmware, and software applications, enables full programmability at the pace of software development, quickly adapting to changing market demands and applications and facilitating the deployment of edge computing, 5G and SDN/NFV. (Ethernity Networks 02.10)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israeli Startups Raised Nearly $500 Million in September

Israeli startups raised nearly $500 million in September, according to press releases issued by companies that have completed financing rounds. The figure may be more as some companies prefer not to publicize the investments they have received. This sum can be added to the more than $3.1 billion that Israeli startups raised in the first half of 2018, according to IVC-ZAG. The country’s startups also raised an estimated $650 million in July and $300 million in August, bringing the amount raised by startups in the first nine months of 2018 to over $4.5 billion, well on course to beat last year’s record of $5.24 billion, according to IVC-ZAG.

The amount raised in September was especially impressive taking into account the number of holidays during the month. Most of the sum was raised in large financing rounds from more veteran startups led by business analytics company Sisense, which raised $80 million. MeMed Diagnostics, which has developed a rapid test to differentiate bacterial and viral infection and combat antibiotic resistance, raised $70 million and fraud prevention company Forter raised $50 million. Digital adoption company WalkMe raised $40 million, AI sports production company Pixellot raised $30 million, and marketing data startup Singluar raised $30 million. Radiation cancer therapy company Alpha Tau Medical raised $29 million and open source security company Snyk raised $22 million. (Globes 02.10)

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10.2 Israel Ranked 6th Internationally for Health Care Efficiency

Israel is among the world’s six leading countries in health efficiency, according to the latest Health Care Efficiency Index published by Bloomberg. The index, published annually, rates the health care efficiency of 56 countries with life expectancies of over 70, per capita GDP of over $5,000 and populations of over five million. Israel was rated one place higher than in last year’s index. The five countries ahead of Israel in health care efficiency are Hong Kong, Singapore, Spain, Italy and South Korea. At the bottom of the list are Bulgaria, the US, Azerbaijan, Russia, Serbia and Brazil.

The Bloomberg index has three components, each of which is assigned a different weight: life expectancy (60%), national per capita health care spending as a proportion of GDP (30%), and per capita spending on health in dollars (10%). Israel’s weighted rating is 67, while Hong Kong tops the list with 87.3. The US is at the bottom of the ranking with a 29.6 rating because its life expectancy is only 79, despite spending 16.8% of GDP on health, mainly because of its expensive and largely private health system.

Israel’s life expectancy of 82.5 is among the world’s highest, putting it in a high place on various global health indices. Israel’s national (public and private) spending on health as a proportion of GDP is 7.3%, substantially lower than the 9% OECD average. Per capital health spending in Israel is $2,750, compared with the OECD average of nearly $4,000. Although the gap between Israel’s high life expectancy and low health spending indicates an efficient health system, it also shows that the health achievements of which Israel boasts are unlikely to persist.

Public spending on health in Israel as a proportion of total national health spending has fallen to 63% at present, the lowest in the OECD, while private health spending has increased to 36%, compared with a 28% OECD average. This trend has resulted in neglect of investment in infrastructure and personnel in the health system in recent years, leading to increased use of private medicine. This means that some of the achievements of the health system in Israel are the result of private money – a trend that contributes to widening of social gaps and undermines the foundations of the public health system in Israel.

The inadequate public budget for the health system in Israel is reflected in a low number of hospital beds per 1,000 people (three beds, compared with the 4.7 OECD average), a low number of nurses per 1,000 people (five, compared with the 9.3 OECD average), and a low number of MRI devices per million residents (4.9, compared with an OECD average of almost 16). The hospital bed occupancy rate (number of hospitalization days in general wards, compared with the potential number) is among the highest in the OECD: 94, and compares with an OECD average of 75. (Globes 25.09)

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11: IN DEPTH

11.1 ISRAEL: Israel’s International Investment Position, Second Quarter 2018

The Bank of Israel announced on 20 September that during the second quarter of 2018, the balance of assets held abroad by Israeli residents increased by about $1 billion (about 0.2%). Net investments (financial and direct) in equities were partly offset by withdrawals from deposits abroad by Israelis and by a decline in the value of customer credit.

Outstanding liabilities to abroad increased by approximately $11.8 billion (4%) in the second quarter. There was an increase in equity prices of Israeli companies traded abroad, net direct investments by nonresidents in Israeli share capital and investments in makam.

The ratio of gross external debt to GDP increased during the course of the second quarter by about 1.2%age points, to 26.4% at the end of June—reflecting an increase in the balance of gross external debt that was greater than the increase in GDP.

Israel’s surplus of assets over liabilities vis-à-vis abroad decreased in the second quarter by approximately $10.8 billion (7.7%), to about $130 billion at the end of June, mainly as a result of an increase in the prices of Israeli equities held by nonresidents that increased the balance of liabilities.

The surplus of assets over liabilities vis-à-vis abroad in debt instruments alone (negative net external debt) declined by about $6.6 billion (4%) in the second quarter, to approximately $157 billion at the end of June.

Table 1: Asset & Liability Balances

The value of Israel’s assets abroad

In the second quarter of 2018, the portfolio value of assets abroad held by Israeli residents increased by about $1 billion (about 0.2%), to approximately $438 billion at the end of June. The increase in the asset portfolio derived mainly from net investments in foreign equities.

The value of direct investments increased by about $0.5 billion (0.5%) in the second quarter. This was mainly as a result of net direct investments in share capital totaling about $2 billion, which were partially offset by net redemption of owners’ loans.

The value of the financial investments portfolio increased by about $1.9 billion (1.3%) in the second quarter, mainly the result of an increase in prices of foreign equities held by Israeli residents—totaling about $1.5 billion—and by net investments in financial equities of about $1.4 billion.

The investments in equities were made mostly by households ($1.2 billion). The banking sector and institutional investors invested similar amounts, (for a total of about $1.6 billion). Those investments were partly offset by net realizations of about $1.2 billion by the business sector.

The value of other investments abroad declined in the second quarter by about $0.5 billion (0.6%). There was an increase of about $2.3 billion in the balance of loans extended by Israeli residents to nonresidents, mostly by one company in the computer manufacturing and software industry, and an increase in the balance of other assets of Israeli residents abroad totaling about $1.2 billion. These increases were more than offset by withdrawals from deposits of Israeli residents abroad and from deposits of Israeli banks abroad of about $1.4 billion and $1 billion, respectively. In addition, there was a decline in customers’ credit of about $1.3 billion.

The composition of Israelis’ securities portfolio abroad: In the second quarter, as a result of the increase in value of investments in foreign shares (capital assets), together with a very small decrease in the value of investments in bonds (debt assets), there was a continued increase in the share of capital instruments in the portfolio of Israeli residents’ assets abroad, to 43% of the total portfolio.

The value of the foreign exchange reserves decreased in the second quarter by about $1.3 billion (1.1%), to $114.8 billion at the end of the quarter.

Israel’s liabilities to abroad

The balance of Israel’s liabilities to abroad increased in the second quarter of 2018 by about $11.8 billion (4%), to about $308 billion at the end of June.

The value of direct investments in Israel increased by about $4.8 billion (3.6%) in the second quarter. The increase derived from nonresidents’ net direct investments in Israeli share capital and by an increase in their prices.

The value of financial investments (stocks and bonds) increased in the second quarter by about $6.3 billion (5.6%). The increase was primarily due to an increase of about $7.3 billion in prices of Israeli equities traded abroad. Net investments by nonresidents in Israeli bonds totaled $1.2 billion, mostly in makam. These investments were mostly offset by nonresidents’ net realizations of Israeli shares totaling about $1 billion.

The value of nonresidents’ financial portfolio on the Tel Aviv Stock Exchange, which makes up a part of nonresidents’ financial investments in Israel, increased in the second quarter by about $4.5 billion, to about $45.6 billion at the end of June. Most of increase in the value of financial portfolio in the second quarter was due to purchases of makam by nonresidents of about $2 billion.

The value of other investments increased by about $0.8 billion (1.6%) in the second quarter. This was mainly due to net deposits by foreign banks in Israeli accounts totaling $0.8 billion and an increase of $0.8 billion in the balance of loans received by Israeli residents from nonresidents. These increases were partly offset by a decline in the value of suppliers’ credit totaling $0.4 billion, and a similarly sized decline in the balance of nonresidents’ deposits in Israel.

The balance of liabilities in debt instruments alone, which makes up Israel’s gross external debt, increased by about $1.6 billion (1.7%) in the second quarter of 2018, to about $93 billion, mainly due to net investments by nonresidents in makam, an increase in the balance of foreign banks’ deposits in Israel and by an increase in the balance of loans received by Israeli residents from nonresidents.

The ratio of gross external debt to GDP increased by 1.2%age points in the second quarter, to 26.4% at the end of June, reflecting an increase in gross external debt that was greater than the increase in GDP.

Israel’s surplus assets over liabilities abroad

Israel’s net assets abroad (the surplus of assets over liabilities) decreased by $10.8 billion (7.7%) in the second quarter of 2018, to around $130 billion at the end of June. The decrease in surplus assets over liabilities abroad mainly derived from an increase in the prices of Israeli shares held by nonresidents, which increased the balance of liabilities.

The net external debt

The surplus of assets over liabilities vis-à-vis abroad in debt instruments alone (negative net external debt) declined in the second quarter by about $6.6 billion (4%), to about $157 billion at the end of June.

The balance of short-term debt assets (repayment/realization within a year) was about $164 billion at the end of the second quarter, mostly in the Bank of Israel’s foreign exchange reserves, reflecting a coverage ratio of 4 times short-term debt.

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11.2 ISRAEL: Foreign Trade, Export & Import of Goods for August 2018

In August 2018, imports of goods totaled NIS 25.7 billion, exports of goods totaled NIS 15.7 billion and the trade deficit of goods totaled NIS 10.0 billion. The cumulative trade deficit since the beginning of 2018 totaled NIS 61.6 billion (NIS 92.5 billion in annual terms).

Exports of Goods

Exports of goods in January – August 2018, as a percentage of imports (excluding ships, aircraft and diamonds), constituted 65.1%, compared with 75.0% in the same months in 2017.

The trade deficit (of goods only) in January-August 2018 totaled NIS 61.6 billion, compared with NIS 32.8 billion in January – August 2017.

Imports of goods (excluding ship, aircraft, diamonds and fuels) increased by 7.3% at an annual rate in June – August 2018, according to trend data, following an increase of 19.4% at an annual rate in March – May 2018.

Exports of goods (excluding ships, aircraft and diamonds) increased by 3.6% at an annual rate in June – August 2018, according to trend data, following an increase of 6.7% at an annual rate in March – May 2018.

Trade in goods in August 2018 was influenced by changes in the value of the NIS relative to the other currencies in which import and export transactions were conducted. In August 2018 the NIS weakened by: 0.6% relative to the US Dollar (the fifth consecutive month in which the NIS weakened relative to the US Dollar), 1.0% relative to the Japanese Yen, 1.2% relative to the Swiss Franc and 1.3% relative to the Canadian Dollar. In contrast, the NIS strengthened by 0.6% relative to the Euro and by 1.7% relative to the Pound Sterling.

Imports of Goods

Imports of goods in August 2018 totaled, as mentioned above, NIS 25.7 billion. 41% of the total imports were imports of raw materials (excluding diamonds and fuels); 21% were imports of consumer goods; 16% were imports of machinery, equipment and land vehicles for investment; and 22% were imports of diamonds, fuels, ships and aircraft.

*The last points are subject to substantial revisions

Trend data point to an increase in imports of raw materials (excluding diamonds and fuels) of 12.8% at an annual rate in June – August 2018, following an increase of 18.8% at an annual rate in March – May 2018. A breakdown by groups shows that imports of raw materials for agriculture increased by 34.9% at an annual rate (2.5% monthly average) and imports of fabrics and yarn increased by 30.7% (2.3% monthly average). In contrast, imports of iron and steel decreased by 8.5%.

Trend data point to a decrease in imports of investment goods (excluding ships and aircraft) of 14.0% at an annual rate June – August 2018, following an increase of 11.4% at an annual rate in March – May 2018. Imports of machinery and equipment (59% of investment imports) decreased by 12.8% at an annual rate, and imports of transport equipment for investments decreased by 14.6% at an annual rate.

According to trend data, imports of consumer goods increased in June – August 2018 by 16.3% at an annual rate, following an increase of 26.9% at an annual rate in March – May 2018 (2.0% monthly average).

Imports of non-durable goods (medicines, food and beverages, and clothing and footwear) increased by 21.5% at an annual rate in June – August 2018 (1.6% monthly average), where the largest increase was of imports of clothing and footwear.

Imports of durable goods (furniture, electrical equipment and transport equipment) increased by 2.8% at an annual rate in June – August 2018, where the largest increase was of imports of furniture and electrical equipment.

Imports of diamonds (net, rough and polished) in January – August 2018 totaled NIS 13.0 billion, compared with NIS 13.3 billion in the same period of 2017.

Imports of fuels (crude oil, distillates and coal) in January- August 2018 totaled NIS 24.5 billion; an increase of 40.5% compared with January – August 2017.

Exports of Goods

Exports of goods totaled, as mentioned above, NIS 15.7 billion in August 2018. Manufacturing, mining and quarrying exports (excluding diamonds) constituted 89% of all exports of goods, exports of diamonds constituted 10%, and the remaining 1% were exports of agriculture, forestry and fishing exports.

*The last points are subject to substantial revisions

Trend data point to an increase in manufacturing, mining and quarrying exports (excluding diamonds) of 3.8% at an annual rate in June – August 2018, following an increase of 7.1% at an annual rate in March – May 2018.

Trend data of manufacture exports, by technological intensity

Trend data point to an increase in exports by high technology industries (44% of total manufactured exports excluding diamonds) of 16.8% at an annual rate in June – August 2018, following an increase of 6.1% at an annual rate in March – May 2018. A breakdown by economic activity shows that the largest increase was in the exports of the manufacture of pharmaceutical products industry.

Trend data point to a decrease in exports by medium-high technology industries (33% of total manufactured exports) of 3.3% at an annual rate in June – August 2018, following an increase of 11.5% at an annual rate in March – May 2018. A breakdown by economic activity shows that exports of the manufacture of chemicals and chemical products industry decreased by 12.5% at an annual rate.

Trend data point to a decrease in exports by medium-low technology industries (16% of total manufactured exports) of 6.8% at an annual rate in the last three months, following an increase of 3.6% at an annual rate in March – May 2018. A breakdown by economic activity shows that exports of the manufacture of basic metals industry decreased by 13.3% at an annual rate.

Trend data show that exports by low technology industries (7% of total manufacture exports) decreased by 0.7% in the last three months at an annual rate, following an increase of 9.4% at an annual rate in March – May 2018. A breakdown by economic activity shows that exports of the manufacture of wood products, furniture and paper products industry decreased by 29.0% at an annual rate (2.8% monthly average).

Exports of diamonds (net, polished and rough) in January – August 2018 totaled NIS 16.5 billion (original data), compared with NIS 17.2 billion in the same period of 2017.

Agricultural, forestry and fishing exports in January – August 2018 totaled NIS 2.9 billion (original data), a decrease of 7.6% compared with the same period in 2017. Exports of growing of citrus fruits decreased by 21.3% in this period. (CBS 17.09)

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11.3 JORDAN: Jordan ‘B+/B’ Ratings Affirmed; Outlook Remains Stable

On 21 September, S&P Global Ratings affirmed its ‘B+/B’ long- and short-term foreign and local currency sovereign credit ratings on Jordan. The outlook remains stable.

At the same time, we affirmed the ‘B+’ long-term foreign currency issue rating on the sovereign-guaranteed bond of senior unsecured debt issued by The Development and Investment Projects Fund of the Jordan Armed Forces.

Outlook

The stable outlook balances our expectation that donor funding will continue to support public finances and low interest costs against the risk that the government will reverse planned fiscal consolidation to alleviate social and economic challenges.

We could lower our ratings on Jordan if strong bilateral and multilateral donor support were to diminish, or the pace of fiscal consolidation were to slow significantly. This could result in higher debt accumulation by the central government and/or state owned enterprises like state-owned National Electric Power Company (NEPCO), and raise government debt-servicing costs.

We could raise the ratings if Jordan’s external imbalances were to significantly narrow for a sustained period, or if terms of trade were to stabilize. We could also raise the ratings if the economic outlook were to markedly improve.

Rationale

The ratings on Jordan are constrained by its high public debt levels and the economy’s large external financing needs, which are driven by large current account deficits. Ongoing pressures from regional conflicts have significantly increased the country’s population through refugee inflows, while slowing the country’s growth trajectory.

The ratings are, however, supported by the authorities’ efforts to implement fiscal consolidation and measures to reduce losses in state-owned enterprises, which we expect will result in gradually falling government debt levels over the forecast horizon through 2021. International assistance from the U.S. and the Gulf Cooperation Council (GCC; Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) continue to support the ratings.

Institutional and Economic Profile: Economic growth will likely remain subdued:

-Social pressures are high, and we anticipate the government will only gradually implement planned fiscal measures.

-We expect donors to continue to support Jordan through grants and concessional funding to maintain political stability.

-We forecast that economic growth will be low, averaging 2.5% over 2018-2021, compared with 6.5% over 2000-2009.

The country’s policymaking and institutional capacity have been strained by both the regional protests and revolutions of 2011 and the Syrian crisis. Large refugee inflows, resulting in an increase in the population by 50% since 2011, and security concerns have weighed on public resources. In particular, rising military, medical, and education costs have led to a deterioration in Jordan’s fiscal position and rising debt levels, as well as high dependence on donor support.

Given the challenging environment, we expect that risks to Jordan’s public finances will persist and that improvements will only gradually become visible over the forecast period. While the three-year Extended Fund Facility (EFF) program from the International Monetary Fund (IMF) has provided a policy anchor, we do not expect the government to meet initial program targets. We also note that there have been some delays in IMF fund disbursements. However, the authorities expect to conclude the second review in the coming months and we anticipate some revisions to the macro-fiscal targets under the program.

A myriad of government austerity measures introduced in the first six months of 2018, including a draft law proposing changes to the income tax, resulted in large-scale protests in June over the rising cost of living. In response to the public discontent, on 4 June, Prime Minister Hani Mulki resigned and was replaced by Omar al-Razzaz, a former World Bank economist. The new government is focusing on building public consensus on necessary reforms and is going to introduce a revised draft income tax law in the coming months. While protests against further fiscal reforms are possible, we do not expect them to be large enough to result in social upheaval in our base-case scenario. Yet, in our view, centralized decision-making reduces the predictability of future policy responses, especially given Jordan’s changing demographics and the rising desire for more political participation among parts of the population.

We expect international support for Jordan to remain strong. Jordan is one of the most politically stable countries in the region, and maintaining this relative stability in the region is an important foreign policy objective for the U.S. and the GCC. In January 2018, the U.S. committed to providing economic and military aid of at least $1.275 billion annually (approximately 3% of 2018 GDP) over five years, representing a 28% increase from 2017, and the first five-year memorandum of understanding (MOU) with Jordan. To demonstrate strong U.S. commitment to Jordan, the U.S. Congress approved aid of $1.52 billion in March for 2018, which is $250 million higher than the MOU amount. The GCC also stepped in following the protests in June, and GCC countries (excluding Qatar) pledged an aid package of $2.5 billion over 2018-2022 in the form of deposits, project finance, and a very small grants portion. Qatar has promised to provide $500 million and jobs for around 10,000 Jordanians in Qatar, which would boost remittances.

Jordan also benefits from concessional lending from bilateral partners and multilateral agencies (close to 20% of GDP outstanding as of end-2017), which have been important sources of financing for Jordan’s twin fiscal and external deficits. In addition, the U.S. has guaranteed Eurobonds of $3.75 billion issued over 2013-2016. In 2019, the IMF’s EFF program of $723 million will end and the first U.S.-guaranteed bond of $1 billion will mature. If the guarantees are not extended, we expect that U.S. bilateral support will nevertheless continue in other forms as per the MOU.

We estimate that real GDP growth will remain subdued in 2018 and stable from 2017 levels at 2%. Regional developments have significantly affected foreign investment, while weakened macroeconomic activity in the GCC has reduced remittances and investment inflows. We do not anticipate a quick resolution to the Syrian conflict and security risks will remain high, which will weigh on economic growth. Moreover, higher taxes, along with the high unemployment rate of 18.4%, will likely reduce private consumption growth.

That said, we expect a slight rebound in growth over the next four years, supported by rising exports and investment projects, particularly in the transport and energy sectors. The opening of the border with Iraq in late August 2017 helped increase exports to Iraq by 33% year on year in the first half of 2018. The authorities could also reopen the Nassib border with Syria in the medium term following the Syrian regime’s repossession of control over the border Daraa area. The border reopening should support higher Jordanian exports and transit fee receipts. Nevertheless, infrastructure damage, logistical issues, and ongoing security concerns pose downside risks to the normalization of trade to pre-2015 levels.

Jordan’s economic growth has not kept pace with the rapid rise in its population. We estimate GDP per capita of $4,050 in 2018. Including our growth forecasts through 2021, 10-year weighted-average real GDP per capita is expected to contract by about 2%, significantly lagging peers at similar income levels. However, population growth has normalized because refugee inflows have slowed since the closing of the borders with Syria in June 2016. We do not see a material risk of large Syrian refugee inflows even if the border reopens, but we also do not anticipate a large number of refugees returning to Syria at this time.

Flexibility and Performance Profile: The government’s gross debt stock is very high, and current account deficits will remain large:

-The gradual advance of fiscal reforms should help slowly reduce high government net debt levels.

-However, financial pressures at state-owned enterprises, in light of higher oil prices, could offset some of the fiscal gains at the central government level.

-We expect external financing needs will remain high through 2021 and external debt levels will continue rising.

Jordan’s central government debt levels have increased substantially to 96% in 2017 from around 62% of GDP in 2011. The increase stems from high fiscal deficits and loan advances to government-guaranteed debt at NEPCO and the Water Authority of Jordan (WAJ). To calculate general government debt, we net out the social security sector’s (SSIF) holdings of government paper because the SSIF falls within the definition of general government, under our criteria. At almost 80% of GDP in 2017, this level of general government debt makes Jordan vulnerable should it face additional financial or economic shocks, in our view. We also see as credit constraints the large banking exposure to government debt of more than 20% of total assets, as well as higher government exposure to foreign currency debt of around 41% of total government debt at end-July.

We anticipate that the government will issue more international bonds to meet its funding needs and as an attempt to lengthen its debt maturity profile. As the proportion of external commercial debt rises, interest costs would also increase, though we expect these to remain under 10% of total revenues over 2018-2021.

The government’s fiscal consolidation efforts in 2017 were broadly on track, although the removal of several general sales tax (GST) exemptions were delayed. Alongside the implementation of growth-enhancing reforms, the government’s reform program targets a mix of revenue and expenditure measures, including the removal of tax exemptions. These relate to an array of GST, customs, and income tax exemptions, which contributed to the decline in tax revenues to 15% of GDP in 2017, from 23% in 2006. In January 2018, the government raised GST on several basic commodities to 10% (previously, exemptions had brought down rates to 0%, 4%, and 8%), eliminated flour subsidies and increased taxes on imported cars, carbonated drinks and cigarettes. The government has also been increasing electricity tariffs on a monthly basis based on a formula linked to global oil prices, barring a temporary freeze in June.

We expect general government debt to decline only gradually to around 74% of GDP by 2021. Increasing taxes further is politically more contentious in the context of the low-growth environment, high unemployment, and ongoing regional instability. Despite the introduction of cash transfers to citizens and other welfare measures in the 2018 budget, several public protests have ensued. As a result, we expect the new draft of the income tax law to be watered down from the initial version and for the government to delay plans for further GST rises to reach to a unified rate of 16% on all products.

The weak performance of NEPCO and WAJ in recent years has also resulted in significant financial costs to the government. The government has been directly servicing NEPCO’s debt payments since 2013, and is now doing the same for WAJ to reduce WAJ’s interest costs. We therefore include the government-guaranteed debt of NEPCO and WAJ of around 12% of GDP in 2017 in our general government debt stock calculations.

Although financial pressures at NEPCO have eased, we understand that it has been loss-making again since 2017 due to higher oil prices. Since the start of this year, the government has been implementing an automatic tariff adjustment mechanism to pass onto consumers any increases in oil prices over NEPCO’s operational breakeven via a fuel surcharge. However, we believe that either the mechanism is being only partially implemented or the tariff formula is insufficient for NEPCO to curb its losses. Absent further measures, this would make it tougher for the government to achieve fiscal consolidation if NEPCO requires additional transfers. We note, however, that the expected start of gas imports from the Leviathan Field in Israel in 2020 could help to reduce costs. Although losses at WAJ continue, it has a target date for operational cost recovery by 2020.

Jordan’s external financing needs increased to over 150% of current account receipts and usable reserves in 2017, owing mainly to larger current account payments and a high proportion of short-term bank debt. Jordan’s current account deficit increased in 2017 to 10.6% of GDP, from 9.5% in 2016. The deterioration reflects weaker trade activity since the closure of key channels with Iraq and Syria, falling remittances since 2014, relatively weak prices of key mineral exports such as phosphate, and higher oil prices forcing up oil imports. We forecast that the current account position will improve gradually, with growth in exports from 2018, but that deficits will remain elevated at an average of 9.6% of GDP over 2018-2021. We expect these deficits will continue to be financed by foreign direct investments, debt inflows (mostly government external debt), grants, and project lending.

Mainly because of the weak external position, central bank gross reserves (including gold) have been declining since 2015, reaching $15.6 billion at end-2017 from $16.5 billion at end-2015. There were also one-off capital outflows in 2017 linked to the sale of a foreign stake in Arab Bank to resident investors. Despite the issuance of U.S. dollar domestic bonds of $500 million and Eurobonds of $1.5 billion, total reserves did not increase from 2016 levels. Instead, reserves continued to decline in 2018, and stood at $13.7 billion at end-July, reflecting partly the lower valuation of gold and the schedule of foreign grants, which mainly arrive in the fourth quarter of the year. We also expect deposit inflows from some GCC countries to shore up foreign currency reserves in 2018.

At the current level, we believe Jordan has sufficient external assets to uphold the currency peg to the U.S. dollar. The Jordanian dinar’s peg supports price stability, although it also limits the central bank’s room for policy maneuver. Despite weak economic growth, the central bank has followed the U.S. Federal Reserve in hiking interest rates to maintain competiveness of the Jordanian dinar. We expect that continued monetary tightening and fiscal consolidation will dampen credit growth and consumption to some extent over the next two years. We expect inflation to rise to 5% in 2018, given the impact of the recent fiscal measures and higher oil prices, before trending toward 2.5% thereafter.

Nonresident deposits in the financial sector make up around 40% of total external short-term debt. Although these deposits have steadily increased over the years, and we understand that they mainly relate to the Jordanian diaspora, we view their reversal as a potential risk. (S&P 21.09)

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11.4 UAE: IMF Staff Completes 2018 Article IV Mission to the United Arab Emirates

An IMF team visited the UAE during 16 – 30 September 2018 to conduct discussions for the 2018 Article IV Consultation. Upon conclusion of the visit, the IMF issued the following statement:

“The UAE economy continues to adjust to a prolonged decline in oil prices since 2014. Non-oil activity remains subdued amid continued corporate restructuring, real estate overhang, and tightening financial conditions. With oil production and government spending set to rise, overall growth is projected to strengthen to 2.9% this year and 3.7% next year. Inflation is projected at 3.5% this year owing to the introduction of the value-added tax and should ease afterwards. The fiscal deficit is expected to remain stable at about 1.6% of GDP this year and turn to a surplus next year. The current account surplus will exceed 7% of GDP this year.

“Given large fiscal buffers, ample spare capacity, and rising investment needs for Expo 2020, the government has appropriately switched to providing stimulus to the economy. Front-loading stimulus measures and focusing them on productive spending, consistent with the Vision 2021 goals of diversifying the economy and raising productivity, would augment their impact on growth. Over the medium term, as oil prices are projected to soften, a return to the path of gradual fiscal consolidation would help save an adequate portion of the exhaustible oil income for future generations. Continued improvements in spending efficiency and strengthening non-oil revenue, including by gradually replacing a system of numerous and regressive fees with corporate taxation, would help achieve these goals.

“Improving medium-term growth and job prospects and advancing to a competitive knowledge-based economy require deepening and broadening structural reforms aimed at increasing the role of the private sector and fostering talent and innovation. The authorities’ recently announced plans to liberalize foreign investment, introduce long-term visas for professionals, and ease licensing requirements and business fees—once implemented—will be a welcome step in this regard. Other reform priorities include promoting competition, privatizing nonstrategic government-related enterprises (GREs), and improving SME access to finance. In particular, developing domestic government debt markets would catalyze financial market development and expand sources of financing for SMEs. Enhancing the quality of education and healthcare and promoting gender equality would cultivate talent.

“Tightening financial conditions and increased global and regional uncertainty call for continued vigilance in monitoring financial sector risks, including those from a prolonged downturn in real estate and concentrated loan portfolios. Ensuring consistency of the draft central bank and banking laws with international best practices and approving them swiftly would buttress the prudential framework. Continued upgrading of bank regulations and strengthening bank supervision are essential to maintain the resilience of the banking system.

“Continued improvement of economic policy frameworks and coordination, and statistics would help align policies with the Vision 2021 goals. Stronger fiscal anchors would help mitigate the impact of adverse shocks on the economy while ensuring long-term debt sustainability and saving for future generations. Better monitoring and analysis of contingent fiscal liabilities stemming from GRE borrowing, delays in payments, and public-private partnerships, would help mitigate risks. Further improvements in the frequency and quality of economic statistics would support policy-making and inform business decisions.” (IMF 30.09)

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11.5 SAUDI ARABIA: The Gray Zone of Social Reforms in Saudi Arabia

Eman Alhussein and Sara Almohamadi posted on 24 September in the Arab Gulf States Institute that the Saudi government is moving forward steadfastly with its social modernization project, but the new policies are clashing with established norms, creating inconsistencies and uncertainties in social spaces.

Since 2017, the pace of social reform in Saudi Arabia has been fast and dramatic. This year alone, the driving ban on women was lifted, cinemas were opened and musical performances started taking place in major cities around the kingdom. Another noteworthy change has been the loosening of the strict dress code for women, which in the past was subject to constant policing. However, some of the changes implemented so far have been confusing and mark a significant departure from longstanding norms. This inconsistency has created a “gray zone” wherein newly imposed standards are clashing with older norms.

For decades, the assumption that conservative elements were against change was constantly employed to explain the lack of social and cultural reform. While possible conservative backlash against the recent social reforms remains a concern, there has not been any major backlash on the ground. Additionally, the prevailing nationalist sentiment influencing Saudi social media has served as an obstacle to voices disapproving of these social reforms. Voices of opposition to the new social reform wave are increasingly concealing their identities on social media platforms. Moreover, curbing the powers of the religious police and appointing “moderate” religious figures to senior positions (such as Mohammed al-Issa, secretary general of the Muslim World League and Suleiman Aba al-Khail, member of the Council of Senior Scholars and the president of Imam Mohammed ibn Saud Islamic University) point to the changing dynamics of the relationship between the government and traditional religious establishment.

The government seems to be moving forward steadfastly with its social modernization project. However, the new policies are clashing with established norms that have been maintained for decades, creating inconsistencies and uncertainties in social spaces. For example, while concerts are finally being held in Saudi Arabia, a number of rules and regulations are recited at the beginning of each concert, most starkly instructing the audience to refrain from dancing. At the same time, dancing was widely tolerated during the annual Janadriyah national heritage and culture festival in February. Similarly, strict gender segregation is not observed in cinemas and at festivals yet is still maintained in restaurants and at concerts.

In the past, what was acceptable or not was fairly clear due to constant policing; now, however, the inconsistencies with the new policies are resulting in a number of different consequences. Several individuals have been penalized for what they have wrongly presumed to be acceptable, given the recent wave of social change. For example, a video of a man and woman dancing in Abha went viral around the same time as a video of a man proposing to a woman on the Jeddah seafront. The dancing Saudi couple infuriated people on social media. Saudi news sources picked up the story and reports of the couple’s arrest were widely circulated. The couple in Jeddah, who were expatriate workers from the Philippines, were penalized, though this was hardly reported by local news outlets. The inconsistency in approach suggests that expatriates and locals are held to different standards, which confuses people as to what is acceptable during this period of rapid social change.

At a recent concert in Taif, a fully covered woman ran on stage and hugged the male singer Majid al-Muhandis during his performance. Saudi social media users blamed the new modernization wave for the woman’s action. Instead of calling for her to be fined, some people on social media wanted a harsher penalty, and many even called for her conviction under the newly introduced Sexual Harassment Law. News coverage of the incident was often lacking in detail; reports stressed that the woman will face a penalty, but details on what that penalty may be have not been disclosed.

In addition, even though the dress code for women has been loosened, when a video of Shireen al-Rifaie, a Saudi female anchor wearing a colorful abaya and loose headscarf went viral, many on social media expressed discontent at her choice of clothing. As a result of the social media frenzy, Rifaie fled the country shortly before the General Commission for Audio and Visual Media issued a statement that it would investigate the incident. As Rifaie’s case was widely circulated, many social media users shared some of their own experiences. A number of women who said they had attempted to go out publicly without wearing an abaya were reportedly stopped by the police and asked to sign a pledge to refrain from such behavior. Some women even reported that they were let off the hook. While Rifaie was publicly shamed to the point where she felt the need to leave the country, others have received a relatively light penalty, or none at all.

At the moment, it seems that due north on Saudi society’s behavioral compass is determined by social media: If an act goes viral and is received negatively, it stands the risk of penalty, ranging from signing pledges to stop the behavior in question, to imprisonment. As a result, many people are unknowingly falling into the trap of the gray zone and are being penalized for committing acts solely because they caused a wave of disgruntlement on social media. As more cases emerge, and more videos go viral, holding “wrongdoers” to different standards will prove unsustainable in the long run.

The Saudi government has gone to great lengths to forward its social modernization project and thus far has managed to deter major opposition. However, without setting clear parameters for what is acceptable, the gray zone is likely to stretch further, and could jeopardize social reform. (AGSIW 24.09)

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11.6 TUNISIA: IMF Executive Board Completes Fourth Review Under EFF Arrangement for Tunisia

On 28 September 2018, the Executive Board of the International Monetary Fund (IMF) completed the Fourth Review of Tunisia’s economic program supported by an arrangement under the Extended Fund Facility (EFF). The Board’s decision makes available to Tunisia SDR 176.7824 million (about $247 million), bringing total disbursements to SDR 984.9309 million (about $1.4 billion). The four-year EFF arrangement in the amount of SDR 2.045625 billion (about $2.9 billion, or 375% of Tunisia’s quota at the time of approval of the arrangement) was approved by the Executive Board on 20 May 2016.

Priorities of the government’s economic reform program that is supported by the EFF arrangement include growth-friendly and socially conscious reforms. Fiscal policies aim at mobilizing revenue and containing current expenditure to reduce Tunisia’s debt burden, and increase public investment and social spending to support sustainable and inclusive growth. Monetary policy focuses on curbing inflation, and continued exchange rate flexibility will help to strengthen international reserves. To maintain adequate social protection, the authorities have increased social transfers to vulnerable households, are working on the better targeting of social expenditure, and submitted a pension law proposal to Parliament. Structural reforms supported under the arrangement include strengthening governance, the business climate, fiscal institutions, and the financial sector.

Following the Executive Board discussion on Tunisia, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, made the following statement:

“The Tunisian authorities’ efforts to reduce macroeconomic imbalances are bearing fruit. Growth accelerated in the first half of 2018, but unemployment and inflation remain high. High oil prices continue to weigh on the external and fiscal balances, investment is weak, and international reserves cover less than three months of imports.

“Policy and reform implementation has improved further since the Third Review. The Tunisian authorities remain committed to the socially-balanced approach to macroeconomic adjustment supported by the four-year EFF arrangement.

“Strong efforts are required to achieve the agreed fiscal targets. Policy priorities include stronger revenue collection, regular energy price adjustments, strict wage bill management and reforms to ensure the financial viability of pensions.

“Further monetary tightening is warranted to reduce inflation. The CBT demonstrated its commitment to price stability by policy rate hikes, but key interest rates remain negative in real terms. Thus, policy rate should increase further to avoid further erosion of the purchasing power of the local currency and anchor inflationary expectations.

“Reducing external imbalances hinges on a market-determined exchange rate. Competitive foreign exchange auctions, backed by effective communication, would support this strategy. Sustained tightening of macroeconomic policies will help to mitigate the impact of the exchange rate depreciation on debt.

“The authorities’ reform agenda depends on maintaining adequate social protection. The recent decision to broaden coverage of vulnerable families benefiting from social transfers, also captured in the new QPC on social spending, should be implemented quickly. Completing the database of vulnerable households will be critical for better social targeting. Any changes in subsidies for food staples should only be considered once adequate safety nets are in place.

“Continued business climate, governance, and financial sector reforms are critical. The authorities should maximize the impact on growth of the new one-stop shop for investors, the negative list of investment authorizations, and the Start-up Act. The appointment of the members of the High Anti-Corruption Authority would be an important step to strengthen enforcement of existing laws and regulations. In the financial sector, the resolution of the BFT, further strengthening of supervisory framework, and progress on the AML/CFT regime are needed.

“Strong program implementation is necessary to reduce macroeconomic imbalance and foster inclusive growth in the difficult political and security environment. Continued support of the donor community is critical for Tunisia’s successful transition.” (IMF 01.10)

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11.7 ALGERIA: Algeria’s Succession Crisis: Plenty of Divisions, but No One Conquers

Abdelillah Bendaoudi wrote in the Fikra Forum on 23 September that in the years since the Arab Spring, Algeria has remained largely insulated from the rapidly-spreading unrest and turmoil affecting the MENA region. Yet dissatisfaction in Algeria is growing, and the country is increasingly facing a recipe for crisis. Depressed oil prices, the demands of a growing youth population, and the insecurity in neighboring countries like Libya and those of the Sahel all pose serious challenges to the Algerian government. While the regime has shown a capacity to manage these crises in a controlled manner, the key issue for Algeria in the coming years will be the transition of power should President Bouteflika pass away or leave office unexpectedly.

As Bouteflika is the most visible member of the Algerian elite, the issue of succession is often misunderstood, even within the rest of the Arab world. Understanding the forces at play behind the regime that will affect succession politics requires an understanding of Algeria’s governing system and the patterns that have shaped the Algerian political landscape. Algeria’s complex political system has dispersed power centers and is not controlled by any single person or institution, as opposed to the more common autocratic model of several other Arab states.

Since independence, Algeria’s political system has instead relied on two crucial dynamics to balance power. First, the bulk of the president’s credibility has always derived from the collective memory of Algeria’s War for Independence and his participation in it. Second, power-sharing between the “Tlemcen clan” of western Algeria and “The Eastern clan”—to which all major segments of the Algerian population belong—provide both with a permanent share of power within the governmental system. This system is often a balancing force within the government and opposition system, where ruling coalitions rotate among various parties over time. Since Algerian independence, power-sharing between the two clans has led to a wide array of political arrangements in which the principal elements of the two clans were guaranteed both official government positions and less quantifiable ‘influence.’

These dynamics of power-sharing are just as clear in the Bouteflika period as in previous eras. The alliance between the president, who represents the Tlemcen clan, and the military chief of staff Gaid Salah, who hails from the Eastern clan, has created a pyramidal power structure, in which the interests of the military, the presidency, and members of the political elite are intertwined in decision making.

In the half-century since its inception, the dynamics of the Algerian system have locked the country into a mode of permanent transition. However, its governing rules no longer apply, since most veterans who fought against the French have died. Thus, a compromise based on the second metric of social cleavages will still not provide the legitimacy derived from participation in the fight for Algeria’s independence. A president from the post-independence generation would lack the substantive legitimacy and credibility Bouteflika currently possesses. Furthermore, it is increasingly unclear who holds the power of veto over government action, including choosing the successor of the president. Thus, due to protracted disagreements, the search for consensus over the succession has turned into a “Cold War.” This “Cold War” has led to political blackmail, governance stagnation, and quick shifts in policy-making, as a changing pool of influencers seek to control the choice of Bouteflika’s successor.

Preparing for 2019

After suffering a stroke in 2013, President Bouteflika limited his public visibility, fueling domestic media speculation over his ability to serve out his mandate. Bouteflika described himself as “politically tired” and claimed that “my generation has had its day.” However, he surprised observers when he went on to win a fourth term in 2014, casting his vote from a wheelchair.

Speculation is increasingly rife in the lead-up to the 2019 elections, including the suggestion of activating article 88 from the Algerian constitution. This article stipulates that “if it is impossible for the President of the Republic to exercise his duties due to a serious and chronic illness, the Constitutional Council unanimously proposes to the Parliament to disclose the reason for the impediment.” The article also states that “The President of the National Assembly shall be entitled to assume the presidency of the acting State for a maximum of (45) days.” However, in case “The President is still unable to continue his duties after (45) days, the Parliament shall announce the vacancy of President of the Republic.”

Under these conditions, selecting a successor is paramount in ensuring a smooth and peaceful transition of power. Evidently, plans are in place to attempt a stable transition, but it is unclear whether the president’s inner circle can prepare the ground for a stable fifth term that maintains the status quo until a consensual candidate emerges.

The Cold War over succession has escalated since the president’s re-election in 2014. Rather than securing the stability needed in the post-Bouteflika period, this in-fighting has removed a number of potential candidates for the future Presidency while failing to provide alternatives. A series of dismissals inside the Algerian regime has led to major shifts in the political landscape, some orchestrated by Bouteflika himself. First, the president maneuvered to dismantle the infamous agency of Algerian Power, the DRS (Département du Renseignement et de la Sécurité), by dismissing the veteran chief of the DRS Mohamed Mediene in 2015. Bouteflika then rebranded the DRS, replacing it with a new presidentially-controlled intelligence service, the DSS (Département de Surveillance et de Sécurité), as a final move to strengthen his grip on power. Mediene had been known as the “God of Algeria,” and his removal allowed Bouteflika more scope to opt for a soft transition. Now, the DSS does not have the power of decision over Algeria’s political destiny, including the choice of a successor.

However, other forces besides the president have also been involved in this succession battle. Special forces from the Algerian Navy boarded a ship sailing from Valencia and seized 701 kgs. of cocaine in the western Algerian port of Oran, and the list of involved suspects included a number public figures. Judges, prosecutors, and mayors, as well as the “personal driver” of Abdelghani Hamel—the head of General direction for National Security (DGSN) and member of a very select inner circle within the Algerian political elites. Hamel denied the allegations and considered it as a personal attack from the military chief of staff Gaid Salah. Indeed, subsequent pressure from Salah pushed Hamel, who is now finished politically, from his former position as a potential candidate to succeed Bouteflika.

Abdelmadjid Tebboune, the former Prime Minister, is another victim of these power struggles; he was relieved of his duties only three months after his appointment as Prime Minister. Many considered Tebboune Gaid Salah’s man inside the regime and a potential candidate of the Eastern clan, and his dismissal weakened the military chief of staff’s position to choose a candidate. Government sources mentioned communication issues between him and the president, but the understood reason of his departure emanated from his push to limit the power of certain oligarchs, including the head of the Business Leaders Forum (FCE) Ali Hadad, who belongs to the presidential faction. This was a red line for the president’s inner circle.

In these power struggles, both clans have so far refrained from resorting to violence to solve disputes, but neither have they embarked on a serious process of reconciliation in order to ensure a stable transition. The “winner” of this cold war currently appears to be Gaid Salah, but he still cannot influence the process of choosing a president without taking into account the Tlemcen clan, and the increasing acrimony between the two side’s elites will make this only more difficult to reach a lasting compromise.

Given these machinations, it is no surprise that both clans continue to prefer Bouteflika, even aging and ailing, over facing the issue of succession during the next election. However, this ‘housekeeping’ is not making the adoption of a consensual candidate easier, as the conditions that established Bouteflika’s legitimacy are no longer present. The Algerian political establishment will ultimately have to find a new dynamic stable enough to replace the stability provided by participation in Algeria’s fight for independence, or else face the country’s other challenges without the political stability that has so far characterized Algeria.

Abdelillah Bendaoudi is a freelance writer based in Maryland with a particular focus on counterterrorism. He is also a reporter and contributor at the Muslim Link Newspaper. (23.09)

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11.8 TURKEY: Moody’s Lowers Turkey’s Country Ceiling on Foreign Currency Bank Deposits to B2

On 24 September, Moody’s Investors Service lowered Turkey’s country ceiling for long-term foreign currency bank deposits to B2 from B1. Other ceilings are unchanged: the ceiling for short-term bank deposits remains Not Prime (NP); the foreign currency bond ceiling remains Ba2/NP; and the local currency country ceilings for bonds and deposits remain Ba1. This decision does not constitute a rating action. It has no implications for Turkey’s sovereign rating (Ba3, with a negative outlook).

Ratings Rationale

Moody’s country risk ceilings determine the maximum credit rating achievable for different classes of debt issuer domiciled in a particular country or for securitizations whose cash flows are generated from domestic assets or residents. The foreign currency deposit ceiling determines the highest rating that may be assigned to deposits held with domestic institutions denominated in foreign currency. It essentially reflects the risk that action by the government would intervene in some way to constrain deposit holders’ access to their foreign currency deposits.

Moody’s decision to lower the foreign currency deposit ceiling reflects the rating agency’s view that the risk of the government intervening to prevent the withdrawal of foreign currency-denominated deposits in order to conserve Turkey’s foreign currency reserves has risen. That in turn reflects recent and prospective pressure on those reserves, the large overall value of foreign currency deposits in the banking system relative to those reserves and the recent steep currency depreciation. Turkey’s central bank reserves remain very low by comparison to currency debt payments falling due over the next year, in particular by the banks and non-financial private sector companies and continue to shrink. Moody’s expects this negative trajectory to continue in the months ahead in view of the large external debt repayments coming due.

Today’s announcement also reflects the ongoing weakening of Turkey’s institutions and the increasingly unpredictable policy environment, as exemplified by the recent presidential decree forcing the redenomination of property contracts between Turkish entities. The decision to lower the foreign currency deposit ceiling to two notches below the government bond rating reflects Moody’s view that the government may come to conclude that inhibiting access to foreign currency deposits is necessary if pressures on the balance of payments and thereby on its own debt are to be alleviated. The risk that the government places constraints on deposit holders’ access to their foreign currency deposits is therefore higher than the risk that it defaults on its own debt. (Moody’s 24.09)

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11.9 TURKEY: Medicine Shortages Leaving Turks Desperate for Help

Pinar Tremblay posted in Al-Monitor on 28 September that Turkish patients who depend on pharmaceutical imports for the treatment of cancer and other chronic illnesses suffer as the government fails to reach a price agreement with suppliers.

In January, Dilek Ozcelik, a 27-year-old lymphoma patient, passed away. Ozcelik had made the news in 2013 when she asked for help from Erdogan Bayraktar, who was then Turkey’s minister of environment and urban planning. Ozcelik refused the roll of cash Bayraktar handed to her. “I am not a beggar,” she said. She needed access to medicines that weren’t available in Turkey.

Since then, the Turkish government has repeatedly talked about grandiose plans to launch “national medicine” projects. Yet, with a growing, aging population, the need for lifesaving medicines also has increased. The data about availability and accessibility of prescription medications shows a problem that has snowballed during the past decade. For example, in 2015 alone, 1,700 pharmacies nationwide closed. Among 25,000 pharmacies, 13,000 are expected to go bankrupt at any time. From 2005 to 2015, the Turkish Pharmacists Union recorded 572 instances in which the Health Ministry called for a drop in drug prices.

This dim picture has only gotten worse with the weakening Turkish lira. In the past couple of months, an increasing number of patients have struggled to get their medication, resorting to creative methods. Not a day passes without a call on social media for help obtaining a needed prescription medication. Most of the time, patients are so desperate they are willing to pay whatever they can to save their loved ones. Even some pharmacists themselves have tried this method to assist their patients. Just like Ozcelik, many patients suffer due to the scarcity of anti-cancer drugs in Turkey. Since those drugs require prescriptions in Turkey, it’s not as simple as buying them over the counter abroad and bringing them back to Turkey.

Al-Monitor spoke with doctors, pharmacists and patients to evaluate the current situation. All medical experts fear that the shortages are going to get worse and soon. Semih Gungor, former chair of the Istanbul chapter of the Turkish Pharmacists Association, noted that economic challenges threaten to overwhelm the medical industry. All the pharmacists Al-Monitor spoke with explained that most of the active ingredients in medicines are imported and no substitutes are produced in Turkey. The import rate is based on euros and the conversion rate was fixed at around 2.6 Turkish liras. Now, 1 euro equals 7.6 liras. With such a large gap, neither companies that import medications, nor the ones that import the essential chemicals to produce the medicine domestically, can operate.

A pharmacist of 10 years from Ankara who works across from a state-run hospital said, “I’ll simply explain how rigid and counterproductive the regulations on pharmacies are in Turkey from my own experience. Let’s assume I’m selling a pill for $11 and I bought it from the depot for $10. Whenever the government wishes, it can — and it has — dictate that [pharmacies] lower the price, let’s say to $8 per unit. Now I am selling [each pill] for a $2 dollar loss. If I purchase goods worth $40,000 and sell them for $30,000, I not only have a net loss of $10,000, but I’ve also paid taxes on the purchase of $40,000.”

Ilfan Erdem, a pharmacist in Gebze for more than 30 years, emphasized that neither individual pharmacies nor pharmaceutical cooperatives are responsible for the growing drug shortages. She and others concurred that currently the most dire shortages of prescription medications are in cancer treatments, eye drops and other optometry-related drugs, and medicine for hypertension, diabetes and chronic lung diseases.

The knot in this issue is the government, particularly the Social Security Institution (SGK), which conducts almost all medical procurement agreements, including pharmaceuticals. Another pharmacist who has worked in Istanbul for more than 25 years told Al-Monitor, “The SGK pays for more than 85% of all prescription drug costs in Turkey. Considering the growing demand and rising prices, the SGK has a major struggle to keep the prices down. The prices they would like are no longer acceptable for several categories of medicine, or active ingredients in these meds. Therefore, their agreements collapse — so, no more imports. Once we are out of stock in the country, shortages start.”

Similar problems are seen with imported medical equipment as well, due to the SGK’s inability to get the prices it prefers. For example, Hurriyet reported on 25 September that bionic ear implant operations for minors have been halted simply because the SGK can’t import more of the implants.

Erdem explained that her pharmacy receives calls from all around Turkey from families of patients desperately asking for certain medications, simply trying their luck. Another pharmacist from Ankara explained, “If a patient has a prescription for a three-month supply of a medication that is on low supply, we explain the situation and give them a month’s supply so that we can spread the medicine to more patients. And we hope that the next month, this crisis will be resolved.”

The Turkish Pharmacists Association also has the ability to independently import certain rare medications for patients. However, the bureaucratic process is slow and most of the time requires hefty payments directly from the patients. When patients realize they can no longer find their pills in any pharmacy in Turkey, acquiring them from abroad is a race against time and sometimes a gambit with legal hurdles.

One medical doctor who works at a state hospital confirmed the observations of several patients. “We are asked to work with the bare minimum: cheaper X-ray machines, limited local anesthetics, even these plastic gloves we wear, and we have to count them. So each day is worse than the day before because the government is counting every penny to cut the costs, but the quality of the services drops as both staff and patients suffer.”

So what can we expect in the coming weeks? Further shortages of imported medications and more pharmacists declaring bankruptcy and shutting down their stores, while an underground economy thrives that promises to deliver prescription medications. They are called “cantaci” and they are an open secret in Turkey. They particularly operate online and near hospitals, and they can provide unregulated medications to those who are able to pay exorbitant fees. Leyla Ozturk, the mother of a 14-year-old cancer patient in Ankara, told Al-Monitor, “I sold my wedding gold for my son’s cancer treatment. Now we get the pills from cantaci. I don’t know if they are counterfeit, or how accurate the dosage is. I know I may be paying such high prices for substandard pills, but it is either this or nothing.”

The Turkish government is once more failing to protect the most vulnerable sectors of society. The government refuses to accept the reality of shortages until the SGK agrees to a strong price hike, one can only expect the situation in the medical field to deteriorate rather quickly.

Pinar Tremblay is a columnist for Al-Monitor’s Turkey Pulse and a visiting scholar of political science at California State Polytechnic University, Pomona. She is a columnist for Turkish news outlet T24. Her articles have appeared in Time, New America, Hurriyet Daily News, Today’s Zaman, Star and Salom. (Al-Monitor 28.09)

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11.10 TURKEY: Turkey Downsizes Economic Growth Outlook as Crisis Bites

Al-Monitor observed that Turkey expects economic growth to slow sharply in the next three years as the government cuts spending and combats inflation, Finance Minister Berat Albayrak said, seeking to shore up the $800 billion economy amid a crisis that crashed the lira and hit banks and corporate balance sheets hard.

Albayrak revealed the government’s revised expectations in a medium-term economic program (MTP) that covers the period until 2021. The presentation had been widely anticipated by rattled investors as a prescription for recovery in yet another test for the neophyte finance minister, who was named to the post by his father-in-law, President Recep Tayyip Erdogan, on 9 July.

Since then, the lira has lost more than a quarter of its value as investors dumped Turkish assets, worried about Erdogan’s control over the economy. Now they want to see Turkey implement austerity measures, even as Erdogan continues to push for lower interest rates to keep credit cheap and the economy growing.

For the moment, tighter fiscal policy appears to have won out as Albayrak unveiled the government’s forecasts for the next three years. Gross domestic product is seen increasing 3.8% this year before slowing to 2.3% next year, compared with previous government forecasts of 5.5% for both years, according to Albayrak’s presentation. Slower growth will persist in 2020 and 2021. Last year, the economy expanded by 7.4%, the fastest in the G20. “Our main motivation is to write a new success story. That’s why we called this the New Economy Program,” Albayrak said.

Market reactions to his plan were mixed. The lira initially rallied, but erased its gains later in the day. Turkish banking bonds strengthened slightly. Refet Gurkaynak, an economist at Bilkent University in Ankara, said the growth targets were “realistic, if optimistic,” adding, “This may be, but the contraction may be much more severe without proper policies.”

Albayrak pledged to develop policies to support exports and production, moving Turkey away from the construction-fueled growth that has ballooned Turkey’s trade deficit and upended budgetary balances. Some two million new jobs will be created over the next three years, he said, even as unemployment climbs to 12.1% next year from 10% now. “We have created a lot of employment in construction in the last few years,” Gurkaynak told Al-Monitor. “Since much of the problem is in the construction industry, it will choke up the employment it had absorbed, so we are going to see unemployment go up way faster than foreseen in the MTP.”

Consumer price inflation will accelerate to 20.8% by the end of the year, nearly triple the previous forecast of 7%, the program showed. Prices will rise more slowly in 2019 at 15.9%, compared with an earlier forecast of 6%. “The Central Bank will continue to use all instruments it possesses in a determined and independent manner to ensure price stability,” said Albayrak.

Questions about its ability to act without Erdogan’s consent have dogged the Central Bank. The president, who subscribes to an unconventional economic theory that high interest causes inflation, has badgered policy-makers not to raise rates.

But the Central Bank hiked its benchmark rate by 6.25%age points last week to underpin the lira, its first increase since early June. It did so just two hours after Erdogan called interest rates “a tool of exploitation,” leading analysts to ask if the bank was finally exerting its independence or if it was engaged in a good-cop-bad-cop act with the president. Albayrak said the banking system remains strong, pointing to a capital adequacy ratio hovering at 16% in July, but promised a comprehensive assessment to see what problems they face. Turkish lenders face an expected crunch by the end of this year, when banks must service $6 billion in foreign loans.

“If they only address the banks’ problems, then we will have banks that can lend but firms that are not lendable. So something has to be done for the real sector too. Both of those are absent in this program,” Gurkaynak said. Albayrak promised to reduce the budget deficit and implement savings and income-generating measures worth 76 billion lira ($12 million).

The program was also thin on details on how Turkey will meet these fiscal targets, wrote Timothy Ash, senior emerging markets strategist at BlueBay Asset Management, in a note to investors. But he added, “I think Albayrak gets a pass on the MTP,” noting that the program typically lacks specifics. One way Turkey will save money is by suspending large-scale infrastructure projects that have not yet been tendered, Albayrak said. Slashing public investments by 36% this year will help the government meet its deficit targets, said Ash. Albayrak ascribed some blame for Turkey’s economic predicament elsewhere: “We are going through a period in which economic sanctions are being used as a weapon.”

In July, US President Donald Trump threatened to sanction Turkey for its refusal to free an American pastor held on charges he plotted to overthrow Erdogan, plunging relations between the NATO partners to their worst in decades and propelling the lira’s tumble. Erdogan has repeatedly accused Washington of “economic warfare.”

Recently, Erdogan denied the country was in the throes of an economic crisis. “We are in a period of recovery now. Do not believe that there’s crisis, this is all manipulation,” he said in a speech on 19 September, singling out shopping centers for charging tenants rent in foreign currencies. “Do not be deceived by those who are undertaking manipulation at shopping centers and elsewhere. There will be no rent [paid] in dollars or euros. From now on, the Turkish lira will be used, or they will pay the price. This is Turkey, not the United States. Here, the lira has authority. You will rent your store in Turkish lira and do your shopping in lira.”

About 70% of rent at Turkey’s 403 malls is denominated in foreign currency. Erdogan gave them and other businesses with contracts in foreign currency a month to switch to agreements denominated in lira.

Turkey’s total corporate debt is calculated at $520 billion, of which foreign-exchange loans total $300 billion. Businesses that contract in foreign currency often do so because they have borrowed in euros or dollars during the credit boom. Now they too may face a hit. (Al-Monitor 20.09)

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11.11 CYPRUS: Cyprus Aims to Export Gas Via Egypt

Simon Henderson posted in The Washington Institute for Near East Policy Alert on 21 September that a new pipeline agreement will further establish Egypt as the energy hub of the Eastern Mediterranean.

During a 19 September meeting in Nicosia, the energy ministers of Egypt and Cyprus agreed to set up a committee within thirty days to work out details for an undersea pipeline connecting the offshore Aphrodite natural gas field with an Egyptian liquefaction plant. In an apparent bid to win European Union backing, Cypriot minister George Lakkotrypis stated, “We are essentially talking about a European pipeline, intended to transport Cypriot natural gas to Egypt for re-export to Europe in the form of liquefied natural gas.” In reality, tankers could transport these LNG exports anywhere in the world.

The proposal is the most commercially logical way of exploiting the Aphrodite field, which lies in water more than 6,000 feet deep about 100 miles from the southern coast of Cyprus. The gas was discovered in 2011 by the U.S. firm Noble Energy, which also found Israel’s offshore fields. The apparent intention is to link it by pipeline with the network servicing Egypt’s giant Zohr offshore field, discovered in 2015 and already producing gas in significant quantities.

Noble is also in talks with Egyptian companies to transfer excess gas from Israel’s offshore Leviathan field via pipeline across northern Sinai. The Egyptians would then convert it to LNG and sell it internationally.

Cairo is already the main gas player in the Eastern Mediterranean by virtue of its large reserves and production capacity. Its ace in the hole is two coastal LNG plants, which have been largely idle in recent years because of soaring domestic demand and political chaos. Israel’s gas potential is deemed smaller than Egypt’s, and efforts to develop it have been limited – some would say hampered – by domestic political opposition and regulation.

The initial challenge to exploiting Aphrodite is financial. Noble and its partners on the project, Royal Dutch Shell and Delek of Israel, must first raise funds to cover the cost of developing the field. They recently began renegotiating with Cyprus to make the contract more profitable for them. The planned pipeline connection to Egypt is an additional expense.

The main political challenge could come from Turkey, which argues that revenue from Cypriot gas sales should benefit all of the island’s citizens, including those in the so-called Turkish Republic of Northern Cyprus, set up after Turkey’s 1974 military intervention. Although Nicosia has accepted this argument, President Recep Tayyip Erdogan still delivered an ominous warning earlier this month when he declared that more Turkish troops would be deployed there. In February, Turkish warships prevented an Italian-contracted drilling ship from operating in southeastern waters that form part of the island’s exclusive economic zone.

If these obstacles are surmounted, the Egyptian route would enable Cyprus to set aside less favorable options such as building its own LNG plant at great expense or exporting gas via pipeline to Turkey. In addition, a new field named Calypso was discovered west of Aphrodite this January, though it needs more appraisal drilling before its commercial prospects can be ascertained. Eni of Italy and ExxonMobil have committed to drill several other exploratory wells before 2020.

These developments reflect Washington’s quiet efforts to encourage and link Eastern Mediterranean energy initiatives among its regional allies. Cyprus is seeking European backing as well, using its EU membership as leverage. Turkey is necessarily part of these discussions, but it should not be allowed to play a spoiling role.

Simon Henderson is the Baker Fellow and director of the Bernstein Program on Gulf and Energy Policy at The Washington Institute. (TWI 21.09)

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↧

Fortnightly, 17 October 2018

October 17, 2018, 1:30 pm

≫ Next: EDUCATIONAL COLLABORATION BETWEEN THE US AND ISRAEL CONTINUES APACE

≪ Previous: Fortnightly, 3 October 2018

17 October 2018
8 Cheshvan 5779
8 Safar 1440

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Israeli Government Spending Increased 50% Since 2010
1.2  NASA & Israel Space Agency Sign Agreement for Commercial Lunar Cooperation
1.3  Amir Yaron Named New Governor of the Bank of Israel
1.4  Jerusalem to Begin Strict Enforcement of Electric Bike Laws

2: ISRAEL MARKET & BUSINESS NEWS

2.1  PureSec Raises $7 Million in Series A Funding to Secure Serverless Applications
2.2  The Technion and Intel to Inaugurate Joint Center for Artificial Intelligence
2.3  Glassbox Raises $25 Million to Strengthen its Leading Digital Customer Management Platform
2.4  Hysolate Secures $18M Series B Round for Disruptive Cybersecurity Isolation Platform
2.5  El Al Ranks 39th Out of 41 Airlines in Punctuality
2.6  Broadridge Expands its Digital Center of Excellence with New Office in Tel Aviv
2.7  Wasteless Raises $2 Million to Eliminate Food Waste with Dynamic Pricing
2.8  Clearlake Capital-Backed Perforce Software to Acquire Perfecto Mobile
2.9  Yissum Launches NanoTech Fund
2.10  JFrog Secures $165 Million Investment to Lead Universal DevOps in the Enterprise
2.11  SolarEdge to Acquire Kokam, Korean Provider of Batteries and Energy Storage Solutions
2.12  Kitov Systems Raises $10 Million in Series A – led by HAHN Group
2.13  Demisto Secures $43 Million Series C Financing Led by Greylock Partners
2.14  Walmart & Eko Joint Venture to Create Interactive Storytelling for Entertainment and Retail
2.15  Kindite Raises $4 Million
2.16  Sygnia to Be Acquired by Temasek

3: REGIONAL PRIVATE SECTOR NEWS

3.1  Snapbook Raises $1.5 Million in Funding
3.2  Skiplino Raises Series A Round from KISP Ventures
3.3  Hamad Bin Khalifa University’s Qatar Biomedical Research Institute Partners With Harvard
3.4  Dubai Becomes World’s First City to Enable Investors to Start Business from Remote Locations
3.5  Smart Crowd Closes Seed Funding Round of $600,000
3.6  Mumzworld Secures $20 Million in New Funding Round
3.7  Dubai Investment Firm Launches $100 Million Fintech Fund
3.8  UAE’s Lulu Group to Invest $500 Million in Egyptian Expansion
3.9  FreeConferenceCall Announces Expansion into the UAE
3.10  Enstoa Seeks Saudi Tech Talent for Qiddiya Project
3.11  Zenoss Announces Expansion Into Kingdom of Saudi Arabia
3.12  iCommunity Raises $600,000 in Series A Funding from Algebra Ventures
3.13  Turkish Health Care Tourism Generated $4.4 Billion Over the Past Five Years

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Israel Aims For Zero Purchase of New Gasoline or Diesel-Powered Vehicles by 2030
4.2 One Hundred Applications Received to Launch Solar Energy Plants Connected to Egypt’s Grid

5: ARAB STATE DEVELOPMENTS

5.1  World Bank Revises Lebanon’s GDP Growth Down to 1%
5.2  Lebanon’s Balance of Payments Registered a $1.17 Billion Deficit in August 2018
5.3  Jordan Sees 2.1% GDP Growth Rate in Second Quarter of 2018
5.4  Jordan’s King Abdullah Vows to Fight Corruption After Protests
5.5  World Economic Forum to Return to Jordan in 2019 for Summit

Arabian Gulf

5.6 Bahrain’s King Issues New Laws to Boost Investment Eco-System
5.7 Moody’s Says Omani Banking System’s Outlook is Negative on Weaker Government Support

North Africa

5.8  Egypt Stops Gas Imports – On Its Way to Becoming Self-Sufficient
5.9  World Bank Foresees 6.8% Growth for Libya
5.10  Sudan to Set Daily Exchange Rate and Cancel Import Restrictions
5.11  Morocco’s Economy to Grow by 2.9% in Fourth Quarter of 2018
5.12  Morocco’s Thriving Aeronautic Industry Attracts International Interest

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkey’s Annual Inflation Jumps to 24.5% in September
6.2  Turkey’s Budget Sees $12.3 Billion Deficit Over First Nine Months of 2018
6.3  Turkey’s Unemployment Rate at 10.8% in July
6.4  EU Parliament Cancels €70 Million Earmarked For Turkey Over Rule of Law Conditions
6.5  IMF Revises Greece’s 2019 Growth Rate Upwards
6.6  Greece to Scrap Controversial Wine Tax
6.7  Greece’s Demographic Problem Threatening Economic Recovery

7: GENERAL NEWS AND INTEREST

ISRAEL

7.1 Study Ranks Israel High Among World’s Most Democratic Countries
7.2 Over 4 Years, the Number of Israelis Studying Abroad Rises by 26%

REGIONAL

7.3  Lebanon’s Parliament Speaker Says Government Formation Back To Zero
7.4  Lebanon Ranked 80 out 189 Countries on the Human Development Indices
7.5  Jordan’s PM Revokes Exceptional State University Admissions
7.6  Morocco to Introduce Holocaust Studies into State Education System
7.7  US University Fair Held in Athens on 9 October

8: ISRAEL LIFE SCIENCE NEWS

8.1  V-Wave Announces First Patients in RELIEVE-HF Pivotal Trial of its Heart Failure Therapy
8.2  First-ever Opium Poppy Genome Assembled
8.3  Eximo Medical Receives FDA Clearance for B-Laser Atherectomy System
8.4  Check-Cap Announces IDE Submission to FDA for Its C-Scan System
8.5  Atlanta and Israel Launch New Medtech Accelerator
8.6  BMS and Compugen Collaborate to Evaluate Therapeutic Regimen in Advanced Solid Tumors
8.7  Celmatix Announces Partnership to Bring the Fertilome Genetic Test to Israel
8.8  Transseptal Solutions Announces FDA Clearance of Its Novel Transseptal Access System
8.9  MEDX Xelerator Broadens International Collaboration
8.10  Hebrew University Establishes Cannabis Research Laboratory
8.11  PolyPid Begins Phase 2 Study to Prevent Abdominal Surgical Site Infections
8.12  CytoReason Findings Uncover New Cellular Players in Tumor Microenvironment
8.13  Cannabics Pharmaceuticals Positive Results in Treatment of Cancer Anorexia Syndrome

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Telrad Networks Announces Successful Trial of New MU-MIMO Technology
9.2  Department of Homeland Security Cites Morphisec for Enhanced Moving Target Defense for Virtual Systems
9.3  Spain Selects Attenti for Multi-Purpose Electronic Monitoring Program
9.4  Magal Awarded $7.7 Million Extension for Systems Protecting Critical Infrastructure in the Americas
9.5  Nano Dimension Strengthens in Defense Sector via U.S. Armed Forces Sale
9.6  Sapiens DECISION Expands Insurance Technology Offering
9.7  MTI Wireless Edge Supports Riverbed Xirrus With Multi-band Antenna Solutions
9.8  ERM Advanced Telematics Launches Improved Driving Using Human Voice Warnings
9.9  Cymulate Announces Technology Integration with Tenable
9.10  Autonomous Investigation App from SecBI
9.11  Sense Wins First Double Award At Worldwide South Summit in Madrid
9.12  CyberArk Launches Advanced Privileged Session Management for Cloud

10: ISRAEL ECONOMIC STATISTICS

10.1  Israel’s CPI Rises by 0.1% and Home Price Index Falls in September
10.2  Upward Revision for Israel’s Growth During First Half of 2018
10.3  IMF Raises Israel Growth Forecast
10.4  Israel’s Unemployment Drops to 4% in August
10.5  Tourism to Israel Increase by 15% in 2018

11: IN DEPTH

11.1  ISRAEL: Bank of Israel Research Department Staff Forecast, October 2018
11.2  JORDAN: Jordanians Fed up With More of the Same
11.3  SAUDI ARABIA: Saudi Arabia ‘A-/A-2’ Ratings Affirmed; Outlook Stable
11.4  EGYPT: Growing Pains
11.5  EGYPT: Egypt to Sell Valuable Cotton Land to Bolster the Textile Industry
11.6  MOROCCO: Outlook Revised to Negative on Budgetary Pressures; ‘BBB-/A-3’ Ratings Affirmed
11.7  TURKEY: Ankara Pins Electoral Hopes on Ignoring Economic Realities
11.8  CYPRUS: IMF Staff Concluding Statement of the 2018 Article IV Mission

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israeli Government Spending Increased 50% Since 2010

The Accountant General’s financial report published on 3 October shows government spending rising at an increasing place. In 2017 alone, spending rose by 1% of GDP. State tax revenue also jumped in 2017, but this was the result of NIS 20 billion in one-time revenue, much of which was at the expense of future tax revenue. Total government spending rose by over 50% in 2010-2017, from NIS 202 billion to NIS 310 billion. Most of the growth was in spending by civilian ministries: the Ministry of Health’s budget has grown by 77% since 2010, the Ministry of Labor, Social Affairs and Social Services’ budget by 68% and the Ministry of Education’s budget by 65%.

Obviously, this increase in government spending would have been impossible without a consistent and substantial rise in GNP and tax payments to the government on the one hand and responsible economic management on the other, which has made it possible in recent years to lower the debt burden and interest payments and divert more resources to the welfare of the people, the report states. The report shows that spending by civilian ministries reached a peak of 19.3% of GDP in 2017, 1% higher than in 2016. Defense spending remained steady at 5.2% of GDP, while interest payments on the government debt dropped to from 2.5% of GDP in 2016 to 2.3% in 2017.

State revenue increased from 25.4% of GDP in 2016 to 26.4% of GDP in 2016, but most of the increase is attributable to the opportunity given to pay a lower tax on dividends, which increased current government revenues at the expense of future revenues. One-time revenue from this concession amounted to NIS 11 billion, while the state received NIS 4 billion in one-time revenue from taxes on profits from Intel’s acquisition of Mobileye. One-time revenue totaled NIS 20 billion in 2017, but the state reduced this sum by NIS 4.2 billion deposited in a property tax fund. (Globes 03.10)

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1.2 NASA & Israel Space Agency Sign Agreement for Commercial Lunar Cooperation

NASA has signed an agreement with the Israel Space Agency (ISA) to cooperatively utilize the Israeli nonprofit SpaceIL’s commercial lunar mission, expected to land on the Moon in 2019. NASA will contribute a laser retroreflector array to aid with ground tracking and Deep Space Network support to aid in mission communication. ISA and SpaceIL will share data with NASA from the SpaceIL lunar magnetometer installed aboard the spacecraft. The instrument, which was developed in collaboration with the Weizmann Institute of Science, will measure the magnetic field on and above the landing site. The data will be made publicly available through NASA’s Planetary Data System. In addition, NASA’s Lunar Reconnaissance Orbiter will attempt to take scientific measurements of the SpaceIL lander as it lands on the Moon.

SpaceIL competed in the Google Lunar X Prize and continues to work toward landing the first Israeli spacecraft on the Moon. Together, NASA and SpaceIL will collaborate on analyzing the scientific data returned from the mission. The agreement exemplifies the innovative approach that NASA and its international partners are taking to team up with commercial partners to advance important science and exploration objectives on and around the Moon. (NASA 03.10)

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1.3 Amir Yaron Named New Governor of the Bank of Israel

Prime Minister Benjamin Netanyahu has nominated Amir Yaron, a finance professor at the University of Pennsylvania’s Wharton School of Business, as the next Bank of Israel governor. Yaron, 54, will succeed Karnit Flug, whose five-year tenure draws to a close next month. The nomination must be reviewed by a government committee.

Professor Yaron’s academic work focuses on asset pricing, macro-finance and applied time series econometrics. Prof. Yaron received his doctorate in economics at the University of Chicago, where he also earned his second master’s in economics. He has a master’s degree in economics from Tel Aviv University, where he also earned his bachelor’s degree in economics and sociology. (Various 09.10)

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1.4 Jerusalem to Begin Strict Enforcement of Electric Bike Laws

Following the large number of accidents involving electric bicycles, Israel’s Ministry of Transport announced a new enforcement plan for these vehicles. Among other things, the plan includes approving fitness to ride bicycles, heavy fines for those increasing the speed of electric bicycles and confiscation of bicycles for those under 16 caught driving them. Minister of Transport Katz announced the measures at his office on 3 October. If the plan is approved, it will become effective in January 2019.

The Ministry of Transport said that the plan, which is aimed at stricter enforcement and punishment for electric bicycle riders, is designed to regulate bicycle riding and riders’ safety, in addition to extensive public relations among the riders and their parents.

There are currently two categories of electric bicycle riders. The first includes people with licenses for two-wheel vehicles or private vehicles and students aged over 16 studying driving theory at school. Under the new plan, starting on 1 January 2019, these students will have to take a special short course including a final exam in order to obtain certification of fitness to ride bicycles. The Ministry of Transport National Road Safety Authority will arrange training for high school students.

As part of the plan, severe sanctions will be applied to riders of electric bicycles under 16, including having to wait a year longer to obtain a driver’s license. In addition, anyone involved in changing the structure of electric bicycles or enabling them to travel faster than the maximum permitted speed of 25 kilometers per hour will be fined NIS 10,000. The local authorities will be authorized to invalidate the business license of anyone selling or supplying illegal electric bicycles and to fine them NIS 10,000 per bicycle. Fines for persons illegally riding electric bicycles or electric scooters will be increased significantly. This includes riding without a helmet, riders under age 16, making telephone calls while riding an electric bicycle, riding while wearing headphones, and other offenses. (Globes 14.10)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 PureSec Raises $7 Million in Series A Funding to Secure Serverless Applications

PureSec announced a $7 million series A round, led by Square Peg Capital, with participation from previous investors including TLV Partners (investor in Next Insurance and container security company Aqua) and Entrée Capital (Meerkat, Monday and Prospa); this round brings PureSec’s capital raised to a total of $10 million.

PureSec was the first company to identify the need for a unique security solution tailored for serverless applications. Following its $3M seed round back in 2017, PureSec developed the world’s only end-to-end Serverless Security Platform enabling organizations to build secure serverless applications and protecting them in real-time. PureSec is the only AWS Lambda security advanced technology partner and has also recently partnered with Microsoft as part of the exclusive Microsoft ScaleUp program. PureSec now offers an early sign-up for its free-tier plan. Early joiners will also receive an exclusive advisory session from the serverless security professionals of the PureSec team, tailored to their specific serverless environment. The free-tier plan helps bridge the gap between developers and security professionals by providing a mutual language and a clear standard for securing serverless applications.

Serverless computing is a cloud-computing execution model in which the cloud provider effectively acts as the server, running code directly and dynamically managing the allocation of machine resources. Organizations no longer have to worry about the infrastructure required to run their applications. Due to its superiority over traditional architectures in every aspect, serverless is considered to be the future of cloud computing. PureSec solves these problems through its holistic approach to serverless security. The PureSec platform integrates into existing CI/CD process, providing static analysis of serverless code and cloud configurations, detecting misconfigurations and vulnerabilities while providing best-practices based mitigation.

PureSec launched in 2016 and currently has 12 employees. Their main office is in Tel Aviv. Customers include numerous Fortune 1000 companies, alongside emerging startups in the US, Canada, the United Kingdom, Australia and Israel. (PureSec 03.10)

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2.2 The Technion and Intel to Inaugurate Joint Center for Artificial Intelligence

The Technion – Israel Institute of Technology and Intel Corporation inaugurated a new Center for Artificial Intelligence (AI) on 8 October. The Center is chartered with advancing research in AI fields and collaboration between Technion and Intel researchers.

The Technion is the leading university in Israel in the field of artificial intelligence and is one of the top ten universities in the world in the field. In 2018 the Technion ranked 7th in the CS Rankings: Computer Science Rankings. The Technion has about 20 faculty members whose main field of research is computational learning and another 40 [researchers] are working in related fields. The majority of the researchers come from the Faculty of Computer Science, the Faculty of Electrical Engineering, and the Faculty of Industrial Engineering and Management and some of them are from other faculties such as Medicine and Biology.

As part of this collaboration with Intel, the company will support research projects of Technion faculty members engaged in computational learning and artificial intelligence together with Intel researchers. The research will cover a variety of areas, including natural language processing, deep learning and hardware optimization for different learning algorithms.”

Intel and The Technion have maintained close ties for many years. In 2009, Intel awarded The Technion the “Intel Award” in recognition of the university, whose graduates were the founding nucleus of the company’s branch which was established in Haifa in 1974. To date, Intel supports some Technion’s labs and funds many scholarships for students at the Technion, including specifically supporting outstanding students in electrical engineering and computer science. (Technion 09.10)

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2.3 Glassbox Raises $25 Million to Strengthen its Leading Digital Customer Management Platform

Glassbox announced the closing of a $25 million round of financing led by Updata Partners, a leading software-focused growth equity firm based in Washington, D.C., and joined by Ibex Investors, CEIIF, the venture arm of CreditEase, and Gefen Capital. This takes its total capital raised since inception to $32.5 million. The investment will fuel Glassbox’s hyper growth globally while accelerating product development efforts related to its automatic insight capabilities.

From the beginning, Glassbox architected its technology platform to capture all activity in real time, an approach that today allows for Digital Customer Management use cases and needs that others in the market struggle to address. For example, Glassbox’s platform is a single collaborative solution for business and IT teams to optimize digital customer experiences across web, mobile web, and mobile app. This approach, coupled with an advanced application of machine learning in the digital analytics space, enables Glassbox to surface automatic insights, resulting in unmatched ROI for customers. Leading enterprises are leveraging the Glassbox platform to optimize web and mobile customer experiences, identify and fix IT performance issues, address risk management and compliance use cases, and guide real-time customer support in contact centers.

Petah Tikva’s Glassbox is the first Enterprise analytics platform that analyses every digital customer interaction. Glassbox is the only enterprise digital analytics platform to automatically record and index 100% of every visit to your site – on both web and mobile applications. Originally known as Clarisite, Glassbox is working with leading enterprise businesses within the Financial, Insurance, Telecoms, Retail and Aviation sectors. (Glassbox 04.10)

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2.4 Hysolate Secures $18M Series B Round for Disruptive Cybersecurity Isolation Platform

Hysolate has closed $18 million in Series B funding. The round, led by notable investment firms Bessemer Venture Partners and Innovation Endeavors, and including NGP Capital, will help accelerate adoption of the Hysolate Platform, a breakthrough solution that fully protects endpoints from cyberattacks while boosting end-user productivity. The investment will be used to expand Hysolate’s market presence and continue building its global customer base.

The Hysolate Platform turns end-user devices into software-defined endpoints, in which each endpoint has multiple isolated virtual machines. Endpoints are built on top of a slim hypervisor layer that sits below the operating system. They’re highly flexible, compatible and secure by design. Everything an end-user does happens in virtualized desktops, running locally, side-by-side with full isolation. The entire Hysolate experience is seamless for users, who are free to access, install and work with whatever websites, apps, external devices and cloud services they need, without being constrained by security restrictions and without exposing corporate assets. Applications automatically launch in the correct, designated virtual environment. To users, everything looks and acts like their familiar Windows desktop.

Tel Aviv’s Hysolate pioneered software-defined endpoints, the most innovative way to secure user devices and boost user productivity. The solution seamlessly splits devices into segregated environments by leveraging virtualization and provides protection below the operating system. Customers include leading financial, technology and services enterprises worldwide. Hysolate’s team includes IT and cybersecurity experts who are veterans of VMware, Microsoft, CyberArk and Unit 8200 (Israel’s NSA). (Hysolate 03.10)

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2.5 El Al Ranks 39th Out of 41 Airlines in Punctuality

According to flightstats, 34.5% of El Al’s flights landed late with an average delay of 51.3 minutes. Conversely, the most on-time airline in September 2018 was SriLankan Airlines and the second promptest airline was Delta Airline, 87% of whose flights landed on time. Flightstats counts a flight as late if it lands more than 15 minutes after the originally scheduled landing according to the flight schedule. In third place was Japanese airline ANA with 86.6%. El Al Israel Airlines was near the bottom of the list in 39th place of the 41 airlines rated.

According to flightstats, 65.5% of El Al’s flights landed on time and 34.5% landed late. The average delay of its flights that were not on time was 51.3 minutes, about the same at the global average for delayed flights. The global average of flights on time was 79.4%. The only rated airlines with higher rates of delay than El Al were Ethiopian Airlines (a 36% rate of late flights) and EgyptAir (36.6% late flights).

Flightstats also rates promptness of airports. Ben Gurion Airport was near the bottom in 351st place, based on 6,000 flights that took off in the September flight schedule (crowded because of the Jewish holidays). According to flightstats, 66% of flights took off on time from Ben Gurion Airport and the average delay for late flights was 48.3 minutes (a late flight is one taking off more than 15 minutes after the scheduled time). (Globes 03.10)

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2.6 Broadridge Expands its Digital Center of Excellence with New Office in Tel Aviv

New York’s Broadridge Financial Solutions, an S&P 500 company and global Fintech leader with $4 billion in revenue, announced the expansion of its Digital Center of Excellence (CoE) with a new office located in Tel Aviv, Israel. The expansion of the Digital CoE broadens Broadridge’s access to industry-leading talent and technology in Israel focused on the development of innovative digital communications management platforms and user experience (UX) tools to drive and facilitate consumer engagement.

Broadridge said its Digital Center of Excellence in Tel Aviv not only demonstrates its commitment to investing in the Israeli market, but also enables Broadridge to be more responsive to the rapidly evolving needs of their clients and helps transform Broadridge’s regulatory and customer communications. The expansion of Broadridge’s Digital CoE follows the company’s acquisition of ActivePath, an Israeli-based company whose digital technology enhances the customer experience associated with consumer statements, bills and regulatory communications. (Broadridge Financial Solutions 03.10)

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2.7 Wasteless Raises $2 Million to Eliminate Food Waste with Dynamic Pricing

Wasteless has completed a $2 million funding round, which was led by the Amsterdam-based venture capital fund Slingshot Ventures. The Wasteless solution offers consumers differentiated pricing for grocery foods based on their expiration date. The system operates based on the inventory, orders, and sales, and executes pricing decisions that are then delivered to the end-consumer via Electronic Shelf Labels on the supermarket shelf or online via the digital store checkout process. Supermarkets stand to gain from improving their bottom line, and consumers can enjoy cheaper prices, while the world benefits from a reduction in food waste.

Wasteless will use its recent capital injection to expand its current team, increase investments further to develop its proprietary dynamic pricing algorithm and manage its rollouts with food retailers.

Just earlier this year, Wasteless successfully implemented its process at a leading Spanish food retailer. Wasteless managed to slash one-third of food waste from the supermarkets, while producing a 6.3% increase in revenue. The pilot program, which achieved highly conclusive results, was summarized in detail in a recent case study published by Wasteless. The pilot itself was part of a scientific study conducted at the University of San Diego. The company is currently in talks with several leading food retailers worldwide to introduce Wasteless’ dynamic pricing solution to their stores.

Founded in June 2016, Tel Aviv’s Wasteless developed a proprietary dynamic pricing algorithm for products with a limited expiration date, allowing retailers to mark off prices across the demand curve. (Wasteless 09.10)

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2.8 Clearlake Capital-Backed Perforce Software to Acquire Perfecto Mobile

Minneapolis, Minnesota’s Perforce Software, a global provider of enterprise-grade DevOps-focused software solutions, backed by Clearlake Capital Group, has reached a definitive agreement to acquire Perfecto Mobile, a market leader in cloud-based automated mobile and web application test software solutions. The acquisition augments Perforce’s software portfolio with additional capabilities for enterprise DevOps teams to achieve continuous testing at scale across web, mobile and IoT applications. The acquisition is expected to close this year.

Perfecto is the industry pioneer delivering the only true enterprise-grade mobile & web automation testing software platform through its globally accessible Continuous Quality Lab. The company is the go-to provider for large organizations that need to accelerate their digital transformation and provide their customers with the best online mobile and web experiences. Leading enterprises in banking, retail, telecommunications, and insurance rely on Perfecto’s robust automated testing software to deliver quality experiences faster and retain users in highly competitive markets.

Perforce continues to add capabilities to its software portfolio that uniquely meet the needs of technology development teams that are challenged with multiple dimensions of scale but still must deliver products at a rapid pace. The acquisition of Perfecto will represent Perforce’s fifth acquisition in the past two years.

Petah Tikva’s Perfecto is the leader in continuous testing and monitoring for today’s dynamic DevOps environments. Their Continuous Quality Lab enables DevOps teams to accelerate development, achieve continuous testing and monitoring, and drive fast feedback through actionable analytics for web, mobile, and IoT applications. More than 3,000 customers rely on their cloud-based Continuous Quality Lab as their digital application test environment and for authoring test automation executed on real browsers, smartphones, and devices under real end-user conditions. (Perforce 08.10)

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2.9 Yissum Launches NanoTech Fund

Yissum, The Technology Transfer Company of The Hebrew University of Jerusalem, launched its new NanoTech Fund, which will focus exclusively on promising innovations emerging from Hebrew University’s elite nanotech research. The Fund has already secured $6 million from top international strategic and institutional investors, and will raise up to $9 million.

The NanoTech Fund will focus on smart materials and nanotechnologies, funding deep technologies offering integrated solutions in the areas of 3D printing, quantum science, and renewable energy. As the global nanomaterials and nanotech markets continue to grow, the fund will ensure the continued leadership of Hebrew University researchers in nanotech research with significant commercial potential.

Yissum’s NanoTech fund is the third investment vehicle created by Yissum in the last six years, with more than $50M raised by these funds to date. It joins Integra Holdings, founded in 2012, focused on Hebrew University biotech technologies including therapeutics, medical devices and diagnostics, and Agrinnovation, founded in 2015, focused on agricultural and food innovations originating from The Hebrew University’s Robert H. Smith Faculty of Agriculture Food and Environment.

Yissum is the technology transfer company of The Hebrew University of Jerusalem. Founded in 1964, it is the third company of its kind to be established and serves as a bridge between cutting-edge academic research and a global community of entrepreneurs, investors, and industry. Yissum’s mission is to benefit society by converting extraordinary innovations and transformational technologies into commercial solutions that address our most urgent global challenges. (Yissum 09.10)

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2.10 JFrog Secures $165 Million Investment to Lead Universal DevOps in the Enterprise

JFrog announced a $165 million Series D funding round led by Insight Venture Partners. The secured funding will drive JFrog product innovation, support rapid expansion into new markets and accelerate both organic and inorganic growth.

JFrog transforms the way software is updated by offering an end-to-end, universal, highly-available software release platform for storing, securing, monitoring and distributing binaries for all technologies, including Docker, Go, Helm, Maven, npm, Nuget, PyPi and more. This enables a continuous software release flow from code to production with zero downtime. More than 5 million developers use JFrog Artifactory as their system of record when they build and release software. Developers deserve the freedom of choice throughout the DevOps lifecycle, from code to production, to avoid vendor lock-in. JFrog’s seamlessly integrated ecosystem of partners is radically universal, providing enterprise-grade technology integrations. JFrog further supports multiple deployment options, with its products available in a hybrid model; on-premise; and across the major cloud platforms: Amazon Web Services [AWS], Google Cloud Platform [GCP] and Microsoft Azure.

Netanya’s JFrog is on a mission to enable Continuous Updates through Liquid Software, empowering developers to code high-quality applications that securely flow to end-users with zero downtime. JFrog is the creator of Artifactory, the heart of the end-to-end Universal platform for automating, managing, securing, distributing, and monitoring all type of binaries. JFrog products are available as open-source, on-premise, and in the cloud on AWS, Microsoft Azure, and Google Cloud. As the leading universal, highly available enterprise DevOps Solution, the JFrog platform empowers customers with trusted and expedited software releases from Code-to-Production. Trusted by more than 4,500 customers, the world’s top brands. (JFrog 04.10)

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2.11 SolarEdge to Acquire Kokam, Korean Provider of Batteries and Energy Storage Solutions

SolarEdge Technologies has entered into definitive agreements to acquire a major stake in Kokam Co. Headquartered in South Korea, Kokam is a provider of Lithium-ion battery cells, batteries and energy storage solutions. Founded in 1989, Kokam has been manufacturing Lithium-ion cells and providing reliable, safe, high-performance battery solutions for the past twenty-nine years. Kokam provides battery solutions for a wide-variety of industries, including ESS (energy storage systems), UPS, electric vehicles (EV), aerospace, marine and more.

The acquisition of approximately 75% of outstanding equity shares of Kokam reflects an aggregate investment of approximately $88 million, including related transaction expenses. The transaction is subject to customary closing conditions and is expected to close in the coming weeks. Over time, the Company intends to purchase the remaining outstanding equity shares of Kokam that are currently listed on the Korean over the counter exchange through open-market purchases and otherwise, eventually resulting in Kokam becoming a wholly-owned subsidiary of SolarEdge.

Herzliya’s SolarEdge is a global leader in smart energy technology. By leveraging world-class engineering capabilities and with a relentless focus on innovation, SolarEdge creates smart energy solutions that power our lives and drive future progress. SolarEdge developed an intelligent inverter solution that changed the way power is harvested and managed in photovoltaic (PV) systems. The SolarEdge DC optimized inverter seeks to maximize power generation while lowering the cost of energy produced by the PV system. (SolarEdge 11.10)

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2.12 Kitov Systems Raises $10 Million in Series A – led by HAHN Group

RSBG, a leading industry holding and investment company invested through HAHN Group in Kitov Systems, a technology company based in Israel, which specializes in universal solutions for visual inspection. Kitov Systems develops AI-based solutions for visual inspection in industrial manufacturing. The systems developed by Kitov reduce manufacturing costs, eliminate inefficiencies and improve quality without the need for any programming or automation expertise. Kitov Systems technology is leveraging Computer Vision, Artificial Intelligence capabilities including Deep Learning, advanced Robotics and Big Data Analytics.

The investment led by HAHN Group, with the participation of Global IOT Technology Venture (GiTV) at total of $10M is a genuine vote of confidence in Kitov Systems’ innovative technology and its unique value proposition for manufacturers.

Petah Tikva’s Kitov Systems is a developer of innovative automated visual inspection solutions for a broad range of production lines and markets. (KITOV 10.10)

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2.13 Demisto Secures $43 Million Series C Financing Led by Greylock Partners

Demisto announced the closing of a $43 million Series C funding round led by Greylock Partners. Demisto will leverage these funds to drive global go-to-market expansion, accelerate adoption and deployment of its industry-leading SOAR platform, and take SOAR well beyond Security Operations Center (SOC) use cases. Additional investors participating in this funding round include early investors Accel Partners, ClearSky Security and others, bringing total funding to date to $69 million.

Amidst fast-growing adoption of SOAR technologies, this latest investment underscores Demisto’s leadership in enabling security teams to automate incident response across disparate security environments. Demisto’s security orchestration and automation enables standardized, automated, and coordinated response across an organization’s security product stack. Playbooks powered by thousands of security actions make scalable, accelerated incident response a reality.

Demisto recently launched v4.0 of its product, expanding the platform into advanced threat hunting, cloud security and more. New features not available in any other SOAR product include: an Investigation Canvas that improves security analysts’ visualization of attack campaigns, end-to-end automation of Amazon Web Services (AWS) cloud security processes and hundreds of other enhancements suggested by existing customers and partners.

Tel Aviv’s Demisto is the only Security Orchestration, Automation and Response (SOAR) Platform that combines orchestration, incident management and interactive investigation into a seamless experience. Demisto’s orchestration engine automates security product tasks and weaves in human analyst tasks and workflows. Demisto Enterprise, powered by its machine learning technology, acquires knowledge from the real-life analyst interactions and past investigations to help SOC teams with analyst assignment suggestions, playbook enhancements and best next steps for investigations. (Demisto 10.10)

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2.14 Walmart & Eko Joint Venture to Create Interactive Storytelling for Entertainment and Retail

Walmart announced a strategic entertainment joint venture with Eko, including plans to develop original, interactive content that will enable Walmart to connect with customers in new and more meaningful ways, with the goal of driving deeper and more frequent engagement. The joint venture expands Walmart’s entertainment ecosystem. The retailer already has a strong physical and digital video presence, through stores, websites, the digital platform VUDU and the recently launched eBook platform, Walmart eBooks, with Rakuten Kobo. This joint venture strengthens Walmart’s continued presence in the evolving entertainment landscape. The joint venture, known as W*E Interactive Ventures, will be led by several industry experts.

Tel Aviv’s Eko is a pioneering interactive entertainment company that lets audiences shape stories as they unfold. Eko’s technology allows participants to affect, control, and influence interactive entertainment like never before. The company provides a platform for creating, distributing and monetizing interactive stories, and partners with media companies, independent creators and top brands to create deeply engaging experiences for audiences. Stories are distributed through HelloEko.com, affiliate partners, and social networks; available on desktop, mobile and connected devices. The company has over 15 patents for its technology, including its proprietary player, authoring tools and high-efficiency interactive streaming technology. Eko Studio, the company’s suite of authoring tools, is also offered for free to creators, enabling them to craft their own interactive experiences using Eko’s platform. (Walmart 11.10)

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2.15 Kindite Raises $4 Million

Kindite has raised $4 million in a seed round led by RDC (owned by Rafael Advanced Defense Systems and Elron Electronic Industries), with the participation of investment fund CE Ventures, which is supported by CreditEase, a leading financial services provider in Asia. The round will enable Kindite to progress with what it claims is a breakthrough product for encrypting sensitive enterprise information in the cloud age. The technology that forms the basis of Kindite’s solution facilitates the analysis and processing of encrypted information without the content being seen, and in fact with no decryption at all. Kindite says that the solution paves the way to the transfer of sensitive enterprise data to a cloud environment without it being visible to the service provider and without detracting from the advanced capabilities available on the cloud.

Tel Aviv’s Kindite opens up the cloud for enterprises and regulated organizations, overcoming risks of privacy, compliance and control using disruptive encryption technology. (Globes 16.10)

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2.16 Sygnia to Be Acquired by Temasek

Sygnia will be acquired by Temasek, the global investment company headquartered in Singapore. The transaction is subject to customary signing and closing conditions. Sygnia will maintain its operational independence while pursuing collaborations with Temasek and its portfolio companies. With the acquisition, Sygnia will grow its resources and expand its global reach as it continues building its capabilities as a world-class provider of cyber consulting and incident response services.

Sygnia works with companies worldwide to proactively build their cyber resilience and defeat attacks within their networks. Since it was founded it has managed numerous heavyweight cyberattacks and has become the trusted advisor of executive managements, boards, and technology teams of top organizations worldwide, including Fortune 100 companies. The company works with organizations across a variety of industries, including financial, legal, retail and consumer goods products, information technology, media and entertainment, pharmaceutical, telecommunication, logistics and manufacturing.

Tel Aviv’s Sygnia was launched in 2015 by Team8, the leading cybersecurity think-tank and company creation platform. It had not received any funding beyond its original seed investment by Team8. Sygnia is the third of four companies launched by Team8.

Sygnia is a cyber technology and services company, providing high-end consulting and incident response support for organizations worldwide. Sygnia works with companies to proactively build their cyber resilience and to respond and defeat attacks within their networks. It is the trusted advisor and cyber security service provider for IT and security teams, senior managements, and boards of top organizations worldwide. The company applies technological supremacy, digital combat experience and a business-driven mindset to cybersecurity, enabling organizations to excel in the age of cyber. (Temasek 16.10)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Snapbook Raises $1.5 Million in Funding

Snapbook, a Kuwaiti photo printing startup, has announced a $1.5 million seed round of funding by Faith Capital, a Kuwaiti Venture Capital firm specializing in early stage technology startups. Founded in 2016, Snapbook has dominated the GCC photo printing market with clients around the globe. Its platform covers a wide range of products such as photo books, photo prints, phone cases, gift items, home decor, apparel, and wall art customized with users’ pictures. With this investment, Snapbook aims at strengthening its ongoing operations and impressive growth with the aid of the Faith Capital team’s expansive professional resources and regional expertise. (ArabNet 03.10)

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3.2 Skiplino Raises Series A Round from KISP Ventures

Skiplino, a Bahrain-based cloud-based queue management system, concluded an investment towards their Series A fund raise from KISP Ventures, a Kuwaiti Venture Capital Firm. The amount of the funding is undisclosed for now, but will be disclosed soon. This news brings the total number of KISP Ventures’ investments to 4, placing Skiplino alongside Aqarmap, POSRocket and Magnitt.

On average, people waste about six months of their lives standing in queues. Skiplino came as a solution to this problem by helping users queue in advance or avoid them altogether. Launched in January 2016, Skiplino offers users a cloud-based queue management system that allows businesses to handle customer queues at their facilities by monitoring real-time data and staff performance, collecting live customer feedback, and assessing valuable data to speed up processes and improve services.

While the Skiplino team is not the first to come up with a queuing solution, it is the first of its kind in the region and only costs between $99 and $149 per month for companies compared to the higher rates of other solution providers. Additionally, it provides companies that handle fewer than 50 customers per day with a free plan. With this investment, Skiplino will have access to KFH’s various retail branches and subsidiaries regionally as well as globally. (ArabNet 10.10)

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3.3 Hamad Bin Khalifa University’s Qatar Biomedical Research Institute Partners With Harvard

Qatar Biomedical Research Institute (QBRI), a premier research institute under Hamad Bin Khalifa University (HBKU), has signed a collaborative research and training agreement with the Harvard Stem Cell Institute (HSCI) in Boston, USA. The five-year initiative includes technical training and research in stem cell biology, which are essential for discovering viable treatments for diabetes.

In this new collaboration, QBRI scientists will work closely with HSCI researchers to exchange knowledge and best practice, and to accelerate the translation of discoveries into clinical applications. In addition to building scientific capacity in the region, the partnership will support ground-breaking research in stem cell biology. Clinical trials that arise from these endeavors will be conducted in collaboration with QBRI’s major stakeholders, including Qatar-based Hamad Medical Corporation and Sidra Medicine.

QBRI aims to address major health challenges over the long term by supporting scientific research into the molecular basis of various diseases, and biomedical research that seeks to translate those insights into solutions for diabetes, neurological disorders, and cancer. The partnership with HSCI will facilitate progress in these areas. (HBKU 08.10)

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3.4 Dubai Becomes World’s First City to Enable Investors to Start Business from Remote Locations

In another world’s first, investors globally will now be able to start their business in Dubai without having to be in the UAE, following an agreement between Dubai Investment Development Agency (Dubai FDI), an agency of the Dubai Economic Development (DED) in Dubai, and the US-based Alliance Business Centers Network (ABCN). The partnership will enable investors overseas to use a network of 650 business centers in 45 countries to start a business in Dubai.

Through the agreement, Dubai FDI seeks to attract international companies to Dubai and enable them grow and expand their business by leveraging a full range of professional services provided by ABCN. The partnership comes at a time when global investors and major multinationals are looking to capitalize on the prospects in Dubai, including its vibrant lifestyle, facilities, cultural diversity and openness, in addition to the highly competitive business environment. The largest global network of serviced offices, ABCN is also one of the leading providers of investor and corporate services for more than 50,000 clients and manages 15 million square-foot of serviced offices worldwide. ABCN operates its businesses in the Middle East, Africa and Russia through its Dubai headquarters. (AETOSWire 14.10)

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3.5 Smart Crowd Closes Seed Funding Round of $600,000

The UAE’s Smart Crowd, the innovative new real estate crowd funding investment platform, is celebrating the successful completion of its Seed funding round – having attracted major financing from one of the region’s leading investment firms – Abu Dhabi based Shorooq Investments – along with backing from cutting-edge DLT firm Abaxx Technologies; early-stage venture fund and seed accelerator, 500 Start-ups, Sheraa, and other high-level strategic individual investors.

Smart Crowd provides the opportunity to buy and sell shares in properties, reducing the barriers to entry to low-middle income households to build financial assets and generate investment income. Unlike the current real estate investment vehicles, Smart Crowd provides users with active management of their shares, transparency on what properties they are actually investing in, low costs of investment and very low minimum investment levels.

Smart Crowd currently operates under an Innovation Testing License (ITL) from Dubai’s Financial Services Authority (DFSA) but plans to pursue a full license. Its current license only allows UAE residents to invest in Dubai properties but the full license would allow citizens ‘around the world’ to invest in other parts of the world from the convenience of Smart Crowd’s platform. (ArabNet 08.10)

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3.6 Mumzworld Secures $20 Million in New Funding Round

Mumzworld, the online shopping platform for mothers based in Dubai, has recently announced its success in securing $20M in its Series B funding round from Gulf Islamic Investment (GII). This investment makes GII the largest stakeholder in Mumzworld. The $20M follows investments from Tamer Group, Wamda Capital, and Swicorp, together with six additional investors earlier this year. The company added that the financing will be used to disrupt the under-served e-commerce market in Saudi Arabia. It will also be used to boost automation and launch vertical specific consumer offerings as well as to continue to grow the brand’s footprint. Ever since Mumzworld was founded in 2011, it has undergone tremendous growth providing over 200,000 products, 25,000 of which are exclusive to the platform. Over 2 million mothers benefit from its services with products being shipped to 20 countries in the MENA region. (ArabNet 03.10)

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3.7 Dubai Investment Firm Launches $100 Million Fintech Fund

Dubai-based Alcazar Capital Limited (ACL) and Fintech Consortium’s investment arm, InQvest Partners (IQP) have partnered to launch a $100 million global fintech fund. Alcazar, an investment firm based in the Dubai International Financial Centre, said that it has also committed to anchor the fund with 10% of total capital. The fund partnership will allow IQP to combine its expertise, knowledge and network in FinTech with ACL’s investment experience and track record to jointly build a successful dedicated Fintech venture capital fund. (AB 15.10)

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3.8 UAE’s Lulu Group to Invest $500 Million in Egyptian Expansion

UAE-based retail giant Lulu Group on Monday said it is planning to invest $500 million in Egypt over the next two years. The company said it intends to build four new hypermarkets in 6 October City, New Cairo and Obour. The company added that it will also build two logistics centers from which it will be targeting exports, particularly frozen fish, to markets in the GCC and Europe. The fish processing and export center will likely be established in East Port Said area, where the largest fish farms are located.

Lulu has recently launched operations in the Philippines and in July announced it plans to invest SR1 billion in Saudi Arabia by 2020. The retailer said it will open another 15 hypermarkets in the next 18 months in the Gulf kingdom, of which five will open by the end of this year. (AB 15.10)

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3.9 FreeConferenceCall Announces Expansion into the UAE

FreeConferenceCall.com, the US-based conferencing and collaboration brand, has announced that it is expanding its coverage to include the UAE. The company said its latest expansion reflects its mission to provide a platform that “bridges countries and collaborators, creating a space where everyone can freely connect, share and innovate without borders and without limits”. FreeConferenceCall.com, the second largest conferencing provider in the world based on minute volume, is a one-of-a-kind player in the retail communications space.

Users need to create an account at FreeConferenceCall.com and then distribute their dial-in number and access code to participants. Users dial in using a phone, mobile device or desktop application and can host HD audio, video or screen sharing conferences with up to 1,000 participants for free. FreeConferenceCall.com said it enables organizations of all kinds to expand their reach internationally, establish a sizeable local presence and tackle communications in new markets with ease.

FreeConferenceCall.com, which has users in more than 800,000 businesses, including nearly all Fortune 500, is based in Long Beach, California. (AB 15.10)

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3.10 Enstoa Seeks Saudi Tech Talent for Qiddiya Project

New York’s Enstoa, a leading systems integrator for capital projects worldwide, has been selected by the Qiddiya Investment Company (QIC) to provide a fully integrated program management information system for the Qiddiya project – set to become the epicenter of entertainment, sports, culture and the arts in Saudi Arabia. Enstoa is currently recruiting talented Saudi nationals passionate about technology and effectuating change, with a background in digital transformations, to support the project.

Qiddiya aims to provide world-class entertainment options inside the Kingdom, allowing the domestic economy to recapture a market share of the $13 billion spent annually by Saudis on entertainment and leisure outside the country. Located 40 kilometers from downtown Riyadh, the Saudi capital, Qiddiya has five cornerstones that frame content, offerings and the overall development strategy for the project: Nature & Environment; Sports & Wellness; Parks & Attractions; Motion & Mobility; and Arts & Culture.

Qiddiya – a Giga-project established to support Vision 2030, is set to become a prominent cultural landmark and an important hub to satisfy and meet the recreational, social, and cultural needs of the current and next generation in the Kingdom. The project will enable economic diversification while enhancing quality of life for all segments of Saudi society. The entertainment destination, which broke ground in April 2018, is set to open its first phase in 2022. (Enstoa 08.10)

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3.11 Zenoss Announces Expansion Into Kingdom of Saudi Arabia

Austin, Texas’s Zenoss, a leader in software-defined IT operations, announced a strategic expansion into the infrastructure operations management market in the Kingdom of Saudi Arabia through its first system integrator partnership with Saudi Telecom Solutions (STCS). STCS guides organizations on their journey to the cloud, through the path of digital transformation, and into the infinite capacity and scope of true empowerment. Zenoss will work with STCS to deploy a software-defined IT operations platform for the STCS Cloud — which delivers software solutions, infrastructure and development platforms as a service — and will provide service assurance to the company’s managed telephony services customers. The partnership with Saudi Telecom Solutions will serve as the springboard to becoming a leading provider of innovation in the Kingdom of Saudi Arabia. (Zenoss 07.10)

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3.12 iCommunity Raises $600,000 in Series A Funding from Algebra Ventures

iCommunity, Egypt’s first mobile community platform for the real estate industry, has announced $600K in Series A funding from Algebra Ventures, Egypt’s largest venture capital fund. Founded in 2016, iCommunity is a community management platform and private social network that connects residents, real estate developers, and facility management all in a single, unified, extensible solution. With a focus on top-tier gated communities, iCommunity has been growing fast and helping transform customer engagement and service provisioning for developers and residents. The company now captures a significant market share of the gated community in Egypt.

The company plans to use the acquired investment in two key areas, to grow faster in Egypt and internationally, as well as to invest in their organization in terms of manpower and technology. (ArabNet 02.10)

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3.13 Turkish Health Care Tourism Generated $4.4 Billion Over the Past Five Years

Revenues from health care tourism over the last five years has reached $4.4 billion while a total of 1.8 million people visited Turkey for health purposes between 2013 – 2017. Data released by the Turkish Statistical Institute (TurkStat) showed that 433,292 people came to Turkey last year for health care tourism. The figure pointed to a 62% increase compared to 2013 when the country welcomed 267,461 visitors for healthcare tourism. In the first half of the year, a total of 274,062 tourists visited Turkey for medical purposes. Moreover, the revenues of health care tourism have also recorded a significant increase over the last five years. Last year, Turkey generated $1 billion in healthcare tourism, while the figure was recorded at $747.6 million in 2013. The revenues of healthcare tourism reached $590.1 million in the first half of the year. (DS 14.10)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Israel Aims For Zero Purchase of New Gasoline or Diesel-Powered Vehicles by 2030

The Energy Ministry announced on 9 October that Israelis will no longer be able to buy new gasoline or diesel-powered vehicles after 2030, as part of a plan to replace them with electric cars and trucks that run on natural gas. The challenge will be creating an initial “critical mass” of cars that will move the local industry away from gasoline and diesel engines, Energy Minister Steinitz said. He noted that the state is already encouraging this by funding charging stations, more than 2,000 new charging stations around the country. The government, he said, will also “reduce taxation on electric cars to almost zero, so they are going to be much cheaper.” The electric vehicle campaign is part of a broader plan to completely wean Israel off gasoline, diesel and coal. Israel in recent years discovered huge deposits of natural gas, a cleaner-burning fossil fuel, and it is converting its power stations accordingly.

The tipping point is expected around 2025, when, according to the ministry’s target, there will be about 177,000 electric cars on the road in Israel. Today there are just a few dozen. After that, it will become easier and cheaper to own electric cars, so the ministry expects the number should jump to nearly 1.5 million by 2030. All new cars will be electric. Buses and trucks will be either electric or run on compressed natural gas. The government, the minister said, is expected to approve the plan by the end of the year. (IH 11.10)

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4.2 One Hundred Applications Received to Launch Solar Energy Plants Connected to Egypt’s Grid

Egypt’s National Solar Cell Project has received over 100 applications to launch solar energy plants connected to the electricity grid. There are some 38 companies approved to implement the plants, coming from the industrial, commercial, residential and tourism sectors. The project is funded with investments of up to $3.5m. It is a grant from the Global Environment Facility (GEF), which is one of the UN funds to finance environmental projects. It implements the projects of the UN development program in cooperation with the Industry Development Centre.

Some 15 agreements were signed to implement solar energy projects connected to the grid, with the majority having a capacity of 150kW. The contracting companies include Ceramica Art, Ragab Faheem, Cairo Petroleum, and others. The agreement is also under way with other factories and companies. The first projects to be contracted in each sector will gain extra support up to $45,000, and several agreements will be signed to launch solar energy plants at hotels and schools. Notably, an agreement was signed with the General Authority for Educational Buildings to install a solar power plant with a 27kW capacity at schools established by the authority. A training course is being prepared in cooperation with the Federation of Egyptian Banks to facilitate the process of lending small solar projects to finance SMEs with 5% interest, highlighted the project director. (DNE 09.10)

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5: ARAB STATE DEVELOPMENTS

5.1 World Bank Revises Lebanon’s GDP Growth Down to 1%

In its October publication, the World Bank has downgraded Lebanon’s 2018 real GDP growth by 1% from a previous forecast of 2%. In fact, Lebanon is witnessing a contraction in its main sectors. First, the tourist arrivals increased annually by 3.3% in H1/18 compared to 14.2% growth last year in the same period. Second, in the real estate sector, cement deliveries declined by 3.4% year-on-year (y-o-y) in H1/18. Moreover, the BDL’s cut for subsidized loans has had an important impact on lending activity. In fact, commercial banks’ total credit to private sector increased (y-o-y) by only 1.9% in June 2018, compared to a growth(y-o-y) of 8.4% last year. The World Bank projects a drive up of fiscal deficit by 8.3% of GDP compared to 6.6% of GDP in 2017. The rise comes mainly from the approval of higher salaries for public sector employees in addition to more debt interest payments. The environment of low growth is accompanied by rising inflationary pressures; with the 12-month headline inflation rate averaging a 6.2% (y-o-y) over 7 months in 2018. The formation of a government is the first turning point for the country with the adoption and implementation of a structural reform program, including a debt management strategy that aims to lower the public debt-to-GDP. Furthermore, the reforms pledged by the government in CEDRE would boost the economy, attract much needed capital inflows, and create job opportunities. (WB 03.10)

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5.2 Lebanon’s Balance of Payments Registered a $1.17 Billion Deficit in August 2018

According to the Central Bank of Lebanon, Lebanon’s Balance of Payments (BoP) witnessed a deficit of $1.17 billion in August 2018 compared to $647.1 million deficit recorded during the same period in 2017. In details, the Net Foreign Assets (NFA) of BDL rose by $1.59B while those of commercial banks slipped by $2.76B by August 2018. Moreover, the BoP recorded a monthly deficit of $408.1M in August 2018 alone, compared to a surplus of $368.3M in August 2017. In fact, the NFAs of BDL recorded a drop of $863.3M, while the commercial banks’ NFAs increased by $461.2M in August 2018. (CBL 04.10)

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5.3 Jordan Sees 2.1% GDP Growth Rate in Second Quarter of 2018

Jordan’s Department of Statistics issued new series of the quarterly estimates of the GDP using 2016 as a base year. This series was developed according to the System of National Accounts 2008 which includes the improvement of the coverage level and the used methodologies, the results show that growth reached 2.1% during the second quarter of 2018 compared with the same quarter of 2017.

At the level of production sectors, most sectors have shown positive growth during the second quarter of 2018 compared with the same quarter of 2017. According to the report, the Social & Personal Services Sector has achieved the highest growth rate at 4.0%, followed by Transport, Storage & Communications Sector by 3.3%, then Agricultural Sector and Finance, Insurance & Real Estate’s Sector by 3.2% for each, then Electricity& Water Sector by 2.1% and manufacturing sector by 2.0%.

At the level of sectors contribution to the achieved growth rate during the second quarter of 2018, 78% comes from four sectors, the Finance, Insurance & Real Estate’s Sector has contributed by 0.71% and the manufacturing sector by 0.37% of total achieved growth, Transport, Storage & Communications Sector contribution was 0.28%, then Social & Personal Services Sector at 0.27% of total achieved growth. (DoS 01.10)

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5.4 Jordan’s King Abdullah Vows to Fight Corruption After Protests

On 14 October, Jordan’s King Abdullah II vowed authorities would crack down on corruption in the country, following mass protests against graft and price rises earlier this year. Thousands of Jordanians went into the streets at the start of June to protest against corruption, price rises and austerity measures. The week of mass demonstrations forced the prime minister’s resignation and the withdrawal of a controversial income tax bill.

With a lack of natural resources to boost state coffers, Jordan relies heavily on foreign aid and faces an unemployment rate of 18.5%. In 2016, Amman secured a $723 million loan from the International Monetary Fund, but the resultant economic reforms led to price hikes. King Abdullah put the current situation down to “a weakening (of) public trust in government institutions, as well as an atmosphere of skepticism”.

Stability in Jordan is seen as fundamental to the region and in the wake of protests Amman was offered a $2.5 billion aid package from three Gulf backers. More than $1 billion has already been deposited in the central bank by Saudi Arabia, the UAE and Kuwait. (AB 14.10)

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5.5 World Economic Forum to Return to Jordan in 2019 for Summit

The World Economic Forum on the Middle East and North Africa will be held at the Dead Sea in Jordan on 5 – 6 April 2019 in partnership with the King Abdullah II Fund for Development (KAFD). This will be the 10th meeting in Jordan and 17th meeting in the region. The meeting will convene over 1,000 government, business and civil society leaders from more than 50 countries.

With first results starting to emerge from social and economic reform efforts launched in several of the region’s economies, the meeting will be a key opportunity to collaborate on scaling up such efforts, with a focus on creating sustainable entrepreneurship and innovation ecosystems. The forum will pay particular attention to women entrepreneurs and key intergenerational issues such as transparency, accountability and sustainability and the protection of the environment. In addition, the meeting will host dialogues with key decision-makers from the region, the United States, Europe and Asia on addressing geopolitical challenges, including in Syria and Libya. The World Economic Forum on the Middle East and North Africa was last held in Jordan in 2017 in partnership with KAFD. (Various 07.10)

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►►Arabian Gulf

5.6 Bahrain’s King Issues New Laws to Boost Investment Eco-System

Bahrain’s King Hamad bin Isa Al Khalifa has issued orders for new laws to enhance the country’s investment eco-system. The four laws are set to be implemented in the coming months and include a Personal Data Protection Law, Bankruptcy Law, Competition Law and Health Insurance Law. The laws come as part of a wider development effort, designed to create new opportunities for investors looking to access the $1.5 trillion GCC economy. The announcement comes as Bahrain Economic Development Board attracted a record $810 million of investment during the first nine months of the year compared to $733 million in 2017 as a whole. It also comes just days after reports suggested Bahrain’s Gulf Arab allies are weighing plans for a five-year aid package to steady its finances and protect a currency peg seen as vital to regional economic stability. The amount under negotiation is $10 billion, though a final agreement has yet to be reached.

Bahrain will introduce a nationwide data protection law, supporting the development of the kingdom’s digital economy. The law promotes the efficient and secure processing of big data for commercial use and provides guidelines for the effective transfer of data across borders. The competition law aims to will make it easier for new businesses to enter existing markets and compete with significant players while the bankruptcy law introduces reorganization, whereby a company’s management is allowed to remain in place and continue business operations during the administration of a case, as in the United States’ Chapter 11 law. The health insurance law will be rolled out by the Supreme Council of Health and a Health Insurance Fund will be set up to assure improved pooling under a new national umbrella and coverage for beneficiaries related to benefits and service provision. (AB 03.10)

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5.7 Moody’s Says Omani Banking System’s Outlook is Negative on Weaker Government Support

Moody’s has maintained its negative outlook for Oman’s banking system, reflecting the diminishing capacity of Oman’s government to support the country’s banks in case need. The negative outlook also reflects banks’ softening asset quality and relatively tight funding. “The government’s capacity to provide support to banks is weakening as its fiscal position deteriorates” said Mik Kabeya, an Assistant Vice President at Moody’s. Moody’s expects the government to continue to show a high willingness to extend support to its banking sector in a crisis, but the rating agency points out that the authorities may become more selective in providing support to banks as the sovereign’s credit strength reduces.

While Oman’s economy will rebound from the sluggish growth rates experienced last year, growth will still remain below the historical average. Moody’s forecasts the Oman’s real GDP will increase by 2.5% in 2018 and 2.6% in 2016, compared with 0.2% in 2017. However, the average growth rate from 2007 to 2016 was close to 5%.

However, Moody’s expects capital to remain sound, providing loss absorbency. Moody’s forecasts system-wide tangible common equity to range between 13%-15% of risk-weighted assets over the next 12 to 18 months, from 14.0% in 2017. Omani banks’ high reliance on government deposits remains a risk, because the government’s ability to finance its rising debt burden is becoming increasingly vulnerable to a change in foreign investors’ risk appetite. This increases the risk of deposit withdrawals from banks should the sovereign face reduced market access. Bank profitability will soften as funding costs rise as higher US rates outweigh rising lending rates from banks’ loan re-pricing. Loan-loss provisioning will increase as problem loans rise. Operating expenses will remain stable, however. (Moody’s 08.10)

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►►North Africa

5.8 Egypt Stops Gas Imports – On Its Way to Becoming Self-Sufficient

Petroleum Minister Al-Molla announced in early October that Egypt will no longer import liquefied natural gas (LNG), saving the government the LE3 billion it earmarked annually to meet local demands. The savings are due, in large measure, to the Zohr gas field which began output in December 2017. Zohr, with reserves of more than 30 trillion cubic feet (tcf), is among the largest gas fields discovered so far in the Mediterranean. Its output is central to the government’s plans not only to become self-sufficient but to transform Egypt into a regional energy hub.

Three years ago Egypt imported up to 1.2 billion cubic feet per day (bcfd). Eni, the Italian multinational oil and gas company which discovered Zohr, announced in early September that the gas field is now producing two bcfd. Zohr’s discovery in 2015 offered the Egyptian government more than a breathing space to save on imports. The field will bring in much needed hard currency when Egypt starts exporting gas, which it is slated to do by 2019 when output from other gas fields comes online. Two months ago Eni announced a new gas discovery in the Western Desert. Other explorations are ongoing in the Red Sea and the Mediterranean.

Cairo is not only focusing on the gas sector. The long-term National Energy Strategy, approved by the Supreme Energy Council, targets an energy mix which includes nuclear and renewable energy sources. An important part of the strategy is for the government to pay off its debts to foreign partners in order to encourage further explorations. The government has succeeded in cutting its debt to foreign oil exploration companies to $1.2 billion in fiscal year 2017-2018, down from $6.3 billion in 2012, the Petroleum Ministry announced in July, and will pay the remaining sum by the end of 2019. The debt accumulated following the January 2011 Revolution when a slowdown in the economy caused a fall in oil and gas investments. By 2014 Egypt had become a net importer, rather than exporter, of natural gas. Egypt now aims to become a regional energy hub, receiving natural gas through underwater pipelines from countries around the Mediterranean to liquefy and then re-export.

One link connecting Israel’s grid to Egypt’s at Arish already exists. The pipeline, built and operated by East Mediterranean Gas (EMG) was previously used to transport Egyptian natural gas to Israel but will be re-engineered to reverse the flow. It is expected to start its new operations in 2019, carrying an estimated 64 billion cubic meters of gas over a 10-year period. A $15 billion agreement was signed in February between the Egyptian private firm Dolphinus Holdings and Delek Drilling LP and Noble Energy Inc, operators of Israel’s Leviathan and Tamar gas fields. Noble Energy and Delek have finalized agreements with an Egyptian partner to acquire a 39% stake in the pipeline operator EMG, paving the way for Israeli natural gas exports to Egypt. (Al-Ahram 04.10)

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5.9 World Bank Foresees 6.8% Growth for Libya

In its latest Economic Outlook, the World Bank has forecast GDP growth in Libya of 6.8% in 2019. Given its high reliance on hydrocarbon activities, the performance of the Libyan economy remains strongly affected by security conditions, especially around the main oil fields and terminals. Improved political and security arrangements reached during H2/17 allowed Libya to more than double its production of oil and to register record growth last year (up 26.7%) after four years of recession. The status quo scenario determined by delayed resolution of the political strife and the persistence of the internal division makes sustained stabilization unlikely. This situation is characterized by recurring clashes around oil terminals and in large cities, with the result that any nascent recovery triggers further resource competition.

In this context, Libya can only manage to resume oil production to a daily average of 1 million barrel per day (bpd) by the end of this year and keep production around this level over the next few years, which will represent only 2/3rd of potential. GDP will grow at 6.8% in 2019 (a catch-up effect) and an average 2% over 2020-21, resulting in a GDP per capita at 62.5% of its 2010 level. (World Bank 09.10)

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5.10 Sudan to Set Daily Exchange Rate and Cancel Import Restrictions

On 7 October, Sudan began using a body comprised of bankers and exchange bureaus to set its daily currency exchange rate as part of a package of measures designed to tackle an economic crisis, the central bank governor said. Sudan is also cancelling import restrictions imposed last year on 19 selected foods and other items. The currency measures mean the Sudanese pound is likely to lose value against the dollar initially before later stabilizing. The new exchange body will also set purchase price of gold to counter smuggling, he said.

Sudan’s economy has been struggling since the south of the sprawling northeast African country seceded in 2011, taking with it three-quarters of oil output and depriving Khartoum of a crucial source of foreign currency. Worsening hard currency shortages have led to strict withdrawal limits and a booming foreign exchange black market, where dollars have been trading for a premium of about 40%. The official exchange rate on 4 October was around 29 pounds to the dollar. Sudan’s inflation climbed to a record 66% in August, one of the highest rates globally. Though gold mining has boomed, officials say most gold is smuggled out of the country. (Reuters 04.10)

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5.11 Morocco’s Economy to Grow by 2.9% in Fourth Quarter of 2018

Morocco’s High Commissioner for Planning (HCP) predicts a 2.9% rise in Morocco’s economic growth in the fourth quarter, down from 4.4% in the same period last year. In its quarterly summary of October 2018, the HCP predicted that the national economy will continue to increase during the fourth quarter of 2018, supported by an increase of 3.6% in agricultural value-added products. Value-added products, excluding agriculture, is expected to improve by 2.8% during the fourth quarter of 2018, almost the same pace in comparison to the same period in 2017.

The HCP attributed the improvement in plant production to the increase in the production of autumn crops, which will benefit from the improvement of dam reserves. Livestock production is expected to improve slightly, affected by reduced poultry production. Non-agricultural value-added production is expected to develop under global trends of increased trade and financial pressures as well as social, economic and political turmoil that some emerging countries are experiencing. Overall, global trade is expected to grow by 4.6% and external demand for Morocco will rise by 4.5%.

The HCP noted that while pending the results of the forecasted economic budget for January 2019, economic growth is likely to remain within 3% in 2018, the same increase announced in the forecasted economic budget in January 2018. (MWN 08.10)

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5.12 Morocco’s Thriving Aeronautic Industry Attracts International Interest

Morocco’s aeronautic industry is growing exponentially thanks to its proximity to Europe, low labor costs, and political stability. Since 2001, the Moroccan aeronautics sector has seen a remarkable and considerable growth. From 2001 to 2011, the number of companies active in the aeronautics industry increased from 10 to more than 100. Total employees increased from only 300 to more than 10,000 with a total sales of over $1 billion, according to the Moroccan Agency of Investment and Development (AMDI).

Morocco’s strategic location has made the North African country a favorite destination for big international aircraft manufacturers, such as Bombardier, Boeing and Safran. In September 2016, Boeing announced plans to create a “Boeing industrial ecosystem” in Morocco to attract 120 suppliers for Morocco’s aeronautics exports, generating $1 billion and creating more than 8,200 jobs. The Seattle-based aerospace company has been in Morocco since 2001. Boeing also has a joint venture with France’s Safran in Casablanca to build aerospace parts such as wire bundles and harnesses for aircraft makers like Boeing and Airbus.

Safran has been operating in Morocco for more than 15 years with more than 2,700 employees in seven companies and joint ventures. Safran’s companies in Morocco involved in activities such as aeronautical cabling, thrust reversers and nacelles, engineering, and engineering maintenance. The company’s employees are primarily young people in their 20s, of which 70% are young women. Women make up 40% of the managing staff. Bombardier has plans to invest $200 million in Morocco by 2020 and create 850 direct jobs and 4,400 indirect jobs. In 2014, Bombardier built an aerospace-manufacturing facility in Morocco. In July 2014, US-based Alcoa Aerospace also announced that it would invest €4.6m in a production unit in Midparc, specializing in fastening systems for the aerospace industry.

In the World Bank’s most recent Doing Business report for 2018, Morocco ranked 69th worldwide. Morocco scored 67.91 points with a more favorable business climate than that of neighboring countries in North Africa, such as Tunisia (88th), Egypt (128th), and Algeria (166th). The report also stated that Morocco’s scoring enabled it to rise to the third position in the MENA region behind the UAE (21st) and Bahrain (66th). Among African countries, Morocco also took third place, behind Mauritius (25th) and Rwanda (41st). (MWN 06.10)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkey’s Annual Inflation Jumps to 24.5% in September

Turkey’s annual inflation reached 24.52%, its highest level in the last 15 years, according to the Turkish Statistical Institute (TSI). The TSI revealed 3 October that the consumer price index (CPI) reached 24.5% in September, compared to 17.9% in August. The Turkish lira has lost about 40% of its value against the United States (US) dollar since the beginning of the year, over concerns about President Erdogan’s economic policies, and the diplomatic dispute with US President Trump. Moreover, the Central Bank of Turkey decided last month, to increase the interest rate to 24%, in line with the hike in inflation, and the decline of the local currency. According to the TSI, the most affected sectors with the inflation are domestic appliances and furniture, whose prices rose by 11.4%, while transport prices increased by 9.15% in September. (DNE 04.10)

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6.2 Turkey’s Budget Sees $12.3 Billion Deficit Over First Nine Months of 2018

Turkey’s central government budget balance posted a deficit of TL 56.7 billion ($12.35 billion) from January to September with a 79.4% year-on-year increase, the Treasury and Finance Ministry announced on 15 October. The country’s budget revenues totaled TL 546.8 billion ($119 billion) in the first nine months of this year, up nearly 20% year-on-year, data showed. During the same period, budget expenditures rose 23.6% to TL 603.5 billion ($131.5 billion) – marking a TL 56.7 billion ($12.35 billion) deficit. The budget balance, excluding interest payments, saw a surplus of TL 3.7 billion ($800 million) from January to September.

Official figures showed tax revenues rose 19.2% to reach nearly TL 459.4 billion (around $100 billion), while interest payments were TL 60.4 billion ($13.2 billion) over the same period. The New Economic Program estimates a TL 72.1 billion budget deficit in 2018, or 1.9% to the country’s GDP. The average United States dollar/lira exchange rate in September was TL 6.38, while one dollar traded for TL 4.59 on average in the first nine months of this year. (DSA 14.10)

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6.3 Turkey’s Unemployment Rate at 10.8% in July

The annual unemployment rate in Turkey hit 10.8, TUIK announced on 15 October. The number of unemployed persons aged 15 years old and over increased by 88,000 to 3,531 million persons in July 2018, compared with the same period of the previous year. The unemployment rate stood at 10.8% with a 0.1% increase. In the same period, non-agricultural unemployment rate was 12.9% with 0.1% decrease. While youth unemployment rate including persons aged 15-24 was 19.9% with a 1.2% decrease, the unemployment rate for persons aged 15-64 was 11% with 0.1%.

The number of employed persons rose by 507,000 to 29.2 million persons in the period of July 2018 compared with the same period of the previous year. The employment rate was 48.2% with a 0.2% increase. According to the distribution of employment by sector; 19.7% was employed in agriculture, 19.5% was in industry, 6.9% was in construction and 53.9% was in services. (TUIK 15.10)

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6.4 EU Parliament Cancels €70 Million Earmarked For Turkey Over Rule of Law Conditions

On 2 October, the European Parliament decided to cancel €70 million in pre-accession funds earmarked for Turkey, as conditions to improve the rule of law were not met. Last November, during the budgetary negotiations, Parliament and Council decided to place in reserve €70 million in pre-accession funds for Turkey (€70m in commitments and €35m in payments), under the condition that Turkey makes sufficient improvements in the fields of rule of law, democracy, human rights and press freedom, according to the annual report of the Commission.

However, the European Commission’s annual report on Turkey, published on 17 April 2018, concluded that “Turkey has been significantly moving away from the European Union, in particular in the areas of the rule of law and fundamental rights and through the weakening of effective checks and balances in the political system”. The condition set by the budgetary authority has therefore not been met, MEPs underline. Accordingly, they support the draft amending budget, in which the Commission will transfer the €70 million earmarked for Turkey to reinforce the European Neighbourhood Instrument. This would be done through commitments– to cover actions linked to the Central Mediterranean migratory route and to fulfil part of the EU pledge for Syria – and to boost Humanitarian Aid by €35 million. The report was been adopted with 544 votes for, 28 against and 74 abstentions. (Various 03.10)

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6.5 IMF Revises Greece’s 2019 Growth Rate Upwards

The International Monetary Fund has revised Greece’s short-term growth forecasts upward while lowering medium-term forecasts in its October 2018 World Economic Outlook. The new IMF report expects next year’s growth rate to come to 2.4%, against 1.8% in April. It is closer to the Greek government’s forecast for 2.5% growth, and the latest projection by the European Commission for 2.3%. However, the medium-term forecast is lower than previously. Specifically, the economic growth forecast for 2023 is now 1.2%, from 1.9% in its previous report.

For Greece’s current account deficit, the IMF predicts that it will be 0.8% of GDP this year, while for 2019 it predicts it will be 0.4% of GDP. In addition, the Fund’s report provides for an ongoing, gradual reduction in unemployment. In particular, the IMF estimates that this year, the unemployment rate will drop by 1.6% from 2017 (21.5%) to 19.9%, while in 2019 the figure will drop to 18.1%. Regarding inflation, the IMF estimates it will fluctuate to 0.7% in 2018, while for the year 2019 an increase of 1.2% is expected. (GN 09.10)

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6.6 Greece to Scrap Controversial Wine Tax

The Greek government reportedly intends to exclude from next year’s draft budget revenues from an excise tax on wine that was introduced in 2016. The tax was initially received by the Greek wine market with suspicion as it could cause damage to Greece’s wine production. The “special consumption tax” as it was called, adds €0.15 ($0.17) to the cost of a 750ml bottle of wine or €0.20 ($0.23) to a 1-liter bottle. The Greek Wine Federation along with the National Interprofessional Organization of Vine and other associations challenged legally this tax and won the case as Greece’s Council of State has now said that its implementation is unconstitutional. (eKathimerini 04.10)

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6.7 Greece’s Demographic Problem Threatening Economic Recovery

Greece’s aging population is seriously undermining the long-term growth prospects of the country’s economy, official data suggest amid warnings by prominent economists. At the outset of the financial crisis in 2010, Greece’s active population – those aged between 20 and 64 – stood at 7.045 million people. Today that number stands at 6.8 million. People aged 20-40 years account for 40% of the population now compared to 46% in 2010. According to the United Nations, by 2025 the proportion of the active population in Greece will have dropped below 6.5 million, with only 2.3 million people forming the 20-40 age group. Moreover, the number of people aged 65 and over is expected to soar to 2.535 million by 2025 from 2.1 million in 2010 and 2.237 million in 2015.

Greece’s falling birth rate has been highlighted as a serious problem by international organizations and prominent economists. Tellingly, the number of children up to the age of 4 is already on the slide, dropping from 585,000 to 503,000 in the period stretching from 2010 to 2015, while this figure is expected to plummet to 404,000 by 2025, according to projections by the UN.

In Greece, the fertility rate – children per couple – stands at 1.26 compared to 1.49 in the European Union. According to the EU’s statistics agency Eurostat, Greece and Italy have the third lowest fertility rates in the EU, behind Germany and Portugal. The country’s protracted economic crisis has resulted in a faster demographic slowdown than previously expected. It could take a full generation for the Greek population to stabilize from the impact of the “economic shock. (eKathimerini 07.10)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Study Ranks Israel High Among World’s Most Democratic Countries

The Jerusalem-based Institute for Zionist Strategies released a new comparative study, challenging the assertion by some that Israel’s democracy is eroding, saying that in terms of balancing between granting state rights and imposing civil obligations, Israel is in line with the world’s leading democracies and sometimes even takes a more liberal approach. The study focused on three issues that have been attacked as undemocratic: the demand for a pledge of loyalty as a condition for citizenship; asking minorities to perform military or national service; and restricting prisoners’ right to vote.

The study compared Israel and 15 of the world’s leading democracies – as ranked by the prestigious Freedom House Index – including the Scandinavian countries, Canada, Austria and others – and found that Israel demands fewer obligations of its citizens than the rights it grants them.

In terms of a pledge of loyalty as a prerequisite for citizenship, the study found that only five of the 15 democracies reviewed require no such pledge at all, while the other 10 did. Israel does not demand those seeking citizenship under the Law of Return to pledge loyalty to the state, but does demand it from individuals who apply for citizenship through other avenues. As for the minorities performing military or national service, the study found that seven other democracies that enact conscription offer minorities exemption from service, but six of them condition give exemption on performance of national service, which is usually longer than the mandatory military service.

Among the seven, none were found to offer minorities a blanket exemption from military service on ethnic or national grounds, as Israel does for its Arab minority; and unlike Israel, all seven impose sanctions on individuals refusing to enlist unless they have been recognized as conscientious objectors. When it comes to restricting prisoners’ right to vote, the study found that like Israel, seven of the 15 democracies reviewed do not place any such limitation on inmates. (IH 04.10)

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7.2 Over 4 Years, the Number of Israelis Studying Abroad Rises by 26%

Within the span of four years, the number of Israeli university students pursuing degrees at mostly prestigious schools outside Israel has risen drastically. According to official figures issued by the Central Bureau of Statistics, 2017 saw a 26.2% increase in the number of Israelis studying abroad, amounting to a record-breaking 33,073 students who left Israel to pursue higher education. For the sake of comparison, in 2013, 26,215 Israelis were enrolled in foreign universities.

Of the students pursuing degrees abroad, 11% are working toward doctorates; 9.4% are in medical school; 4.6% are in graduate schools and 5.8% are undergraduates. The percentage of Israeli academics living abroad for a period of three years or more is particularly high among those seeking degrees in the exact sciences and engineering in relation to those working toward degrees in the humanities and social sciences.

The Israeli students abroad are pursuing degrees in mathematics, statistics and computer science (11.7%); medicine (9.6%); languages and literature (8.6%); engineering and architecture (7.6%); agriculture (6.7%); economics and business management (4.2%); and law (3.6%). Meanwhile, 24.2% of doctoral students are pursuing a degree in mathematics; 20.6% in physiology; and 19.3% in computer science. Among graduate students, 22% are working toward a music degree; 15.7% toward a mathematics degree; and 15.5% toward a computer science degree. (CBS 11.10)

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*REGIONAL:

7.3 Lebanon’s Parliament Speaker Says Government Formation Back To Zero

Lebanese Parliament Speaker Nabih Berri on 6 October said the process of forming a government more than five months after a national election had returned “to zero”, after saying earlier there had been a “glimmer of hope”. In the five months since the parliamentary election, there has been no sign of the concessions sought by Prime Minister-designate Saad Al Hariri that would enable the formation of a unity government that can get to work on badly needed economic reforms. Politicians are warning that Lebanon faces an economic crisis.

The main sticking point in negotiations has been seen as how to satisfy the competing demands of Maronite Christian President Michel Aoun and his Free Patriotic Movement (FPM) on the one hand, and their Maronite rival Samir Geagea and his Lebanese Forces Party on the other. The Christian parties have clashed over how power should be divided in the government, casting doubt over Hariri’s prediction on that an agreement would be reached soon. (Reuters 07.10)

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7.4 Lebanon Ranked 80 out 189 Countries on the Human Development Indices

The UNDP released its new report concerning the updated Human Development Indices and Indicators in more than 189 countries. The HDI is a summary measure for assessing long-term progress in three basic dimensions of human development: A long and healthy life (measured by life expectancy), Access to knowledge level (measured by mean years of education among the adult and children population), and a decent standard of living (measured by Gross National Income (GNI) per capita).

Lebanon’s HDI value for 2017 is 0.757 putting the country in the high human development category – positioning it at 80 out of 189 countries and territories. Between 2005 and 2017, Lebanon’s HDI value increased by 3.4%. In fact, between 2005 and 2017, life expectancy grew by 3.91% to reach 79.8, while GNI per capita recorded an uptick of 10.12% to $13,378. Lebanon’s HDI 0.757 is above the average of 0.699 for countries in Arab States.

In the 2014, Human Development Report Office (UN) (HDRO) introduced a new measure, the GDI, based on the sex-disaggregated Human Development Index, defined as a ratio of the female to the male HDI. The GDI measures gender inequalities in achievement in three basic dimensions of human development: health (measured by female and male life expectancy at birth), education (measured by female and male expected years of schooling for children and mean years for adults aged 25 years and older); and command over economic resources (measured by female and male estimated GNI per capita).

In Lebanon, the 2017 female HDI value is 0.701 in contrast with 0.788 for males, resulting in a GDI value of 0.889 compared to 0.857 for Jordan and 0.990 for Kuwait. In 2010, HDR introduced the GII, which reflects gender-based inequalities and give an idea about the loss in human development due to inequality between female and male achievements. In 2017, Lebanon had a GII value of 0.381, ranking it 85 out of 160 countries while Jordan and Kuwait are ranked at 108 and 57, respectively. In fact, women held 3.1% of parliamentary seats in Lebanon. The female participation in the labor market is 23.2% compared to 71.1% for men. Moreover, 53% of women have done at least a secondary level of education compared to 55.4 % of their male counterparts. (BLOMInvest 09.10)

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7.5 Jordan’s PM Revokes Exceptional State University Admissions

On 8 October, Jordanian Prime Minister Razzaz decided to cancel the admission of students at universities accepted outside the unified admission system. Razzaz called on Higher Education Minister Tweisi to revoke a decision to admit students in medicine, pharmacology and other specializations, which had been issued a few days earlier upon a decision by the minister. The premier highlighted the importance of following regulations of the unified admission, so as to achieve justice and equality among all students.

Tweisi had sent an official letter to several university presidents to accept several students in various medical specializations, following a decision by the Higher Education Council. The council authorized the minister to address any cases that may arise and require making immediate decisions pertaining to the unified admission at public universities. The number of students admitted at official universities increased from 29,713 in the academic year of 2017-2018 to 32,174 in this academic year. (JT 09.10)

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7.6 Morocco to Introduce Holocaust Studies into State Education System

King Mohammed VI of Morocco has ordered to incorporate Holocaust studies into the country’s education system. The decision was made while the monarch was attending the 73rd U.N. General Assembly in New York recently, adding that King Mohammed sent word to Education Minister Amzazi, saying Holocaust studies must be included in the country’s high school curriculum. “Education has the power to fight against discrimination and racism, as well as the ugly phenomenon of anti-Semitism,” he said. It is unclear at this time what form Holocaust studies would take in Morocco and what language the country’s textbooks would opt for. (Various 04.10)

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7.7 US University Fair Held in Athens on 9 October

The Fulbright Foundation in Greece inaugurated on 9 October the 24th US University Fair, where representatives and alumni from 32 American universities and colleges were in attendance providing information on courses, entry requirements, cost of living and other useful tips for students wishing to study in the United States. According to the Fulbright Foundation and data from the Institute for International Education, there were 2,199 Greek students at American universities in the 2015-2016 academic year, 1,000 of which were in postgraduate or doctoral programs. Foundation representatives were also on hand at the event, which is being held at the Crowne Plaza hotel, to talks about its scholarship program. (GN 09.10)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 V-Wave Announces First Patients in RELIEVE-HF Pivotal Trial of its Heart Failure Therapy

V-Wave has enrolled the first patients in its global, 500 patient pivotal study of its proprietary, minimally invasive implanted interatrial shunt device for treating patients with NHYA Class III and ambulatory Class IV symptomatic heart failure (HF). This randomized, controlled, double-blinded multicenter clinical trial – the RELIEVE-HF study – will evaluate the safety and effectiveness of V-Wave’s novel device therapy in severe HF patients with either preserved or reduced ejection fraction. The study is funded by V-Wave’s $70M early 2018 C-Round financing.

The first two patients in the RELIEVE-HF study were successfully implanted and discharged home the following morning from The Ohio State University Wexner Medical Center. Approximately 50 major North American hospitals are expected to participate in the pivotal study with up to another 25 centers in the EU and Israel. The study protocol allows inclusion of a broad pool of patients who are expected to have the best chance of benefitting from the treatment. The primary effectiveness outcome measure includes a hierarchical composite of mortality, heart transplant or ventricular assist device implantation, HF hospitalizations, and change in six-minute walk test distance.

Caesarea’s V-Wave has developed a proprietary, minimally invasive implanted interatrial shunt device for treating patients with severe symptomatic heart failure with either preserved or reduced ejection fraction. (V-Wave 03.10)

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8.2 First-ever Opium Poppy Genome Assembled

Xi’an Jiaotong University, The Wellcome Sanger Institute, The University of York and NRGene have recently completed the world’s first assembly of the opium poppy genome. NRGene’s DeNovoMAGIC provided comprehensive results only a few weeks after receiving the raw material from the University of York. DeNovoMAGIC assembles Illumina reads into long sequences, delivering accurate assembly results to provide researchers with a complete picture of their varieties for in-depth research. The opium poppy genome project team supplemented NRGene’s data with analysis from PacBio and a linkage map to further improve the result from NRGene’s scaffold N50 at 15.6Mb, contig N50 at 121kb to the final product of scaffold N50 at 205Mb and contig N50 1.77Mb.

The final assembly allows the teams to understand the species evolution and how metabolic pathways are constructed, providing a more in-depth picture of the plant’s properties as a natural pharmaceutical. Opium has long been used as a natural pain killer; the poppy plant is the basis of the extracts used to create hydrocodone and codeine.

Researchers around the world are leveraging NRGene’s technologies to accelerate agricultural research on animals and food and biofuel crops, such as wheat, soy, potato and maize. GenoMAGIC enables researchers to easily relate genomic sequences with beneficial traits to accelerate and enhance genetic discovery and breeding. PanMAGIC produces an accurate genome-to-genome mapping and displays all types of sequence differences within the studied population including SNPs, InDels of any size, inversions, translocations, gene PAVs, and gene CNVs. ArrayMAGIC maximizes the data found in microarrays/GBS to obtain high resolution genomic information by imputing back from SNPs to full genomic sequences.

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8.3 Eximo Medical Receives FDA Clearance for B-Laser Atherectomy System

Eximo Medical has received 510(k) clearance from the U. S. Food & Drug Administration (FDA) for its B-Laser Atherectomy System for Peripheral Artery Disease (PAD). B-Laser is a transformative 355nm wavelength laser technology designed to address unmet clinical needs for treating multiple vascular indications. The specific indication cleared by the FDA is: “The B-Laser Atherectomy System is intended for use in the treatment, including atherectomy, of infrainguinal stenoses and occlusion, including in-stent restenosis (ISR).”

Clinical evaluation of the B-Laser device in the intended population was performed in a prospective, single-arm, multi-center, open-label, non-randomized pilot clinical study in 50 subjects in Europe, as well as in a pivotal, prospective, single-arm, multi-center, open-label, non-randomized IDE clinical study in 97 subjects in U.S. and Europe. In the pilot clinical study, the results presented 100% success in crossing the target with no device related perioperative clinically significant adverse events and no complications requiring intervention. There were no major adverse events (MAE) at one month and six months post procedure, and only two cases (4.3%) of TLRs among 46 subjects who completed the 1-year post procedure follow-up. In the pivotal study, the safety and efficacy primary endpoints were achieved with high margins and the 6-months data was consistent with the pilot study results.

Rehovot’s Eximo Medical is a startup Israeli company with a novel hybrid technology for superior tissue resection in various vascular and gastrointestinal endoluminal applications. B-Laser, Eximo’s proprietary single-use catheter, combines the best of the leading technology solutions: optical fibers that deliver short laser pulses, aspiration, and other innovative solutions. (Eximo 08.10)

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8.4 Check-Cap Announces IDE Submission to FDA for Its C-Scan System

Check-Cap, a clinical-stage medical diagnostics company engaged in the development of C-Scan, a preparation free screening method for the prevention of colorectal cancer through the detection of precancerous polyps, announced that it has submitted an Investigational Device Exemption (IDE) to the U.S. FDA to advance studies of C-Scan®. If approved, the Company plans to initiate a U.S. pilot study during the fourth quarter of 2018.

Usfiya’s Check-Cap is a clinical-stage medical diagnostics company developing C-Scan, an ingestible capsule-based device for preparation-free colorectal cancer screening. Utilizing innovative ultra-low dose X-ray and wireless communication technologies, the capsule generates information on the contours of the inside of the colon as it passes naturally. This information is used to create a 3D map of the colon, which allows physicians to look for polyps and other abnormalities. Designed to improve the patient experience and increase the willingness of individuals to participate in recommended colorectal cancer screening, C-Scan removes many frequently-cited barriers, such as laxative bowel preparation, invasiveness and sedation. (Check-Cap 09.10)

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8.5 Atlanta and Israel Launch New Medtech Accelerator

The Global Center for Medical Innovation (GCMI) and the Rambam Health Care Campus, the largest medical center in northern Israel, announce the establishment of a medical technologies accelerator for Israeli-based companies in Atlanta. The agreement, which calls for joint funding, was formally announced on 10 October at Metro Atlanta Chamber. The accelerator intends to provide promising Israeli medtech startups a source of funding and U.S. commercialization pathway expertise including market assessment, design, prototyping, preclinical trials, FDA submission requirements, investor readiness and market access. In addition to GCMI and Rambam, the new venture was fostered by the Consulate General of Israel to the Southeast, Conexx: America Israel Business Connector and the Metro Atlanta Chamber of Commerce.

In addition to its share of funding responsibilities and commercialization pathway support GCMI will also maintain a presence at the Rambam Healthcare Campus in Haifa, Israel, to assist in the evaluation, selection and early support of prospective accelerator matriculants. Selected companies will be hosted within the new accelerator for 6-12 months, depending on milestones agreed upon prior to admission. Launched in 2017, GCMI’s “A1” accelerator is currently host to 3 early stage medtech companies and shares relationships with the American Cancer Society, Piedmont Healthcare, Georgia Tech, Children’s Healthcare of Atlanta and other private and public entities.

The GCMI-Rambam program also provides opportunities for U.S.-based companies to access Rambam Health Care Campus resources including a large, diverse patient population, innovative Key Opinion Leaders and access to early-stage clinical research and rich digital health capabilities. (GCMI 10.10)

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8.6 BMS and Compugen Collaborate to Evaluate Therapeutic Regimen in Advanced Solid Tumors

Bristol-Myers Squibb Company and Compugen have entered into a clinical trial collaboration to evaluate the safety and tolerability of Compugen’s COM701, an investigational anti-PVRIG antibody, in combination with Bristol-Myers Squibb’s programmed death-1 (PD-1) immune checkpoint inhibitor Opdivo (nivolumab), in patients with advanced solid tumors. In conjunction with this collaboration, Bristol-Myers Squibb will make a $12 million equity investment in Compugen.

Compugen will sponsor the ongoing two-part Phase 1 trial, which includes the evaluation of the combination of COM701 and Opdivo in four tumor types, including non-small cell lung, ovarian, breast and endometrial cancer. The collaboration is also designed to address potential future combinations, including trials sponsored by Bristol-Myers Squibb to investigate combined inhibition of checkpoint mechanisms, such as PVRIG and TIGIT. The clinical combination of multiple immune checkpoint inhibition is designed to test the biological rationale of the PVRIG pathway and the synergistic activity demonstrated in preclinical models.

Holon’s Compugen is a therapeutic discovery and development company utilizing its broadly applicable predictive discovery infrastructure to identify novel drug targets and develop first-in-class therapeutics in the field of cancer immunotherapy. The Company’s therapeutic pipeline consists of immuno-oncology programs against novel drug targets it has discovered, including T cell immune checkpoints and myeloid target programs. (BMS 11.10)

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8.7 Celmatix Announces Partnership to Bring the Fertilome Genetic Test to Israel

New York’s Celmatix, a next-generation women’s health company, announced a commercial agreement with Oncotest-Teva, a subsidiary of Teva Pharmaceutical Industries to bring the Fertilome test, the world’s first multigene panel test for a woman’s reproductive health and fertility, to the Israeli market. This partnership, which brings together two pioneers in the field of personalized medicine, represents the first strategic international collaboration for Celmatix and will make the Fertilome genetic test widely available to women through their doctors in Israel.

Among developed nations across the globe, women are waiting longer to start building their families, leading to a worldwide surge in the use of assisted reproductive technologies including in vitro fertilization (IVF) and cryopreservation. In Israel, a country with 1.7 million women of reproductive age, the impact of this demographic shift is stark: Today, more than 4% of babies born to Israeli mothers each year result from IVF treatments, compared to approximately 1% in the U.S. (Celmatix 09.10)

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8.8 Transseptal Solutions Announces FDA Clearance of Its Novel Transseptal Access System

Transseptal Solutions, developer of an innovative Transseptal Access System with a novel approach of transseptal puncture and left atrial navigation to introduce various cardiovascular catheters into the left heart chambers, announced that the company has received FDA 510(k) clearance for the TSP Crosser[TM] Transseptal Access System. With the increased availability of transcatheter left atrium procedures, there is a growing need to provide physicians with tools that allow accurate, quick and safe access to the left atrium. TSP Crosser is an advanced transseptal puncture system with a built-in steering mechanism, indicated for use in procedures where access to the left atrium via transseptal technique is desired.

The TSP Crosser Transseptal Access System combines a sheath, dilator and a flexible puncturing needle in a single integrated system for controlled LA access and enhanced performance during transseptal catheterization procedures. A radiopaque loop wire is positioned at the distal end of the steerable sheath to aid in the localization of the fossa ovalis. The flexible puncturing needle and the steerable sheath allows pre-puncture deflection and orientation, positioning the needle in the desired puncturing location of the fossa ovalis for transseptal access. The sheath is steerable up to 180° bidirectionally after crossing the fossa ovalis.

Netanya’s Transseptal Solutions, founded in 2013, brings to the market a new steerable sheath with a novel approach of transseptal puncture and left atrial navigation. By addressing significant unmet market needs, Transseptal Solutions seeks to improve the LA access procedure and generate a novel approach to serve the expanding indications of left heart treatment. (Transseptal Solutions 11.10)

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8.9 MEDX Xelerator Broadens International Collaboration

Israeli medical-device incubator MEDX Xelerator is broadening international collaboration with innovation hubs in the EU and the US to advance medical technologies. In the EU, MEDX Xelerator will collaborate with Health Hub Vienna (HHV), a healthcare-innovation acceleration program managed by INiTS, a Vienna-based incubator developing life-sciences start-ups for over 15 years. In the US, MEDX Xelerator will collaborate with Parvizi Surgical Innovation (PSI), a private, Philadelphia-based accelerator founded by key opinion leaders in orthopedics from Thomas Jefferson University’s Rothman Institute, an institution considered a world leader in orthopedics.

MEDX Xelerator has also launched collaboration with an academic institution – the University of Navarra (UN), a prominent innovation center in Spain. Through these collaborations, MEDX Xelerator, HHV, PSI and UN will facilitate exchange in fields that are essential to innovation infrastructure, such as exposure to investors, mentors and industry leaders, as well as leverage their extensive networks of strategic partners, hospitals and universities.

The collaborations with HHV, PSI and UN are a part of MEDX Xelerator’s proactive strategy that leverages the incubator and its partners’ infrastructure in business, technology, intellectual property, regulation and finance to address significant unmet medical needs. Among other programs, the incubator developed the unique “X Lab” program, which supports inventors and entrepreneurs with very early-stage ideas in defining their project and arriving at proof-of-concept in order to become an incubator company. The X Lab program’s first graduate is Exero Medical, which had entered its next phase of development as a matured incubator company in September.

MEDX Xelerator is a MedTech incubator located in Or Yehuda, Israel, specializing in seed-stage medical technologies for minimally invasive procedures, medical robotics and implantables. Its partners are MEDX Ventures Group, Boston Scientific, Intellectual Ventures and Sheba Medical Center. (Globes 14.10)

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8.10 Hebrew University Establishes Cannabis Research Laboratory

The Hebrew University of Jerusalem received a $2.3 million investment to establish a cannabinoid research lab, to be called Lumir Lab. The investment came from Asana Bio Group, an Israeli holding company specializing in medical cannabis ventures. Set up in 2017 but only very recently licensed by the Israeli health ministry, the lab will provide clinical validation, analyses, and solutions to companies operating in the medical cannabis industry, as well as custom product formulations, cannabinoids and terpenes profiling, and product compliance services. The lab is headed by analytic chemist Lumír Ondřej Hanuš, one of the world’s leading cannabinoids researchers and the first one to identify and isolate the first endocannabinoid in the human brain, Anandamide.

The lab’s first research and development collaboration, announced in June, is with Gynica, a company specializing in cannabis-based solutions in the field of women’s health. The two will collaborate on a treatment for endometriosis, a condition where tissue from the uterine lining migrates to other organs inside the body. The lab aims to set an international standard for clinically backed cannabis treatments. Asana, which is licensed to manufacture active cannabis in Malta under the brand Terrapeutics, intends to use the intellectual property created in the lab for manufacturing and marketing in the European market. (Various 15.10)

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8.11 PolyPid Begins Phase 2 Study to Prevent Abdominal Surgical Site Infections

PolyPid announced that the first patient has been enrolled in a Phase 2 clinical study evaluating D-PLEX100 for the prevention of abdominal surgery incisional site infections. The Phase 2 clinical trial is a prospective, multicenter, randomized, controlled, two arm single-blind study to assess safety and efficacy of D-PLEX100 administered concomitantly with the standard of care in the prevention of abdominal surgical site infections. The study is expected to be conducted in up to 300 patients undergoing elective colorectal surgery. Top-line results are anticipated in H2/19.

PolyPid’s lead product candidate, D-PLEX100, is a novel product designed to provide local anti-bacterial activity directly at the surgical site to prevent surgical site infections. Following D-PLEX100 administration into the surgical site, the drug reservoir constantly releases the entrapped broad spectrum antibiotic in a controlled manner over a predetermined period of four weeks, thus allowing prolonged infection management with increased potential to eradicate antibiotic resistant bacteria.

Petah Tikva’s PolyPid is a clinical stage, biopharmaceutical company focused on developing and commercializing novel, locally administered therapies using its transformational PLEX (Polymer-Lipid Encapsulation Matrix) technology to treat a wide variety of localized medical conditions with an initial focus on the management of surgical site infections. PLEX-based products have demonstrated an excellent efficacy and safety profile during extended clinical trials, with more than 100 patients treated in clinical trials to date. (PolyPid 15.10)

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8.12 CytoReason Findings Uncover New Cellular Players in Tumor Microenvironment

New findings presented by CytoReason reveal possible new cellular players in the tumor microenvironment that could impact the treatment process for the most in-need patients – those who have already failed to respond to ipilimumab (anti-CTLA4) immunotherapy. Once validated, the findings could point the way to improved strategies for the staging and ordering of key immunotherapies in refractory melanoma.

Analysis of data from melanoma biopsies, using CytoReason’s proprietary machine learning-based approach, identified cells and genes that distinguish between nivolumab responders and non-responders in a cohort of ipilimumab resistant patients. The analysis revealed that adipocyte abundance is significantly higher in ipilimumab resistant nivolumab responders compared to non-responders (p-value = 2×10-7). It also revealed several undisclosed potential new targets that may be valuable in the quest for improved therapy in the future.

In this study, using a single published data set, CytoReason was able to apply its knowledge base and technologies to rebuild cellular composition and cell specific expression. This enabled CytoReason to undertake a cell level analysis, uncovering hidden cellular activity that was mapped back to specific genes that can be shown to emerge only when therapy is showing and effect.

Tel Aviv’s CytoReason is one of the largest systems immunology groups in the world. At the core of its capabilities is a unique and singular focus on re-defining understanding of the immune system at a cellular level. The immune system is implicated in a vast array of diseases (and treatments), that go far beyond those diseases clearly defined as immune-related. CytoReason has spent more than a decade building up its Cell-Centered Model, through development of the most accurate machine-learning technologies trained on the most extensive and inaccessible data. (CytoReason 16.08)

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8.13 Cannabics Pharmaceuticals Positive Results in Treatment of Cancer Anorexia Syndrome

Cannabics Pharmaceuticals announced the results of its pilot study to test the efficacy of Cannabics capsules for the treatment of cancer anorexia-cachexia syndrome (CACS) in advanced cancer patients. Held at Rambam Hospital in Israel, the study is aimed at evaluating the effect of dosage-controlled cannabis capsules on CACS, and more specifically, on weight variations in advanced cancer patients.

Preliminary findings showed that all patients who were involved in the study for the first four and a half months reported an increase in appetite, as well as 83% of all those that completed the study. Results also demonstrated a weight increase of over 10% for 60% of the patients who completed the study. The remaining patients had a stable weight. 50% of the patients who completed the study reported pain reduction and sleep improvement.

Tel Aviv’s Cannabics Pharmaceuticals is developing a platform which leverages novel drug-screening tools and artificial intelligence to create cannabinoid-based therapies for cancer that are more precise to a patient’s profile. By developing tools to assess effectiveness on a personalized basis, Cannabics is helping to move cannabinoids into the future of cancer therapy. The company’s R&D is based in Israel, where it is licensed by the Ministry of Health to conduct scientific and clinical research on cannabinoid formulations and Cancer. (Cannabics Pharmaceuticals 16.10)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Telrad Networks Announces Successful Trial of New MU-MIMO Technology

Telrad Networks announced the launch of their MU-MIMO (Multi-user, multiple-input, multiple-output) technology, enabling operators to increase capacity in a network by up to 70%, and thereby increasing subscriber connectivity rates. The new feature has been tested in a successful trial by long-term customer Seaside Wireless Communications, a Canadian Wireless Internet Service Provider located in Nova Scotia.

The new feature falls into an overall strategy by the Company to increase capacity and coverage for customers. The MU-MIMO technology announcement follows two feature announcements earlier in the year for the Dual Sector/Carrier feature and Carrier Aggregation solution, both of which are now generally available. MU-MIMO will help improve network reliability and provide higher spectral efficiency for operators around the world. The technology allows for more users to use the same spectrum without self-interference and without degrading the overall network performance. The value of increased sector capacity without the addition of new spectrum or additional hardware greatly reduces operational costs to operators and creates faster return on investment (ROI).

Lod’s Telrad Networks is a global provider of innovative LTE telecom solutions, boasting over 300 4G-deployments in 100 countries. Telrad stands at the forefront of the technology evolution of next-generation TD-LTE solutions in the sub-6 GHz market. Since 1951, the company’s been a recognized pioneer in the telecom industry, facilitating the connectivity needs of millions of end-users through operators, ISPs and enterprises globally. (Telrad Networks 04.10)

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9.2 Department of Homeland Security Cites Morphisec for Enhanced Moving Target Defense for Virtual Systems

Morphisec has received an award from the Department of Homeland Security (DHS) Science and Technology Directorate (S&T) to extend, deploy, test and evaluate a Moving Target Defense (MTD)-based cybersecurity solution for virtual desktop infrastructure (VDI) environments. The project objective is the development of a product that will prevent attacks to financial institutions without reducing the overall performance of VDI environments. The award is part of the DHS S&T’s Silicon Valley Innovation Program (SVIP) and the first award in the Financial Services Cyber Security Active Defense Technologies category to an international company.

VDI use has grown significantly over the past two years, across enterprise, government and mid-market environments. Morphisec’s objective is to deliver a radically enhanced, never-seen-before preventative solution against targeted, zero-days and advanced attacks across VDI environments. The company will develop an MTD-based solution that randomly changes different areas of a VDI environment’s memory, including locations and layouts. This will increase the uncertainty and complexity of attacking the system, thus reducing the window of opportunity and increasing the cost of attack efforts. The proposed solution will use negligible resources and will not require a single signature, indicator of compromise (IOC) or any prior knowledge of the attack it’s facing to comprehensively prevent the threat from executing.

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9.3 Spain Selects Attenti for Multi-Purpose Electronic Monitoring Program

Attenti’s electronic monitoring solutions were selected for an additional three-year term by the Spanish General Secretary of Penitentiary Institutions. The new contract includes a vast range of electronic monitoring solutions for the thousands of individuals currently on different levels of imprisonment in Spain. The contracted solutions include home curfew monitoring, which provides continuous presence monitoring within a defined perimeter; substance abuse monitoring, which supports rehabilitation programs; as well as GPS supervised release monitoring solutions for temporary and post-release programs, which provides on-going supervision of offenders upon completion of their prison term and supports their reintegration into society. This multi-purpose electronic monitoring program is one of the first and one of the largest electronic monitoring programs in Europe.

As one of the largest global electronic monitoring companies in the industry, Tel Aviv’s Attenti tracks more than 70,000 offenders simultaneously in around 40 countries for criminal justice agencies. With twenty-five years of designing, engineering, developing, manufacturing, and implementing electronic monitoring equipment and system solutions. Attenti pioneered the offender tracking industry by being the first company to integrate the multiple technologies of RF, GPS, landline and cellular communications, alcohol detection and voice verification into a comprehensive offender tracking solution. From alternatives to incarceration, to inmate tracking and substance abuse monitoring, Attenti provides a full spectrum of electronic monitoring solutions tailored to each client’s unique requirements. (Attenti 04.10)

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9.4 Magal Awarded $7.7 Million Extension for Systems Protecting Critical Infrastructure in the Americas

Magal Security Systems has been awarded, through one of the subsidiaries, a $7.7 million extension to an ongoing project providing integrated security solutions for critical energy infrastructures protection in the Americas. Most of this order is scheduled to be delivered during the remainder of 2018.

Yehud’s Magal is a leading international provider of solutions and products for physical and video security solutions, as well as site management. Over the past 45 years, Magal has delivered its products as well as tailor-made security solutions and turnkey projects to hundreds of satisfied customers in over 80 countries – under some of the most challenging conditions. Magal offers comprehensive integrated solutions for critical sites, managed by Fortis4G – our 4th generation, cutting-edge physical security information management system (PSIM). The solutions leverage our broad portfolio of home-grown PIDS (Perimeter Intrusion Detection Systems), Symphony – our advanced VMS (Video Management Software) with native IVA (Intelligent Video Analytics) security solutions. (Magal 03.10)

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9.5 Nano Dimension Strengthens in Defense Sector via U.S. Armed Forces Sale

Nano Dimension has sold two additional DragonFly Pro systems to different branches of the United States Armed Forces. This brings the total number of U.S. Armed Forces customers to four since Nano Dimension received a Commercial and Government Entity (CAGE) Code from the U.S. Department of Defense’s Defense Logistics Agency in June 2018.

Sending confidential intellectual property to an external supplier is a major security concern for defense industry companies. The multi-material DragonFly Pro precision additive manufacturing system allows electronics designers and electrical engineers to 3D print conductive metal and dielectric polymer simultaneously, and in-house, to meet stringent security requirements. This capability significantly shortens electronics developers’ project turnaround times. PCB prototypes and other functional circuitry, including antennas and sensors, can be additively manufactured in a matter of hours instead of weeks. This helps businesses achieve greater value by leveraging more agile workflows and adopting new design opportunities within shorter development cycles.

The DragonFly Pro additive manufacturing system transforms electronics development by enabling companies to reinvent their development processes as well as their products. Furthermore, the DragonFly Pro makes it possible to manufacture customized and low-volume parts without requiring with an outside vendor. This technology enables IP-secure in-house prototyping or manufacturing of functional electronics such as sensors, antennas, molded interconnect devices, printed circuit boards and other innovative circuitry.

Ness Ziona’s Nano Dimension is a leading additive manufacturing technology company focused on precision 3D printed electronics that is disrupting, reshaping, and defining the future of how functional and connected products are made. With its unique additive manufacturing technologies, Nano Dimension targets the growing demand for electronic devices that require sophisticated features. Demand for circuitry, including PCBs, sensors and antennas – which are the heart of electronic devices – cover a diverse range of industries, including consumer electronics, medical devices, defense, aerospace, automotive, IoT and telecom. These sectors can all benefit greatly from Nano Dimension’s products and services for short-run manufacturing and rapid prototyping. (Nano Dimension 03.10)

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9.6 Sapiens DECISION Expands Insurance Technology Offering

Sapiens International Corporation announced that a top tier insurer has selected Sapiens DECISION Manager, a business decision management solution, to modernize its insurance applications. Expanding the industry-leading business management system to include underwriting and product creation capabilities is expected to help insurers offer a unique customer experience. The Sapiens DECISION solution is a strategic component that enables insurance companies to continuously improve their technology and provide the highest level of service to clients.

Holon’s Sapiens International Corporation is a leading global provider of software solutions for the insurance industry, with a 35-year track record of delivering to more than 400 organizations. The company offers software platforms, solutions and services, including a full digital suite, to satisfy the needs of property and casualty/general insurers, and life, pension and annuity providers. Sapiens also services the reinsurance, workers’ compensation, financial and compliance, and decision management markets. (Sapiens 09.10)

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9.7 MTI Wireless Edge Supports Riverbed Xirrus With Multi-band Antenna Solutions

Riverbed Technology, The Digital Performance Company, is implementing MTI Wireless Edge’s antenna solutions to provide flexible Wi-Fi services to its customers. Riverbed Xirrus leads the way in delivering high-performance wireless networks for enterprises working to keep up with the ever growing demand for mobile connectivity. Their solutions provide consistent, ‘wired-like’ performance, plus superior coverage and security, to meet any customer’s requirements-from single small offices to global, multi-site enterprise networks.

Tel Aviv’s MTI Wireless Edge Limited is engaged in the development, production and marketing of High Quality, Cost Effective, Flat Panel Antennas for Commercial and Military applications. Commercial applications include: 4G, LTE, WiMAX, Wi-Fi, Point-to-Multipoint (PtMP),Point-to-Point (PtP), and Broadband Wireless Access (BWA) applications as well as for Public Safety, Utilities and general Wireless Networking. With over 40 years of experience, MTI supplies antennas up to 90GHz including directional antennas for base stations, subscribers and omni-directional antennas for outdoor and indoor deployments as well as Smart Antennas. For the RFID market, MTI offers antennas for RFID readers and terminals. Military applications include a wide range of broadband, tactical and specialized communications antennas, antenna systems and DF arrays installed on numerous ground, airborne, naval and submarine platforms worldwide. (MTI 08.10)

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9.8 ERM Advanced Telematics Launches Improved Driving Using Human Voice Warnings

ERM Advanced Telematics is launching two new products aimed at improving driving quality with the use of human voice warnings and visual signals to the driver. The development of the two products, eVoice and eFlash SF, was completed, and both are now being implemented by a number of clients and are available to their partners and customers in the 68 countries where ERM is active. The main target markets for the products are car fleets, automakers and auto importers. The eVoice and eFlash SF join the company’s mature eSafe product for identifying and analyzing driver behavior. The latest products represent expansion of the existing solutions for safety and communications solutions launched by ERM in recent years for connected vehicles.

The eVoice product is based on a speaker installed in a vehicle that utilizes a processor and a memory chip for supplying the driver with human voice warnings designed to help him or her identify dangerous situations they made while driving. This service enables personalized learning by the driver with the aim of improving habits and behavior while driving. The device allows a fleet manager or the operator of the platform to record in advance up to 100 warnings in the mother tongue of the driver that are adapted to various dangerous patterns on the road or based on various situations of the vehicle, and to define with a user-friendly software program which warning will be played for each type of event.

The eFlash SF product serves as a warning system for the driver and includes 6 icons with LED lighting installed on the dashboard. It warns the driver, through the use of flashing icons and a series of beeps, of various situations that he or she needs to be informed of or require attention. For example, icons can be defined for problematic behavior such as dangerous maneuvering, accelerations, excessive breaking and sharp turns. In addition, the fleet manager, the automaker or the operator of the system can define in advance actions for which visual warnings using lighting and icons can be given. These could include sections of roads with speed limits, speed cameras, holes in the road, dangerous intersections, designated areas for cargo collection, bus stops etc.

Rishon LeZion’s ERM Advanced Telematics is an international automotive technology vendor, whose technologies and products are installed in more than 5 million vehicles worldwide. The company’s solutions are based on a range of wireless technologies, including all available cellular communications, RF, Bluetooth and Wi-Fi. ERM offers a wide range of modular solutions that improve the protection, management, and diagnostics of vehicles, vehicle fleets, and valuable assets, reducing operating costs for both the service provider and the end customer. (ERM 10.10)

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9.9 Cymulate Announces Technology Integration with Tenable

Cymulate announced that it has achieved technical integration with Tenable, Inc., the Cyber Exposure company. Tenable.io® will now seamlessly integrate into Cymulate’s BAS platform.

Cymulate’s BAS platform enables organizations to launch simulations of multi-vector cyberattacks against their networks, immediately exposing vulnerabilities and providing remediation steps. This integration enables security teams to seamlessly view Tenable.io data from within Cymulate’s platform. This allows for improved insight into current exposures and risks, vulnerabilities and infiltration patterns within the corporate network to provide a more comprehensive view of the organization’s cybersecurity posture. By taking vulnerability data and insight from Tenable.io and correlating them with Cymulate’s findings, organizations are able to better prioritize mitigation steps based on where they are most exposed.

Rishon LeZion’s Cymulate helps companies to stay one step ahead of cyber attackers with a unique breach and attack simulation platform that empowers organizations with complex security solutions to safeguard their business-critical assets. By mimicking the myriad of strategies hackers deploy, the system allows businesses to assess their true preparedness to handle cyber security threats effectively. An on-demand SaaS-based platform lets users run simulations 24/7 from anywhere, shortening the usual testing cycle, and speeding up time to remediation. (Cymulate 11.10)

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9.10 Autonomous Investigation App from SecBI

SecBI announced the availability of the Autonomous Investigation app for the Palo Alto Networks Application Framework. The Application Framework is a cloud-based framework that extends the capabilities of the Palo Alto Networks Security Operating Platform, which allows organizations to rapidly consume and implement a variety of innovative cloud-based security applications from any provider, large or small.

SecBI’s Autonomous Investigation technology uses network traffic analysis (NTA) based on unsupervised machine learning to detect complex and stealthy cybersecurity threats without the need to deploy special sensors or agents. Security analysts are presented with the full scope of the suspicious incident’s kill chain, including visibility to all affected users and devices, as well as infection points and malicious communications, enabling fast and complete remediation. As part of the Application Framework, the Autonomous Investigation app will enable customers to easily and quickly deploy SecBI Autonomous Investigation without friction and respond to malicious threats.

Tel Aviv’s SecBI has developed a revolutionary approach to network traffic analysis (NTA) to deliver automated threat detection and investigation for security operations centers (SOCs) and managed security service providers (MSSPs). Their value is best understood in contrast to solutions that generate sporadic alerts and anomalies requiring manual correlation and investigation. Their Autonomous Investigation technology incorporates machine learning to uncover the full scope on every suspicious incident, including all affected entities (e.g. users, domains, devices) within minutes. (SecBI 10.10)

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9.11 Sense Wins First Double Award At Worldwide South Summit in Madrid

Sense Education has been chosen as the number one EdTech Startup at South Summit’s 2018 enlightED competition. Sense identifies how people solve problems, allowing instructors to provide personalized feedback at scale. Sense works on many types of open-ended questions in FEAST (Finance, Engineering, Accounting, Science and Technology) courses at scale. Sense makes providing grading and feedback faster, fairer, and more personalized, all at a greater scale than has ever been possible before. The system was first deployed at Tel Aviv University, Bar-Ilan University and is also being used at many other schools in Israel and the United States. Sense is generating tens of thousands of AI-generated personalized responsive hints, tips, and grades.

Sense Education has raised its initial capital from well-known angel investors and OurCrowd, Israel’s most active Venture investor. Sense utilized OurCrowd Connect, a strategic business development engine, to make contact with IE University, one of Spain’s most innovative and influential educational institutions. This contact resulted in Sense being invited to apply to compete against 600 other startups in the enlightED competition at this year’s South Summit in Madrid, Spain.

Tel Aviv’s Sense Education is the world’s first Artificial Intelligence solution that helps instructors provide personalized education feedback to massive amounts of open ended assignments. Personally tailored educational feedback is an essential component for learning. However, it is virtually impossible to provide personalized feedback to large numbers of students in courses with high-enrollment. Sense Education is the missing link that enables instructors, schools, and e-learning companies to provide students with feedback that is both personalized and scalable. (Sense Education 15.10)

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9.12 CyberArk Launches Advanced Privileged Session Management for Cloud

CyberArk announced CyberArk Privileged Session Manager for Cloud. Through a transparent user experience, this new offering extends privileged access session isolation, monitoring and control to the most common web applications, cloud and social media platforms. As part of an integrated solution, Privileged Session Manager for Cloud also leverages industry-leading risk scoring capabilities to detect and alert on suspicious privilege-related activity.

Cloud administrators and privileged business users often have elevated rights to sensitive cloud platforms and web applications, yet this access is not always managed by the IT team. This allows users to operate outside of corporate security, potentially exposing the entire organization to unknown risks. An external attacker or malicious insider who is able to hijack these types of user credentials could shut down cloud environments, execute a total compromise of web applications or DevOps tool consoles, steal sensitive customer data or post inflammatory comments on social media. Innovative CyberArk Privileged Session Manager for Cloud capabilities are based on technology acquired from Vaultive.

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israel’s CPI Rises by 0.1% and Home Price Index Falls in September

Israel’s Home Price Index fell 0.3% in July-August after rising 0.3% in June-July, and 0.9% in May-June, according to the Central Bureau of Statistics. This latest fall will be good news for the Ministry of Finance, which has pledged to halt the rise in home prices over the past decade, which has made it difficult for young people to afford their own home. The Ministry of Finance will be able to take further comfort from the fact that home prices have fallen 1.1% over the past 12 months. Housing prices in July fell 1.4% in the North, but rose 0.2% in Jerusalem.

The Consumer Price Index (CPI) for September rose 0.1%, as expected. This means prices have risen by 1.2% over the past 12 months. Prices of fresh vegetables rose 5.8% in September while prices of culture and entertainment fell by 2.1% and fresh fruit prices fell by 1.3%. (CBS 15.10)

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10.2 Upward Revision for Israel’s Growth During First Half of 2018

The Central Bureau of Statistics announced that figures for Israel’s annualized GDP growth during the first half of 2018 were revised upwardly, from 4.1% to 4.2%, following 4.3% and 2.4% growth in the second half of 2017 and first half of 2017, respectively. The Central Bureau of Statistics left its 1.8% estimate for second quarter growth unchanged, following 5.2% growth in the first quarter. The difference between these two figures is attributable to a wave of vehicle purchases. Excluding vehicle purchases, growth was 4.0% in the first quarter and 2.8% in the second quarter.

Changes in GDP in the second quarter included annual decreases of 2.4% in private consumption (a 2.3% rise excluding durable goods), 4.3% in public spending, and 1.8% in investments in fixed assets, combined with an annualized 1.7% rise in exports of goods and services. Imports of goods and services were up 1.3%. Business product jumped by an annualized 4.5% in the second quarter, following increases of 4.8% and 2.2% in the second and first halves of 2017, respectively.

The most dramatic development in the accounting figures was the increase in the trade deficit, a result primarily of imports of goods and services, which rose 10.5% in H1/18, following a 14.3% increase in the H2/17. Annualized exports of goods and services, excluding startups and diamonds, were up 5.7% in H1/18. Industrial exports, excluding diamonds, rose 5.6%, exports of tourist services 8.5%, and exports of other services 7.6%, while agricultural exports were down 12.3%. (CBS 16.10)

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10.3 IMF Raises Israel Growth Forecast

The International Monetary Fund (IMF) has revised Israel’s 2018 GDP growth forecast upwards from 3.3% to 3.6%. Since its last forecast in March, the IMF has also revised upwards Israel’s expected inflation this year from 0.7% to 0.9%. The IMF sees 3.5% growth in Israel in 2019, 3.3% in 2020 and 3% in 2021-2023. This is slightly lower than the IMF’s forecast for world growth of about 3.6%-3.7% per year but considerably higher than growth in Western developed countries, which the IMF sees falling from 2.4% this year to 1.5% between 2021 and 2023. The rate of growth in the developing world will be an average of 4.6%-4.8% in the years to 2023. (Globes 09.10)

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10.4 Israel’s Unemployment Drops to 4% in August

On 8 October, the Central Bureau of Statistics announced that Israel’s unemployment rate in August was 4%, down slightly from the 4.1% rate in July and equal to the rate in June. The Central Bureau of Statistics measures each month the proportion of unemployed people in the labor force among those in the +15 age bracket. The rate in the 25 – 64 age bracket was 3.4%, the same as in July 2018.

The employment rate in the +15 age bracket rose slightly from 61.2% in July to 61.5% in August. Figures that remained unchanged from July 2018 included the proportion of those in the labor force in the 25-64 age bracket (80.4%). Together with the increase in the number of available jobs in June-August and continued growth in the average monthly wage posted in June, which now stands at NIS 10,884, all the indicators point to the strength of the Israeli labor market. (CBS 08.10)

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10.5 Tourism to Israel Increase by 15% in 2018

A record 3.1 million tourists entered Israel in the first nine months of 2018, 15% up from the corresponding period of 2017, the Central Bureau of Statistics announced. The number included 2.9 million tourists and 200,000 day visitors who entered Israel for less than 24 hours. Of the 2.9 million tourists, 2.6 million flew into Israel and 324,000 came by land. In September, Israel had 300,000 tourists. 2018 looks set to be a record year for tourism. Israel had 3.836 million tourists last year and 3.069 million tourists in 2016. Since the start of 2018, 1.6 million tourists have come to Israel from Europe and 704,700 from North America. 300,000 tourists have come from Asia and 93,200 from South America. (CBS 04.10)

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11: IN DEPTH

11.1 ISRAEL: Bank of Israel Research Department Staff Forecast, October 2018

Below is the forecast of macroeconomic developments compiled by the Bank of Israel Research Department in October 2018 regarding the main macroeconomic variables – GDP, inflation and the interest rate. According to the staff forecast, gross domestic product (GDP) is projected to increase by 3.7% in 2018, similar to the previous forecast, and by 3.6% in 2019, slightly higher than the previous forecast. The inflation rate over the next year is expected to be 1.4%, similar to the previous forecast. The Bank of Israel interest rate is expected to increase to 0.25% in the first quarter of 2019, and to increase again, to 0.5%, in the third quarter of 2019.

Forecast

The Bank of Israel Research Department compiles a staff forecast of macroeconomic developments on a quarterly basis. The staff forecast is based on several models, various data sources, and assessments based on economists’ judgment. The Bank’s DSGE (Dynamic Stochastic General Equilibrium) model developed in the Research Department – a structural model based on microeconomic foundations – plays a primary role in formulating the macroeconomic forecast. The model provides a framework for analyzing the forces that have an effect on the economy, and allows information from various sources to be combined into a macroeconomic forecast of real and nominal variables, with an internally consistent “economic story”.

The Global Environment

Our assessments of expected developments in the global economy are based mainly on projections by international institutions (the International Monetary Fund and the OECD) and by foreign investment houses. These institutions’ forecasts for growth and inflation in advanced economies were revised only slightly since the previous forecast, but their projections for world trade declined markedly. We assume that growth in advanced economies will be about 2.4% in 2018 and 2.0% in 2019, and that the advanced economies’ imports will increase by 4.3% in 2018 and by 4.0% in 2019, compared with the previous forecast of 5.0% in 2018 and 4.7% in 2019. According to the assessments of investment houses, the US federal funds rate is expected to be 2.5% at the end of 2018 and 3.1% at the end of 2019. The declared interest rate in the Eurozone is expected to be 0.0% at the end of 2018, and 0.2% at the end of 2019. Additionally, our assumption is that inflation in the advanced economies will be 2.1% in 2018 and 2.0% in 2019. The average price of Brent crude oil was about $76 per barrel in the third quarter of 2018, essentially unchanged from its second quarter average, though there was an upward trend toward the end of the quarter.

Real Activity in Israel

GDP is expected to grow by 3.7% in 2018 and by 3.6% in 2019 (Table 1). The expected growth rate for 2018 is similar to the previous forecast, while the expected growth rate for 2019 is 0.1% higher. Although National Accounts data that became available since the publication of the previous forecast (in July) indicated notable moderation in the second quarter growth rate, our assessment regarding the full-year growth rate did not change, due to two reasons. First, the moderation was already reflected in the previous forecast, as we had mostly expected it. Second, current indicators strengthen our assessment that this moderation reflects volatility of the quarterly data and that in the third quarter the growth rate is expected to return to higher levels. The forecast for 2019 was revised slightly upward, due to an upward revision in the expected growth rates of public consumption and of exports.

Regarding the uses, in 2018 exports are expected to grow at a slightly slower pace than assessed in the previous forecast, due to the downward revision in the world trade forecast, while in 2019 they are expected to grow at a slightly faster pace, with the culmination of several investments in various industries. The growth rate of public consumption was revised slightly upward, among other things due to the development of actual public consumption to date, which was higher than our previous assessment. The forecast for private consumption and for investments remained unchanged.

Table 1: Economic Indicators, Research Department Staff Forecast for 2018–2019 (rates of change,%, unless stated otherwise)
	2017	Bank of Israel forecast for 2018	Change from the previous forecast	Bank of Israel forecast for 2019	Change from the previous forecast
GDP	3.5	3.7	–	3.6	0.1
Private consumption	3.4	4.0	–	3.5	–
Fixed capital formation (excluding ships and aircraft)	3.2	3.0	–	3.5	–
Public sector consumption (excluding defense imports)	4.4	3.0	0.5	3.0	1.0
Exports (excluding diamonds and start-ups)	7.3	5.0	-0.5	5.5	0.5
Civilian imports (excluding diamonds, ships, and aircraft)	6.4	6.0	–	4.5	–
Unemployment rate^a	3.7	3.4	0.1	3.4	–
Inflation rate^b	0.3	0.8	-0.4	1.5	–
Bank of Israel interest rate^c	0.1	0.1	-0.15	0.5	–
a) Annual average of unemployment in the primary working ages (25–64). b) Average CPI reading in the final quarter of the year compared with the final-quarter average in the previous year. c) End of the year.

Inflation and Interest Rate Estimates

According to the staff forecast, the inflation rate in the four quarters ending in the third quarter of 2019 will be 1.4%. Inflation at the end of 2018 will be 0.8%, and at the end of 2019 it will be 1.5%. The Consumer Price Index readings published since the publication of the previous forecast indicated a lower inflation rate than we had assessed, and the inflation rate in the third quarter is expected to be lower than preceding quarters. This development, as well as the appreciated level of the effective exchange rate relative to our assessment in the previous forecast, led to a downward revision in the forecast for annual inflation (previous four quarters) for the coming quarters. In contrast, the increase in oil prices from the middle of August is expected to make a positive contribution to inflation. Overall, we assess that the moderate inflation in recent months is a transitory phenomenon, and our baseline assessment remains in place – inflation is expected to continue rising gradually toward the midpoint of the target range, and the inflation rate over the coming four quarters will be 1.4%, similar to our assessment in the forecast published in July. The main contribution to this process is expected to derive from the tight labor market, which in our assessment will support a continued increase in wages, and as a result in an increase in manufacturing costs. The inflation in prices of imported goods is expected to rise gradually, after being low in recent years due to the appreciation of the shekel and the moderate inflation worldwide. This is in light of the rise in inflation worldwide, and assuming relative stability in the representative exchange rate.

The rise in inflation is expected to be gradual, as various factors are expected to moderate the process – continued growth in competition in the economy, steps that the government is taking to reduce the cost of living, and the development of e-commerce.

According to the Research Department’s assessment, the Bank of Israel interest rate will begin rising in the first quarter of 2019, to a level of 0.25%. As inflation was more moderate than we assessed in July, we slightly deferred the timing of the expected interest rate increase. The deferral is slight because we assess that the moderate inflation of recent months is only transitory, and that the inflation rate will continue to increase at a pace similar to our assessment in July. In accordance with our assessment of the continued increase in inflation, the interest rate is expected to be raised another time, to 0.5%, in the third quarter of 2019.

Table 2: Inflation and interest rate forecasts for the coming year (percent)
	Bank of Israel Research Department	Capital Markets^a	Private Forecasts
Inflation rate^c	1.4	1.3	1.1
(range of forecasts)			(0.6–2.2)
Interest rate^d	0.5	0.5	0.35
(range of forecasts)			(0.10–0.75)
a) Average following publication of the Consumer Price Index for August. Inflation expectations are seasonally adjusted. b) The forecasts published following the publication of the Consumer Price Index for August. c) Inflation rate in the coming year. Research Department: average CPI reading in the third quarter of 2019 compared with the average in the third quarter of 2018.
d) The interest rate one year from now. (Research Department: in the third quarter of 2019.) Expectations from the capital market are based on the Telbor market. SOURCE: Bank of Israel.

Table 2 indicates that the forecast compiled by the Research Department regarding inflation is slightly higher than the average of private forecasters’ projections, and close to expectations derived from the capital market. The Research Department’s forecast regarding the interest rate in one year is similar to the projections derived from the capital market and slightly higher than the average of the private forecasters.

Main Risks to the Forecast

Several factors may lead to economic developments that differ from those in the forecast. These include uncertainty concerning the future development of the shekel exchange rate; uncertainty concerning the extent to which government measures to reduce the cost of living will roll over to prices and regarding the strength of further measures of this kind that the government may take in the future; uncertainty regarding the magnitude of the impact of the increase in competition in the economy; and uncertainty regarding the future development of the housing market.

Regarding the global environment, the recent developments in the world trade environment are liable to worsen to the point of a broad trade war, which could impact on the Israeli economy, though there is also uncertainty regarding the extent of such impact. There is also marked uncertainty regarding the future development of oil prices. (BoI 08.10)

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11.2 JORDAN: Jordanians Fed up With More of the Same

Aaron Magid observed on 3 October in Sada that many Jordanians are unwilling to give the new Razzaz government a chance on its reintroduced tax bill unless accompanied by other reforms.

Confronting a spiraling debt and a bloated public sector, Jordanian Prime Minister Omar al-Razzaz publicly introduced a new tax bill on 11 September, having promised significant action by 100 days in office. Yet his signature tax law faces heated opposition. On 15 September, activists angrily shut down a session of government ministers trying to explain the legislation in the southern city of Tafileh. “We will never accept any version of any income tax law,” one Tafileh resident insisted. The next day, citizens expelled an official delegation from Ma’an from a panel discussion presenting the tax law. A 1 October poll showed that approximately 75% of citizens urge parliament to reject the legislation. This opposition to Razzaz’s bill echoes frustration that peaked only four months ago.

In June, fierce protests had erupted against former Jordanian Prime Minister Hani al-Mulki’s income tax law, endorsed by the cabinet on 21 May. Facing intense demonstrations far larger than the ones in December 2017 against the U.S. Embassy transfer to Jerusalem, King Abdullah replaced the prime minister, citing “unjust taxes”—a familiar trick to defuse protests through nominal change while remaining the same. Soon after Razzaz became the new prime minister on 7 June, he withdrew the despised tax bill. But the Jordanian government still understood that an updated tax bill was key to the nation’s fiscal health, since only approximately 4% of citizens pay income tax, and annual growth (its traditional source of revenue) has fallen to about two% in recent years. The state thought it would be easier to advance a tax law when protests seemed to have died down.

Yet Razzaz’s new tax legislation is eerily similar to the shelved bill. Starting in 2019, the Razzaz version will require individuals earning over 9,000 Jordanian dinars ($12,700) per year to pay income tax compared to 8,000 dinars ($11,300) in the Mulki version – and double for families under both bills. The tax rates for banks dropped slightly from 40% under Mulki’s bill to 37% in the updated Razzaz version. The legislation aims to gain 280 million dinars ($395 million) in additional revenue in 2019, 180 million dinars ($254 million) of which will come from increased taxes and the rest by cracking down on an estimated 132,000 Jordanian companies committing tax evasion. On 24 September, the Jordanian cabinet approved an updated version of the tax bill before sending the legislation to parliament on the following day.

The government faces a dire budget crunch. Jordan’s debt-to-GDP ratio soared to 96.1% in 2018 and Amman made almost zero progress toward the International Monetary Fund’s (IMF) 2016 proposal to reduce this ratio to 77% by 2021. If the Razzaz administration were to disregard the IMF’s call for a fiscally sound tax law, it would likely lead outside investors to flee the kingdom and rating agencies to downgrade Jordan’s credit rating, plunging the country into a deeper economic crisis.

With Jordan’s spiraling debt of $37 billion, Amman is further stretched by hosting such a large Palestinian and Syrian refugee population, strains that will be exacerbated since Washington announced on 30 August that the United States would cut aid to the UN Palestinian refugee agency (UNRWA). UNRWA, which received $364 million from the United States in 2017, oversees health clinics serving 1.1 million Palestinian refugees and provides education for 120,000 children in Jordan. The country’s public schools are already overburdened by a “mass shift” of 50,000 students from private to public schools, with parents unable to afford high tuition fees, and by accepting approximately 130,000 Syrian children in Jordanian schools as of the 2017-2018 academic year. While Jordan announced on 28 September that donor countries raised an additional $120 million in response to the U.S. decision, the overall reduced assistance to so-called Palestinian refugees will still strain Jordan’s ability to provide educational services.

Recognizing that this necessary bill would be unpopular, the government unveiled a slick website explaining the law and is actively promoting the bill on social media. Razzaz also sent ministers to advocate for the bill in cities far from the capital on 17 September, after unveiling it but before submitting it to parliament, trying to show the public that he was interested in their input and valued their perspectives prior to finalizing the law. However, despite these efforts, Razzaz faces unfair misinterpretations of his tax bill by many citizens, just as Mulki did. Many Jordanians worry they will be unable to pay taxes because they cannot find work – disregarding the fact that no one unemployed will be forced to pay a single dinar and that both bills would still have exempted about 90% of the population from paying income tax.

Husam Abu Ali, head of Jordan’s Income Tax Department, also appeared to go too far in attempting to promote the bill, saying, “This law is specifically designed to achieve social justice and to help the poor” by giving the government funds to expand services, particularly healthcare, transportation and education. However, additional government revenue does not necessarily improve this dearth of services – which combined with a rising unemployment rate, currently at 18%, has provoked the wrath of many across the kingdom. Significantly, few trust the government to use increased taxes to improve conditions given longstanding corruption. After being ranked 45 out of 167 countries in Transparency International’s 2015 Corruption Perceptions Index, Jordan dropped 14 slots in the 2017 index, ranking 59 out of 180 countries.

Jordanians fear the government will collect more of citizens’ limited fiscal resources while still maintaining the status quo of inadequate public transportation, crumbling government infrastructure and endemic corruption. Citizens are therefore demanding better social services prior to bearing the brunt of a tax hike. Jordanians launched a social media campaign using the hashtag al-islah qabla al-driba or “reform before the tax.” For instance, on 17 September, one activist called out the government for preventing Jordanian women from passing along citizenship to their children when they marry foreigners, but considering these children sufficiently Jordanian for taxation. Other citizens demanded that the government combat corruption more aggressively and redirect illegally spent sums to improve welfare programs.

Healthcare inequality also remains a longstanding concern for activists, with one Amman hospital so overcrowded that multiple children were placed on a single bed. Many Jordanians are still feeling the pain from the government’s January decision to nearly double bread prices. Frustration with the education sector is high, since in recent years not a single student in hundreds of Jordanian high schools has been able to pass the General Secondary Educational Certification exam, known as the tawjihi.

In a bid to address activists’ grievances, Razzaz noted on 21 September that funds from the additional taxes would be used to improve transportation and healthcare in addition to fiscal issues, and that to address ongoing political stagnation, he would work to make Jordan a parliamentary government within two years. But, since citizens have heard promises of reform for many years but seen little tangible change, activists are skeptical of Razzaz’s rhetoric.

Razzaz so quickly recycling the tax law that was shelved just four months ago reinforces the monarchy’s support for the bill. With the June protests leading to such significant instability and Mulki’s downfall, it would be unimaginable for King Abdullah not to play a key role in backing this critical legislation. If the king were opposed to the bill, he could force Razzaz to resign in a similar manner to Mulki’s recent departure, yet he has not shown any indications of doing so. Jordanians who frequently back the king’s policies have escalated attacks on social media against critics of the tax bill.

Amman has similarly attempted to shield King Abdullah from backlash against the unpopular law by assigning blame to Mulki. By contrast, official state media depicted the king as intervening on behalf of the people by freezing a separate fuel tax on 1 June, winning the praise of regime loyalists. Once again, the king has delegated to Prime Minister Razzaz the challenge of promoting the tax bill in local media interviews while the king, despite his more influential position, focuses his attention on more comfortable political subjects for his domestic audience, especially Palestinian issues.

Even so, there has been mounting criticism even from among the political elite. “Perhaps the beginning should be correcting the public sector’s failed management approach, taking serious action to combat rampant corruption and rebuild trust between the citizen and the state,” tweeted Prince Hamza bin al-Hussein, the half-brother of King Abdullah, on 25 September. Member of Parliament Saddah Habashneh warned Razzaz on 26 September that he should “withdraw the [tax] law or fall like Hani al-Mulki.”

Paradoxically, the king’s frequent dismissal of prime ministers has only reinforced the status quo. Firing Mulki and withdrawing the initial tax bill cleared protesters from the streets, offering the next government another chance. Although Razzaz’s tax law is important to cut the climbing national debt, citizens frustrated with longstanding corruption appear unwilling to give the government this chance. In the absence of the government providing tangible economic improvements, many citizens have vowed to fight Razzaz’s tax bill or other fiscal austerity measures, making it more difficult for Amman to tackle its debt crisis. This time, demonstrators’ ire may no longer be pacified with the king’s musical chairs game, shuffling out premiers while keeping the same despised tax policies largely intact.

Aaron Magid is a Middle East analyst at Tesla Government, a U.S. government contractor providing open source research. (Sada 03.10)

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11.3 SAUDI ARABIA: Saudi Arabia ‘A-/A-2’ Ratings Affirmed; Outlook Stable

On 5 October 2018, S&P Global Ratings affirmed its ‘A-/A-2’ unsolicited long- and short-term foreign and local currency sovereign credit ratings on Saudi Arabia. The outlook is stable.

Outlook

The stable outlook is based on our expectation that moderate economic growth will continue through 2021, supported by rising government investment. At the same time, we expect that the Saudi authorities will continue to take steps to consolidate public finances over the next two years, while maintaining the government’s large stocks of liquid external assets.

We could raise the ratings if Saudi Arabia’s economic growth prospects improved markedly beyond our current assumptions.

We could lower our ratings if we observed a reversal in the trend of fiscal consolidation, or a sharp deterioration of the sovereign’s external position. An unexpected materialization of contingent liabilities or a build-up of arrears could also place additional pressure on expenditures. The ratings could also come under pressure if we observed a significant increase in domestic or regional political instability, which we thought would have fiscal consequences.

Rationale

The ratings on Saudi Arabia are supported by its strong external and fiscal stock positions, which we expect it will maintain despite ongoing central government deficits. Since our last review in April, we have raised our oil price assumptions; but we do not expect any material change to the overall pace of fiscal consolidation. We expect the additional revenues from higher oil prices will be spent as is suggested in the recent 2019 Pre-Budget Statement. The ratings are constrained by the limitations on the transparency of government assets and limited monetary policy flexibility.

While decision-making structures are centralized and, in our view, relatively opaque, we do not expect any major deviation from the stated domestic policy course of fiscal consolidation, economic diversification, and gradual socioeconomic liberalization.

Institutional and Economic Profile: An era of change brings both risks and opportunities

-Saudi Arabia has articulated an ambitious strategy to reduce the economy’s dependency on oil and on imported labor, to transform the domestic education and job market, and to consolidate the budget.

-Policy decision-making is centralized, with limited institutional checks and balances.

-The increasingly centralized decision-making could lead to more uncertain policy implementation, but we don’t expect any major deviation from the stated policy course.

We expect that the key parameters of Saudi Arabia’s institutional framework will remain steady through the 2018-2021 forecast period. The country will partly fund its ambitious economic reform program using the large fiscal and external buffers that it amassed during the pre-2015 era of twin balance of payments and budgetary surpluses. The government is implementing a series of reforms that include social measures that aim to increase labor participation (particularly of women), to improve levels of educational attainment and to raise the private sector’s role in the economy, while achieving a balanced budget by 2023. Although the country’s decision-making process remains highly centralized, we do not expect any major deviation from the goal to broaden the economy beyond its traditional reliance on hydrocarbons.

Higher-than-expected oil prices throughout 2018 have led to an increase in expenditures that include employee bonuses and reinstated allowances. We do not see these measures as indicative of a weakening of the overall target of balancing the general government budget by 2023, given the fiscal effort implemented to date and recent announcements regarding the 2019 budget.

However, they do indicate that higher-than-budgeted revenues are more likely to be spent than saved as the government attempts to shore up support for its social liberalization plans. We continue to anticipate that public investment will increase under a four-year stimulus plan whose goal is to stabilize private-sector demand, even as the government moves on other fiscal consolidation measures, such as energy tariff hikes. Higher oil prices, higher volumes of production, higher government expenditures and positive high-frequency data support our projection of gradual economic recovery, following last year’s contraction. Nevertheless, given that oil production makes up a significant portion of Saudi Arabia’s GDP, forecasting growth in the country continues to be highly sensitive to assumptions of OPEC production targets, not least because Saudi Arabia maintains the world’s largest installed crude oil production capacity at around 12 million barrels per day, and is the key marginal producer. Our GDP per capita estimate is just over $23,000 in 2018, and we expect that, on a trend basis, growth will remain somewhat below that of peers.

We expect the longstanding tension with Iran to remain high. Saudi Arabia’s war in Yemen contributes to military and security services being the single largest spending item, at about 30% of total government expenditures. We do not expect any of these foreign policy challenges to significantly impact the domestic economy. Rather, we believe that they add to the government’s already heavy policy program, which could weaken its commitment to its fiscal adjustment plans.

Flexibility and Performance Profile: Strong external and fiscal positions from a stock perspective

-Despite the country’s rising fiscal expenditures, we expect continued consolidation as oil prices increase in 2018 and as other revenue-raising items come online.

-We forecast an improved current account surplus and an accumulation of foreign currency reserves, but we note a continued increase in external debt that somewhat moderates Saudi Arabia’s strong external stock position.

-Monetary policy effectiveness is limited by the fixed exchange rate, which requires Saudi Arabia to follow the movements in the U.S. federal funds rate, even when they may not be appropriate for Saudi Arabian economic conditions.

We’ve marginally improved our fiscal consolidation expectations for 2018 and 2019 as a result of our higher oil price assumptions, but we expect that the pace of consolidation will slow in 2020 and 2021 as prices fall again. Over the first half of 2018, a 43% increase in revenues (including an almost 50% increase in non-oil revenues following the introduction of a 5% value-added tax) has been offset by a 26% increase in expenditures, mainly through public sector compensation. We factor in our expectation that Saudi Arabia’s oil production will remain around current levels (10.4 million barrels per day).

In addition to the budget, we understand that a separate plan focusing on domestic capital expenditures is being implemented by the Public Investment Fund and the National Development Fund, with expenditures totaling some 5% of GDP in 2018. Compared with most rated sovereigns, the Saudi authorities spend far more on investment, and this could raise growth potential toward the end of our ratings horizon.

We forecast an average annual increase of net general government debt of about 2% of GDP over 2018-2021, down from 3% in our previous review (this is our preferred fiscal metric, because in most cases it is more comprehensive than the reported headline deficit), and we expect that the pace of net debt growth will slow over the forecast horizon. In Saudi Arabia’s case, we assume that the central government deficit is financed 30% by asset draw-downs and 70% by debt issuance. This split implies that Saudi Arabia would report gross liquid financial assets of about 95% of GDP by 2021. These fiscal assets include the central government’s deposits and reserves on the liabilities side of the balance sheet of the Saudi Arabia Monetary Authority, government institutions’ deposits, and an estimate of investment income. We also include in our calculation an estimate of government pension funds’ liquid assets.

We acknowledge both upside potential and downside risk to these forecasts. Upside potential stems from oil prices. Downside potential depends on the scale of fiscal consolidation and the broader impact it will have on the economy. Our general government balance consolidates the central government and the social security system. It also includes our estimate of investment income from sovereign wealth fund assets, which largely accounts for the difference between our central government and general government deficit projections.

Although Saudi Arabia’s fiscal profile has been weak on a flow basis in recent years, we believe it has remained strong on a stock basis. We expect net general government assets (the excess of liquid fiscal financial assets over government debt) to remain at about 65% of GDP through 2021.

We continue to view Saudi Arabia’s external position as a strength and note a substantial improvement in projected current account surpluses. We expect that Saudi Arabia’s liquid external assets, net of external debt, will average about 200% of current account payments over 2018-2021. This figure has weakened somewhat, because we expect an increase in public sector external debt (following the Public Investment Fund’s raising of an $11 billion syndicated loan in September 2018). Gross external financing needs will likely remain below 40% of the sum of usable reserves and current account receipts over the same period, suggesting ample external liquidity (and higher foreign currency reserves than we had previously projected). We expect usable reserves to grow over the forecast period, following higher current account surpluses. Our calculation of usable reserves subtracts the monetary base from gross foreign currency reserves for sovereigns that have a long-standing fixed peg with another currency (because the reserve coverage of the base is critical to maintaining confidence in the exchange-rate link).

Given the Saudi riyal’s peg to the U.S. dollar, we view monetary policy flexibility as limited. The longstanding currency peg helps to anchor the population’s inflation expectations, but binds Saudi Arabia’s monetary policy to that of the U.S. Federal Reserve. We expect that the peg will be maintained. (S&P 05.10)

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11.4 EGYPT: Growing Pains

Wael Gamal observed in Diwan on 3 October that Egypt’s economy may be improving, but this is neither inclusive nor sustainable.

In fiscal year 2017–2018, ending in June, Egypt’s GDP grew by 5.3%. This was the highest growth rate since 2007–2008, when the economy grew by 7.2%, just before it was hit by the global economic crisis and political instability starting in early 2011.

However, despite such improvement, growth in Egypt is neither inclusive nor sustainable. Indeed, most Egyptians are feeling the burden of soaring prices and low incomes. That is because in November 2016 the government introduced an austerity program and devalued the Egyptian pound within the framework of a $12 billion loan agreement with the International Monetary Fund (IMF).

In a statement on 23 September, the managing director of the IMF, Christine Lagarde, said that the Egyptian economy was showing signs of recovery as one of the highest growing economies in the Middle East. She promised that the measures agreed with the IMF would bring inclusive growth and help create jobs, while also ensuring that adequate resources would be available for social protection.

Egypt has a history of high economic growth rates alongside the poor distribution of the fruits of growth, as was illustrated during first decade of the millennium. Indeed, this was one of the factors that led to the uprising in January 2011. In 2018 economic growth returned, accompanied by a reduction in unemployment, which the government considers a sign of inclusive growth. Unemployment fell to 9.9% by the end of June 2018, the lowest level in years, as the economy created new jobs, mainly in the fishing, agriculture, education, and retail-wholesale sectors. However, the new jobs have tended to be seasonal, while the number of sustainable jobs in sectors such as industry grew much more slowly.

Most importantly, economic growth was mainly driven by the extractions sector, which grew by 8.6% during the 2017–2018 fiscal year and contributed 15.8% to the annual overall growth rate. The gas sector attracted most foreign direct investment in Egypt, a pattern that is expected to continue. However, in terms of job creation it is important to underline that the sector is not labor intensive, again qualifying the inclusiveness of growth.

A better performance in the tourism sector might have helped restore some of the jobs lost during the years of political instability. The sector recorded an annual growth rate of 36% in the first nine months of the fiscal year and was responsible for 0.7% of the GDP growth rate. However, the job numbers in real economy sectors, including industry and agriculture, told a different story. The sectors showed some quarter on quarter slowdowns during the fiscal year, according to available official data.

Inclusive growth, sometimes referred to as pro-poor growth, is not exclusively about creating jobs, regardless of how decent and sustainable these are. Rather, it is the pace and pattern of growth that are critical for achieving a high, sustainable record of growth, as well as a reduction in the poverty level. Inclusiveness also refers to equity, equality of opportunity, and protection in the market.

As a percentage of GDP, Egypt’s expenditures on social protection and safety nets were below regional and global averages in 2016, while the severe inflation shocks that accompanied the IMF program may have pushed millions of Egyptians below the poverty line. The expansion of a conditional cash transfer program to the poor in the previous two years failed to bridge the gap. The situation was made worse by the increasing cost of public services, including transportation, water and electricity.

Moreover, experts at CAPMAS, the government’s official statistical agency, suggest that poverty may have risen to 35% in 2017, from 27.8% in 2015, before the IMF program began, even after updating the national poverty line for inflation. However, because the assessment was preliminary, the poverty level could be even higher. More austerity measures are yet to come, according to phase four of the program, threatening to make things worse for vulnerable and low-income Egyptians. The government is expected to raise energy prices at least once more in 2019, slashing subsidies to meet the IMF targets for narrowing the budget deficit.

The austerity package has also hit different aspects of social spending, including education and health. Public expenditure on both sectors declined as a percentage of GDP to only 1.34% and 2.6%, respectively. The Egyptian government and the IMF consider education and health to be crucial pillars of inclusive growth and equality of opportunity.

In October 2011, Massood Ahmed, who was then the director of the IMF’s Middle East and Central Asia Department, concluded that the clearest lesson of the Arab uprisings was that the sustainability of growth was conditioned by how broadly its gains were shared and to what extent this was accompanied by social policies for the most vulnerable. Now, Egypt, has to fulfill such a requirement while facing very substantial and expanding domestic and external debts, as well as low levels of investment. The Egyptian government has made its choice by wholeheartedly adopting a package of policies pushing hard in the opposite direction of sustainable growth. (Diwan 03.10)

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11.5 EGYPT: Egypt to Sell Valuable Cotton Land to Bolster the Textile Industry

Abdulla Kadry posted in Al-Monitor on 4 October that Egypt announced that it will sell 14 tracts of land where it stores its industrial cotton gins to compensate for the heavy losses suffered by the textile industry.

Egypt’s Minister of Public Business Hisham Tawfik said on 17 September that Egypt will sell 14 tracts of land where it stores its industrial cotton gins in a bid to overhaul and develop the textile manufacturing industry. The land is worth EGP 27 billion ($1.51 billion). The industry suffered losses of EGP 2.7 billion from 2016-2017.

Tawfik said the plan to bolster the Holding Company for Spinning and Weaving will be funded from the proceeds of selling the cotton gin lands. He added that the development project will cost an estimated EGP 25 billion. Though there is no prospective buyer for the land, the government plans to change the land’s purpose from industrial to real estate.

Egypt is home to a distinguished and diversified textile industry. The sector plays a major role in the Egyptian economy, starting from the cultivation of cotton all the way to the production of textiles. In 2011, the textile industry made up 3% of the GDP, 30% of the industrial product and 13% of nonpetroleum exports, according to the Central Bank of Egypt.

The state-owned Holding Company for Cotton, Spinning and Weaving handles the textile industry in Egypt. It comprises 32 companies distributed across Egypt’s governorates. The holding company is divided into different businesses dealing in cotton trades and the spinning and weaving industry. The holding company has suffered since late Egyptian President Sadat initiated a policy of economic liberalization. Egypt began to import more cotton instead of focusing on cultivating Egyptian cotton. Textile manufacturing equipment has aged since then, and economic policies have not been renewed.

The textile industry in Egypt continued its downhill trajectory following the decrease in the price of cotton, to the dismay of farmers. Cotton production has since waned and the government has reduced customs on imported seeds, leading to poor government marketing plans for long-staple cotton. High energy prices have also prompted Egyptian companies and factories to import cotton.

Cotton acreage decreased in early 1990. This decline was further exacerbated by the liberalization of Egypt’s cotton sector in 1994, which ended the state oversight of cotton cultivation and opened the door for the private sector. Cotton acreage fell dramatically, reaching 270,000 feddans (280,000 acres) in 2017, as opposed to the heyday of 1991, when Egypt cultivated up to 1 million feddans.

The Egyptian government seeks to increase cotton acreage in 2018. The Ministry of Agriculture announced earlier this year that it aims to cultivate 500,000 feddans of cotton this year, setting the price of 2,700 Egyptian pounds per quintar (approximately 143 kilograms or 315 pounds) of high-quality cotton.

Prior to the 1994 liberalization, which dealt a severe blow to the cotton industry, the price of one quintar stood at EGP 100. After 1994, prices rose to EGP 500 per quintar, reaching EGP 1,600 in 2010, a year before the January 25 Revolution.

Following the outbreak of the revolution, the successive government cared little about the cultivation of cotton, until the government began setting policies to increase cotton acreage and encourage farmers, setting the price of one quintar at EGP 2,700.

In 2009, Egypt exported cotton to more than 20 countries. That year, Qatar ranked first in terms of cotton imports from Egypt, with 38% of imports, China 16% and Turkey 15%. According to the 2009 Egypt cotton crop statement, Egypt made $37 million in cotton exports, amounting to 12 million quintars. In 2017, 86,000 quintars of cotton were exported for $139,000, according to the Central Agency for Public Mobilization and Statistics.

Yomn al-Hamaki, a professor of economics at Ain Shams University, told Al-Monitor via phone that private businesses’ control over the textile industry, as well as the absence of a government vision and the lack of coordination between its institutions, have taken a heavy toll on the industry. Hamaki said the sale of cotton gin land is part of a Ministry of Business strategy to overhaul the textile industry, whereby new cotton acreage will be determined in Upper Egypt to encourage farmers to cultivate short-staple cotton in a bid to meet the needs of local cotton factories.

This is in addition to the development of the cotton gin manufacturers, which will be funded from the revenues from the sale of the high-priced cotton gin lands — a step that the government believes is the best option to overhaul this sector.

She believes that the state’s strategy to promote the textile industry is viable so long as there is close monitoring, administrative control over cotton sales, encouragement of competition among companies and support for small textile projects. “The sale of the cotton gins is the best way to overhaul the sector. It is the only option in the absence of the necessary resources, especially since the government budget cannot be burdened and the weaving and textile companies are suffering great losses,” Hamaki said.

The Ministry of Business announced in 2018 its strategy to overhaul the textile industry. The strategy relies on the cultivation of small-staple cotton in Upper Egypt; changing the curricula in technical schools to meet the needs of factories; having the factories take on students’ scientific research costs; and setting up colleges to award advanced technology degrees.

Economist Rashad Abdo criticized the state’s plan to sell the cotton gins. “This brings to mind the popular saying that goes, sacrificing the mother so the child lives. It does not make sense to me to sell the land to promote the factories,” Abdo told Al-Monitor during a phone interview. He believes the government’s plan is a result of incompetence and confusion within the Ministry of Business. Abdo believes the government should take into consideration alternative plans, such as involving the private sector in the textile industry or using the holding company’s land instead of selling it. “The government said the sale deal is worth EGP 25 billion,” he said. “Why don’t we keep the lands and opt for better alternatives?”

Raif Tamraz, undersecretary of parliament’s agriculture and irrigation committee, concurred with Abdo. “This plan has made things worse. This decision is totally unacceptable. Had this government been able to properly run the textile industry, we would not have reached this point in the first place,” Tamraz told Al-Monitor via phone. “I am all for the participation of the private sector and foreign investors and developers, even if through borrowing. Selling is a big no,” he added. Tamraz believes these alternatives would ensure the continuous production of textiles and circumvent the failure of public sector companies. “The government did not address this plan with parliament,” he said. Tamraz said that when parliament next convenes in October, he will issue a request to meet with Tawfik and the minister of agriculture.

Egyptians will not likely welcome the government’s plan to sell state assets. According to economists, the best way to promote industry is through the participation of the private sector.

Abdulla Kadry is an Egyptian journalist and programmer. He works as a political and government editor for Masrawy. (Al-Monitor 04.10)

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11.6 MOROCCO: Outlook Revised to Negative on Budgetary Pressures; ‘BBB-/A-3’ Ratings Affirmed

On 5 October 2018, S&P Global Ratings revised its outlook on Morocco to negative from stable. At the same time, we affirmed our long- and short-term foreign and local currency sovereign credit ratings at ‘BBB-/A-3’.

Outlook

The negative outlook signifies that we could lower our ratings on Morocco within the next 24 months if the government fails to improve its budgetary position, pushing net government debt levels beyond our forecasts; if real GDP growth rates materially undershoot our expectations; or if external imbalances widen further, causing a substantial increase in the economy’s gross financing needs.

We could revise the outlook to stable if the budgetary consolidation prospects materially improve, or the ongoing transition toward a more flexible exchange rate regime that targets inflation significantly bolsters Morocco’s external competitiveness and ability to withstand macroeconomic external shocks. An outlook revision to stable could also arise if Morocco’s ongoing economic diversification strategy results in less volatile economic growth.

Rationale

After meeting its 2017 budget deficit target of 3.5% of GDP, the Moroccan government will, in our opinion, likely deviate significantly from its 2018 target of 3.0%, posting a budget deficit of about 3.8% of GDP. We base our expectations on the weak performance on the revenue side so far this year, particularly given the adverse impact of lower grants from the Gulf Cooperation Council (GCC). During the same period, government spending has increased due to higher expenditures, in particular on transfers to lower levels of government and increased cost of energy subsidies for liquefied petroleum gas. We believe that, if unchecked, persistently wide budget deficits will push government debt to higher levels that reduce the government’s fiscal space when the economic growth of its trading partners, especially in Europe, decelerates.

The ratings on Morocco continue to be supported by a moderate level of government debt and manageable current account deficits, amid relatively stable policymaking. The ratings remain constrained by GDP per capita lower than that of similarly rated sovereigns, significant economic reliance on agriculture, high social needs, and a relatively slow approach toward budgetary consolidation.

Institutional and Economic Profile: Economic growth will likely slow down, while economic diversification is set to continue:

-Morocco’s GDP per capita remains one of the lowest of sovereigns rated in our ‘BBB’ category.

-We forecast real GDP growth will average about 3.2% in 2018-2019, absent any significant shocks in the external and domestic business environments.

-Economic growth remains vulnerable to the volatility of agricultural output and the ongoing economic slowdown in Europe, and it excludes parts of the Moroccan population.

We expect real GDP growth in Morocco to decelerate to about 3.2% in 2018-2019 from 4.1% in 2017. We assume that agricultural and nonagricultural output will continue to expand moderately, in line with the past trend. The main sources of growth are the expanding automotive and tourism sectors, combined with additional demand for phosphates and their derivatives. We expect that all the aforementioned sectors will post solid improvements in their performance this year. We forecast real GDP growth will average close to 4% in 2020-2021, backed by increasing resilience in the agricultural sector, and that the business environment and external demand will remain broadly supportive of a gradual pick-up in nonagricultural output. Unless Morocco suffers external economic shocks – for example, due to the heightened risk of global protectionism or a faster slowdown in European economies, which currently represent about 70% of its export markets – we believe that the expansion of its export capacity and its rise up the value-added ladder will contribute positively to economic growth over 2018-2021.

The government aims to reduce the economy’s vulnerability to weather shocks by investing in more efficient technologies in the agricultural sector via the Green Morocco Plan. The Moroccan authorities are also putting significant effort into industrializing the economy. We expect Morocco to diversify its economy further by continuing to develop its automotive, aeronautics, electronics and renewable energy sectors. Morocco has built comprehensive industry-specific clusters to develop its emerging automotive industry. It has successfully attracted a number of foreign car manufacturers, first from France and most recently from China. In addition, in September 2016 Boeing announced its intention to establish a new industrial hub in the country, and in March 2017 the Chinese group HAITE invested $1 billion in a new industrial city. Together, car manufacturing and aeronautics-related exports will likely account for about 30% of total goods exports in 2018, versus 13% in 2007. We expect the industrialization plan, which enjoys broad political support, to attract additional foreign direct investment – despite this year’s dip in performance from levels in 2017 – helping Morocco enhance its economic diversification and the resilience of its economic growth.

That said, in our view, the country’s pronounced development potential may materialize only slowly, unless the government makes progress in removing the structural impediments affecting the country’s economy, such as administrative hurdles. In order to attract investments, the authorities introduced a five-year tax break on newly established industrial companies in 24 different sectors. Moreover, in our view, corporate sector activity would benefit from measures that reduce the accumulation of arrears among corporate sector firms to improve their liquidity. The government has contributed by proposing measures aimed at simplifying the existing taxation framework, including the 2018 finance law introducing a system based on progressive marginal tax rates, and with respect to the value-added tax (VAT) system. Tackling these weaknesses, in our opinion, could support the country’s economic growth potential.

Additional steps to ease the economy’s dependence on external sources of energy are positive, in our opinion, and the ongoing initiative to raise the share of domestically generated renewable energy in total energy consumption would support a further reduction in current account imbalances. Moreover, several gas field exploration projects have been promoted. Even though they are unlikely to come on stream over the coming two years, if successful, they could further reduce Morocco’s energy imports and benefit its trade balance.

We believe that Morocco has largely demonstrated political and social stability, especially in the context of the Arab Spring. It has achieved this through constitutional reforms, a rise in spending by the government aimed at economic development and reducing economic inequality in less developed regions, and broad support from King Mohammed VI. The king chairs the Council of Ministers, which deliberates on strategic laws and state policy orientations. The king’s role in policymaking has held greater importance since 2017, when he intervened in curbing social tensions in the regions of Rif and Jerada. In addition, the king mandated the prime minister to appoint new ministers of education, planning, housing, health, and African relations, as well as more recently, of finance, to revamp the country’s development plans.

Although ethnic, tribal, religious, and regional divisions are less pronounced in Morocco than in much of the Middle East and North Africa, there are rising demands from some parts of the Moroccan population for more inclusive economic growth. In our view, this partly stems from high unemployment among youths and the income disparities between more- and less-developed areas of the country. The government has expressed its willingness to accelerate the implementation of regional development programs to improve income disparities, including by tackling high unemployment. We believe that these demands will continue to persist and constrain Morocco’s budgetary position, delaying a faster reduction in the country’s budget deficit over our projection horizon.

Flexibility and Performance Profile: Budgetary consolidation expected to slow down:

-We now expect the government to post a budget deficit of about 3.8% of GDP – a pronounced deviation from its 2018 budget deficit target of 3.0% of GDP.

-Stronger export performance should eventually enable a reduction in the current account deficit over the projection horizon, despite the increase in oil prices, but external liabilities will remain large.

-We anticipate that the authorities will inch toward a more flexible exchange rate regime over the medium term.

After meeting its 2017 budget deficit target of 3.5% of GDP, we now expect the government will deviate from its 2018 target of 3.0% and instead post a budget deficit of about 3.8% of GDP. We base our projection on the weak performance on the revenue side, with only receipts from VAT and personal income tax recording growth during the first half of 2018, given the repercussions of lower grants from the GCC. The decline in corporate income tax receipts is in part related to the above-mentioned corporate tax reform, which introduced the progressive marginal tax rates. During the first half of this year, government spending jumped by about 4% compared with the same period in 2017, mainly due to transfers to other levels of government and increased cost of energy subsidies for liquefied petroleum gas, with the public wage bill increasing only slightly. Eventual reintroduction of fuel price ceilings to cushion the impact of the rise in oil prices would imply an additional climb in government spending.

The reduced GCC grants will continue to weigh on revenues, complicating further spending cuts, especially given the government’s plans to address the rising social demands for better living standards, including education and health care, and tackling high unemployment rates in poorer parts of the country. Morocco provides socially sensitive subsidies on basic goods (flour, sugar and liquefied petroleum gas) and faces an expected increase in capital spending given its large investment projects. Nevertheless, a renewed agreement with the GCC partners, which would support revenues, cannot be excluded.

In 2019, the budget balance is expected to slightly improve, despite the aforementioned corporate tax reform and, potentially, fiscal costs related to the reinstatement of military service. However, we believe that the government is unlikely to meet its budget deficit target of 3% of GDP. That said, we view favorably the government’s plans to broaden the tax base in order to improve tax collection and as an attempt to address the sizable tax avoidance and evasion.

We forecast that, on the basis of our projected fiscal trajectory, gross government debt-to-GDP ratios will stabilize at about 54% of GDP over the medium term. We expect net general government debt to average about 53% of GDP during 2018-2021. Our gross general government debt data consolidate the holdings of central government debt by other branches of state, such as public pension funds, while net general government debt excludes from gross debt the government’s liquid assets. As such, according to our sovereign rating methodology, our preferred variable of fiscal flow performance, i.e. change in net government debt, reflects all the components affecting the government debt position and not only the central government balance. The general government debt stock has risen significantly over the past eight years (32% at year-end 2010, before the Arab Spring) due to consistently large budget deficits, which we believe points to structural weaknesses of the Moroccan economy, relative to other sovereigns at this rating level. The government’s debt profile appears favorable: At year-end 2017, the average life on outstanding debt stood at six years and nine months, and the average cost of debt was 4%.

The Moroccan dirham is currently pegged to a currency basket comprising 60% euros and 40% U.S. dollars. The foreign exchange (FX) peg regime limits monetary policy flexibility, in our view. In January 2018, the Moroccan authorities and the central bank, Bank Al Maghrib (BAM), decided to increase flexibility in the exchange rate regime by widening the band of fluctuation between the dirham and the basket of currencies to 2.5% in each direction from the previous +/- 0.3%. In our view, the measure was implemented smoothly, especially considering earlier attempts in mid-2017, when BAM’s FX reserves shrank by more than 15% in the two months before the reform was rolled out. We attribute the decline in FX, in part, to pressure from domestic market participants due to increasing demand for hedging instruments. As a result, a sizable portion of these reserves was transferred onto domestic banks’ balance sheets, leading to a substantial increase in foreign-currency assets, and the banking system as a whole did not lose its FX reserves. After the related tensions subsided, BAM restored its reserve position; reserve coverage is now back at more than six months of current account payments, from about five months following the episode of stress.

If widening the fluctuation bands continues to go well, we would view further widening as positive for our overall monetary assessment on Morocco. It would likely bolster Morocco’s external competitiveness and ability to withstand macroeconomic external shocks. However, we anticipate that the authorities will first allow the current fluctuation bands to be tested by external financial developments, and for other parameters like budget and current account balance to improve before moving toward further widening of the bands. Finally, although they are moving toward a more flexible exchange rate regime, we expect the Moroccan authorities will maintain restrictions on capital accounts in the near term. Such restrictions will be eased gradually, to avoid any potential large-scale capital outflows.

The banking sector appears to be appropriately capitalized and unlikely to pose a significant risk to the wider economy, given its current relatively high regulatory capital ratio of almost 14%. Although nonperforming loans comprise a relatively high proportion of the total, at 7.5% in mid-2018, they appear to be well provisioned. Nonetheless, the banking sector remains vulnerable to credit concentration risks. The banks’ expansion into Sub-Saharan Africa has been so far highly profitable, but it opens new channels of risk transmission to Morocco’s banking system.

We expect Morocco’s current account deficit to widen this year to about 4.2% of GDP in 2018, mainly due to an increase in global oil prices. In the absence of a significant decline in external demand, such as one due to the rise in global protectionism or the ongoing economic slowdown in Europe, we expect the current account deficit to narrow by 2021, as rising export capacity materializes in higher value-added industries, like the automotive sector. Importantly, cars have become the country’s leading export product, accounting for almost 24% of total goods exports and more than 5% of GDP in 2017. Automotive exports have grown by almost 17% during January-July of this year compared with the same period last year, with an even larger increase recorded in aeronautics (19.8%). Furthermore, the export of phosphate and its derivatives bottomed out and will grow in line with external demand (15.1% growth so far this year). We anticipate that increased phosphate production, coupled with further growth in tourism receipts, should support exports in the future. Meanwhile, the development of domestic energy sources should curb growth in Morocco’s still-low energy bill, although we do not incorporate this development into our forecast yet, since it is likely to emerge only at the end of our projection horizon. Moreover, Morocco benefits from strong remittances. These factors will likely more than offset the impact of the increase in capital goods as part of Morocco’s strategy for industrialization.

The external liabilities position will remain large over the next three years, and we forecast narrow net external debt as a proportion of current account receipts (CARs) to be about 30% in 2018-2021. We also forecast that external financing requirements will remain covered by CARs and usable reserves over this period. (S&P 05.10)

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11.7 TURKEY: Ankara Pins Electoral Hopes on Ignoring Economic Realities

On 12 October, Mustafa Sonmez wrote in Al-Monitor that the Turkish government’s vacillations and zigzagging in the face of the country’s economic woes reflect how squeezed it has become economically and politically and how concerned it is about it with elections scheduled for March.

Turkish President Recep Tayyip Erdogan has quickly returned to anti-American ranting after conciliatory messages to Washington and Berlin two weeks ago that seemed to herald a bid to mend fences with the West. In a 6 October speech heavily peppered with anti-American rhetoric, Erdogan nixed a consultancy deal with the US company McKinsey that Finance Minister Berat Albayrak had recently announced as part of efforts to fix the ailing economy. Turkey can manage it by itself, Erdogan asserted, only days after Albayrak, who happens to be his son-in-law, said that those opposed to collaboration with McKinsey were “either ignorant or traitors.”

Such zigzagging in Ankara reflects how economically and politically squeezed Erdogan’s government has become. On the economic front, it faces a hefty debt stock, a badly weakened currency, an inflation rate of nearly 25%, a serious unemployment problem and stagnation, which are causing loud grumbling among the electorate, including long-time voters for Erdogan’s Justice and Development Party (AKP). With municipal elections looming in March, the circle around Ankara tightens by the day.

The International Monetary Fund (IMF) appears to be the only source of much-needed recovery funds — in return for an austerity program, of course — but Erdogan has bluntly rejected that option, maligning past IMF-backed programs as an “IMF yoke.”

All in all, Ankara seems bent on deferring the bitter pills the crisis calls for, which involves enacting serious measures. Instead, its course of action until elections appears to be based on buying time by distracting the electorate, sweeping the dirt under the rug of the Treasury and foisting corporate debt woes onto banks, especially when it comes to companies in the good graces of the AKP.

Erdogan is averse to calling the turmoil a “crisis,” instead often describing it as “manipulations” or a foreign conspiracy against Turkey. The IMF, however, sees a Turkey in the grips of crisis. The IMF’s “World Economic Outlook 2018,” released on 8 October prescribes tighter monetary policies for Turkey to curb “unanchored inflation expectations” amid the lira’s sharp depreciation. Pointing to “significant stress … emerging in bank and corporate balance sheets,” the fund calls for “strengthening bank supervision and enhancing the crisis management framework.”

The IMF expects a sharp decline in Turkey’s economic growth, projecting the rate to drop to 0.4% in 2019, from 3.5% this year. By implication, this means that the economy would shrink by 1-2% between the last quarter of 2018 and the third quarter of 2019. High inflation and economic contraction, coupled with increasing unemployment, make for the particularly vicious type of crisis called stagflation. Instead of acknowledging reality, however, Ankara is pursuing measures that deny the crisis while producing little in terms of results.

In mid-2018, Turkey’s external debt stock stood at $457 billion. Over the next 12 months, the country will need $181 billion to roll over maturing debts. The financing of the current account deficit requires another $40 billion, at the least, though the gap has begun to decrease under the impact of the economic downturn.

In total, Turkey needs a minimum of $220 billion over the next 12 months, or roughly $18 billion a month, but it has become a high-risk country for creditors. Its risk premium, reflected in credit default swaps, has decoupled from those of other emerging economies, hovering above 400 basis points despite occasional drops. In sum, borrowing has become more expensive for Turkey.

Under pressure from Erdogan, the central bank had dragged its feet in hiking interest rates to prop up the melting lira before announcing a massive hike of 625 basis points in mid-September. With inflation hitting 24.52% last month, however, the hike has quickly become irrelevant. Anticipation is now building for another hike of up to 300 basis points at the bank’s next meeting, on 25 October. Increased interest rates on the Turkish lira have had limited effect in shoring up the currency. The price of a dollar remains at about 6 liras, and although the lira’s free fall has stopped, the exchange rate appears prone to fluctuation.

Ankara’s zigzagging on economic policies is fueling the perception of risk. Albayrak’s deal with McKinsey was aimed at providing some international credibility to Ankara’s economic management and restoring confidence among fleeing foreign investors. In less than a week, Erdogan rebuffed the deal. This flip-flopping has of course stoked foreign creditors’ and investors’ mistrust.

Consumer inflation is widely expected to climb further in the coming months under the pressure of producer inflation, which stood at a staggering 46% in September. In the eyes of the AKP, however, malicious forces are again to be blamed.

Ankara is telling the nation that opportunists, speculators and hoarders are fueling the inflation. In an unprecedented move, it has mobilized municipal police to inspect supermarkets to hunt for price gougers. Furthermore, Albayrak asked businesses this week to grant customers 10% discounts by the end of the year as part of an “all-out struggle” against inflation.

Fighting inflation with discount pledges from sellers is nothing but fantasy, yet Ankara’s efforts appear aimed at producing an argument against inflation-indexed pay rises at the end of the year. When the time comes for pay and pension hikes in December, Ankara is likely to argue that its measures will bring inflation down to 16-17% next year, so the hikes should be fixed accordingly, not in line with the current rate. Such a fiat would affect some 19 million working people and about 10 million pensioners, threatening political fallout for the AKP in the March polls.

The problem does not end with the real income loss caused by inflation. Unemployment is on the rise as well, and no measures are being discussed to stem layoffs. Moreover, the assets of the Unemployment Insurance Fund, amounting to TL 125 billion (about $21 billion), have been put in use to shore up the gaps of public banks, adding to popular discontent. Many among the electorate are also struggling to repay bank debts. Hundreds of indebted companies, big and small alike, are in a financial bottleneck and pressing banks to make sacrifices. The banking system itself needs safeguarding.

In sum, the challenges are many, but Ankara’s means are limited. As the government scrambles for solutions, budget deficits and other, less visible gaps in public finances are widening, and Ankara’s room to maneuver is shrinking.

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11.8 CYPRUS: IMF Staff Concluding Statement of the 2018 Article IV Mission

In the Concluding Statement by the IMF following consultations under Article IV of the IMF’s Articles of Agreement, it was noted that five years after the financial crisis, the Cypriot economy has turned the page on its recovery path. The growth momentum is strong. Fiscal performance is robust. A set of legislative reforms aimed at addressing the crisis legacy of non-performing loans (NPLs) has been approved, catalyzing the cleanup of bank balance sheets. Nevertheless, challenges remain. Risks have partially been transferred to the public sector as part of the bank clean-up strategy, but high debt will remain a burden on the private sector until NPLs, which constrain investor confidence and growth prospects, are resolved.

The key policy priorities are therefore to achieve further private and public balance sheet repair by steadfastly implementing the recently amended legal tools to lower NPLs and the private debt overhang; safeguarding fiscal space and reducing risks to public debt sustainability by maintaining strict spending discipline; and enacting structural reforms, especially in the judiciary and public administration, to attract further investment and enhance productivity. These policies are critical to reduce vulnerabilities and reinvigorate medium-term growth potential. The current phase in the electoral and economic cycle provides an opportunity to advance this policy agenda.

Outlook and Risks

The Cypriot economy continues its rapid recovery from the 2012–13 financial crisis. The growth momentum has been strong over the past three years, bringing real GDP back to its pre-crisis level. The economy grew by over 4% in 2017 and the first half of 2018, supported by tourism, professional services, and construction. Consumption picked up further amidst a sharp decline in unemployment. After an extended period of stagnation, wages and property market prices are rising, although the pace remains very gradual, contributing to low underlying inflationary pressures. Increased domestic demand has boosted imports, widening the underlying current account deficit. With the banking sector hamstrung by weak balance sheets, economic growth has been largely supported by external financing.

Important strides were made in addressing key vulnerabilities in the banking sector. Notwithstanding the strong economic recovery, the Cypriot economy is weighed down by very high private and public debt. NPL ratios, while declining, are among the highest in Europe. The recent resolution of the government-owned Cyprus Cooperative Bank (CCB), the second-largest bank, and the passage of a long-delayed legislative package to strengthen the insolvency and foreclosure frameworks, have mitigated near-term risks to financial stability. While the resolution of the CCB has come at a high cost to the public purse, it marks a decisive step in dealing with the crisis legacy of a large NPL overhang and achieving consolidation in the banking system, which in turn has boosted confidence and earned Cyprus a sovereign ratings upgrade to investment grade status.

The near-term outlook remains favorable, although challenges remain on the horizon. Growth is expected to exceed 4% in 2018–19, driven by domestic demand. While private consumption growth is expected to decelerate as borrowers step up debt servicing, investment is expected to pick up further, as reflected in the pipeline of ongoing and new construction projects in residential properties, education, health and tourism infrastructure. These import-intensive projects, coupled with slowing tourism growth owing to the recent depreciation in some competitor and source markets, will somewhat widen the current account deficit. Over the medium term, as the transitory effects of the investment boom and the euro area cyclical growth gradually dissipate, growth is expected to slow towards a potential growth rate of around 2½%. Sustaining this medium-term growth will require progress in structural reforms, which are crucial for lowering systemic financial risks and catalyzing productivity-enhancing investments.

Risks to the outlook are tilted to the downside. While NPLs have now partially shifted from the banking system to the public balance sheet as a result of bank cleanup operations, progress in resolving NPLs and in strengthening payment discipline is still limited. In this context, delays in NPL resolution will continue to weigh on investor sentiment and growth potential until they are adequately addressed. An increase in moral hazard and realization of contingent liabilities from publicly supported schemes could weaken the fiscal position and raise risk premiums, particularly under tightening global financial conditions. High dependence on Citizenship-by-Investment (CbI) financed investments to propel growth could pose risks for its sustainability. External risks arising from escalating trade tensions, a sharper-than-expected slowdown in euro area growth or a hard Brexit could also affect export revenues and FDI. Upside risks to growth include the prospect of offshore hydrocarbon development. Faster progress in dealing with NPLs could attract additional FDI, increase credit flows, and strengthen economic growth.

Policy Priorities

Financial Sector Policy: Lowering NPL and private debt overhang

Steady reduction of NPLs and high corporate and household debt remains a priority. The recent amendments to the foreclosure and insolvency legislation, the sales of loans law, and the adoption of a law on securitization all enhance the toolkit available to borrowers and creditors to address NPLs on a durable basis. By acting as a credible threat against strategic default, the strengthened foreclosure framework should also help to improve payment discipline and incentivize borrowers to engage with banks in reaching sustainable restructuring solutions. Steadfast implementation of the enhanced frameworks will be key to facilitate this process and ensure timely enforcement. The new frameworks should be supplemented by structural reforms aimed at strengthening institutions, in particular the court system, and removing uncertainties related to title deeds.

The supervisory and governance framework for credit-acquiring companies – which includes the newly-established Cyprus Asset Management Company (CAMC) – needs strengthening. Sales of NPLs to credit-acquiring companies have already begun, making it urgent for the central bank to develop a regulatory and supervisory framework for these institutions: key elements include reporting requirements, on-site inspections and off-site monitoring. To maximize recovery and contain fiscal costs, the governance framework for the government-owned CAMC needs to adequately balance operational independence with public accountability and transparency, with a clear mandate accompanied by operational targets, an independent board, and skilled management compensated based on performance.

The proposed subsidy scheme (Estia) to encourage distressed borrowers to begin servicing their loans should be better targeted to those most in need of assistance. Tighter eligibility criteria and clearer communication would help avoid moral hazard that would further erode payment discipline by extending benefits to those already capable of servicing their obligations. In addition, appropriate assessment of borrower’s capacity to repay the restructured debt on a sustained basis will be important to be sure that those in need of assistance emerge from the process able to make good on their new obligations. Banks should maintain provision coverage at adequate levels and promptly utilize the foreclosure and insolvency framework to address re-defaults. The design of the scheme and an assessment of its impact should be informed by a detailed analysis of borrower data.

More broadly, efforts to strengthen bank balance sheets should continue. In particular, diversifying income sources and consolidating operations would improve cost-income ratios. Better positioning of banks in anticipation of regulatory changes and in the face of competitive pressures would also be prudent. Furthermore, a focus on bank lending policies, sustainability of restructurings, adequacy of provisioning coverage and debt-to-asset swap policies would encourage sound bank risk management practices.

Fiscal policy: Safeguarding fiscal space and reducing risks to public debt sustainability

While fiscal performance is expected to remain robust, caution is needed against pro-cyclical fiscal pressures. Cyprus is projected to maintain large primary fiscal surpluses that should reduce public debt going forward (despite a large one-off increase this year due to the CCB transaction). Although revenues remain buoyant, the reversal of crisis-era wage cuts and interest levy, the introduction of the Estia scheme, and likely increases in health expenditures following the rollout of the National Health System starting next year imply a modest structural loosening. With the output gap closed, a pro-cyclical fiscal stance could in turn increase wage pressures and weigh on competitiveness.

With public debt already elevated, strict spending discipline should be maintained. Debt dynamics could be adversely affected if some of the large banking sector contingent liabilities were to materialize and growth were to slow more than expected. To mitigate these risks, transitory revenues arising from cyclical gains and one-off measures should not be relied upon to finance permanent spending initiatives, while expenditure rises should be capped by medium-term GDP growth (adjusted for permanent revenue changes). Keeping the public wage bill envelope within the nominal GDP growth will be especially crucial. The transition to public insurance in the health sector will need to be carefully managed, bearing in mind that the phasing in and fine tuning of the regulatory framework for service provision and the reimbursement mechanism that keeps incentives for over-provision under control may take time. Complementary fiscal structural reforms for spending reviews, public administration, local government and governance of state-owned enterprises (see below) should be implemented to minimize risks.

Structural reforms: Improving the investment climate and achieving sustainable and inclusive growth

Institutional reforms are needed to further enhance the investment climate, and bolster productivity and medium-term growth potential. Although Cyprus has maintained its external competitiveness, investment in more productive sectors is needed to sustain high economic growth. Key challenges remain in enforcing contracts owing to lengthy judicial processes and weaknesses in government effectiveness reflecting administrative inefficiencies.

Advancing judicial reform and strengthening commercial claims enforcement

Reforms to increase the efficiency of courts, clear the backlog of cases, and speed up enforcement of commercial claims should be pursued to reduce cost of capital and improve access to financing and investment. The addition of judges should be supported by reform of the civil procedure code and introduction of the e-justice system to help reduce the length of court procedures. Persistent delays with issuance and transfer of title deeds should be addressed expeditiously, focusing on clearing the backlog but also on avoiding a recurrence of similar problems in the future.

Strengthening public sector governance and public administration effectiveness

Fiscal structural reforms are needed to lower risks and strengthen service delivery. Public financial management could be strengthened through better internal controls for financial management and monitoring of risks from local government and public bodies. In particular, improving corporate governance of commercial state-owned enterprises, including through strengthening financial oversight, implementing a more effective planning and reporting framework with greater disclosure and transparency and introducing a code of conduct consistent with OECD principles are key to improve the efficiency of the state-owned sector. The legislation to reform the assessment and promotion of the civil service would facilitate greater mobility and enhance efficiency in public administration. Local government reform would also help improve service delivery. Legislative efforts to strengthen the governance and autonomy of the Central Bank of Cyprus should also be expedited.

Ensuring More Inclusive Growth

Ensuring inclusive growth is crucial not just to equity but also to the sustainability of the recovery. Youth unemployment remains high and the employment rate for recent tertiary graduates remains below the EU average, mainly due to skills mismatch. Promoting Active Labor Market Policies (ALMPs) targeting the youth as well as other vulnerable groups, strengthening the education system to better link work-based and school-based programs, and encouraging investments in high value-added sectors would help address these challenges. (IMF 05.10)

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↧

EDUCATIONAL COLLABORATION BETWEEN THE US AND ISRAEL CONTINUES APACE

October 20, 2018, 1:07 pm

≫ Next: Fortnightly, 31 October 2018

≪ Previous: Fortnightly, 17 October 2018

Academic and educational collaboration between Israel and the US has been a cornerstone of their close relationship for many years. Israel is a leader in science and technology innovation, and many US higher education institutions have formed partnerships and joint ventures with Israeli universities, companies, and organizations.

A 2016 study conducted by the prestigious Samuel Neaman Institute at Israel’s Technion-Israel Institute of Technology, using data retrieved from academic databases, reports that academic collaboration between US and Israeli universities increased by 45 percent in the prior decade —despite aggressive, well-funded campaigns to stifle joint research.

In fact, since 2006, American and Israel academics have published more than 40,000 joint publications.

What this landmark report shows is that the relationship between American and Israeli universities is stronger than ever. At a time when Israel’s detractors are calling for academic boycotts across the nation, American universities and their faculties have been undeterred in their work to solve some of the world’s most intractable problems by working closely with their Israeli counterparts to advance knowledge.

Dr. Daphne Getz, the lead researcher for the Samuel Neaman Institute, comments that “this in-depth study shows that the deep bond between American and Israeli academics is vital for the advancement of research in medicine, physics, biochemistry, agriculture, computer science, and many other disciplines.” She expects these collaborations to continue to grow at a significant pace in the months and years ahead.

A recent example of that collaboration is the establishment of the Discovery Partners Institute (DPI) in Chicago and its connection with Tel Aviv University.

Led by the University of Illinois (U of I) system, DPI will be home to more than 100 world-class researchers and thousands of students pursuing economy-building discoveries. It will bring together top faculty from the U of I System and partner universities, including Northern Illinois University (NIU), the University of Chicago, Northwestern University, and Israel’s Tel Aviv University as well. Tel Aviv University is discussing establishing a Midwest center at the DPI.

DPI will be developed on a donated site in Chicago, and researchers will connect with hundreds of businesses, thousands of students, and many entrepreneurs and venture capital firms. DPI’s research and educational collaborations will address real-world challenges, promoting the kind of breakthrough discoveries that create new products and companies.

Most recently, as part of the development of the DPI, an excellent research center targeting food systems, water resources and environmental change is planned for Northern Illinois University as part of this new statewide innovation network led by the University of Illinois System. As the fourth hub of the Illinois Innovation Network – and the first outside of the U of I System’s three universities – the new center will be part of a statewide network aimed at simultaneously driving economic growth in Illinois and addressing critical global issues. The facility is targeted for opening in fall 2021.

The University of Illinois as its first (and so far only) international partner has targeted Israel, the “Startup Nation,” in order to tap into the depth of creative R&D being pursued by Israel’s tech sector. Clearly the University recognizes the world class R&D work being done in Israel and desires to have this act as a catalyst for local growth.

José Angel Guria, Secretary General of the OECD said: “It takes collaboration across a community to develop better skills for better lives.” US-Israel academic collaboration symbolizes that axiom to a “T”.

Atid EDI Ltd. is proud to represent the interests of the Discovery Partners Institute in Israel.

Sherwin Pomerantz

President

↧

Fortnightly, 31 October 2018

October 31, 2018, 12:23 pm

≫ Next: Fortnightly, 14 November 2018

≪ Previous: EDUCATIONAL COLLABORATION BETWEEN THE US AND ISRAEL CONTINUES APACE

31 October 2018
22 Cheshvan 5779
22 Safar 1440

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  PM Netanyahu Makes Surprise Trip to Oman and Meets with Sultan Qaboos
1.2  Punjab Chief Minister Seeks Israel’s Assistance
1.3  New Program Starts to Boost Employment of Arabs & Ultra-Orthodox in High-Tech Sector

2: ISRAEL MARKET & BUSINESS NEWS

2.1  Israeli Blockchain Startup Landscape Now Stands at Over 200 Companies
2.2  WhiteSource Raises $35 Million to Mainstream Open Source Security Management
2.3  Workiz Raises $2 Million
2.4  FundGuard Raises $4 Million
2.5  EyeSight Raises $15 Million
2.6  Resonetics Announces Acquisition of STI Laser Industries
2.7  Team8 Leads Walmart, Softbank, Airbus, Microsoft, Moody’s Led Strategic Coalition
2.8  VPTax Marks Global Expansion with First Office in Israel
2.9  Yissum Launches Express Licensing Campaign to Increase Academic & Industry Collaboration
2.10  Placer.ai Raises $4 Million
2.11  Tel Aviv University Partners in Entrepreneurship & Innovation Center in Chicago
2.12  Volkswagen, Mobileye & Champion Motors Invest in Israel & Deploy First Autonomous EV Ride-Hailing Service
2.13  HARMAN Strengthens Presence in Israel with New Headquarters

3: REGIONAL PRIVATE SECTOR NEWS

3.1  Esri Enters into MoU with United Arab Emirates’ Statistics Authority
3.2  Blueground Raises $20 Million in Funding from Global Investors
3.3  Saudi Arabia’s Unifonic Announced $21 Million in Series A Funding Round

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 UAE Waste to Fuel Facility Set to Start Operations in 2020
4.2 Ras Al Khaimah Launches Major Energy Efficiency Drive

5: ARAB STATE DEVELOPMENTS

5.1  Lebanon’s Average Inflation Reached 6.10% by September 2018
5.2  Lebanon’s Trade Deficit Reached $11.73 Billion by August 2018
5.3  Tourist Spending in Lebanon Climbed by an Annual 5.41% by the Third Quarter
5.4  Lebanese Total Tourist Arrivals Up by 3.88% y-o-y in Third Quarter While Arab Tourists Lagged
5.5  Jordan’s Trade Balance Deficit Down 3.7% in First 8 Months of 2018
5.6  Germany Allocates €462.12 Million to Support Jordan

Arabian Gulf

5.7  GCC Forecast to Enjoy 125% Growth in Russian Tourists by 2023
5.8  MHI Successfully Launches UAE’s KhalifaSat Satellite
5.9  UAE Workforce Comprised of 91% Expats
5.10  Dubai Picked to Host First Overseas Russian Innovation Hub
5.11  RTA & du Set to Add Free Wi-Fi to All Dubai Taxis
5.12  WEF Says Saudi Arabia Leads GCC in Economic Stability
5.13  Saudi Arabia’s Recovery Gains Pace with Higher Consumer Spending
5.14  Saudi Arabia Pledges $3 Billion to Support Pakistan’s Economy

North Africa

5.15  Egypt’s Trade Volume Amounts to $67.63 Billion Over First 9 Months of 2018
5.16  Cairo Tops the List for the Fastest Growing City in Tourism
5.17  Morocco’s Privatization to Cut Deficit to 3.3% of GDP in 2019
5.18  First 8 Months of 2018 See 8.7 Million Tourists Visit Morocco

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Greece is the Eurozone’s Leader in Indirect Taxation

7: GENERAL NEWS AND INTEREST

ISRAEL

7.1 Israel Ended Daylight Savings Time on 28 October
7.2 Israel’s National Anthem Played in UAE Following Israeli Judoka Win

REGIONAL

7.3 Jordan Changed Its Clocks to Wintertime on 26 October
7.4 Moroccans are the Largest Foreign Student Community in France

8: ISRAEL LIFE SCIENCE NEWS

8.1  Positive Results of Orthopedic Treatment With ApoGraft Enriched Stem Cells Derived
8.2  Turning Apple Waste into a Superfood
8.3  FSD Pharma Signs Binding LOI to Acquire Therapix Biosciences
8.4  Clew Medical Raising $20 Million
8.5  Teva & New Jersey Governor Formalize North America Headquarters Move in Israel Ceremony
8.6  NRGene and Kayagene Collaborate to Improve Cannabis Breeding and Seed Production
8.7  Cellect Breakthrough for Industrialization of Apotainer Stem Cell Product Line
8.8  CollPlant Agreement for 3D Bioprinting of Solid-Organ Scaffolds for Human Transplants
8.9  Regentis Biomaterials Expands SAGE Clinical Trial of GelrinC for Knee Pain
8.10  Wize Pharma Announces $4.45 Million Private Placement
8.11  Alvit LCS Pharma Manufacturing Agreement with Bazelet
8.12  89Bio Launches into Liver and Metabolic Disorders with $60 Million Series A Financing
8.13  Gamida Cell Raises $50 Million in NASDAQ IPO
8.14  FDA Grants Breakthrough Therapy Designation (BTD) for UroGen Pharma’s UGN-101 Cancer Treatment

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Kaymera Technologies to Expand Adaptive Mobile Threat Defense Footprint
9.2  Tactile Mobility Comprehensive Tactile Data Solution for Road Authorities
9.3  Israel Develops Bomb-Detecting Robot to Save Soldiers’ Lives
9.4  My Size & Lightspeed Provide Mobile Measurement Solution to e-Retailers Worldwide
9.5  Baccara Geva is a Market Leader in Water Management Solutions
9.6  Aurora Labs Named a Cool Vendor by Gartner
9.7  Comtrend Selects Celeno High Performance Tri-Band Wi-Fi Solution for Gateways
9.8  Allot Narrows Technological Divide in Rural Territories with Improved Web Security
9.9  IAI $777 Million Deal for Barak 8 LRSAM Air & Missile Defense Systems to India’s BEL
9.10  Introducing Walabot HOME: A New Senior Care Smart Home Device for Fall Detection
9.11  Waterfall Unidirectional Security Gateways CCC Certified
9.12  Ethernity Networks’ ENET Flow Processor Firmware Integrated by North American Vendor
9.13  macOS Goes Password-Free With Introduction of Octopus Authentication
9.14  Cymulate Finds Logical Bug in Microsoft Office Suite – Word Embedded Video Code Execution
9.15  Allot Partners With Swiftel to Provide DDoS Protection for Their ISP and Enterprise Customers
9.16  VisIC Technologies is a Final Nominee for the 2018 GSA Company Award
9.17  On Track Innovations Receives Interac Certification for Canadian Market

10: ISRAEL ECONOMIC STATISTICS

10.1 Israel Places 20th on Global Competitiveness Index

11: IN DEPTH

11.1  ISRAEL: High-Tech Companies Raised $1.6 Billion in 131 Deals in Q3/2018
11.2  ISRAEL: Netanyahu Visits Oman
11.3  LEBANON: Lebanon’s Perfect Financial Storm
11.4  JORDAN: Policing and Protection for Syrian Refugees in Jordan
11.5  TUNISIA: Tunisia’s Bold Move to End Racial Discrimination
11.6  MOROCCO: Morocco’s Auto & Phosphates Exports to Narrow Account Deficit
11.7  TURKEY: Turkey’s Fantasy War on Inflation
11.8  CYPRUS: Fitch Upgrades Cyprus to ‘BBB-‘; Outlook Stable

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 PM Netanyahu Makes Surprise Trip to Oman and Meets with Sultan Qaboos

On 25 October, Israel’s Prime Minister Benjamin Netanyahu has made an unpublicized trip this week to Oman, a Gulf Arab country that it has no diplomatic relations with. Prime Minister Netanyahu met with Oman’s Sultan Qaboos bin Said, being the first Israeli leader to visit the sultanate since Shimon Peres in 1996.

In recent years, Netanyahu has insisted that relations between Israel and Gulf Arab countries have been growing, without much official evidence. None of the seven Gulf Arab countries officially recognizes Israel. Netanyahu’s office revealed the visit on his return, and images of the prime minister and Sultan Qaboos meeting and shaking hands began to circulate.

According to Israel, PM Netanyahu travelled to Muscat at the invitation of the sultan after lengthy communications. It called it a “significant step” towards implementing Netanyahu’s policy of strengthening ties with Gulf Arab countries. A joint statement said the two sides “discussed ways to advance the Middle East peace process and discussed a number of issues of mutual interest to achieve peace and stability in the Middle East”.

The visit also came as Israel’s Culture and Sports Minister Regev arrived in the United Arab Emirates for the Abu Dhabi Grand Slam Judo tournament, in which the Israeli national team competed. The Israeli flag could also fly in Qatar soon, if the country’s athletes taking part in the World Artistic Gymnastics Championship being held in Doha do well in the competition. Qatar had assured organizers that it would allow Israeli national symbols at the event. (MEF 26.10)

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1.2 Punjab Chief Minister Seeks Israel’s Assistance

To check pollution and generating water for irrigation purposes, Punjab Chief Minister Capt. Amarinder Singh sought Israel’s assistance in enabling recycling of sewerage water in five major cities of the state. The Chief Minister recently held extensive talks in Jerusalem with Israel’s Minister of Energy and Water Resources Steinitz on the issue of water management to boost water conservation in Punjab. Impressed with the fact that 95% of sewerage water was being recycled for agriculture in Israel, Capt. Amarinder said that Punjab would like to do the same in urban areas.

Capt. Amarinder apprised the Israeli Minister of the problems being faced by Punjab on the water front as a result of its depleting water table caused by melting glaciers. While Punjab had a power surplus, water resources remained a challenge for the state, which was trying to get out of the paddy-wheat cycle to save this precious resource. Dr. Steinitz said that Israel would be happy to extend all possible support in this regard, while underlining the need for proper water management through assessment of total requirement and availability.

He pointed out that Israel was having its fifth year of drought but was managing its water needs through various measures, such as double desalination, to meet 80% of its domestic water need. Regulating water distribution was the crux of water management, said the Minister, stressing the need for educating people in this regard. The Chief Minister invited the Minister to visit Punjab to further strengthen the cooperation between the two sides.

Underlining Punjab’s role in building India’s food security over the past 40 years, the Chief Minister said the depleting water table was now threatening to destroy the state’s agricultural prowess. He stressed the need to diversify crop cultivation in the state to get it out of the wheat-paddy cycle and said that Israel’s drip irrigation technology was a laudable initiative that Punjab could adopt to its advantage. (PNS 25.10)

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1.3 New Program Starts to Boost Employment of Arabs & Ultra-Orthodox in High-Tech Sector

A new program launched recently by a coalition of Israeli NGOs, high-tech companies, philanthropists and government leaders, put together by the non-profit Start-Up Nation Central (SNC) is set to tackle the serious shortage of skilled workers for the tech sector, while increasing the participation of Israel’s Arab and ultra-Orthodox communities in the industry.

The Program for Enhancement of Arab and Haredi [ultra-Orthodox] Human Capital for the Jerusalem High-Tech Workforce, dubbed Excellenteam, is based in Jerusalem and will focus on computer science graduates from the two communities to provide “hands-on technical training, experience in problem solving, exposure to the industry, help in developing soft skills, and assistance in finding relevant placements in tech companies.

According to SNC research, the ultra-Orthodox population makes up only 2% of the workforce in the sector, and the Arab population only 3%. Meanwhile, the country suffers from a chronic shortage of high-tech workers. A survey conducted by Start-Up Nation Central, JP Morgan Chase Foundation and Israel Advanced Technology Industries put that figure at up to 15,000 unfilled positions in the industry. Excellenteam selected its first group of 20 graduates from each community for the program, with a future goal of 12 cycles in three years. It includes full tuition and scholarships toward living expenses. (No Camels 22.10)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Israeli Blockchain Startup Landscape Now Stands at Over 200 Companies

The Israeli Blockchain Association has released its third Israeli Blockchain Startup Map, which covers over 200 startups operating in the blockchain industry. Most Israeli blockchain startups are concentrated in the Fintech (57 companies) and Protocols/ Core Infrastructure (37 companies) sectors. A large increase was seen in the Security sector, which today accounts for 23 startups. It is also worth mentioning that since the beginning of the year, 20 blockchain startups have ceased operations.

Regarding the 2019 forecast, the Israeli Blockchain Association expects the amount of blockchain startups to double, the role of academic structures in startup companies to increase, and the radical growth of “non-native” blockchain startups in A & B rounds, which are going through a blockchain-transformation. The complete version of the map can be found at: http://blockchainisrael.io/startupmap. It is updated quarterly.

The Israeli Blockchain Association aims to educate, develop, and empower the blockchain community of Israel and to connect it with both global leaders and best practices. The Israeli Blockchain Association was founded in 2017 and currently has more than 1200 individual members, 37 advisory board members, experts and ambassadors, as well as dozens of corporate, investment, and academic partners from all over the world. (IBA 17.10)

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2.2 WhiteSource Raises $35 Million to Mainstream Open Source Security Management

WhiteSource announced a $35 million funding round led by Susquehanna Growth Equity, with participation by existing investors 83North and M12 – Microsoft Ventures. This $35 million Series-C adds to the $11 million raised by WhiteSource in previous financing rounds.

Founded in 2011, WhiteSource was created with the mission to help businesses harness the power of open source without compromising on security or slowing development. With the latest funding, WhiteSource plans to double down on serving the enterprise market where leading customers such as Microsoft, IBM, Comcast and KPMG already leverage the WhiteSource platform. WhiteSource continues to gain attention for its ability to think beyond the abstract concepts of security and compliance and has delivered capabilities that answer the business needs of development and security teams alike, as it has proven with its latest revolutionary offering, Effective Usage Analysis, which reduces open source vulnerabilities alerts by 70%.

Tel Aviv’s WhiteSource is the pioneer of open source security management. Its vision is to empower businesses to develop better software by harnessing the power of open source. WhiteSource is used by more than 500 customers worldwide, from all verticals and sizes, including 23% of Fortune 100 companies, as well as industry leaders such as Microsoft, IBM, Comcast and many more. The company has been recognized by Forrester as the best current offering in its Software Composition Analysis (SCA) Wave report. (WhiteSource 17.10)

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2.3 Workiz Raises $2 Million

Israeli field service market platform developer Workiz has announced the completion of a $2 million seed financing round by Aleph venture capital fund. The funds will support the expansion of the company’s operations in North America and the acceleration of its product development with new employees being hired in Israel and the US.

Some 75% of small field service businesses in North America close within their first five-years. Workiz slashes this number down to 20%. Tens of thousands of field service professionals use Workiz’ platform to run highly profitable, five-star operations and provide premium service to millions. Backed by state-of-the-art technology, like AI, bots and unified communication feeds, they are now able to outperform larger competitors – without the need for huge budgets or specialized expertise. Workiz operates in two strategic areas – with its technological and business development centers located in Israel, and its sales center located in America. (Globes 21.10)

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2.4 FundGuard Raises $4 Million

FundGuard has raised a $4 million financing round led by Blumberg Capital and LionBird. FundGuard will use the capital to accelerate the development of its platform and Contingency NAV product as well as to bring operational efficiencies afforded by AI and cloud technologies to market.

FundGuard’s Contingency and Oversight NAV product provides an unparalleled daily-resetting, fully automated operating system at a secondary independent location to enable asset managers to fulfill their fiduciary responsibility for business continuity and for protecting their funds’ proprietary and most critical data and valuation during core systems failures and cyberattacks. This solution is designed to efficiently address the systemic risk of long period outages similar to a week-long incident at a large custodian bank that impacted hundreds of mutual funds and exchange-traded funds, damaging their reputations.

Tel Aviv’s FundGuard helps asset managers, custodian banks and fund administrators manage investments across mutual funds, ETFs, separately managed accounts, pension funds as well as insurance. Using machine learning and AI to identify unstructured financial and operational anomalies or potential fraud, the platform provides real-time support while providing insights and recommendations to its customers. (Globes 21.10)

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2.5 EyeSight Raises $15 Million

Herzliya Pituah’s EyeSight Technologies announced it has raised $15 million in a funding round led by Hong Kong-based Jebsen Capital, Arie Capital and Mizrahi-Tefahot Bank, bringing its total raised to date to $50 million. EyeSight said its artificial intelligence computer vision system monitors a driver’s gaze direction, pupil dilation, eye openness and head position and uses algorithms to detect levels of drowsiness and distraction.

The European New Car Assessment Program, which awards safety stars to car models, will require new car models to have driver monitoring systems by 2020. EyeSight will also scan the entire cabin of a car, understanding who and what is in the vehicle. In addition, an EyeSight system can identify drivers, automatically adjusting their seats and mirrors or selecting their music playlist, which could be useful as car-sharing increases, the company said. EyeSight also makes vision-based solutions for the smart home and consumer electronics.

Eyesight offers the most advanced edge-based Computer Vision and AI solutions. The company’s technology improves daily life experiences in the car, home, and with other consumer electronics, using intelligent interactions that are responsive to users and their actions. The company’s technology utilizes proprietary algorithms to deliver a range of applications: from passive sensing with the detection user presence, to active interactions using touch-free gesture control. With Eyesight’s technology devices now “see” and “understand” their users, unlocking a world of enhanced user experiences. (EyeSight 23.10)

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2.6 Resonetics Announces Acquisition of STI Laser Industries

Nashua, New Hampshire’s Resonetics has acquired STI Laser Industries (STI), based in Or Akiva, Israel, a leading supplier of laser processing, nitinol shape setting and electro-polishing, and cleanroom assembly and packaging for the medical device industry. In addition to servicing the prolific startup community in Israel, STI has developed a global business with extensive customer relationships in the U.S., Japan, China and Korea.

STI is doubling the size of its operations in Or Akiva, 40 minutes North of Tel Aviv. Building 2 is under construction and will open in early 2020 to increase the Israel operation to 60,000 sq. ft. to accommodate the company’s growth and new manufacturing capabilities.

STI Laser Industries is an original equipment manufacturer (OEM) specializing in laser cutting and finishing of miniature metal components. STI provides a comprehensive manufacturing platform for medical device, bio-engineering and hi-tech companies. STI focuses on medical device manufacturing of implants and surgical tools intended for Minimally Invasive Surgery (MIS) procedures. (Resonetics 23.10)

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2.7 Team8 Leads Walmart, Softbank, Airbus, Microsoft, Moody’s Led Strategic Coalition

Team8 announced the launch of an international coalition incorporating Walmart, Airbus, Softbank, Moody’s, Dimension Data, Munich Re, Scotiabank and Barclays. Team8’s existing investors, including M-12, Microsoft’s venture-capital arm, Cisco Investments, Nokia, Bessemer Venture Partners, Temasek and Innovation Endeavors have also joined the coalition. By bringing together leaders in finance, technology, retail, aerospace, risk and insurance, the coalition aims to build technology companies to create secure and agile environments that empower enterprises to realize the true benefits of digital transformation and leverage data to create real business impact.

The coalition formed with this unprecedented approach after respective member organizations concluded that the formidable threat posed by cyber-crime inhibits enterprises’ ability to maximize digital transformation opportunities due to inherent risks. Rather than simply viewing cybersecurity as a necessity, the Coalition will unlock its value through rethinking enterprise infrastructure, enabling new growth opportunities through infrastructure for networks, the Cloud, data and computing.

The Coalition members have secured $85 million in capital to fund and build a series of companies that accelerate secure digital transformation through Team8’s company-building model, driven by its dedicated team of researchers, scientists, engineers and analysts. Chief Information, Technology, Data and Security Officers from each of the member organizations will work together with Team8’s research, recruiting and business development teams to identify problems, ideate on disruptive solutions, validate technology, hire talent and plan go-to-market approaches. The committed $85 million will be invested at seed-level into each of the solutions, resulting in independently operating companies with shared ownership by the investors.

Team8 was founded by former leaders of Israel’s military intelligence Unit 8200. To date, Team8 has launched four disruptive companies, with four more operating in stealth mode, each with an innovative approach for organizations to build resilience against cyber warfare and that today protect dozens of Fortune 100, 500 and other leading companies. Including the new $85 million investment, the group has raised more than $260 million to date and employs more than 370 people worldwide.

Team8 is a leading think tank and company creation platform specializing in cyber resilience and data analytics. Team8 is supported by an in-house team of top researchers, engineers and analysts. Team8 combines its in-depth understanding of the attacker perspective, data science AI to develop disruptive technologies and category-leading companies that enable businesses to reap the benefits of digital transformation in an agile and secure manner. (Team8 23.10)

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2.8 VPTax Marks Global Expansion with First Office in Israel

VPTax, a San Francisco-based professional services firm, announced that the company is expanding its presence globally with the opening of an office in Israel. This new office will allow VPTax to offer its tax expertise to the growing number of Middle Eastern companies looking to do business in the U.S. VPTax is owned and operated by experts drawn from senior level positions at the Big 4 accounting firms. By leveraging proprietary software applications and in-house expertise, VPTax delivers superior quality at prices far below the competition. VPTax also provides services specific to the new sales tax regulations stemming from the U.S. Supreme Court case South Dakota v. Wayfair, Inc. Clients include companies such as The RealReal, Google, Oanda and Bloom Energy. (VPTax 24.10)

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2.9 Yissum Launches Express Licensing Campaign to Increase Academic & Industry Collaboration

Yissum launched its pioneering Express Licensing Campaign at the ITTN’s 5th biennial conference: Tech Transfer 4.O: Reinventing Technology Transfer. The campaign aims to make the cutting-edge research conducted at the Hebrew University of Jerusalem more accessible to industry partners by dramatically simplifying technology licensing or acquisition.

Yissum currently dominates academic tech transfer in Israel and in 2017 was responsible for nearly half of all tech transfer licensing agreements signed by universities as well as new company formations. The Express Licensing Campaign is yet another channel initiated by Yissum to broaden industry reach into Intellectual Property (IP) born out of translational academic research, by offering close to 70 technologies alongside ready-to-sign license contracts, drafted in collaboration with several leading law firms in Israel.

Israel is a global leader in tech transfer, second only to the United States in the amount of IP revenue it generates, mainly because of the academia’s extensive experience and capabilities in inventing new technologies and powering new markets and industries. A recent ranking of Reuters World’s Most Innovative Universities, which identifies the top 100 international universities that excel at original research, create useful technologies, and contribute to the world’s economy put Hebrew University at #79 worldwide and first in the Middle East.

Yissum also recently launched its 3rd seed fund, focused on venture creation from the top nanotech research innovations from Hebrew University. More than 20 startups were established by Yissum’s funds over the last five years.

Yissum is the technology transfer company of The Hebrew University of Jerusalem. Founded in 1964, it is the third company of its kind to be established and serves as a bridge between cutting-edge academic research and a global community of entrepreneurs, investors and industry. Yissum has registered over 10,000 patents covering 2,800 inventions; licensed over 900 technologies and has spun out more than 135 companies. (Yissum 24.10)

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2.10 Placer.ai Raises $4 Million

Placer.ai announced the closure of a $4 million funding round on 24 October. The round was led by IrishAngels Ventures, with participation from Array Venture and Stage Venture Partners. The funds will be used to expand its service for tracking and predicting foot traffic and people’s movements and to grow its sales and marketing teams. The company said it obtains its data through the 100 popular smartphone apps that use its SDK and that it can anonymously but accurately track the movements of 60% of Android users and 40% of iOS smartphone users in the United States.

Alongside the funding news, Placer.ai announced the launch of a free version of its app that can share limited foot traffic movement details about virtually any business in the U.S. Placer.ai aims to tell users not just who visits a business but where they came from and where they go after they leave. Machine learning is then used to make predictions about customer data or visitation trends. Initial Placer.ai users include CBRE, Caesar’s Entertainment, tech company Oath, and the Santa Cruz boardwalk in California.

Placer was founded in 2016 and has 35 employees in offices in Los Altos, California and Tel Aviv, Israel. (Placer 24.10)

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2.11 Tel Aviv University Partners in Entrepreneurship & Innovation Center in Chicago

Tel Aviv University is one of four founding partners in the innovative Discovery Partners Institute (DPI), which will be established and operated in Chicago. Led by the University of Illinois, together with the University of Chicago and Northwestern University, all the partners in the project are among the leading research institutions in the world, and in the coming months, additional institutions are expected to join them. The new center will focus on research and teaching in the fields of entrepreneurship and innovation, and will focus on topics currently facing the forefront of science and society, including cyber security, artificial intelligence, data and food security. The first group of students from the Koller Faculty of Management has already stayed at the center (which is currently operating in an existing building), and the activity is expected to expand with the construction of the new facilities.

The ambitious project was welcomed by Illinois Governor Rowner and Chicago Mayor Emanuel, who promised the city’s support for its establishment. The Illinois House of Representatives has allocated $500 million to build the center and deploy a network of innovation centers across the country. EDI represents the interests of the DPI in Israel. (TAU 24.10)

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2.12 Volkswagen, Mobileye & Champion Motors Invest in Israel & Deploy First Autonomous EV Ride-Hailing Service

The Volkswagen Group, Mobileye and Champion Motors announced plans to deploy Israel’s first self-driving ride hailing service – or Mobility-as-a-Service (MaaS) – starting next year. For this, the partners are planning to establish a joint venture. The planned cooperation is subject to approval by the responsible authorities and bodies. Operating as “New Mobility in Israel,” the group’s proposal was formally accepted by the Israeli government during a private ceremony at the recent Smart Mobility Summit in Tel Aviv.

The Volkswagen Group will provide the electric vehicles (EVs) and bring in its in-depth knowledge and competency about design and deployment of user-centered mobility services. Mobileye will provide its level-4 AV Kit – a turn-key, driverless solution comprised of hardware, driving policy, safety software and map data. Champion Motors will run the fleet operations and control center. Together, the three companies will add the mobility platform and services, content and other MaaS tools, ensuring a seamless rider experience in the deployment of a full-stack MaaS offering.

The government of Israel has committed to support the project in three main areas: furnishing legal and regulatory support, sharing the required infrastructure and traffic data, and providing access to infrastructure as needed. While New Mobility in Israel will be Israel’s first commercial MaaS service with self-driving vehicles, all facilitations and rulings will be applied to all other ventures that wish to operate a MaaS in Israel.

Volkswagen, Mobileye and Champion Motors will use New Mobility in Israel to serve as a global beta site for testing the Mobility-as-a-Service model using autonomous electric vehicles. The project will start in early 2019 and scale to commercialization by 2022. New Mobility in Israel will roll out in phases and grow quickly from several dozen to hundreds of self-driving electric vehicles. This initiative harnesses the disruptive power of several trends in the automotive industry: autonomous vehicle platforms changing the way we control vehicles, electric vehicles changing how we power vehicles, and Mobility-as-a-Service changing how we access mobility. (Volkswagen 29.10)

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2.13 HARMAN Strengthens Presence in Israel with New Headquarters

Stamford, Connecticut’s HARMAN International, a wholly-owned subsidiary of Samsung Electronics Co. focused on connected technologies for automotive, consumer and enterprise markets, announced that the company is strengthening its presence in Israel by opening a new R&D center with an advanced smart car lab in Hod HaSharon

HARMAN’s new facility in Hod HaSharon will now serve as the headquarters for HARMAN in Israel. This building will feature an advanced Smart Car Lab, where teams can research, test and validate the company’s award-winning cybersecurity, over-the-air software updates technologies, and automotive cloud solutions, in real-life conditions. The company’s existing Research & Development (R&D) centers, currently based in Kfar Saba, Hod HaSharon and Ramat Gan will now be consolidated under the new center at Hod HaSharon.

HARMAN is increasing its innovation capabilities globally, including expanding its workforce in Israel. HARMAN’s innovation hubs in Israel are home to a team of highly-skilled, senior engineers developing technologies that will shape our future, including autonomous, connected and augmented reality platforms. HARMAN has acquired three Israeli start-ups in the last five years: iOnRoad, a red alert company situated in Ramat Gan; Red Bend, which enables today’s cars to be connected to the cloud and is located in Hod HaSharon; and TowerSec Automotive Cybersecurity, which was based in Kfar Saba. (HARMAN 29.10)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Esri Enters into MoU with United Arab Emirates’ Statistics Authority

Redlands, California’s Esri, the global leader in location intelligence, has entered into an MOU with the Federal Competitiveness and Statistics Authority (FCSA), the national statistics body for the United Arab Emirates (UAE). Under the agreement, FCSA and Esri will work together to geo-enable its vital work. This agreement seeks to strengthen the future cooperation between FCSA and Esri. The resultant collaboration between the two will include the creation of an innovative road map to further enhance the geospatial capabilities of FCSA, further integrate location intelligence technology with statistics data, and provide subject and technical expertise to the UAE.

Esri, the global market leader in geographic information system (GIS) software, offers the most powerful mapping and spatial analytics technology available. Since 1969, Esri has helped customers unlock the full potential of data to improve operational and business results. (Esri 24.10)

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3.2 Blueground Raises $20 Million in Funding from Global Investors

Blueground, the hospitality-tech company that is transforming the experience of big city living, completed a new funding of $12M from a group of global investors, including Dubai-based Jabbar Internet Group, VentureFriends and Endeavor Catalyst. The latest investment marks the fourth and largest round of funding for Blueground, bringing the total investment from global investors in Blueground to nearly $20 million. The Blueground concept is simple: to lease carefully-selected, high-quality properties in the most sought-after locations on a medium and long-term stay basis to professionals and individual travelers.

Blueground in-house interior design team works with individual and corporate property owners – such as Emaar Properties, Meraas Holding, Daman Investments, Orra Intl and others – to upgrade properties into best-in-class apartments. This ensures a premium experience for renters, and boost revenue opportunities for owners. The funding has helped Blueground gain the trust and confidence of well-known property management companies and individual owners.

Blueground has an ambitious vision for growth, with the goal of becoming the largest tenant in Dubai in 2019, as well as expanding to more than 50 cities with 50,000 properties in its worldwide portfolio by 2023. Besides Dubai, the company is currently present in New York, San Francisco, Boston, Chicago, Los Angeles, Washington DC, Istanbul and Athens. (ArabNet 25.10)

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3.3 Saudi Arabia’s Unifonic Announced $21 Million in Series A Funding Round

Unifonic, the Riyadh-based communication platform, has closed a $21 million Series A round of funding. This round was led by STV with the participation of RTF, Endeavor Catalyst, ELM and Raed Ventures. The startup plans to use the investment to accelerate company’s growth and continue building different communications solutions.

Unifonic was founded in 2006 and provides cloud-based communication tools to business customers and enables integration of text and voice-based solutions through its API platform. Therefore, Unifonic eliminates the need for costly hardware infrastructure making business communication simple, fast, and cost-effective. The company has been profitable for over 8 years, has experienced double-digit monthly revenue growth, and has grown to over 100 employees in 5 countries. (ArabNet 17.10)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 UAE Waste to Fuel Facility Set to Start Operations in 2020

The UAE’s Ministry of Climate Change and Environment has signed a concession agreement with the shareholders of the Emirates RDF Company to develop and operate a refuse derived fuel facility in Umm Al Quwain. The project will be developed under a public private partnership (PPP) scheme and is co-financed by the Ministry of Presidential Affairs. The construction of the RDF facility will start in December and is expected to start operating in April 2020.

The RDF facility will receive 1,000 tons per day of household waste from Ajman and Umm Al Quwain and will cost around $40 million to build. It will convert the waste of 550,000 residents from the two emirates into an alternative energy source. This product, named refuse derived fuel (RDF), will be used in cement factories as a fuel. It will partially replace the traditional use of gas or coal. By implementing this project, approximately 90% of household waste will be diverted from landfill. The Emirates RDF Company is a joint venture consisting of UAE-based contractor BESIX, Ajman-based Tech Group Eco Single Owner Holding and Finland’s Griffin Refineries. (AB 17.10)

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4.2 Ras Al Khaimah Launches Major Energy Efficiency Drive

Ras Al Khaimah Municipality has launched a major initiative to retrofit thousands of buildings in the emirate to make them more energy efficient. The Retrofit Program, coordinated by the Energy Efficiency and Renewables Office (REEM) within RAK Municipality, aims to retrofit about 3,000 buildings by 2040. It’s an important pillar of the RAK Energy Efficiency and Renewable Energy Strategy 2040, which targets 30% energy savings, 20% water savings, and 20% generation from renewable energy sources.

The Government is expected to lead by example in the execution of the strategy by improving energy efficiency in its buildings. RAK Municipality has issued a set of guidelines to support all government entities in achieving their energy efficiency goals, and will provide direct support through its Energy Efficiency and Renewables Office (REEM). A first retrofit project involving the Municipality buildings has already begun. (AB 27.10)

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Average Inflation Reached 6.10% by September 2018

According to the Central Administration of Statistics (CAS), Lebanon’s average prices rose by 6.10% by September 2018 compared to the same period last year as all 13 components of the Consumer Price Index (CPI) posted average yearly upturns. The average costs of Housing and utilities (water, electricity, gas and other fuels) constituting a combined 28.4% of the Consumer Price Index or CPI, rose by 6.64% year-on-year (y-o-y) by September 2018. In fact, Owner-occupied rental costs, which grasped 13.6% of this category, rose by 3.90% y-o-y. As for the average prices of Water, electricity, gas, and other fuels (11.8% of the total CPI), they increased by an annual 10.16% by September 2018. In turn, the average prices for Food and non-alcoholic beverages (constituting 20% of the CPI), Transportation (13.1% of the CPI), and education costs (6.6% of CPI) registered yearly upticks of 4.86%, 8.55%, and 4.07% by September 2018. (CAS 22.10)

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5.2 Lebanon’s Trade Deficit Reached $11.73 Billion by August 2018

Lebanon’s trade deficit widened by 4.83% year-on-year (y-o-y) to reach $11.73B by August 2018. Total imports increased by a yearly 4.76% to $13.72B by August 2018 while exports recorded a yearly rise of 4.39% to $1.99B over the same period.

Mineral products were the leading imports to Lebanon in the first 8 months of 2018, grasping a 21.29% stake of total imported goods. Machinery and Electrical Instruments followed, constituting 11.87% of the total, while Products of the chemical or allied industries grasped 10.92% of the total. The value of imported mineral products stood at $2.92B by August 2018, down by a yearly 0.12%, owing it to a 26.73% y-o-y decline in their imported volume to 5.40M tons by August 2018. Meanwhile, the average price of oil increased by 38.08% y-o-y to $72/barrel over the same period.

As for the value of machinery and electrical instruments, it recorded a rise of 25.76% y-o-y to settle at $1.63B, and that of products of the chemical or allied industries also increased by 5.63% to $1.50B over the same period. In terms of top trade partners, Lebanon primarily imported from China, Italy, Greece and USA with shares of 10%, 8%, 8% and 7% in the total value of imports, respectively, in August 2018.

As for exports, the top category of products exported from Lebanon was pearls, precious stones and metals, which grasped a share of 23.59% of total exports, followed by a share of 13.61% for prepared foodstuffs, beverage and tobacco and 13.59% for base metals and articles of base metal by August 2018. In details, the value of pearls, precious stones, & metals rose by an annual 16.82% to reach $468.49M by August 2018. In turn, the value of prepared foodstuffs, beverage, and tobacco decreased by 12% y-o-y to $270.25M. Meanwhile, the value of base metals and articles of base metal climbed by a yearly 22.9% to $269.95M. In August 2018, the UAE, followed by South Africa and Saudi Arabia were Lebanon’s top three export destinations, respectively constituting 14%, 8% and 7% of the total value of exports. (DoS 22.10)

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5.3 Tourist Spending in Lebanon Climbed by an Annual 5.41% by the Third Quarter

According to Global Blue, tourist spending in Lebanon added 5.41% by Q3/18, compared to Q3/17. The rise can be linked to the 3.88% yearly increase in tourist arrivals to 1.51M by September 2018. The number of refund transactions rose by 2.12% y-t-d by September 2018. The highest increase of number of refund transactions was executed during the month of September with growth rate of 13.9% while the highest drop was performed during the month of June with a reduction of 5.17%.

Tourists from the Arab countries remained the largest spenders in Lebanon, with Saudis, Emiratis, Syrians and Kuwaitis in particular grasping shares of 12%, 11%, 9 and 7% of total spending, respectively. On a year-to-date basis, tourist spending by Syrian, Kuwaiti and Qatari visitors rose by 74.56%, 5.89% and 62.55%, respectively. Meanwhile, spending by Saudi Arabian visitors and Emiratis slumped by 19.9% and 2.19%, weighing down on overall tourist spending for the period. In Q3/18, tourists expended 67% of their total spending on Fashion and clothing, followed by 18% on watches and jewelry, noting that spending on fashion and clothing grew by a marginal 1% by September 2018. Similarly, spending on watches and jewelry increased by 23.8% over the same period. (GB 25.10)

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5.4 Lebanese Total Tourist Arrivals Up by 3.88% y-o-y in Third Quarter While Arab Tourists Lagged

The latest data by the Ministry of Tourism revealed that the number of tourist arrivals to Lebanon increased by 3.88% year-on-year (y-o-y) in Q3/18 to settle at 1.51 million. However, the rise remains incremental (compared to the growth rate of 11.3% recorded a year before) owing it to the growth of tourist arrivals namely from Europe and America, and to a slump in the number of Arab tourists who are Lebanon’s largest spenders. In details, the number of visitors from the Arab countries (constituted 27.8% of total arrivals) declined by an annual 5.45% to 419,142 visitors in Q3/18. In fact, geopolitical tensions arose between Lebanon and the KSA particularly following the Prime Minister Hariri crisis in November 2017. The developments since weighed down on the number of Arab incomers in general, and on Saudis, Emiratis and Kuwaitis in particular. As such, the number of tourists coming from Saudi Arabia retreated by a yearly 18.06% to 44,369 by Sept. 2018. Similarly, tourists from the United Arab Emirates and Kuwait slumped by 20.98% and 14.35% y-o-y to 1,296 and 29,930 over the same period. In addition, visitors from Iraq slipped by yearly 10.58% to reach 161,228 tourists, respectively, in Q3/18. On the counterpart, European tourists (which grasped 35.70% of total tourists) added a yearly 9.52% to 537,846 travelers in Q3/18. In details, the number of French and German visitors increased by 6.58% y-o-y and 4.18% y-o-y, to 139,620 and 82,876 tourists, respectively. By the same token, British, Turkish and Italian tourist arrivals added 12.25%, 6.65% and 6.98% annually, to settle at 60,705 travelers, 23,389 and 27,295 visitors, respectively. Meanwhile, tourists from Sweden slipped by a yearly 4.89% to 30,469 travelers over the same period. As for American tourists, (19.1% of total tourists), their number increased by 8.68% y-o-y to 287,887 visitors by September 2018 owing it to the 6.88% and 11.32% annual upticks recorded in the number of visitors coming from the USA and Canada, to reach 153,616 and 101,098 visitors, respectively. (MoT 18.10)

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5.5 Jordan’s Trade Balance Deficit Down 3.7% in First 8 Months of 2018

Jordan’s balance of trade deficit for the first eight months of 2018 fell by 3.7%, driven by higher national exports and lower imports, latest figures showed. According to data from the Department of Statistics, the total exports during the same period amounted to JD 3.555 billion with an increase of 2.9%, compared to the same period in 2017.

National exports during the first eight months of 2018 stood at JD 2.999 billion with an increase of 2.6% compared to the same period last year. The value of re-exports reached JD564 million during the first eight months of this year, an increase of 4.5% compared to the same period of 2017. Imports were at JD9.949 billion during the first eight months of 2018, down by 1.3% compared to the same period of 2017. The total export coverage of imports reached 37.8% during the first eight months of 2018, the coverage rate was 36.2% during the same period of 2017. (Petra 22.10)

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5.6 Germany Allocates €462.12 Million to Support Jordan

The German government on allocated €462.12 million in new aid, grants and soft loans to finance development projects in Jordan and support Syrian refugees. The Ministry of Planning and International Cooperation said that the annual Jordanian-German government talks on development cooperation for 2018 led to the signing of a memorandum to allocate the funding.

The new aid was distributed to €291.8 million to fund vital sectors through grants, technical assistance and soft loans, of which €164 million would be grants to support various sectors such as water and sanitation, the environment, solid waste management, education, vocational training and technical education, €25.8 million in technical assistance, and €102 million in very concessional loans to support water, sanitation and to enhance energy efficiency in the water sector. Some €73.32 million was allocated to support Syrian refugees and host communities through UN organizations and NGOs, and €86 million as a soft loan to support the public budget and support economic reforms in Jordan. (Petra 23.10)

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►►Arabian Gulf

5.7 GCC Forecast to Enjoy 125% Growth in Russian Tourists by 2023

Russia continues to be one of the top 10 source markets for the UAE, with 530,000 Russian visitors entering the UAE in 2017. The number of Russian tourists travelling to the GCC is expected to increase 125% from 933,000 in 2018 to 2.1 million in 2023. The latest research published by Colliers International predicts the increase in Russian tourists to the GCC to create an extra 2.9 million room nights over the coming five years.

It said Russia’s links with the GCC have strengthened in recent years due to the introduction of additional airline routes, relaxed visa regulations for Russian nationals, the oil price recovery and stabling of value of the Russian ruble.

Russia continues to be one of the top 10 source markets for the UAE, with 530,000 Russian visitors entering the UAE in 2017, a 121% increase from the previous year. This increase stemmed from the UAE’s introduction of visas on arrival for Russian tourists last year. Colliers International expects this trend to continue in 2018, with 895,700 Russian visitors expected, an increase of 69% from 2017.

Supporting this demand, in June Emirates announced a third daily flight to Moscow, while in September the airline confirmed that it would be the first to fly an A380 to St Petersburg. Etihad Airways and flydubai have also increased their flights between the UAE and Russia, with flydubai twice extending its Russian network in 2017, adding flights to Makhachkala, Voronezh and Ufa, and daily flights to a second airport in Moscow – Sheremetyevo International.

While the UAE is expected to account for the majority of Russian arrivals in 2018, Saudi Arabia witnessed the highest compound annual growth rate (CAGR) between 2013 and 2018, at 20% compared with 17% for the UAE. Despite the UAE and Saudi Arabia leading comparative growth, Oman witnessed an increase of 11% between 2013 and 2018, while Kuwait experienced an aggregate growth rate of 7%. (AB 24.10)

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5.8 MHI Successfully Launches UAE’s KhalifaSat Satellite

Japan’s Mitsubishi Heavy Industries successfully delivered UAE Mohammed bin Rashid Space Centre’s (MBRSC) KhalifaSat satellite into orbit on 29 October via the H-IIA launch vehicle F40. The launch vehicle trajectory was executed as planned, and at about 24 minutes after liftoff, separation of the KhalifaSat satellite was confirmed. This mission was performed along with Japan Aerospace Exploration Agency’s (JAXA) Greenhouse gases Observing SATellite-2 “GOSAT-2” satellite.

KhalifaSat is the first national satellite manufactured by the UAE, thus the mission should prove to be a great step towards UAE’s mid-and-long term plans in government space activities and industries. Additionally, MHI holds the launch service contract for the Emirates Mars Mission (EMM spacecraft, planned to be launched in 2020), through which it hopes to build upon a strong and lasting relationship with the MBRSC and UAESA (UAE Space Agency).

KhalifaSat is one of the most technologically advanced remote-sensing observation satellites, with five patents registered. The images provided by the satellite will be used in urban planning and management, ensuring the effective optimization of land use and realistic infrastructure proposals. The images will also be used to develop detailed maps of targeted areas and monitor major engineering and construction projects. In the field of environmental protection, KhalifaSat will monitor environmental changes locally and internationally to support global efforts to preserve the environment. The satellite is also expected to provide detailed imagery of the ice caps at the North and South Poles, helping to detect the effects of global warming. (MHI 29.10)

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5.9 UAE Workforce Comprised of 91% Expats

Based on the surveys and findings of various agencies, an expert pointed out that the non-nationals in the GCC workforce are estimated to comprise 75% of workers, with the UAE at the largest number of expats in its workforce at 91%. In 2018, nationals formed just 8% of the UAE workforce. The number is projected to further dip to 6% in 2020 and to 3% by 2030. According to government statistics, the employment of nationals remains at less than 2% in the private sector, which comprises more than 62% of the total jobs in the country. Additionally, jobseekers have increased from 30,000 in 2006 to 36,000 in 2018.

Jobseekers in the GCC stand at an average of 6.1%: Oman and Bahrain at 15%, Saudi Arabia at 11.8%, the UAE at 4.2%, Kuwait at 4.1% and the lowest in Qatar at 1.5%. The total population of the GCC has surpassed over 54 million in 2018 and is expected to grow by nearly 12 million in 2030. GCC states need to create 500,000 top private jobs annually at twice the present salaries. (KT 25.10)

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5.10 Dubai Picked to Host First Overseas Russian Innovation Hub

Dubai Internet City (DIC) has signed an agreement with the Russian Export Center (REC) to launch the first Russian Center for Digital Innovations and Information and Communication Technologies outside of Russia in Dubai. The center is the first of four global centers planned, and the first commitment to investment promotion of this scale by Russia abroad, a statement said. The opening of the center comes at a time when the UAE and Russia reported growth in bilateral trade between the countries to $1.2 billion in 2017.

Leaders of both countries reviewed bilateral relations, discussed cooperation, and signed a new strategic partnership earlier this year. In addition to opening the center, the Russian Export Centre and DIC will jointly work to support Russia and UAE-based technology companies of all sizes, including start-ups and entrepreneurs and further support DIC’s commitment to provide a thriving and nurturing ecosystem for companies to thrive in. (AB 17.10)

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5.11 RTA & du to Add Free Wi-Fi to All Dubai Taxis

Dubai’s Roads and Transport Authority (RTA) and telecom firm du are set to embark on a joint project to fit all taxis in Dubai – about 10,800 cabs – with free Wi-Fi. The entities have signed a cooperation agreement on the sidelines of GITEX 2018, saying the deal demonstrated their commitment to support the efforts of ranking Dubai as the smartest and happiest city in the world. “According to the agreement, du will start fitting the required devices to taxis. All fleet vehicles of the six taxi franchise companies operating in Dubai will be covered by the service within one year from the date of signing this agreement, said the CEO of RTA’s Public Transport Agency. The Wi-Fi service is also available at more than 400 hotspots in the UAE including the Dubai Metro, Dubai Tram, shopping centers, Emaar Boulevard Downtown and the Global Village. (AB 18.10)

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5.12 WEF Says Saudi Arabia Leads GCC in Economic Stability

Saudi Arabia lead the list of the region’s country as the most stable economy according to the World Economic Forum’s global competitiveness index for 2018. The Saudi kingdom was also ranked 39 out of 140 economies, showing progress, its best since 2012. The kingdom advanced two ranks in the Global Competitiveness Index compared to last year report. The report gives decision makers a full score of confidence in the stability of the Saudi economy and its ability to withstand external challenges and enhance sustainable growth opportunities.

Among the countries in the region, the Global Report for 2018 gave Saudi Arabia, the UAE and Kuwait a full score in the macroeconomic stability index by 100%. The World Economic Forum’s Global Competitiveness Index 4.0 is a composite indicator that assesses the set of factors that determine an economy’s level of productivity- widely considered as the most important determinant of long-term growth. The GCI 4.0 framework is built around 12 main drivers of productivity – institutions, infrastructure, technological readiness, macroeconomic context, health, education and skills, product market, labor market, financial system, market size, business dynamism and innovation. (Al Arabiya 17.10)

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5.13 Saudi Arabia’s Recovery Gains Pace with Higher Consumer Spending

Latest macroeconomic indicators from Saudi Arabia points to a sustained recovery in the economy supported by improving consumer spending, corporate and banking sector earnings and gains in government revenues, according to analysts. A recent analysis from Arqaam Capital showed the Saudi Kingdom witnessed strongest consumer spending numbers up 9%, year on year, in the third quarter of this year more than expected after a weak first half of 2018.

The International Monetary Fund (IMF) has forecast a real GDP growth of 1.9% in 2018, with non-oil growth strengthening to 2.3%. The pickup in GDP growth follows a negative growth of 0.9% in 2017. GDP growth is expected to pick up further over the medium-term as the reforms take hold and oil output increases. The fiscal deficit is projected to narrow to 4.6% of GDP in 2018 from an estimated 9.3% last year. Higher exported oil, domestic energy, and non-oil revenues more than offset additional capital spending, compensatory payments to households through the citizens’ accounts, and the cost of the January Royal Decree, which introduced monthly allowances for public sector workers, retirees, students, and those on social benefits through end-2018 (1.8% of GDP).

Latest data showed aggregate consumer spending as indicated by point of sales (POS) and ATM withdrawals registered a 16% year on year growth in September and 9% in the third quarter of 2018 compared to 5% in the second quarter over the first quarter. The IMF estimates non-oil growth to strengthen to 2.3% this year supported by higher on and off-budget fiscal spending and higher oil prices, although rising interest rates could act as a drag. (AB 29.10)

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5.14 Saudi Arabia Pledges $3 Billion to Support Pakistan’s Economy

On 23 October, Saudi Arabia pledged $3 billion to Pakistan as the South Asian country battles a balance of payment crisis. It also agreed to provide up to another $3 billion on deferred payment for import of oil, the statement added. The agreement came between the two countries during a visit by Prime Minister Imran Khan to Riyadh where he met King Salman bin Abdulaziz. Khan also attended a Saudi Arabian investment conference where the new Pakistani leader launched a charm offensive targeting potential investors as Pakistan continues to seek funding to plug its deteriorating finances.

It was also agreed that a one year deferred payment facility for import of oil, up to $3 billion, will be provided by Saudi Arabia. This arrangement will be in place for three years, which will be reviewed thereafter.

Since taking power in August Khan has also sought loans from allies such as China and Saudi Arabia, promised to recover funds stolen by corrupt officials and embarked on a series of high-profile populist austerity measures. But help has been in short supply and economists’ warnings have grown increasingly urgent. The Saudi pledge comes days after Pakistan’s central bank warned inflation could double in the coming year — hitting 7.5% — while the country’s growth target rate of 6.2% would likely be missed.

Pakistani Finance Minister Umar warned the country was fast heading towards bankruptcy. However, he promised to end the country’s reliance on IMF bailouts to shore up its shaky economy, as officials prepared to negotiate a new loan. An IMF team is set to arrive in Pakistan in early November to begin negotiations. (AB 24.10)

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►►North Africa

5.15 Egypt’s Trade Volume Amounts to $67.63 Billion Over First 9 Months of 2018

Egypt’s trade volume from January to September 2018 hit $67.63 billion, up from $59.82 billion during the same period the previous year; a rise of 13%, according to a report released on 28 October by the General Organization for Import and Export Control (GOEIC). The report said that Egypt’s non-petroleum exports during the first nine months of the year reached $15.514 million, compared to $16.605 million during the same period the previous year; a rise of 11%. Egyptian exports during September 2018 rose by 20% to hit $1.933 billion compared to $1.613 billion during the same month last year. Imports recorded a drop of 13% to register $4.206 billion compared to $4.860 billion in September 2017.

The report added that the countries of the League of Arab States take the lead when it comes to imports from Egypt at $6.735 billion from January to September 2018, followed by the EU countries at $5.528 billion. Egypt exports to the United States in the same period were worth $1.185 billion, while to non-Arab African countries $1.123 billion.

When it comes to the most important markets Egypt sent exports to in the past nine months, the UAE lead at $1.576 billion, followed by Turkey at $1.49 billion, while the United States came in third at $1.185 billion. Italy came in fourth place with exports equal to $1.17 billion, followed by Saudi Arabia at $1.05 billion. (Ahram Online 28.10)

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5.16 Cairo Tops the List for the Fastest Growing City in Tourism

According to the latest City Travel and Tourism Impact Report published by the World Travel and Tourism Council, Cairo tops the list for the fastest growing cities in travel and tourism activity, constituting 34% of the country’s GDP in 2017. This rapid growth was achieved after a recovery from a long period of decline following the Arab Spring and frequent terror attacks, including the Russian Metrojet plane crash in 2015. However, while tourism is on the rise, it remains well below its 2010 peak, when an estimated number of 14.7 million tourists visited Egypt and generated $12.5 billion in revenue.

The tourism sector in Egypt faced a huge setback following the January 2011 revolution, seeing a 37% decline in visitors. However, things started to take a positive turn as the United Nations World Tourism Organization reported in 2017 that Egypt is the second fastest growing destination in the world. Currently, Cairo is taking several measures to boost the tourism sector, from attempts to eliminate terrorism in the Sinai Offensive launched this year and announcing new projects, such as the new administrative capital and the grand new Egyptian museum expected to open in early 2019. (WTTC 26.10)

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5.17 Morocco’s Privatization to Cut Deficit to 3.3% of GDP in 2019

Moroccan Economy Minister Benchaaboun announced that Morocco will privatize some public companies to help reduce the budget deficit to 3.3% of GDP in 2019. The move will also generate MAD 8 billion, Minister Benchaaboun said in a parliamentary session. The decision comes to improve the governance of public companies and to increase state resources. Benchaaboun estimated that the treasury’s deficit in 2018 would end at 3.8% instead of 3% of GDP as stipulated in the finance bill.

Without revenue from privatization, the budget deficit is expected to stay almost flat at 3.7% from a forecasted 3.8 this year. However, the minister did not reveal which companies the government plans to privatize.

According to Al Massae, the National Railway Office (ONCF) and the Moroccan Airports Authority (ONDA) may be privatized. Benchaaboun also stated that increasing taxes on tobacco consumption will generate additional revenue estimated at MAD 1.2 billion in 2019.

The government has also considered other measures to raise revenues. The 2019 Finance Bill will levy an additional 2.5% corporate income tax on companies with annual profits equal to or more than MAD 40 million. The government believes it will generate MAD 2 billion in 2019-2020 to be used as a “solidarity contribution” to reduce social disparities. Benchaaboun also noted the impact that rising oil and gas prices will have on financial balances. The economy, he added, requires measures to mobilize resources, control spending and establish mechanisms to reduce the burden on the investment budget.

The government allocated MAD 17.67 billion for the subsidy fund to subsidize butane gas, sugar and flour in 2019. The significant increase of MAD 4.65 billion from the 2018 budget can be explained by the increase of oil prices at the international level. (MWN 23.10)

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5.18 First 8 Months of 2018 See 8.7 Million Tourists Visit Morocco

Morocco received 8.7 million tourists from January to August, according to statistics released on 30 October by the Ministry of Tourism. Tourist arrivals in Morocco rose 8% for the eight month period from the same period last year. Foreign tourist numbers were up 14% while returning Moroccans increased by 2%. Tourist arrivals from Italy made the most considerable increase between the first eight months of 2017 and 2018, rising 14%. German tourist numbers increased 10%, French 7% and Dutch 6%.

Morocco earned $4.88 billion in tourism revenue in the period, compared to $4.82 billion during the same period in 2017. Counting overnight stays at hotels and guest houses, Marrakech, Casablanca, and Agadir were tourists’ top destinations. Along with the traditional European market, the number of Asian visitors, mainly from China, hiked significantly. The increase follows Morocco’s exemption of Chinese travelers from needing to apply for visas in 2016. Morocco’s 2020 vision, presented by King Mohammed VI in 2010, aims to double the tourism sector and set the country among the top tourist destinations in the world. (MWN 26.10)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Greece is the Eurozone’s Leader in Indirect Taxation

Greece has the highest indirect taxes in the Eurozone and is showing no signs of reducing them in 2019. This ominous conclusion for taxpayers stems from a comparison of the 2019 draft budgets submitted to the European Commission by the 19 members of the Eurozone. According to the figures, special consumption taxes and the value-added tax will amount to 17.3% of Greek GDP in 2019, putting the country in the top spot in the Eurozone, followed by France and Cyprus.

Greece’s absence of tax justice is also illustrated by another statistical finding: The country has the largest spread between returns of direct and indirect taxation, with direct tax revenues expected to come to 10% of GDP next year, 7.3% below indirect tax takings. No other Eurozone country will have such a wide spread, which is actually widening as in 2018 it is projected to come to 6.8%.

In the sum of taxes and social security, Greece ranks fifth among the Eurozone member-states for 2019, only behind Belgium, France, Finland and Italy. The difference is that citizens in the other states get a lot more back: While Finland spends 2.1% of its GDP to protect its unemployed, Greece contributes just 0.6%. (eKathimerini 21.10)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Israel Ended Daylight Savings Time on 28 October

Israel’s winter began officially at 2:00 on 28 October as clocks were turned back one hour, marking the end of daylight savings time. Daylight savings time will return officially on 29 March 2019. The change in Israel coincides with the EU and the Palestinian Authority, but not the US, which changes on 4 November.

In 2013, the Knesset passed legislation extending daylight savings time from the last Sunday in March to the last Sunday in October. Before that, standard time would begin the Saturday night before Yom Kippur, so that the day’s fast, which ended at nightfall, would end an hour “earlier.”

Because the Hebrew calendar is lunar, Yom Kippur can fall between mid-September and mid-October, which used to mean that Israelis returned to standard time as much as a month and a half before most other countries, where daylight savings time ends on 1 November. As a result, the issue of the seasonal time transition became contentious among Israelis, and was caught up in political tensions between religious and secular political parties. (ToI 25.10)

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7.2 Israel’s National Anthem Played in UAE Following Israeli Judoka Win

Israel’s Culture and Sports Minister Miri Regev fought back tears as the Israeli national anthem played for the first time in the United Arab Emirates – a country that does not recognize Israel – after Israeli judoka Sagi Muki won gold in Abu Dhabi on 28 October. Muki, the current European champion, won the men’s under-81 kilogram category in this year’s Abu Dhabi Grand Slam, just as Israeli Tal Flicker did at the same event in 2017. But unlike last year, when Israel’s competitors appeared under the International Judo Federation flag rather their own, this year the Israeli competitors appeared with the Israeli flag stitched to their uniforms. After downing his Belgian rival to win the gold medal, Muki pointed proudly to the Israeli flag on his judo uniform. This year’s event was a significant change from last year, when UAE organizers singled Israel out with a ban on displaying its flag or playing its anthem during the tournament.

The Israeli national anthem Hatikvah was played for Muki’s gold win – the first ever sounding of the Israeli anthem in the Arab country. Regev stood next to the podium as the anthem played and wept visibly while singing along. Israeli television channels broke into their regular broadcasts to show the medal ceremony live. Regev credited the IJF’s president, Austria’s Marius Vizer, for influencing the organizers to change their policy on Israeli symbols. (Various 29.10)

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*REGIONAL:

7.3 Jordan Changed Its Clocks to Wintertime on 26 October

Jordan changed over to wintertime on Friday, 26 October, according to a Cabinet decision. Clocks were set back by 60 minutes at midnight Thursday, making Jordan two hours ahead of Greenwich Mean Time. Under the Cabinet decision taken in 2013, Jordan switches to wintertime on the last Friday of October every year. (Petra 22.10

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7.4 Moroccans are the Largest Foreign Student Community in France

The French Agency for the Promotion of Higher Education, Hospitality and International Mobility, “Campus France,” has ranked Moroccans as the largest foreign student community in France during the 2017/2018 academic year. According to the statistics, the number of Moroccan students enrolled in French higher education institutions is 39,855 students. During the 2016/17 academic year, the number of Moroccan students in France stood at 38,002, or 43.9% of foreign students. It reflects an increase of 17% compared to the 2011 – 2016 period. Algeria follows Morocco, with 30,521 students, followed by China with 30,071 students, Italians with 13,341 students and Tunisia ranked 5th with 12,842 students.

France ranks fourth among the countries that host international students, behind the US, the UK and Australia, and ahead of Germany. (MWN 14.10)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Positive Results of Orthopedic Treatment With ApoGraft Enriched Stem Cells Derived

Cellect Biotechnology has achieved positive results on the use of human fat derived stem cells (mesenchymal) treated with the ApoGraft process in orthopedic treatments of animals. The study used ApoGraft enriched human mesenchymal stem cells at the time of surgery with the aim of improving the post-surgery healing process. Preliminary evidence of enhanced strength on biomechanical testing and significantly improved rotator cuff repair in animals treated with ApoGraft-treated human fat-derived stem cells (ASCs) have been achieved with shorter incubation compared to standard preparations of adipose derived stem cells.

Until this study, ApoGraft was mainly used on blood cells (hematopoietic) and, in studies to date, has proven to be beneficial in stem cells selection of bone marrow (including for treatment of cancer by Bone marrow transplantation, and autoimmune diseases). The new study has shown beneficial effect of the Apograft treated cells in an orthopedic model. This study further supports previous reported data showing activation of MSCs, as measured by significant increase in proliferation, the ability of those cells to create colonies and differentiate into bone after only a short incubation.

Kfar Saba’s Cellect Biotechnology has developed a breakthrough technology for the selection of stem cells from any given tissue that aims to improve a variety of stem cell-based therapies. The Company’s technology is expected to provide research, hospitals and pharma companies with the tools to rapidly isolate stem cells in quantity and quality allowing stem cell-based treatments and procedures in a wide variety of applications in regenerative medicine. The Company’s current clinical trial is aimed at bone marrow transplantations in cancer treatment. (Cellect Biotechnology 18.10)

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8.2 Turning Apple Waste into a Superfood

Each year, more than 150 thousand tons of apples are picked in Israel, but 10% of the crop is considered waste, due to appearance, size, dents and damage as a result of falling prematurely from orchard trees. This causes huge economic damage of NIS 25 million a year after these defective-looking apples are marketed to wholesalers or to the juice industry, at a seriously low prices that are not economical for the farmers.

New research currently being conducted by at Tel-Hai College and at Kiryat Shmona’s MIGAL Galilee Research Institute has found that it is possible to use this waste to create high-quality “apple powder” with surprising nutritional advantages putting it in the category of “superfood” products.

The apples go through a long process that includes grinding, drying through two different processes (oven or freeze-dried) and vacuum storage. In the research process, comparisons were made among a number of different kinds of “apple flour” taken from five different kinds of granny smith apple waste: grade A – with no damage, intended for stores; grade B – with minimal damage (marks), intended for markets; grade C – with mechanical damage and sun spots, intended for animal feed; grade D – with much damage and marks, intended for companies that use it for processed food; and grade E – apples that fell in the orchard and did not reach the sorting stage in the packing house, but which are still edible.

Examination of the different grades of apples was intended to map levels of waste that are usable for creating the powdered superfood with high nutritional quality, through comparison among five apple powders in different quality categories and examination of the drying process. It was found that there is no difference between powder that is created from high quality apples (grade A) and powder created from waste apples. In addition, it was found that the technology of freeze drying is preferable to heat drying technologies because it better preserves the natural nutritional value of the fruit. According to the research findings, “apple flour” from apple waste has a great deal of nutritional value, identical to powder made from grade A apples!

The powder made from waste apples has 600 ml of vitamin C, three times the amount found in a guava, which is considered to have record high levels of vitamin C, and ten times more vitamin C than orange juice! In addition, the powder has a high quantity of 25% nutritional fiber and high anti-oxidant properties. (IsraelAgri 22.10)

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8.3 FSD Pharma Signs Binding LOI to Acquire Therapix Biosciences

Ontario’s FSD Pharma announced the signing of a binding letter of intent (LOI) to acquire Therapix Biosciences, effective 22 October 2018. The Transaction combines two highly-complementary businesses and creates a medical cannabis industry innovator focused on the research and development of advanced cannabinoid treatments. Therapix Biosciences shareholders will receive $48 million of FSD stock upon closing of the Transaction. The terms of the LOI will be superseded by a definitive agreement, which FSD Pharma and Therapix intend to execute within 30 days.

The intended acquisition of Therapix Biosciences at this time is a pivotal step in the evolution of FSD by entering the high-value medical cannabis market. In addition to growing products for the direct to consumer retail cannabis market in Canada, they are now developing a new class of novel cannabinoid-based treatments for several central nervous system disorders, including chronic pain, fibromyalgia, irritable bowel syndrome and several other disease areas. With this acquisition, FSD Pharma is signaling its commitment to furthering very high-value pharmaceutical R&D clinical programs centered on cannabinoid molecules, a number of which are actively under way at several distinguished medical institutions across the globe, including among others, the Therapix’ investigator-initiated Phase IIa study at Yale University Medical Center in the U.S. for Tourette syndrome Program, the preparations for commencing anticipated subsequent Phase IIb studies at the Hannover and Munich University Medical Schools in Germany for Tourette syndrome program, and collaboration with Assuta Medical Centers in Israel to develop therapeutic products in the field of sleeping disorders.

Givatayim’s Therapix Biosciences is a specialty clinical-stage pharmaceutical company led by an experienced team of Senior Executives and Scientists. Their focus is creating and enhancing a portfolio of technologies and assets based on cannabinoid pharmaceuticals. With this focus, the company is currently engaged in the following drug development programs based on repurposing an FDA-approved cannabinoid: THX-110 for the treatment of CNS disorders, THX-120 for the treatment of sleep disorders and the treatment of pain; THX-130 for the treatment of Mild Cognitive Impairment (MCI) and Traumatic Brain Injury (TBI); and THX-150 for the treatment of infectious diseases. (FSD 22.10)

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8.4 Clew Medical Raising $20 Million

Netanya’s Clew Medical is currently in the final stages of raising $20 million and has signed an agreement with Sheba Medical Center at Tel HaShomer. Clew has developed an analytics platform for predicting at an early stage, life threatening complications in intensive care.

When a body is in distress, it gradually shuts down all systems that are not vital, in a process known as systems collapse. The aim is to protect the most vital systems, the brain and the heart, but the systems that collapse aren’t always restored to full functioning and in all likelihood won’t be restored. So if the patient reaches the stage, after the appearance of clinical indications, of systems collapse and the kidneys, pancreas, lungs and liver are not functioning. Sometimes the systems collapse could have been prevented if it was identified two or three hours ahead of time.

Clew’s product has already been used in trials at Ichilov Hospital in Tel Aviv and several US hospitals and will now also be used at Sheba Medical Center in Tel Hashomer. Marketing approval and regulatory matters must still be finalized, but it is hoped that the system will be available as a product from next year. Clew has raised $10.5 million to date and as mentioned has almost raised another $20 million. (Globes 22.10)

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8.5 Teva & New Jersey Governor Formalize North America Headquarters Move in Israel Ceremony

Teva Pharmaceuticals executives formalized with New Jersey Governor Murphy Teva’s commitment to consolidate its North America Commercial business areas into New Jersey (NJ) on 21 October at the company’s global headquarters in Petah Tikva, Israel.

Announced earlier this year as part of a global restructuring process, Teva will establish its North America headquarters in Parsippany-Troy Hills, including more than 1,000 high-wage jobs and the transfer and creation of more than 800 positions. Teva accepted an offer of 10-year, $40 million tax savings incentives from the NJ Economic Development Authority to move forward with its plan to negotiate a lease for office space in the Parsippany-Troy Hills area.

This ceremony marks another step forward in Teva’s global restructuring efforts to drive savings, restore financial security and stabilize its business. Reducing the number of sites is part of Teva’s strategy to unify and simplify the organization, as well as improve productivity and efficiencies.

Teva Pharmaceutical Industries is a global leader in generic medicines, with innovative treatments in select areas, including CNS, pain and respiratory. Headquartered in Israel, with production and research facilities around the globe, Teva employs 45,000 professionals, committed to improving the lives of millions of patients. (Teva 21.10)

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8.6 NRGene and Kayagene Collaborate to Improve Cannabis Breeding and Seed Production

California’s Kayagene, an innovative cannabis breeding company, and NRGene are collaborating on research to enhance Kayagene’s breeding capabilities to develop improved cannabis varieties and more robust seed production. The non-exclusive partnership between NRGene and Kayagene will accelerate development of cannabis varieties for hybrid seed production through stabilized lines. The companies will be working in tandem to sequence and assemble multiple genomes of diverse cannabis lines to enhance valuable traits, related to cultivation practices, overall cannabinoid profiles, and yields.

NRGene’s DeNovoMAGIC 3.0 is used to develop high-quality, comprehensive genome assemblies of several varieties of cannabis to uncover and utilize the genetic variation of the species in a breeding program. NRGene is a global leader in crop genomics and recently entered the cannabis industry to leverage its vast experience in crops to advance cannabis breeding.

The genome assemblies will increase genetic gain using markers in selecting for valuable traits while reducing the time and space required for each cycle in the breeding program and providing means to validate and protect the IP of the new varieties. The varieties of Kayagene will be tailored to customers’ needs, including healthier, hardier plants that are optimal for production, as well as custom cannabinoid and terpenoid profiles. These metabolite profiles are key for targeting specific therapeutic uses, such as pain relief and sleep support, as well as providing unique flavor profiles for energy drinks, edibles, and recreational products.

Ness Ziona’s NRGene is a genomic, big data company delivering cutting-edge software and algorithms to their clients to facilitate the modern genomics-based research that is revealing the function, complexity, and diversity of human, plant, and animal genomes that supports the most advanced medical research and sophisticated breeding programs. NRGene tools have already been employed by some of the leading agribiotech companies worldwide, as well as the most influential research teams in academia. (Kayagene 22.10)

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8.7 Cellect Breakthrough for Industrialization of Apotainer Stem Cell Product Line

Cellect Biotechnology has successfully developed for industrialization its first in kind new technology as an integral part of Cellect’s ApoTainer. The new technology utilizes FasL-coated magnetic beads for maximizing efficacy and scalability of stem cell-based products’ manufacturing. The Apotainer improves the uniformity and hence quality of the outcome thereby supporting the safety and efficacy of raw material for all cell therapy.

During the last 6 months, the Cellect team was able to optimize the beads size, coating technology, elimination of the release of FasL into the medium, all while preserving the biological activity observed in Cellect’s ongoing human clinical trial. As previously reported, pre-clinical proof of concept testing of the ApoTainer has shown that the use of FasL-coated magnetic beads significantly increases the active surface allowing a dramatic increase of interactions between the selecting agent and the cells. Further, such testing showed that the outcome increases specific elimination of certain (but not all) of the non-stem cells while full preservation of the number and function of the stem and progenitor cells.

The enhancement of the ApoTainer with the Fas-L-presenting magnetic beads is designed to replace highly complex and expensive procedures currently used by laboratories (e.g. T cells depletion), with a significantly more effective process at a fraction of the time and cost. Utilizing the ApoTainer, Cellect expects blood stem cell donation to be transplantable within less than 6 hours from donation through a simple process performed bedside instead of undergoing a lengthy laboratory procedure in a highly specialized setting. The standard medical procedure for reaching enriched stem cells currently costs tens of thousands of dollars and produces significant adverse effects.

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8.8 CollPlant Agreement for 3D Bioprinting of Solid-Organ Scaffolds for Human Transplants

CollPlant and Silver Spring, Maryland’s United Therapeutics Corporation announced that they have entered into a license, development and commercialization agreement for 3D bioprinted lung transplants. The agreement combines CollPlant’s proprietary recombinant human collagen (rhCollagen) and BioInk technology with the regenerative medicine and organ manufacturing capabilities of United Therapeutics.

Under terms of the agreement, CollPlant granted United Therapeutics, through its wholly owned organ manufacturing and transplantation-focused subsidiary Lung Biotechnology PBC, an exclusive license to its technology for the production and use of rhCollagen-based BioInk for 3D bioprinted lung transplants throughout the universe. CollPlant will manufacture and supply BioInk for a few years to meet development process demand, and will provide technical support to United Therapeutics as it establishes a U.S. facility for the manufacture of CollPlant’s rhCollagen and BioInk. In addition to the initial focus on lung manufacturing, the agreement grants United Therapeutics an option, in its sole discretion, to expand the field of its license to add up to three additional organs.

Under financial terms of the agreement, once effective, CollPlant will receive an upfront payment of $5 million and milestone payments of up to $15 million based on the achievement of certain operational and regulatory milestones related to the development of manufactured lungs. The agreement also provides for option exercise payments of up to $9 million, and additional developmental milestone payments of up to $15 million if United Therapeutics elects to develop manufactured organs other than lungs using CollPlant’s technology.

Ness Ziona’s CollPlant is a regenerative medicine company focused on 3D bioprinting of tissues and organs, developing and commercializing tissue repair products for orthobiologics, and advanced wound care markets. The Company’s products are based on its rhCollagen (recombinant human collagen) that is produced with its proprietary plant-based genetic engineering technology. (CollPlant 22.10)

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8.9 Regentis Biomaterials Expands SAGE Clinical Trial of GelrinC for Knee Pain

Regentis Biomaterials has expanded the SAGE clinical trial of GelrinC for the treatment of articular cartilage damage in the knee to 11 U.S. sites. GelrinC is an investigational device being evaluated as a treatment to help the body regrow cartilage in the knee.

The SAGE study is an FDA Investigational Device Exemption (IDE) clinical study comparing GelrinC to microfracture, the current standard of care treatment for damaged knee cartilage. The multi-center Phase III pivotal study will enroll 120 patients. All patients who meet study requirements and agree to enter the trial are provided GelrinC as treatment, and their results will be compared to raw level historical data of a microfracture control arm.

In the U.S., GelrinC from Regentis Biomaterials is an investigational device for patients with articular cartilage damage in their knee. GelrinC is composed of a synthetic material called polyethylene glycol (PEG) and a structurally modified form of human fibrinogen, a protein which in its native form assists healing processes. PEG and native human fibrinogen have been used individually in medical products for many years with excellent results. GelrinC’s unique mode of action relies upon its ability to be implanted as a liquid so that it completely fills the defect, and then be cured into a gel that enables the body’s own stem cells to settle on its surface. Over a period of six to 12 months, the GelrinC is gradually resorbed by the body and replaced by new cartilage tissue. Preliminary clinical trials in Europe have indicated that this regenerated tissue provides excellent improvement in pain and function.

With offices in Princeton, New Jersey, and Or Akiva, Israel, Regentis Biomaterials is a privately held company focused on developing and commercializing proprietary hydrogels for tissue regeneration. The technology was originally developed at Haifa’s Technion-Israel Institute of Technology. (Regentis Biomaterials 23.10)

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8.10 Wize Pharma Announces $4.45 Million Private Placement

Wize Pharma has entered into a securities purchase agreement with a group of investors, which will result in gross proceeds to Wize Pharma of approximately $4.45 million, before deducting placement agent fees and estimated offering expenses. The net proceeds of the offering are expected to be used for advancement of the Company’s development plans for its lead product, LO2A, including completing clinical studies. ThinkEquity, a division of Fordham Financial Management, acted as sole placement agent for the offering.

Hod HaSharon’s Wize Pharma is a clinical-stage biopharmaceutical company currently focused on the treatment of ophthalmic disorders, including dry eye syndrome (DES). Wize Pharma has in-licensed certain rights to purchase, market, sell and distribute a formula known as LO2A, a drug developed for the treatment of DES, and other ophthalmological illnesses, including conjunctivochalasis (CCH). (Wize Pharma 24.10)

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8.11 Alvit LCS Pharma Manufacturing Agreement with Bazelet

Israel’s largest medical cannabis company Bazelet signed a manufacturing and licensing agreement with Israeli medical cannabis pharmaceutical product developer Alvit LCS Pharma to manufacture, market and sell Alvit’s line of pharma grade medical cannabis products in Israel and the EU. These products include sublingual tablets, oral sprays, extended release, delayed release, and suppositories containing Bazelet’s proprietary and patent-pending active pharmaceutical ingredient (API). Bazelet will manufacture the products in its recently completed, state of the art, fully GMP compliant manufacturing facility, and expects to begin marketing the products in the first half of 2019. Bazelet and Alvit additionally signed a joint research and development agreement to develop a new pharmaceutical drug for the treatment of Inflammatory Bowel Disease (IBD) based on Bazelet’s API. Alvit will be responsible for researching and developing a pharmaceutical product based on Alvit’s unique drug delivery technologies and Bazelet’s API.

Even Sapir’s Bazelet is an Israeli medical cannabis company that provides medical cannabis products to its patients since 2014. The capacity of Bazelet’s new, state of the art manufacturing plant is large enough to supply the cannabis needs of 100,000 patients. Bazelet securely delivers its products to the homes of thousands of patients every month, and runs an in-house laboratory to analyze its products confirming their composition, quality, and reproducibility. Bazelet’s scientists have developed proprietary technologies for improved production and a range of new compositions of improved therapeutic efficacy. Bazelet’s intellectual property portfolio includes 18 families of patent applications.

Tel Aviv’s Alvit is an international leader in the development of products based on standardized cannabis extracts. Alvit’s products are differentiated by the fact that they have undergone clinical trials to prove their efficacy and bioavailability. These pharma grade, clinically tested products speak the language of doctors, allowing them to know how much cannabis is being delivered to the body, how much is being absorbed into the body, and for what duration it is effective in the body, providing them the knowledge they need to more effectively prescribe cannabis to patients. (Alvit LCS Pharma 24.10)

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8.12 89Bio Launches into Liver and Metabolic Disorders with $60 Million Series A Financing

89Bio has closed a $60 million Series A financing. The funding will be used to advance the company’s pipeline of biologic and small molecule drug candidates acquired from Teva Pharmaceutical Industries. The investment round was led by OrbiMed Israel, OrbiMed US, and Longitude Capital and joined by RA Capital Management and Pontifax. OrbiMed Israel and OrbiMed US founded 89Bio.

89Bio’s lead candidate for the treatment of NASH is BIO89-100 (formerly TEV-47948). Currently in Phase 1, BIO89-100 is a novel long-acting glycopegylated fibroblast growth factor 21 (FGF21) analogue that was developed using a proprietary glycopegylation technology to prolong the half-life and optimize the biological activity of native FGF21. In preclinical studies BIO89-100 demonstrated a long half-life, potentially enabling extended-interval dosing, and significant improvements in biomarkers such as body weight, blood glucose, and lipids. 89Bio also has an undisclosed preclinical compound with potential utility in the treatment of NASH and other related disorders.

89Bio is a privately held biopharmaceutical company building a pipeline of biologic and small molecule treatments for liver and metabolic disorders. The company’s lead product candidate for the treatment of NASH is BIO89-100. Currently in Phase 1, BIO89-100 is a novel long-acting glycopegylated FGF21 analogue. 89Bio is headquartered in San Francisco with R&D and operations in Herzliya, Israel. (89Bio 25.10)

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8.13 Gamida Cell Raises $50 Million in NASDAQ IPO

Gamida Cell announced the pricing of its initial public offering of 6,250,000 ordinary shares at a public offering price of $8.00 per share for aggregate gross proceeds of $50 million. All of the shares in the offering are being offered by Gamida Cell. In addition, Gamida Cell granted the underwriters a 30-day option to purchase up to 937,500 additional ordinary shares at the initial offering price, less underwriting discounts and commissions. Gamida Cell’s ordinary shares began trading on the Nasdaq Global Market on 26 October 2018, under the ticker symbol GMDA and the offering closed on 30 October, subject to customary closing conditions.

BMO Capital Markets and RBC Capital Markets are acting as joint book-running managers for this offering. Needham & Company and Oppenheimer & Co. are acting as co-lead managers for this offering.

Jerusalem’s Gamida Cell is a clinical stage biopharmaceutical company leveraging its proprietary technology to develop cell therapies that are designed to cure cancer and rare, serious hematologic diseases. Gamida Cell leverages its nicotinamide-, or NAM-, based cell expansion technology to develop a pipeline of products designed to address the limitations of cell therapies. Gamida Cell’s most advanced product candidate, NiCord, is a NAM-expanded cord blood cell therapy which has the potential to serve as a universal curative stem cell graft for patients who need a hematopoietic stem cell transplant, or HSCT. (Gamida Cell 26.10)

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8.14 FDA Grants Breakthrough Therapy Designation (BTD) for UroGen Pharma’s UGN-101 Cancer Treatment

UroGen Pharma announced that the U.S. FDA has granted Breakthrough Therapy Designation status to the Company’s lead product candidate, UGN-101, (mitomycin gel) for instillation. UGN-101 is currently in Phase 3 development for the treatment of patients with low-grade upper tract urothelial cancer (LG UTUC). Breakthrough Therapy Designation is designed to expedite the development and review of new drugs to treat serious or life-threatening conditions, so patients may have access to therapies through FDA approval as soon as possible. The FDA previously granted both Orphan Drug and Fast Track designations to UGN-101 for the treatment of LG UTUC.

LG UTUC is a rare malignant tumor of the cells lining the urinary tract. It most commonly presents in the elderly who also suffer from comorbid conditions such as hypertension, diabetes, obesity and the metabolic syndrome. No therapeutic agent has ever been approved to treat LG UTUC. The criteria for Breakthrough Therapy Designation require preliminary clinical evidence that demonstrates that use of the drug may result in substantial improvement on at least one clinically significant endpoint over available therapy. The Breakthrough Therapy Designation for UGN-101 is supported by data from the ongoing Phase 3 OLYMPUS clinical trial of UGN-101 for the non-surgical treatment of LG UTUC.

UGN-101 (mitomycin gel) for instillation is an investigational drug formulation of mitomycin in Phase 3 development for the treatment of low-grade (LG) upper tract urothelial cancer (UTUC). Utilizing the RTGel technology platform, UroGen’s proprietary sustained release, hydrogel-based formulation, UGN-101 is designed to enable longer exposure of mitomycin to the urinary tract tissue, thereby potentially enabling the treatment of tumors by non-surgical means. UGN-101 is delivered to patients using standard intravesical catheters.

Ra’anana’s UroGen Pharma is a clinical-stage biopharmaceutical company developing advanced non-surgical treatments to address unmet needs in the field of urology, with a focus on uro-oncology. UroGen has developed RTGel, a proprietary sustained release, hydrogel-based platform technology that has the potential to improve therapeutic profiles of existing drugs. UroGen’s sustained release technology is designed to enable longer exposure of the urinary tract tissue to medications, making local therapy a potentially more effective treatment option. (UroGen 30.10)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Kaymera Technologies to Expand Adaptive Mobile Threat Defense Footprint

Kaymera Technologies, the leader in high-end Mobile Threat Defense solutions, announced that BGZ BNP Paribas have chosen the Kaymera’s Adaptive Mobile Threat Defense Platform to help protect personal and business-related mobile data across its employee base and business partners.

Kaymera’s Adaptive Mobile Threat Defense Platform takes a holistic approach to organization level mobile security. It provides proactive protection and predictive intelligence to help organizations and their mobile users stay ahead of cyberattacks and improve their overall mobile security health. Using multi-layered threat identification and mitigation approach, together with a flexible product portfolio to match various organization segments’ sensitivity levels and deployment options, the Kaymera platform, leveraging years of vast experience in providing high-end mobile security to public sectors worldwide, can identify known and unknown threats, in real time, without infringing on end user experience or privacy. From military-grade mobile security solution designed to provide top level protection for high-risk employee segments, to application-based mobile security solution for BYOD (managed and unmanaged) governed by a centralized, cross product, management and monitoring capabilities, the Kaymera product portfolio is uniquely positioned to provide IT security professionals the most flexible, organization-centric mobile security structure.

Herzliya’s Kaymera was founded by veterans in the cyber security industry with in depth knowledge and expertise in mobile cyber security, cyber-attack and intelligence gathering techniques. Kaymera delivers the world’s most advanced mobile cyber threat defense technology, designed to protect organizations, governments and professionals against all types of mobile security threats. (Kaymera 18.10)

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9.2 Tactile Mobility Comprehensive Tactile Data Solution for Road Authorities

Tactile Mobility is demonstrating the feasibility and importance of combining vision-based data with tactile data in order to develop better and safer autonomous vehicles and cities. The first-of-its-kind tactile mapping solution for road conditions was on display at the NVIDIA GPU Technology Conference in Tel Aviv recently.

Tactile Mobility collects “first principle data”, such as wheel speed, wheel angle, RPM, paddle position, gear position and then analyzes it to yield actionable insights, like vehicle-road dynamics, the vehicle and the road profile, in real-time. Pairing tactile data collection with visual automotive data yields “first principle-based” mapping of the road conditions alongside enriched visual media for the end-user. The two modalities produce a more robust and reliable output vis-à-vis both mapping and real-time auto responses. The pairing of Tactile Mobility’s solution and the NVIDIA DRIVE compute platform will enable vital insights for road authorities and municipalities, i.e. real-time hazard detection and correction, as well as better informed road repair, that will improve urban planning, reduce road incidents, and build a smart city future.

Haifa’s Tactile Mobility is the world’s leading tactile data and sensing technology solution, enabling actionable insights for autonomous vehicles, municipalities, insurers and fleet managers. Tactile Mobility’s unique technology collects “first principle”, crucial, real-time data from vehicle sensors and turns it into actionable insights such as road quality, tire grip, vehicle weight and other vehicle- and road-specific models. Insights provided by Tactile Mobility greatly enhance vehicle intelligence, safety and dependability. (Tactile Mobility 18.10)

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9.3 Israel Develops Bomb-Detecting Robot to Save Soldiers’ Lives

Israel Aerospace Industries has completed the development of an autonomous system that can identify, locate and destroy improvised explosive devices (IEDs) and mines before troops reach them. The system is installed on a robotic platform made by IAI and integrates a combination of multiple sensors that detect IEDs which may be hidden in “complex areas.” The robotic engineering scout can be maneuvered autonomously without danger to troops, and can detect, engage and remove the IEDs by using a blade installed on the vehicle.

The robotic system enables faster, more efficient execution of missions without risk to human life. It combines a number of different detection devices capable of finding explosives on and under surfaces, and the engineering capabilities for neutralizing them. The system can be operated in any terrain and has a precision system that generates a real image of the area for its operator. The device will now be transferred for trial and evaluation purposes.

The system is part of the SAHAR IED detection family, which includes a number of robotic platforms that can locate hidden or buried explosives before clearing them. Each system includes the robotic platform, a control system and detection payloads. Last summer IAI announced that it had begun testing its Counter Improvised Explosive Device and Mine Suite (CIMS) mobile system, which can identify, locate and destroy improvised explosive devices and mines. Primarily intended for patrols during routine security missions on Israel’s borders, CIMS can be operated day or night and in any weather conditions and environment. A large, rectangular multi-sensor system is placed directly in front of armored vehicles, allowing it to search and destroy IEDs.

According to IAI, CIMS has a 270-degree visual radius. When an IED or mine is identified, the system alerts soldiers with warning sounds and indicators displayed on a screen. The system also includes a firing position from where troops can shoot at the explosive device to destroy it without having to leave the safety of their vehicle. (IAI 21.10)

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9.4 My Size & Lightspeed Provide Mobile Measurement Solution to e-Retailers Worldwide

My Size announced it has partnered with Montréal’s Lightspeed, a leading point-of-sale solution for independent retailers and restaurants with roughly $15 billion in annual on-line apparel transactions, to provide access to its MySizeID mobile measurement solution to e-retailers worldwide.

Retailers utilizing Lightspeed’s online platform will soon be able to deploy the MySizeID turnkey solution through a simple widget integration from the Lightspeed app store and offer their customers the personalized and efficient online shopping experience they deserve. With MySizeID, retailers can provide customers with a personal sizing profile to ensure each item purchased fits properly, without having to guess the appropriate size and excessive returns. Following a 30-day free trial period, retailers will be able to subscribe to a monthly paid service plan to continue providing MySizeID to customers, while also maintaining the back office services for data and sizing entry the solution provides.

The MySizeID app is a turnkey solution that helps any online shopper choose the appropriate apparel size for that specific brand, based on the shopper’s real-time body measurements. My Size’s innovative technology enables consumers to measure themselves once using their smartphone and then be matched with a brand-specific apparel item in their size.

Airport City’s My Size has developed a unique measurement technology based on sophisticated algorithms and cutting-edge technology with broad applications including the apparel, e-commerce, DIY, shipping and parcel delivery industries. This proprietary technology is driven by several algorithms which are able to calculate and record measurements in a variety of novel ways. ((Lightspeed 22.10)

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9.5 Baccara Geva is a Market Leader in Water Management Solutions

Baccara Geva has launched a series of new products which along with the ii.ri, will contribute to this ‎market. The ii.ri features a smart and user-friendly App for both IoS and Android platforms, ‎having a wide range of logic irrigation plans and unique options to help sustain healthier ‎landscapes and maximize crop growing yields, making the most of every drop of water.‎

Baccara 11 LG is a smartphone operated controller is compatible with a wide range of valve ‎sizes and port sizes, has no display and by pressing the button on the top, allows to pair the ‎smartphone to either IoS or Android. The simple, smart software does not require a pairing ‎code to connect and suits a wide range of logic irrigation plans. Equipped with a ¾” UNEF male ‎thread, the ii.ri is compatible with most valves from 1/8” to 2” range. The IP68 class ii.ri ‎controller is supplied with a Li battery which can be easily replaced and the controller ‎automatically shuts off on low battery.‎

Baccara’s new G75-A3P, an innovative 3 ways plastic solenoid valve featuring multiple ‎positioning Manual Override (Open – Auto – Close) for 2 and 3 ways latch valves. This manual ‎mechanism guarantees correct positioning of the latch coil safely. This new 3 ways solenoid ‎valve suits a pressure range from 1 to 10 bar. It offers a wide range of orifice sizes up to 2.40 ‎mm on NO or NC configurations.‎

The G75-VM, is new 3 way direct operated solenoid valve with a modular assembling feature for ‎manifolds. The manual connection design suits an easy and friendly mounting for up to 10 ‎stations. It allows a fast manual connection and guarantees optimal sealing for conveying air ‎and water at industrial, mining, landscape and farming applications.‎

Kvutzat Geva’s Baccara is a market leader in the manufacture and specialization of products ‎for automation such as air valves, air cylinders, solenoid valves and nylon tubing for use in ‎industry, agriculture and irrigation. Today, one can find BACCARA products in all sectors of ‎industrial and agricultural automation, designed to be dependable in the most adverse ‎environments such as marine conditions, chemicals and heavy industries. They have gained ‎ISO-9001:2000 certification for all products and ISO 14001 certification for environmental quality ‎control. (Baccara 11.10)‎

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9.6 Aurora Labs Named a Cool Vendor by Gartner

Aurora Labs has been named a Cool Vendor by Gartner in their October 2018 report: “Cool Vendors in Automotive and Smart Mobility.” The report highlights new and innovative vendors that use AI-powered solutions with the potential to transform the mobility market.

Aurora Labs, one of only four companies identified as a Cool Vendor in the report, enables automotive manufacturers to proactively respond to future vehicle software architectures, processes, and services in order to bring vehicles to market faster, today. According to the report, “Software and AI are becoming increasingly fundamental not only to vehicle operational performance but also as the primary interface for systems that frame the user experience. The software age in the automobile is leading to an explosion of innovation around the car.”

Gartner’s naming of Aurora Labs as a Cool Vendor in Smart Mobility comes soon after Aurora Labs being invited to participate in the STARTUP AUTOBAHN, the innovation platform created by Daimler, Plug and Play and the University of Stuttgart to further develop the Self-Healing Software solution.

Launched in 2016 with offices in Tel Aviv and Munich, Aurora Labs is pioneering Self-Healing Software for connected cars to enable OEMs to proactively respond to future vehicle software architectures, processes and services. Agile user-centric software development processes create a plethora of continuous opportunities and risks for the OEMs, even after the car has left the production line. Aurora Labs’ Line-Of-Code Maintenance technology uses machine learning algorithms to uniquely address all three stages of a software health solution, future proofing the next generation of software-driven automotive features. From detecting line-of-code faults to predicting downtime events, fixing errors on-the-go and enabling reliable and cost-effective rollouts of new automotive features to all ECUs in the vehicle without any downtime for the user, Aurora Labs is paving the way for the age of the self-healing car. (Aurora Labs 23.10)

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9.7 Comtrend Selects Celeno High Performance Tri-Band Wi-Fi Solution for Gateways

Celeno Communications announced that Comtrend, a leading designer and manufacturer of broadband communication equipment, has selected its powerful 4×4 + 4×4 + 4×4 Tri-Band Wi-Fi solution for gateways and extenders. The solution leverages Celeno’s advanced CL2400 802.11ac Wave 2 chipset and is ready for the Wi-Fi Alliance EasyMesh certification for a powerful multi-AP topology. The solution enables a compact Tri-Band Access Point that delivers double the capacity and implements Celeno’s enhanced Wi-Fi technologies, supporting multi-AP centralized orchestration and dynamic interface assignment, taking into account home topology and network conditions for optimal Wi-Fi connectivity deployment.

The hardware reference design enables exceptional RF performance over three bands, allowing simultaneous transmissions on the 2.4GHz band and adjacent channels in the 5GHz high and low bands with no inter-band interference. The solution enables an all-wireless multi-AP architecture utilizing independent backhaul and front-haul (service) channel assignments for the main AP and each of the Tri-Band smart extenders. This results in a high performing mesh network with enhanced spectral efficiency.

Leveraging Wi-Fi smarts perfected in the home environment, Ra’anana’s Celeno offers advanced Wi-Fi chipsets, edge software and cloud technology to take Wi-Fi beyond connectivity into the realm of smart homes, smart cities, smart buildings and smart industry. Celeno’s field-proven chips and software technology have been successfully integrated into numerous OEM Wi-Fi devices and have been deployed in tens of millions of homes around the world by almost 100 leading service providers worldwide. (Celeno 23.10)

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9.8 Allot Narrows Technological Divide in Rural Territories with Improved Web Security

Allot Communications announced that a regional government in North America chose the Allot Secure Service Gateway (SSG) unified solution to increase end-to-end visibility of all network traffic and to strengthen its web filtering. The precise monitoring of traffic usage and pinpointing of application performance anomalies and threats provided by Allot’s SSG will allow the regional government to improve network and bandwith performance in both its own offices and to vital online public services for local residents.

The diverse and comprehensive features and functionality of the Allot SSG: including, flexible redundancy configurations, passive bypass via automatic port failover, maximizing uptime and availability as well as Quality of Service (QoS) traffic shaping, traffic steering, bot containment and web security – will empower the regional government to improve the quality and breadth of online services they provide to their residents.

Hod HaSharon’s Allot Communications is a provider of leading innovative network intelligence and security solutions for service providers worldwide, enhancing value to their customers. Their solutions are deployed globally for network and application analytics, traffic control and shaping, network-based security services and more. Allot’s multi-service platforms are deployed by over 500 mobile, fixed and cloud service providers and over 1000 enterprises. (Allot 23.10)

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9.9 IAI $777 Million Deal for Barak 8 LRSAM Air & Missile Defense Systems to India’s BEL

Israel Aerospace Industries (IAI) has been awarded an additional, $777 million contract for the supply of LRSAM Air & Missile Defense systems (the marine version of the AMD system Barak 8) for seven ships of the Indian navy. The contract was entered with Indian state-owned company Bharat Electronics Limited (BEL) which serves as the main contractor in the project.

The LRSAM system, part of the Barak 8 Family, is an operational AMD system used by Israel’s navy as well as by India’s navy, air and land forces. It provides broad Aerial and point defense against a wide range of threats to the marine arena from the air, sea or land. The system integrates several advanced state-of-the-art systems as, digital radar, command and control, launchers, interceptors with modern RF seekers, Data link and system-wide connectivity.

Barak-8 AMD system was developed by IAI in collaboration with Israel’s MOD India’s DRDO (Defense Research and Development Organization), the navies of both countries, IAI’s ELTA Group, RAFAEL and local industries in India and Israel.

IAI is a world leader in both the defense and commercial markets, delivering state-of-the-art ‎technologies and systems in all domains: air, space, land, sea, cyber, homeland security and ‎ISR. Drawing on over 60 years’ experience developing and supplying innovative, cutting-edge ‎systems for customers around the world, IAI tailors optimized solutions that respond to the ‎unique security challenges facing each customer. IAI employs its advanced and proven engineering, manufacturing and testing capabilities to ‎develop, produce and support complete systems – from components, sensors and subsystems ‎all the way to large-scale, fully-integrated systems of systems. (IAI 24.10)‎

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9.10 Introducing Walabot HOME: A New Senior Care Smart Home Device for Fall Detection

Vayyar Imaging announced the launch of Walabot HOME. Poised to radically change the future of digital health monitoring, Walabot HOME detects if a person has fallen and automatically places a call for help, without requiring any wearables. Walabot HOME is Vayyar’s flagship product in a new line of smart home devices being developed to ensure seniors stay connected when it matters most: in case of emergency.

Vayyar has created Walabot HOME to eliminate the need to carry a fall detection device by discreetly monitoring for a fall; it operates in the background of the home just like a smoke detector sensor. Simply place it on the wall and forget about it, but in the case of a fall, it will call loved ones for help. Additionally, individuals can place a call to their emergency contact at any time with simply the push of a button on their Walabot HOME device.

Walabot HOME is easy to install and does not require further action once it’s been setup. The device uses advanced, low-power radio wave technology, similar to Wi-Fi, instead of cameras, to monitor individuals’ movements. This ensures occupants maintain their privacy, especially in locations where falls are more likely to happen, such as bathrooms. Walabot HOME also works in a wide range of conditions that cameras cannot, including steam and darkness, and can sense through objects like curtains and glass walls.

Yehud’s Vayyar Imaging is the global leader for imaging and sensing applications with its cutting-edge 3D imaging sensor technology. Vayyar’s sensors quickly and easily look into objects or any defined volume and detect even the slightest anomalies and movements to bring highly sophisticated imaging capabilities to many industries. Utilizing a state-of-the-art embedded chip and advanced imaging algorithms, Vayyar’s mission is to help people worldwide improve their health, safety and quality of life using mobile, low-cost, and safe 3D imaging sensors. (Vayyar Imaging 24.10)

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9.11 Waterfall Unidirectional Security Gateways CCC Certified

Waterfall Security Solutions announced that Waterfall’s flagship products were awarded China Compulsory Product Certification (CCC). The CCC Mark is essential for any manufacturer selling to Chinese manufacturers, industries and critical infrastructures. With CCC certification in place, Chinese owners and operators of industrial control systems can be confident that Waterfall’s products comply with Chinese safety and other operating requirements.

Waterfall Unidirectional Security Gateways provide safe IT/OT integration for industrial control system and critical infrastructure networks. The gateway hardware creates an impassable, physical barrier preventing external online attacks, network-propagating malware and remote-control attacks. The gateway software makes copies of servers and emulates devices to IT networks. The IT replica servers participate normally in IT network ecosystems and are indistinguishable from the original industrial servers.

Rosh HaAyin’s Waterfall Security Solutions is the global leader in industrial cybersecurity technology. Waterfall products, based on innovative unidirectional security gateway technology, represent an evolutionary alternative to firewalls. The company’s customers include national infrastructures, power plants, nuclear plants, on-shore and off-shore production facilities, refineries, rail systems, manufacturing plants, utility companies, and many more. (Waterfall Security Solutions 25.10)

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9.12 Ethernity Networks’ ENET Flow Processor Firmware Integrated by North American Vendor

Ethernity Networks has signed a contract to supply its ENET Switch and Traffic Manager firmware for a North American tier 1 telecommunications OEM. Ethernity has completed the integration of its firmware on the equipment manufacturer’s existing fiber-to-the-home optical networking platform for advanced broadband services with 4K video. The contract represents significant short-term revenue for Ethernity and, given the popularity of the platform and the size of the OEM, is expected to generate generous ongoing future royalty streams. Further, the parties have already engaged in discussions to apply Ethernity’s ENET firmware and software to the customer’s broadband switch and router platforms, which, if successfully concluded, would add significantly to the ongoing royalty stream.

Lod’s Ethernity Networks is a leading innovator of network processing technology and products. Mounted on low-cost COTS FPGAs and with a rich set of networking features, Ethernity’s ACE-NIC smart network adapters, ENET SoCs, and network appliances offer best-in-class all-programmable platforms for the fixed and mobile telecom, enterprise security, and data center markets. Their complete offering, incorporating hardware, FPGA firmware, and software applications, enables full programmability at the pace of software development, quickly adapting to changing market demands and applications and facilitating the deployment of edge computing, 5G and SDN/NFV. (Ethernity Networks 24.10)

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9.13 macOS Goes Password-Free With Introduction of Octopus Authentication

Secret Double Octopus is now available for Mac enterprise users. Octopus Authentication is the first high-assurance, password-free authentication for macOS within corporate networks managed by Microsoft’s Active Directory.

Microsoft’s Active Directory (AD) centralizes authentication and authorization for domain resources. However, by only using one password to access all resources, AD passwords are a lucrative target for attacks. In place of passwords, Octopus Authentication enables login from a macOS host using a high-assurance, password-free authenticator. Octopus Authentication for macOS supports access to all enterprise resources, whether on-premise, remotely accessed or in the cloud. The solution is built upon unbreakable cryptography that is highly resistant to common attacks, such as phishing, MitM and cracking.

Tel Aviv’s Secret Double Octopus is pioneering the password-free workplace. Its high-assurance authentication solutions are built on provably unbreakable cryptography that is highly resistant to attacks and provide superior user experience. Secret Double Octopus is a Gartner Cool Vendor, Business Insider ‘Startup that will boom in 2018’, PwC game-changer for Global Financial Services Innovation, and recipient of the Frost and Sullivan ‘Technology Innovation Award’. (Secret Double Octopus 25.10)

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9.14 Cymulate Finds Logical Bug in Microsoft Office Suite – Word Embedded Video Code Execution

Cymulate has uncovered a security flaw in Microsoft Office Suite which may affect Word users. Cymulate’s security research team identified the bug and notified Microsoft. The security flaw was identified as a JavaScript code execution within the office-embedded video component. It has the potential to impact all users with Office 2016 and older versions of the popular Productivity Suite. Cymulate noted that no configuration was required to reproduce the issue and no security warning is presented while opening this document with Microsoft Word.

This logical bug is revealed when a user embeds a video via the ‘online video’ feature. It resides in the .xml file, where a parameter called embeddedHtml refers to a YouTube iframe code. Hackers can replace the current YouTube iframe code with malicious html /JavaScript that would be rendered by Internet Explorer. One way attackers can use this unauthorized entry is by phishing.

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9.15 Allot Partners With Swiftel to Provide DDoS Protection for Their ISP and Enterprise Customers

Allot Communications has partnered with South Dakota based Swiftel Networks, a leading provider of global network and IP transit. Allot will provide Swiftel with a distributed denial-of-service (DDoS) protection solution to offer it as a service across their expansive network of internet service provider (ISP) and enterprise customers. Allot developed a turnkey DDoS security-as-a-service solution that provides an additional opt-in layer of protection on top of the existing transit link services purchased from Swiftel Networks. This solution is groundbreaking as it provides DDoS and deep packet inspection (DPI) in a cloud scrubbing center. Revenues from the security solution will be shared between the two companies.

To create this solution specifically for Swiftel, Allot incorporated its DDoS Secure solution for mobile, fixed, and cloud service providers with an added DPI and root cause intelligence. Swiftel customers and partners will benefit from detailed attack forensics and analytics to treat the root cause of misbehaving endpoints. They will also benefit from the solution’s ability to rapidly mitigate volumetric DDoS attacks and neutralize outbound threats before they affect network service and business continuity. The solution allows Swiftel and its customers to be aware of their transit utilization and quality of experience while DDoS is being mitigated.

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9.16 VisIC Technologies is a Final Nominee for the 2018 GSA Company Award

Ness Ziona’s VisIC Technologies is one of the four final nominees for the 2018 Global Semiconductor Alliance “2018 Outstanding EMEA Semiconductor Company Award”. VisIC’s GaN transistors feature low RDS(ON), exceptionally fast switching performance, ultra-low switching energy and advanced embedding packaging with record low thermal resistance. Its ALL-Switch (Advanced Low Loss) products are an ideal fit in performance power conversion applications requiring high efficiency, high power density and low system cost, such as in on/off board chargers and inverters for hybrid/electric vehicles, server power supplies for data centers, high end gaming power supplies, green energy conversion systems and various industrial applications.

The winner will be announced at GSA’s Awards Dinner Celebration on 6 December in Santa Clara, California, USA. GSA’s annual Awards Dinner Celebration is the industry’s premier event celebrating the achievements of semiconductor companies in several categories ranging from outstanding leadership to financial accomplishments as well as overall respect within the industry. (VisIC 28.10)

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9.17 On Track Innovations Receives Interac Certification for Canadian Market

On Track Innovations has received a renewed Interbank Network Interac certification, which now allows Canadian businesses to integrate OTI’s secure cashless payment solutions into vending machines, kiosks and other unattended devices throughout Canada. Interac Corp. operates an economical, world-class debit payments system with broad-based acceptance, reliability, security, and efficiency. The organization is one of Canada’s leading payments brands and is chosen an average of 16 million times daily to pay and exchange money.

Rosh Pina’s On Track Innovations (OTI) is a global leader in the design, manufacture and sale of secure cashless payment solutions using contactless NFC technology. OTI’s field-proven innovations have been deployed around the world to address cashless payment and management requirements for the Internet of Payment Things (IoPT), wearables, automated retail, and petroleum markets. (OTI 30.10)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israel Places 20th on Global Competitiveness Index

Israel placed 20th from 16th a year ago on the latest World Economic Forum’s Global Competitiveness Index, released on 16 October. The index said several factors are impeding the growth of the Israeli economy and have caused its fall in the rankings, including measuring government bureaucracy (59), the time it takes to open a business in Israel (74), the costs associated with starting a business in Israel (50), and cumbersome business credit application practices (45). Israel also fell short in indices measuring the complexity of its tariffs and payments system (81), the ease of employing foreign workers (125), maritime and air services (42), the quality of vocational training (37) and government budgetary transparency (90).

Despite this, the index stressed that Israel has been able to maintain its position as the world’s No.1 start-up nation in terms of investment in research and development companies and the overall approach to entrepreneurial ventures. Israel ranked 10th in the World Economic Forum’s Patent Application Index and second in its Venture Capital Availability Index. As well, Israel ranked 6th in the index evaluating the integration of women in the workforce.

The United States, Singapore, Germany, Switzerland and Japan lead the new index, while Chad was ranked last at 140th place. (WEF 16.10)

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11: IN DEPTH

11.1 ISRAEL: High-Tech Companies Raised $1.6 Billion in 131 Deals in Q3/2018

The IVC Research Center and ZAG S&W Zysman, Aharoni, Gayer announced on 29 October that during Q3/18, Israeli high-tech companies raised $1.6 billion in 131 deals. While the amount invested was comparably high, there were fewer deals compared with the last quarters. Only one mega-deal was recorded in Q3/18 – Trax Solutions raised $125 million, equal to 8% of the total amount raised in the third quarter.

In Q1-Q3/2018, Israeli high-tech companies raised $4.5 billion. The number of deals matched 68% of the total number of deals in 2017. Yet, in the first nine months of 2018, Israeli high-tech capital raising equalled 82% of the total raised in 2017.

Following an uplift of seed capital raising in H1/18, only 21 seed deals were recorded in Q3/18, the lowest number since 2013 and below the ranges of the last five years. The number of mid and late financing rounds (B and Later rounds) was in the range of the previous years, while A rounds decreased in Q1-Q3/2018. According to IVC analysis, median numbers at all stages continued to increase.

Chart 1: Israeli High-Tech Capital Raising Q1/2013-Q3/2018

Capital Raising by Deal Size and Type

In Q3/18, deals above $20 million reached a record level of $1.1 billion. While the number of deals under $5 million decreased, the number of deals larger than $10 million continued to rise.

Marianna Shapira, research director at IVC Research Center points out: “Investors preference for mature companies has negatively affected the levels of seed financing, which continues to shrink similar to US patterns.” Shapira added, “We expect capital raising in 2018 to achieve the levels of 2017. According to the investment patterns in Israeli high-tech from the last years, it seems the third quarter marked a bottom for the latest period.”

In Q3/18, VC-backed capital raising deals totaled $1.3 billion in 67 deals. The number of VC-backed deals dropped 34% compared with Q3/17. Non-VC-backed deals accounted for $285 million, at the lower end of the last three years.

Chart 2: Israeli High-Tech Capital Raising by Deal Size Q1/15-Q3/18

Capital Raising by Stages and Selected Technology Clusters

In Q3/18, mature-stage companies raised almost six times more capital compared with early-stage companies. In terms of number of deals, IVC found that, through 2016, investors favored seed and R&D stages. Since 2017 and even more in 2018, the trend shifted, as investors turned to more mature companies (initial growth + revenue growth stages).

In Q3/18, software companies raised $760 million mainly due to 12 deals, each larger than $20 million. Artificial Intelligence (AI) companies were the main attraction for financing deals in the last quarter. The number of deals grew 15% in Q3/18, compared with the corresponding quarter last year. The number of AI deals in Q1 – Q3/18 rose steadily – 17 companies attracted more than $20 million each.

Investor’s Activity

In Q3/18, IVC analysis found that the share of corporate VCs grew to 14% of total capital invested. An increase was noted in VC funds’ investments, following a slowdown that started in Q1/17. In Q3/18, VC funds’ investments accounted for 42% of total capital invested.

“Despite the vacations in the third quarter, Israeli high-tech was able to withstand this period,” said Shmulik Zysman, managing partner at Zysman, Aharoni, Gayer & Co. (ZAG-S & W): “More importantly, the total amount raised was similar to the total amount raised in the corresponding quarter of last year, one of the highest in the past six years, indicating the stability of the market.”

Zysman notes that, “Although the number of companies that raised capital this quarter declined, the amount of capital grew. Some would see it as a lack of confidence in the Israeli high-tech industry, we believe it is another evidence of the vitality of the Israeli high-tech.”

According to Zysman, the volume of capital raised from foreign investors continues to be particularly high: “This is in spite of the fact that Israeli companies that have benefited from Chinese investors are now encountering much more sophisticated and selective Chinese investors. This increase can also be credited to European venture capital funds that start investing in Israel”.

Chart 3: Israeli High-Tech Investments by Investor Type ($M)

ZAG-S&W (Zysman, Aharoni, Gayer & Co.) is an international law firm with offices in Israel, the United States, China and the UK. The firm’s attorneys specialize in all disciplines of commercial law for both publicly held and private companies, with particular expertise in hi-tech, life science, international transactions, and capital markets. ZAG-S&W provides result-driven legal and business advice to its clients, addressing all aspects of the clients’ business activities, including penetration into new markets in strategic locations. In recent years, the firm has acted on a majority of the equity and debt financing transactions by Israeli technology companies on the NASDAQ. It has been the firm’s experience that the best results, those that give their clients the competitive advantage they need, are attained by coupling professional experience, global presence, and connections with the investor communities in Israel and abroad. (IVC 29.10)

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11.2 ISRAEL: Netanyahu Visits Oman

Simon Henderson and Assaf Orion wrote in The Washington Institute on 26 October that the high-profile nature of the meeting reaffirms Israel’s success in developing ties with Gulf states, as well as the independent character of Oman’s leader.

On 25 October, Prime Minister Binyamin Netanyahu traveled to Oman for the first such visit by an Israeli leader in more than twenty years. According to a joint statement issued after the trip, he and Sultan Qaboos discussed “ways to advance the peace process in the Middle East, as well as several matters of joint interest regarding the achievement of peace and stability in the Middle East.”

The reference to the peace process will give Qaboos diplomatic cover from criticism elsewhere in the Arab world, building on the effect of Palestinian leader Mahmoud Abbas’s visit earlier that week. Yet the substance of the conversation may have concentrated on “deepening relations with the states of the region while leveraging Israel’s advantages in security, technology, and economic matters,” in the words of the Israeli Prime Minister’s Office.

Omani state television broadcast video of the visit on the evening news, showing the sultan, who is seventy-eight next month and has been unwell, looking spirited but frail. He introduced Netanyahu to four of his top advisors: Minister of the Royal Court Khalid al-Busaidi, Minister of the Royal Office Sultan al-Numani, Minister Responsible for Foreign Affairs Yousef bin Alawi bin Abdullah, and Head of Liaison and Coordination Munthir al-Said, whose duties center on external intelligence. Netanyahu’s delegation included Mossad chief Yossi Cohen, National Security Council head Meir Ben-Shabbat and Foreign Ministry director Yuval Rotem.

The last such visits occurred before the turn of the century. Prime Minister Yitzhak Rabin traveled to Oman in 1994 and acting prime minister Shimon Peres hosted Yousef bin Alawi in Jerusalem a year later. In 1996, the two countries agreed to establish reciprocal trade representative offices, with Peres formally opening the one in Muscat. Although Oman closed the office after the second Palestinian intifada broke out in 2000, it continued allowing Israeli representatives to stay in the country. Undeclared intelligence and security relations between the two governments have since become very close. As with other Arabian Gulf states, Muscat allows non-identifiable Israeli products to be sold inside Oman.

For Israel, the visit shows that Netanyahu’s regional approach is paying dividends, which could prove useful domestically if the next elections are held soon as expected. It also shows Muscat’s role as a possible back channel with Iran, perhaps relating to Syria. For Qaboos, the meeting may help deflect criticism of his relations with Tehran and his willingness to tolerate the transshipment of Iranian weapons to Houthi rebels in Yemen. In addition, it implies that Saudi Arabia and the United Arab Emirates are not the only regional routes for Israeli diplomacy. For Washington, the meeting is another good first step down the long road to reviving the peace process.

Simon Henderson is the Baker Fellow and director of the Bernstein Program on Gulf and Energy Policy at The Washington Institute. Assaf Orion, a retired Israeli brigadier general and defense strategist, is a visiting military fellow at the Institute. (TWI 26.10)

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11.3 LEBANON: Lebanon’s Perfect Financial Storm

Mona Alami wrote on 17 October in the Atlantic Council that as Lebanon’s debt grows and the traditional pillars of its economy stagnate, a drop in remittances from the Gulf may push the country into bankruptcy.

At Hope or Gloom, an economic conference held by Lebanese International Finance Executives (LIFE) on 7 August that brought together economic experts and Lebanese government officials, the state’s narrative bordered on the absurd. Government advisors and parliamentarians issued unconvincing economic predictions and reassurances, all of which showed a disconnect from the clear signs of impending economic disaster. Notably, in addition to longer-term financial problems, a likely drop in remittances from the Gulf is expected to worsen banks’ ability to continue financing the public debt.

Lebanon’s economy is struggling. Recent annual growth continued to hover between 1 and 1.5% throughout 2017 and 2018, a long-term issue tied to the Syrian war, which caused a drop in exports and worsened investors’ fear of instability. This is a significant drop from the 8 to 10% growth witnessed prior to 2011. This meager growth pales in comparison to rate at which the debt is growing, estimated at 7.5% as of May 2018. This means Lebanon will not be able to pay off this debt through economic growth alone. This has left Lebanon’s debt-to-GDP ratio at 157% as of April 2018, the fifth-highest in the world. Moreover, as Lebanon fails to pay down its public debt – which amounted to $81.5 billion as of February 2018 – interest payments on the debt are rising and further widening the fiscal deficit, currently estimated to be over 8.5% of GDP.

Even the usually unflappable Finance Minister Ali Hasan Khalil warned in April that Lebanon’s public debt was more of a threat than the country’s security situation. Banks have been taking their own steps to mitigate it, in particular seeking to prevent capital flight and maintain the current level of currency deposits by printing more money to finance the debt – which alleviates the debt but worsens inflation. To encourage people to save, average interest rates on deposits of Lebanese pounds increased by 95 basis points between February 2017 and February 2018 to reach nearly 7%. This not only puts more money in the central bank but also discourages the high spending that can increase imports and therefore deplete foreign reserve levels. But if the deposit rates climb too high, it will also increase inflation and discourage taking out loans for new enterprises that could spur much-needed economic growth. The Central Bank has already tightened lending provisions, in response to rising non-performing loan ratios that reflect nonpayment of debts.

This lack of access to loans, as well as foreign investors’ decreasing trust in Lebanon’s economy, has notably affected the real estate sector, one of Lebanon’s economic pillars. Without easy access to loans, together with the prevailing political and economic crises that are discouraging investment in Lebanon, the sector has been on a steady decline. Construction of new buildings has slowed dramatically: the total area of land to be developed under new registered building permits fell by 23.9% in the second quarter of 2018 compared to the same period in 2016. Facing such pressures, Sayfco – one of the largest Lebanese real estate companies, with projects worth an estimated $2 billion – went bankrupt in May 2018.

According to a World Bank report issued in April 2018, these problems trace back in part to long-term financing challenges, but also to the November crisis between Saudi Arabia and Lebanon. On 4 November, Prime Minister Saad Hariri issued a televised statement from Riyadh resigning his position, citing Iranian influence via Hezbollah rendering it difficult for him to do his job without fear of assassination. The situation quickly escalated with claims that Saudi Arabia was holding Hariri hostage. In response, Riyadh threatened to expel Lebanese nationals working in Saudi Arabia and other Gulf states and withdraw investments from Lebanon. Through French intervention, Hariri and his family were able to leave Saudi Arabia, and he withdrew his resignation on 5 December, calming the situation down, but tensions have remained high.

The tensions between Saudi and Lebanon are affecting remittances. Lebanese workers in the Gulf contribute nearly one-fifth of Lebanon’s GDP, making them a vital source of the deposits banks are using to buy more debt. The approximately 400,000 Lebanese expats in the Gulf – half of them in Saudi Arabia – contributed to between 43% and 60% of total remittances in 2015, but total remittances dropped by 7% in 2017. Another decline is expected this year, as Saudi Arabia’s Vision 2030 undertakes unprecedented economic restructuring to provide more jobs for Saudi nationals. Already, increased taxes on foreign residency permits in Saudi Arabia are making jobs for Lebanese nationals scarcer. Dubai, another hub for Lebanese workers, is also facing an economic downturn and higher overall unemployment that will reduce opportunities for foreign nationals in general. Although remittances are still coming in steadily from other regions, money earned by Lebanese workers in the Arabian Gulf will continue to decline in the face of these trends.

The tensions are also affecting Lebanon’s other main revenue-generating sector, tourism. It was already in decline due to security concerns and high airline and hotel prices, falling from its peak of 2.2 million visitors in 2010. Since tensions with Saudi Arabia erupted, there has also been a sharp decline in tourism from Gulf visitors, who spend the most money while in Lebanon. Spending by Saudi tourists decreased by 21.4% in the first half of 2018 compared to the same period in 2017. Likewise, total visitors from Saudi Arabia dropped by 21.1% compared to the same period of last year and visitors from the UAE dropped by 32.2%.

Given that Lebanon’s three main revenue-generating sectors – real estate, tourism and remittances – are dangerously in the red, combined with soaring debt and eroding trust in its banking sector, bankruptcy could be imminent. International aid is unlikely to help avert bankruptcy, even in the short term. In April 2018, an international donors meeting in Paris pledged more than $11 billion of investment for Lebanon, but conditioned the aid on strict economic reforms that cannot be enacted without a functioning government – the formation of which remains stalled five months after parliamentary elections due to political bickering. The World Bank has likewise earmarked $2.2 billion for investments in Lebanon to be spent on job creation, health services and transportation projects all of which require government’s approval before it can be disbursed.

Speaker of the Lebanese parliament Nabih Berri attempted to circumvent government approval by proposing on 24 September that parliament be authorized to approve urgent legislation but was unable to get parliamentarians to stop bickering long enough to debate the proposal, let alone vote on it. For now, the political elite appears to be more concerned with securing prominent appointments on the next cabinet, however long it takes, rather than speeding up the process so they can get to work fixing the economy.

Looking at the lack of progress on economic reform, World Bank Group Vice President for the Middle East and North Africa Ferid Belhaj stated in July that “Lebanon has been defying gravity for quite some time.” It appears than in the near future Lebanon will realize it cannot beat gravity. Its only saving grace remains in finalizing political institutions, namely the cabinet, which can then prioritize reforms.

Mona Alami is a nonresident fellow at the Atlantic Council and at Trends Research and Advisory. (AC 17.10)

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11.4 JORDAN: Policing and Protection for Syrian Refugees in Jordan

Jessica Watkins posted in Sada on 16 October that in Jordan, internationally backed efforts to extend successful community policing programs beyond refugee camps face multiple challenges.

Jordan’s official refugee camps, where roughly 20% of Jordan’s 671,000 registered Syrian refugees live, have served as testing grounds for policing models since 2012. While the United Nations High Commissioner for Refugees (UNHCR) and Emirati Red Crescent run camp administration, the Syrian Refugees Affairs Directorate (SRAD) – part of Jordan’s Public Security Directorate (PSD) – has always overseen security. The darak (gendarmerie) man the perimeters, while inside the main gates, police stations house representatives from Criminal Investigations, Family Protection and Juvenile Police. Criminal matters are referred to the Mafraq and Zarqa police stations, but disputes are taken to various stakeholders in the camps’ security.

When the Zaatari refugee camp opened in 2012, police interaction with residents was minimal. Police and gendarmerie dealt with riots, but otherwise kept out of day-to-day camp affairs and rarely patrolled the streets. In the camp’s residential districts, which correspond roughly to areas in Syria from which residents hail, a collection of street leaders emerged, primarily by self-appointment. They became principal points of contact for aid agencies and police alike.

In late 2013, the U.S. Embassy funded a pilot project to enable camp refugees to preserve their own security. Zaatari’s Neighborhood Watch Program aimed to recruit, vet and train 600 Syrians to police their own neighborhoods in coordination with Jordanian police. Despite an initial bout of training, the program was quickly shelved as the potential for corruption and vigilantism became apparent and Syrians voiced hostility toward fellow refugees acting as “spies” for the PSD.

Parallel to the U.S. project, a U.K.-backed pilot program took shape in December 2013. The British company SIREN Associates was contracted to train a batch Jordanian police as community police officers. Espousing the principles of visibility, approachability and accessibility, SIREN trained a pilot group of twelve officers to engage with residents’ ongoing concerns while patrolling Zaatari’s streets. Despite recruits’ initial fears that angry residents would attack them, the program’s low-key approach coupled by the willingness of the community police to work with street leaders, imams and aid agencies appeared to gain them progressively more approval. While NGO staff generally left the camp after 4:00 in the evening, the community police were always present.

The community police became resources for solving myriad problems from medical emergencies to water and sanitation issues, to family and neighborhood disputes. One former Jordanian community police officer recalled how she had secured positions for several widows at relief agencies as part of the money-for-work initiative. “Traditional policing is about transactions,” said a SIREN trainer; “community policing is about relations.” In total, 90 community police officers were trained to work in Zaatari and Azraq, which opened in 2014.

In 2015, the United Kingdom funded another camp-based initiative to recruit former Jordanian police officers as Community Police Assistants (CPAs). Over 800 retired officers applied for 44 initial vacancies, and the program eventually trained 83 CPAs. The retired officers brought extensive experience from other PSD departments, with most having served in the tourist or traffic police, Family Protection Department and/or on UN missions abroad. CPAs solved police manpower shortages, but not everyone approved. One retired senior PSD officer criticized employing retired officers in what he described as guard positions. Emphasizing the importance of sovereign Jordanian control over security across the kingdom, he added that employing retirees amounted to privatizing policing.4

The police assistant project ended in late 2016, but broadly speaking, the U.K. initiative was hailed a success. SIREN left the camps at the end of 2017, leaving SRAD to run the show singlehandedly. Since then, British trainers have turned their attentions toward policing Jordanian host communities in northern Jordan, aiming to instill the same principles of accessible policing to the PSD’s local police stations. They face formidable challenges.

Major-General Fadel al-Hmoud, Jordan’s current police chief and former head of the Family Protection Department, has highlighted community policing as a PSD priority, and police trainers are taking inspiration from the model developed in the camps to improve police engagement with the general public. But tensions are high in urban communities where refugees and the local population compete over jobs, education, and resources, and most urban refugees are keen to avoid the police wherever possible. The PSD can help change that state of affairs, but only by evolving.

In the confines of the camps, where serious crimes are rare, it is easier for the police to cultivate trust with refugees than in an urban context. In the northern governorates of Amman, Mafraq, Irbid and Zarqa where over 85% of Syrian refugees are concentrated, the ability of the police to act as intermediaries in disputes involving refugees is undermined by their role as law enforcers. Possibly the majority of refugees are at odds with the law: whether because they have not registered with the UNHCR and local police, have not registered in the correct district, are working without work permits or are sending their children to beg instead of to school.

Legal irregularities make refugees vulnerable to illegal exploitation and abuse. An amnesty instituted by the government in March 2018 enabling around 30,000 unregistered urban refugees to register without penalty has reduced fear of the authorities, as has an increase in working permits available to Syrians. But fears that the police forcibly relocate or deport “illegal” refugees are often justified, and surveys suggest that few are confident to seek police protection. Most first seek out the UNHCR and its partner agencies for assistance. Domestic abuse cases, for instance, which are prevalent within the refugee community, are rarely taken directly to the PSD’s Family Protection Department where they are supposed to be managed. Victims seldom seek legal action against abusers and are more likely to approach women’s NGOs for advice and support.

Recognizing the limitations of formal dispute resolution channels, several NGOs in northern Jordan focus on engaging both Jordanian and Syrian parties to reduce community tensions. One such program by Mercy Corps, for instance, combines funding for local infrastructure projects with interest-based conflict resolution training to community leaders, who include municipal council members and tribal elders but also housewives and young activists. Participants in focus groups in Mafraq town, even those in official positions, indicated that going to the police was a last resort that would inevitably magnify the problem.

For years, Jordan boasted low crime rates, crediting “preventative measures designed to reduce crime and provide education and alternative activities for teenagers.” Now, with economic pressures created by a rapidly expanding population, as well as changes to the penal code and increasing social diversity, crime is rising, although under-reporting makes it difficult to judge how much.

In this context, enhancing community engagement is harder but more crucial than ever for the police. With U.K. and Dutch funding, British police trainers are currently training members of the PSD’s Community Policing Department with modules covering cultural awareness, gender sensibility, managing community meetings and de-escalation of conflict. But the concept of police as a citizen-oriented service is still new. Until 1956, the police were attached to the military and it shows. The rank system copies the army’s, and the majority of PSD police chiefs are appointed from the military. The systematically rapid turnover of senior officers makes securing top-down support for new initiatives tortuous. Moreover, by admission of several former PSD officers, the organization is inexperienced in cooperating with other organizations whose services intersect with its own.

Conversely, the police are accustomed to working alongside tribal figures to diffuse tensions. The large majority of the police, like the military, hail from East Bank “tribal” backgrounds, with few Palestinian Jordanians achieving high ranks within the PSD despite the fact that they comprise up to 65% of Jordanian citizens. At local police stations, familiarity with tribal processes for resolving disputes has partly institutionalized these processes, for example with police officers witnessing tribal truces. Much of the Syrian refugee population hails from rural Deraa, Homs and Aleppo, and are also familiar with tribal solutions to grievances ranging from verbal disputes to injuries and fatalities caused by traffic incidents. But social capital always plays a role in the negotiated outcomes of tribal settlements, and this is something refugees lack.

For most police and many Jordanians, liaising with influential tribal figures is the central component of community policing. Whether or not this practice encourages egalitarian solutions to disputes, it is unlikely to be dislodged any time soon. But increasingly, community-based organizations, NGOs and civil society activists are also claiming central roles in mediating disputes between East Bankers, Palestinian Jordanians, Syrian and Iraqi refugees, and foreigners. If the Jordanian police are to play a role in enhancing social cohesion, they need to connect and cooperate with both new and conventional tribal and administrative figures in dispute resolution. Doing so does requires enhanced knowledge, but more fundamentally it requires a shift in the organizational culture away from the patriarchal norms that still characterize the PSD.

Jessica Watkins is a research officer in the Middle East Center at the London School of Economics. (Sada 16.10)

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11.5 TUNISIA: Tunisia’s Bold Move to End Racial Discrimination

Stephen Quillen posted on 17 October in Al-Monitor that activists have hailed the Tunisian parliament’s recent approval of a law criminalizing racial discrimination, although they believe the road is still long to completely eliminate racism that is deeply rooted in Tunisian society.

Tunisia’s parliament voted to criminalize racial discrimination on 9 October in what supporters are calling a historic step in the protection of minority rights in the country. “Today, minorities and non-Tunisians who might face discrimination in our country are protected by the law,” said Rania Belhaj Romdhane, a member of M’nemty (My Dream), an anti-racism organization that advocated for the legislation. “It is a very important step.”

Messaoud Romdhani, head of the Tunisian Forum for Economic and Social Rights, agreed in regard to the law’s significance. After the vote, he was reported as saying, “This is a very important turning point in the history of Tunisia, equivalent to the abolition of slavery.”

Under the law’s provisions, those convicted of using racist language could be imprisoned for one month or fined $350, while those guilty of inciting hatred, making racist threats, spreading and advocating racism or belonging to an organization that supports discrimination could face one to three years in prison or a $1,050 fine. Even steeper fines can be levied against institutions and associations found to have engaged in discriminatory practices. The legislation puts Tunisia, often hailed as the catalyst and biggest success story of the Arab Spring, once again at the forefront of progressive change in the region.

Throughout its history, Tunisia has often led the way on social issues, among them racial equality and women’s rights. In 1846, it became one of the first countries to formally abolish slavery (though the practice continued until 1890). Under the autocratic rule of former President Habib Bourguiba, it introduced landmark reforms protecting women’s rights, a legacy on which Tunisia’s current president, Beji Caid Essebsi, has sought to build.

Tunisia also prides itself on its diverse and tolerant character. Living at the crossroads of the Maghreb, Europe and the Levant, Tunisians are an ethnically diverse people — a mix of Arab, Berber, European and Phoenician roots along with others — bringing together a range of cultural influences. A small community of Jews has also lived alongside their Muslim neighbors for centuries, mostly on the southeastern island of Djerba. They now number around 2,000, less than 0.1% of the overall population.

Despite Tunisia’s diverse background and open outlook, racism — particularly directed at the country’s significant black population — remains deeply ingrained throughout the country, activists say. Those of darker skin tones are frequently subjected to racial slurs, social stigma, discrimination and even violence.

“You see racism on the streets on a daily basis — when you get mocked, when you get bullied, when you are called names,” asserted Belhaj Romdhane, a black woman who said she regularly encounters such behavior. “When I was a child, I was always called names, even by my teachers, who were supposed to be role models. … This made me always feel scared of being judged.”

Fadwa Gmiden, from Gabes, told Al-Monitor that life as a black Tunisian has come with its struggles. “Sometimes I’m not sure which is harder: being a woman or being black,” Gmiden said. “It requires double the effort to be accepted. There is always this ‘You’re not Tunisian enough.’”

Since the 2011 revolution, civil society groups have pressured the government to pass legislation specifically geared at protecting racial and ethnic minorities, but at first, there was little political will, said Belhaj Romdhane. That changed in 2016 following a series of racially motivated assaults that prompted a wave of protests and a national conversation about racism. In one highly publicized case in December of that year, three Congolese students were attacked with a knife in central Tunis, landing one of them in intensive care.

Responding to the incident, Prime Minister Youssef Chahed called on parliament to “ratify the draft law criminalizing racial discrimination as a matter of urgency.” Today, nearly two years later, Belhaj Romdhane and other activists are proud that the law they long worked to enact has finally been passed. That done, however, they recognize that the road ahead for ensuring equality is a long one.

“For years, we’ve held many protests, we’ve held many sit-ins, including behind the doors of parliament. We’ve organized a lot of marches on the streets, and we’ve held many cultural events and campaigns to raise awareness,” said Belhaj Romdhane. “Without the presence of civil society, none of this would have happened.” She added, “Today, we are very hopeful. We are very excited, and we are very proud of our country, but this is only the beginning. We can’t say that racism or discrimination will stop immediately because of a law. This is only the key to opening the door.”

Along those same lines, Romdhani remarked, “It’s a giant step, but there’s still a lot of work to be done to make this law a reality in a society where there is racism against the 10% of black Tunisians and sub-Saharan Africans who suffer from insults and sometimes violent attacks.”

According to Minister of Higher Education and Scientific Research Salim Khalbous, Tunisia’s black minority is estimated to account for 10-15% of the overall population, and there are some 6,500 foreign African students, mostly from the sub-Sahara, currently living in the country. Gmiden, asked whether she was optimistic about the new law, stated, “In Tunisia, we have good legislation for many things that are not yet put into practice. … We need a cultural shift in order for this law to be successful.”

The Tunisian Press Agency has reported that to help educate the public and to fulfill the spirit of the law, a new body, the National Commission against Racial Discrimination, will be tasked with overseeing strategies and public policies and conducting public awareness campaigns on the issue. Proponents of the law said that efforts to raise awareness, especially among the country’s younger generations, are critical to effecting change. “Today, many Tunisians, most of them with good intentions and good faith, say that we have no problem with racism, but the first act to tackle the issue of racism is to recognize it,” said Mehdia Ben Gharbia, Tunisia’s former human rights minister, after passage of the new law, which he helped bring forward.

“Racism is a universal illness that you can find everywhere” said Belhaj Romdhane. “We just need to talk about it, because denial is always a problem. We want this country to become fully democratic, so that it can be an example for other countries in the region, a country that leads on human rights, that leads on diversity and that accepts all people.”

Stephen Quillen is a Tunis-based journalist. (Al-Monitor 17.10)

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11.6 MOROCCO: Morocco’s Auto & Phosphates Exports to Narrow Account Deficit

In a report by Fitch Solutions Macro Research, Morocco’s account deficit is set to shrink to 3.3% of GDP in 2018 and 2.2% in 2019, down from 3.6% in 2017. The lowered deficit is thanks to rising export growth, expected to continue in 2019. The main drivers behind booming exports are vehicles, phosphates, aeronautics and agricultural products.

The report also anticipates rapidly increasing growth in Morocco’s vehicle production. Production will grow by 18.2% in 2019, up from 16.8% in 2018, in line with the government’s 2014-2020 Industrial Acceleration Plan. The plan has two major goals. The first goal is to create 500,000 jobs, half of which are to be generated by Foreign Direct Investment (FDI) and half from the restored industry. Second, the plan aims to increase industrial production’s share in GDP from 14% in 2018 to 23% in 2020. “FDI has performed poorly over 2018, with liabilities (investments by foreign residents) contracting by 1.9% quarter-on-quarter in Q218. That said, this still represents a 3.9% increase on a year-on-year basis.”

The report keeps an optimistic tone over Morocco’s ability to attract more FDI over the coming years. The US and Brazilian markets’ demand for fertilizers, “the primary end-product of Moroccan phosphates,” is also expected to increase, the report states. Moreover, the projected slower rise of global energy prices compared to the rapid rise in 2018, will support Morocco’s current account by moderating imports.

Rapid Rise of Oil Prices Pressured Moroccan Imports

The rapid rise in oil price “has put immense upward pressure on Moroccan imports,” states the report, explaining that Brent crude oil prices rose to $86.3 per barrel in early October 2018 from $57.2 per barrel a year earlier. Fitch expects Brent crude to remain $82 per barrel on average in 2019, calling the trend “more tepid oil price gains ahead.” As Morocco’s energy imports are expected to remain more steady, the current account deficit will gradually narrow.

In its previous report, Fitch group argued that the Moroccan government is no longer considering capping fuel prices, taking back its earlier argument which stated that the “political pressure brought about by rising inflation on the back of higher oil prices, would push the government to cap fuel prices.”

For now, Morocco’s fuel prices cap scheme has “fizzled out,” since inflation is on the back foot again. “Given that we expected subsidies to account for nearly a third of new spending in 2018, the avoidance of this measure will be positive for consolidation efforts,” it states. The government had reportedly finalized a plan to cap fuel prices in July and was awaiting approval by Head of Government Saad Eddine El Othmani.

The fuel price cap plan came amid growing anger and demonstrations against rising living costs that have fueled a boycott against three companies: Sidi Ali, Afriquia gas, and Centrale Danone. Morocco lifted fuel subsidies in 2015, deregulating the fuel distribution market. Now prices have reached a five year high as oil prices worldwide have increased.

The public became angrier when a parliamentary report was leaked revealing fuel distributors had increased their profits. As prices increased, distributors’ profit margins widened, but they did not expand Morocco’s storage capacity to the extent they pledged. (Fitch 23.10)

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11.7 TURKEY: Turkey’s Fantasy War on Inflation

Mustafa Sonmez posted on 23 October in Al-Monitor that Ankara has declared an “all-out fight against inflation,” cajoling sellers into 10% discounts and sending municipal police to hunt hoarders, and while this bizarre strategy is unlikely to bear fruit, it might be a sign of other plans that are being cooked up in Ankara.

Turkey is grappling with soaring inflation, the highest since 2003, which was the first full year in power of the Justice and Development Party (AKP). In September, year-on-year inflation reached 24.5% in consumer prices and 46% in producer prices. The inflation dynamics indicate that the year-end figures could climb to between 30% and 35% in consumer prices and between 50% and 60% in producer prices.

Consumer inflation had been in single digits since 2003, excluding last year, when it reached 11.9%. The current surge is a new situation that makes wage earners and pensioners relatively poorer as they fail to increase their incomes in line with price increases. The biggest fear of working people, however, is that they could end up with no income at all if the slowing economy spawns a new wave of layoffs. For those indebted to banks, the reasons to worry are even bigger.

Faced with an inflation unseen in the last 15 years, Turks are primarily incensed over the increase in food prices, which owes heavily to the ill-advised policies of the AKP. For years, the AKP encouraged construction-centered growth, neglecting agriculture, as a result of which Turkey is now facing supply shortages and has become a net importer of food.

The main factor fueling inflation, however, is the dramatic depreciation of the Turkish lira or, in other words, the huge increase in foreign exchange prices. At the end of September, the price of the dollar was up 82% from the same period last year. In the first 10 years of AKP rule, the price of the greenback had increased only 27%, which made possible the single-digit inflation rates. With the currency crisis this year, imports became much more expensive and the costs of producers shot up, hence the 46% producer inflation in September.

The big gap between producer and consumer inflation indicates that retailers have refrained from hiking their prices at the rate of producers. Yet despite the threat of sharp declines in domestic demand, consumer prices have already soared 24.5%. No doubt the global increase in the prices of energy and commodities such as wheat, iron ore and copper has also played a role in the growing cost burden for producers.

According to government officials, however, the soaring inflation is essentially the work of malevolent actors such as greedy middlemen and speculators who have to be disciplined through forceful measures, including the mobilization of municipal police. In a 2 October speech, for instance, President Erdogan said, “I’d like to appeal to my dear nation: You are the ones who inspect the prices most closely at supermarkets and elsewhere. If you spot products with extraordinary price differences, report them immediately to the municipal police. I am also calling on mayors to encourage more attention on the issue among the municipal police. It is our duty to do what is necessary if there are fluctuations in prices and to raid stocks if there are hoarders.”

Treasury and Finance Minister Berat Albayrak, who is also the president’s son-in-law, followed suit. In a television interview the following day, he said citizens were reporting “speculative” price hikes on a consumer line set up by the government. “Citizens and [government] are both in action,” he said.

Interior Minister Suleyman Soylu, for his part, instructed governors across the country to tighten measures against hoarding and price gouging and slap fines on transgressors.

In short, Ankara has refused to acknowledge the real dynamics of inflation and draw up measures accordingly. True to style, it has instead pointed an accusing finger at “villains,” who, in this case, are hoarders and opportunists.

For those familiar with the AKP, this strategy is hardly a surprise. Blaming setbacks and problems on external factors, conspiracies or instigators has been an AKP hallmark for years. According to this thinking, the surging inflation cannot be the result of Ankara’s mismanagement, so it must be the work of greedy actors in the market, against whom the victimized populace has to be protected.

Then, at a 9 October meeting attended by leading business people, Albayrak announced an “all-out fight against inflation.” As part of the campaign, which is perhaps unprecedented in the world, the private sector promised 10% discounts to consumers by the end of the year. Another measure envisaged a freeze on the prices of gas and electricity, again by the end of the year. Banks, for their part, would contribute a 10% cut in the interest rates of already issued loans.

The Turkish Statistical Institute (TUIK) calculates consumer inflation on the basis of more than 400 products and services, which are provided by tens of thousands of companies in the market. Participation in the campaign was not obligatory, but the business community was asked to promise discounts. Of course, no one publicly raised objections, but many could not conceal sardonic smiles. With consumer prices already up by more than 24% and further cost-related hikes already factored into producer prices, discounts of 10% will make little difference.

The increased prices, meanwhile, have led to a drop in domestic sales. According to TUIK, retail sales were down 3% in August in terms of inflation-adjusted value. The drop is likely to have worsened since then, given the decreasing real income of consumers. The shrinking demand has already forced companies to make markdowns, with many shops advertising discounts of up to 50%. This again raises the question of what difference the 10%-discount campaign can make.

So, what is the government’s actual purpose with the campaign? Is it another attempt to shirk responsibility by portraying inflation as an external calamity against which a fierce struggle is waged? Or is the government laying the ground for looming negotiations with trade unions to determine the hike in the minimum wage, which is the principal income of millions of Turks? By claiming a sincere struggle against an externally inflicted setback, Ankara might be planning to press its interlocutors to make their own sacrifice in the “all-out fight” and acquiesce to a low pay hike. This perhaps is the calculus behind the AKP-style fight against inflation.

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11.8 CYPRUS: Fitch Upgrades Cyprus to ‘BBB-‘; Outlook Stable

On 19 October, Fitch Ratings has upgraded Cyprus’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘BBB-‘ from ‘BB+’. The Outlooks are Stable.

Key Rating Drivers

The upgrade of Cyprus’s IDRs reflects the following key rating drivers and their relative weights:

High

Buoyant fiscal revenue and prudent fiscal policy mean we expect Cyprus will record a fiscal surplus of 2.7% of GDP in 2018, compared with a target of 1.7% in the April 2018 Stability Programme Update and a current ‘BBB’ median fiscal deficit of 2%. We forecast the fiscal surplus will remain high at 2.4% and 2.2% of GDP in 2019 and 2020, respectively, compared with 3.1% and 2.9% targeted in the 2019 Draft Budgetary Plan. Robust economic growth will boost fiscal receipts, while previously adopted hiring freeze and collective agreements will likely limit growth in the wage bill.

Cyprus’s gross general government debt (GGGD)/GDP will remain on a firm downward trajectory, despite a one-off expected increase in 2018. Following the placement into Cyprus Cooperative Bank (CCB) of €3.19 billion government bonds (15.5% of GDP) to facilitate the acquisition of part of the state-owned bank by Hellenic Bank (HB), GGGD/GDP is set to increase to 104.4% at end-2018 from 95.7% in 2017. However, we expect large primary surpluses, robust growth and contained nominal effective interest rates will reduce GGGD/GDP to 70% of GDP by 2027.

Medium

The ratio of non-performing exposures (NPEs) to total loans decreased to pro-forma 40.3% in H1/18 from 44% in 2017 as per the Central Bank of Cyprus, partly supported by the announced securitization by Bank of Cyprus (BoC) of €2.7 billion gross NPEs, which is still subject to regulatory approval by the European Central Bank. The acquisition by HB of CCB’s good assets and the subsequent transfer into a run-off entity of CCB’s €5.7 billion NPEs portfolio are estimated to have led to a further decrease in NPEs to 30% in September 2018. This will support a substantial decrease in contingent liabilities stemming from the banking sector, although these remain large.

The government has taken further decisive steps to address legacy issues within the banking sector. Key legislative amendments aimed at facilitating NPEs securitization and sales of loans, and strengthening foreclosure and insolvency toolkits were adopted by the parliament in July. The government also intends to launch a subsidy scheme to defaulting borrowers (Estia scheme) in January 2019, which implies loan restructurings and state subsidies to incentivize loan repayment. So far, use of foreclosure instruments has been negligible and the degree of implementation of the scheme and enforcement of the new legislative package remains uncertain.

Additional fiscal costs could arise from potential calls on the government-guaranteed Asset Protection Scheme, covering unexpected losses on €2.6 billion of CCB’s assets acquired by HB. State subsidies related to the Estia scheme and increased debt servicing costs following government support to CCB are estimated at a yearly 0.5% of GDP by the government and are already captured in our forecasts.

Cyprus is benefitting from a strong economic recovery with real GDP reaching pre-crisis level and the economy forecasted by Fitch to grow 4% in 2018 and 3.8% in 2019, supported by large foreign-financed investment projects in construction and tourism, and robust private consumption.

Cyprus’s ‘BBB-‘ IDRs also reflect the following key rating drivers:

Cyprus’s ratings are supported by a high level of GDP per capita, strong governance indicators and a favorable business environment significantly above ‘BBB’ rated peers’ and closer to ‘A’ category peer levels.

Private sector debt and non-performing exposures remain high, however, at 226% (excluding special purpose entities) and 97% of GDP in Q1/18, respectively, and constrain credit growth. Household and corporate debt stood at 105% and 121% of GDP and a large part of the recent decline in such debt stemmed mostly from high GDP growth, debt-to-asset swaps, loan write-offs, rather than loan repayment.

We expect private sector deleveraging will accelerate, however, as enforcement of new legal amendments, improving earnings and recovering house prices foster debt repayment. Economic growth will likely remain resilient to a faster resolution in NPEs as rising wages, a dynamic labor market and high household savings will help preserve disposable income and smooth consumption.

The banking sector remains extremely weak as reflected by Fitch Banking System Indicator (BSI) of ‘b’. Very weak asset quality and high NPE ratios are still weighing on new lending and profitability. The acquisition of CCB’s healthy assets by HB, respectively the second- and third-largest banks of the country, will result in further concentration within the sector between the two large national banks, with total banking sector’s assets still accounting for a high 336% of GDP at end-H1/18 (352% at end-2017). Unreserved NPEs for BoC and HB will also decrease to an estimated €3.8 billion (19% of GDP) following the sale of CCB assets and BoC transaction, but could lead to some capital shortfall if losses are crystallized and higher-than-expected haircuts incurred on collateral. This level of unreserved NPEs is significant relative to the banks’ common equity Tier 1 capital, highlighting their vulnerability to asset quality shocks.

Banking sector liquidity has improved after a 0.8% decline in deposits in Q1/18 due to uncertainty around the CCB sale. A highly indebted private sector has led to an accumulation of liquid assets and a decrease in the loan-to-deposit ratio to 91% in July 2018 (104% in 2017). Non-resident deposits in locally active credit institutions, however, still represent 29.5% of total deposits in H1/18, albeit on a declining trend. These are largely short-term funding and confidence-sensitive and would likely become more volatile than domestic deposits in case of stress.

Fitch forecasts the current account deficit will widen to 6.7% of GDP in 2018 and 7.2% in 2019, compared with the current ‘BBB’ median of 1.6%, as strong domestic demand, especially in the construction sector, fuels imports. When excluding special purpose entities (SPEs) including shipping and financial companies that materially distort external statistics, the current account deficit decreases substantially, according to the Central Bank of Cyprus. Cyprus’s net external debt (NXD) turned into a small asset position in Q2/18, when adjusted for SPEs, compared with a non-adjusted NXD of 154% at-end 2017 and a current ‘BBB’ median of 7.7%.

Cyprus’s financing flexibility has improved substantially since the country exited the macroeconomic adjustment program in March 2016. The government improved access to capital markets by issuing Eurobonds in June 2017 and September 2018. The sovereign has a large cash buffer, which accounts for 11% of GDP and covers more than the government’s medium-term debt management strategy of prefunding the next nine months of gross financing needs.

Fitch has revised the Country Ceiling to ‘A’ from ‘BBB+’. It is now four notches above the Long-Term Foreign-Currency IDR, up from three previously. This reflects Cyprus’s recent structural economic and financial sector adjustments and reduced risk of capital controls. It is still below the maximum possible six-notch uplift for Eurozone member states, owing to the weakness of the banking sector and recent history of capital controls.

Rating Sensitivities

Future developments that may, individually or collectively, lead to a positive action include:

-Materially reduced contingent liabilities to the sovereign stemming from the banking sector, for example from declining NPEs or an upgrade in the sector’s Viability Ratings;

-Marked reduction in the GGGD/GDP ratio; and

-Continued deleveraging of the private sector.

Future developments that may, individually or collectively, lead to a negative action include:

-Heightened risks in the banking sector, for example from deterioration in asset quality; and

-Stalling of the decline in the government debt-to-GDP ratio, for example due to deterioration of budget balances, weak growth or materialization of contingent liabilities.

Key Assumptions

Gross government debt-reducing operations such as future privatizations are not considered in Fitch’s baseline scenario. The projections also do not include the impact of potential future gas reserves off the southern shores of Cyprus, the benefits from which are several years into the future.

Fitch does not expect substantial progress with reunification talks between the Greek and Turkish Cypriots over the next quarters. The reunification would bring economic benefits to both sides in the long term but would entail short-term costs and uncertainties. (Fitch 19.10)

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Fortnightly, 14 November 2018

November 14, 2018, 6:33 am

≫ Next: Fortnightly, 28 November 2018

≪ Previous: Fortnightly, 31 October 2018

14 November 2018
6 Kislev 5779
6 Rabi Al Awwal 1440

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Israel & Boeing Sign Reciprocal Spending Agreement
1.2  Ben Gurion University and the State of Louisiana Announce Water Research Collaboration
1.3  Deputy Governor Dr. Baudot-Trajtenberg to Serve as Acting Bank of Israel Governor

2: ISRAEL MARKET & BUSINESS NEWS

2.1  Israel to Set Up Startup Incubators in India – Starting with Bengaluru in December
2.2  MTS Closes a $1.5 Million Investment
2.3  Shavit Capital Completes $100 Million Investment Round for Its Fifth Fund
2.4  Foresight Increases Stake in RailVision Following Successful Developments
2.5  Chinese Investors Participated in Three Out of the Four Largest Israeli Financing Rounds in 2018
2.6  The Hyundai Motor Company Invests in allegro.ai
2.7  Linse Capital, Together with Oppenheimer Asset Management, Invested $63 Million in Valens
2.8  Maverick Medical AI Raises $700,000
2.9  Mueller Water Products to Acquire Krausz Industries
2.10  Overwolf Raises $16 Million in Series B Funding Led by Intel Capital
2.11  Checkmarx Acquires Custodela to Bring Enhanced Automation to DevSecOps Programs
2.12  Turbonomic Expands In EMEA to Address Growing Demand for SMART Workloads
2.13  ForeScout Acquires SecurityMatters
2.14  Vitec Group Buys Amimon in $55 Million Cash Deal
2.15  Technion Launches t-hub, a New Center for Entrepreneurship and Innovation
2.16  RADA Announces $12 Million in New Orders
2.17  XM Cyber Closes $22 Million in Series A Funding
2.18  Cognigo Secures $8.5 Million Series A Round to Transform Data Protection & Privacy via AI

3: REGIONAL PRIVATE SECTOR NEWS

3.1  ICONS Coffee Shop Chain Eyes 40 Arabian Gulf Outlets by 2020/a>
3.2  BECO Capital Receives $15 Million from IFC
3.3  Cvent Continues Global Expansion with Opening of First Office in Dubai
3.4  Andersen Global Announces Expanded Presence in Saudi Arabia
3.5  Saudi Cinema Revenues Forecast to Hit $1.5 Billion by 2030
3.6  Saudi Car Sales Set to Rise 8% Courtesy of the New Women’s Market
3.7  Toys R Us Launches New Middle East E-Commerce Platform

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1  Dubai Expands Plan for Phase 4 of Giant Solar Park
4.2  Softbank Said to Plan $1.2 Billion Solar Power Plant in Saudi Arabia
4.3  King Mohammed VI’s Renewable Energy Goals Reached Within Deadline

5: ARAB STATE DEVELOPMENTS

5.1  Lebanon’s Fiscal Deficit Up to $3.04 Billion by June 2018
5.2  Jordanian Parliament’s Committee Passes Draft Income Tax Law
5.3  Iraq’s 2019 Draft Budget Analysisr
5.4  Iraq Granted Exemption from US Sanctions on Iran’s Energy Exports
5.5  South Korea Wins $500 Million Deal for Electricity in Iraq

Arabian Gulf

5.6  Bahrain’s Growth Accelerates as Non-Oil Sector Expands
5.7  Dubai’s Nine-Month Trade Figure Exceeds $262 Billion
5.8  Saudi Budget Deficit Shrinks as Revenues Surge

North Africa

5.9  Egypt’s Foreign Reserves Rise to $44.5 Billion in October
5.10  Egypt’s Non-Oil Business Activity Slows Slightly in October
5.11  More Foreign Debt for Egypt?
5.12  Morocco Jumps 9 Places, Ranks 60th in World Bank ‘Doing Business’ Report
5.13  Morocco’s Trade Deficit Widens as FDI Drops by 2.7%

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkey’s Inflation Hits 25% in October, Highest in 15 Years
6.2  Turkey’s Automotive Exports See Second-Highest Monthly Figure – $2.9 Billion in October
6.3  Greece Slips in World Bank’s Ranking on Ease of Doing Business

7: GENERAL NEWS AND INTEREST

ISRAEL

7.1 Forty Two Countries to Participate in Tel Aviv Eurovision Song Contest

REGIONAL

7.2  UAE Private Sector to Get Long Weekend for Mawlid Al Nabi
7.3  QS Reveals the Best Universities in the Arab Region
7.4  UAE Now Requires Pre-Approval to Bring Personal Medicines Into the Country
7.5  Half of Moroccan University Students Drop out Before Graduation

8: ISRAEL LIFE SCIENCE NEWS

8.1  iCAN Signs Bilateral Service Agreement With Global Technology Company
8.2  Zion Medical Announces Results of First Human Clinical Trial of HIV drug Gammora
8.3  Sweetch Partners With WellSpan Health to Help Fight Diabetes
8.4  FruitSpec Completes Successful Field Studies
8.5  Cellect Receives Multiple Patent Grants
8.6  Taranis Gets $20 Million Series B for its Crop-Monitoring Technology
8.7  PolyPid Raises $15 Million
8.8  ConTIPI Medical Raises $11 Millions
8.9  Alpha Tau Medical Launches New Clinical Trials in Italy with Leading Cancer Centers
8.10  MaxQ AI Receives FDA Clearance for Accipio Ix Intracranial Hemorrhage Platform
8.11  HemoScreen Hematology Analyzer for Point of Care Receives FDA 510(k) Clearance

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Camilyo Scores a Triple Win at the SIINDA Industry Excellence Awards 2018
9.2  Gilat to Provide the Ground Network for China Satcom’s ChinaSat-18
9.3  KPN Chooses Allot Service Gateway to Deliver Superior Network Performance
9.4  Elbit Systems to Provide Maritime UAS to the European Union Maritime Safety Agency
9.5  Ladingo Takes Top Prize at Retail Disrupt Startup Competition
9.6  VoiceSense Launches Speech-based Predictive Analytics Solution for Human Resources
9.7  2bPrecise Honored as One of Israel’s Top Startups
9.8  IDRRA Named a “Cool Vendor” by Gartner for 2018
9.9  Moovit Partners with Microsoft to Provide Public Transit Data for Azure Maps
9.10  Innoviz’s Solid-State LiDAR Wins CES 2019 “Best of Innovation” Award
9.11  CloudAlly Introduces a Backup Solution for Dropbox Business
9.12  Foresight’s QuadSight Vision System Wins Prestigious 2019 CES Innovation Award

10: ISRAEL ECONOMIC STATISTICS

10.1  The Composite State of the Economy Index for September 2018 Increases by 0.3%
10.2  Israel’s Budget Deficit Climbs by 3.6%
10.3  Israel Improves Ease of Doing Business Ranking

11: IN DEPTH

11.1  JORDAN: Moody’s Affirms Jordan’s B1 Ratings, Maintains Stable Outlook
11.2  UAE: Fitch Affirms Abu Dhabi at ‘AA’; Outlook Stable
11.3  EGYPT: IMF Agreement on the Fourth Review for Egypt’s Extended Fund Facility
11.4  MOROCCO: Fitch Affirms Morocco at ‘BBB-‘; Outlook Stable
11.5  TURKEY: Turkey’s Crisis-Hit Construction Sector Threatens Big Fallout

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel & Boeing Sign Reciprocal Spending Agreement

Boeing has agreed to spend billions of dollars in Israel over the coming decade if it wins major defense contracts, Israel’s Economy Ministry said on 30 October. The “reciprocal procurement” agreement calls for Boeing to collaborate with Israeli industries for at least 35% of the value of any transaction it signs with the Israeli government. This could ease concerns in Israel over new requirements in a U.S. aid package that divert funds away from local industries.

Boeing is competing in Israel for a number of key Defense Ministry contracts, including the purchase of additional F-15 aircraft, fueling planes and a squadron of transport helicopters. With Israel expecting to make about $10 billion of military purchases from Boeing over the next decade, the agreement with the U.S. aerospace company means $3.5 billion in new business in Israel.

Under a defense aid deal signed in 2016 by Israeli Prime Minister Netanyahu and then U.S. President Obama, the United States agreed to provide Israel with $38 billion in military assistance over 10 years. However, one component of the deal was to phase out a special arrangement that had allowed Israel to use 26.3% of the U.S. aid on its own defense industry instead of on American-made weapons. All the aid will now have to be spent on U.S. equipment by 2026. (Reuters 31.10)

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1.2 Ben Gurion University and the State of Louisiana Announce Water Research Collaboration

Louisiana Governor John Bel Edwards visited Beer Sheva’s Ben Gurion University in late October to participate in the signing of a research Memorandum of Understanding (MOU) between BGU’S Zuckerberg Institute for Water Research and the Water Institute of the Gulf in Baton Rouge. The MOU calls for the two institutes to collaborate on research and development projects related to integrated water resource research and applied science, and to collaborate on decisions related to water management issues. This will include exchanging research staff and students, as well as conducting joint research and academic meetings.

Governor Edwards added that he expects the five-year agreement to lay the groundwork for advanced bilateral projects focusing on issues including ecological and stream restoration, transboundary water resource research, water/groundwater modelling, policy and planning for sustainable management of water resources, agricultural efficiency, improved water quality, advancing water resource technology, and more.

The Zuckerberg Institute for Water Research (ZIWR) is located in Midreshet Ben Gurion as part of The J. Blaustein Institutes for Desert Research, Ben-Gurion University of the Negev. Two departments operate within the Institute: The Department of Environmental Hydrology & Microbiology and The Department of Desalination & Water Treatment. Studies of advanced degrees of MSc. and PhD in Hydrology and Water Quality are part of an international program and are conducted in English. Students attend from all over the world. ZIWR is also actively engaged in research projects within Israel and globally. (BGU 31.10)

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1.3 Deputy Governor Dr. Baudot-Trajtenberg to Serve as Acting Bank of Israel Governor

In accordance with the Bank of Israel Law, 5770-2010, if the Governor has ceased to serve in the position, the Deputy Governor shall take the place of the Governor and shall be authorized to exercise the Governor’s powers until a new Governor is appointed. As such, beginning on 14 November 2018, and until the new Governor shall take up the position, Deputy Governor Dr. Nadine Baudot-Trajtenberg will serve as Acting Governor and will be authorized to exercise the powers accorded to the Governor. The date of the new Governor beginning his term in office shall be determined after his appointment is approved by the Government. (BoI 13.11)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Israel to Set Up Startup Incubators in India – Starting with Bengaluru in December

The Modi’in Entrepreneurs’ Startup Hub (MESH) will set up an India-Israeli Innovation Centre (IIIC) in Bengaluru, which will be its first startup incubation facility in India after the US, the UK and China. IIIC in Bengaluru is expected to be launched mid of December this year, which will be followed by two more such incubation facilities in India. The Bengaluru facility, which is MESH’s fourth such facility globally, will be set up in the central business district of Bengaluru and will be operated by MESH itself. Startups that are part of IIIC will be given mentorship and guidance and opportunities to participate at all IIIC’s Global events and experience networking avenues with potential customers.

Beside giving Indian startups access to Israeli investors and frontier tech talent, the Bengaluru and other upcoming incubator facilities will bring on board both Israeli and Indian educational institutions for collaboration and co-research, under which Israel’s Technion, Ben-Gurion and Tel Aviv Universities will cooperate with India’s IITs and IIIT.

As well, Israel is aligning its India strategy around government initiatives like Startup India and Digital India. Israel has also identified six cities for starting these kind of incubation centers. Additionally, for Bengaluru and other upcoming incubation facilities in India, Israel will team up with Indian government policy think tank, NITI Aayog, and Atal Innovation Mission, an innovation promotion platform involving academics, entrepreneurs, and researchers. (IW2 Research 13.10)

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2.2 MTS Closes a $1.5 Million Investment

MTS – Mer Telemanagement Solutions announced the closing of the investment by an institutional investor, of $1.5 million in the newly-created class of convertible preferred shares of the Company, at a price per preferred share of $1.14. The closing follows the approval of the Securities Purchase Agreement and the transactions contemplated thereby (the SPA) by the Company’s shareholders at the Company’s annual general meeting of shareholders held on 28 October 2018. The price per share was determined based on a 15% discount to the volume weighted average price of the Company’s ordinary shares for the three trading days preceding the signing of the term sheet with the institutional investor in June 2018.

Ra’anana’s Mer Telemanagement Solutions (MTS) is focused on innovative products and services for enterprises in the area of telecom expense management (TEM) and Call Accounting. MTS markets its solutions through wholly-owned subsidiaries in Israel, the U.S and Hong Kong, as well as through distribution channels. (MTS 31.10)

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2.3 Shavit Capital Completes $100 Million Investment Round for Its Fifth Fund

Shavit Capital completed a $100 million funding round for its fifth fund. Shavit Capital has over $400 million under management in five funds and specializes in pre-IPO investments in leading technology companies with a special focus on the life science sectors. Shavit Capital is one of the most active investors in late-stage life sciences companies. Shavit Capital’s portfolio includes Foamix Pharmaceuticals, Kamada, Anchiano Tx (formerly BioCancell), Gamida Cell, Brainsway, Alpha TAU Medical and PolyPid.

Shavit Capital, which until now has focused on companies planning an IPO on Nasdaq, is expected to expand its activities to include companies nearing flotation in other markets, such as Europe, Canada, Australia and Hong Kong. Shavit works closely with most of the leading international investment banks that specialize in raising capital for Israeli companies. Shavit leads investment rounds ranging in size from $20 million to $60 million and its investments are also supported by leading financial institutions in Israel and around the world. Shavit’s co-investors also support the fund’s portfolio companies when they go public. Currently, Shavit is leading several investment rounds, including a round for a security company that plans to go public in Australia, and a $40 million investment round for Syqe Medical, which is developing an advanced inhaler for medical cannabis.

Jerusalem’s Shavit Capital was founded in 2007. The fund’s investors include leading financial institutions from the United States, Asia and Israel, as well as owners and senior managers of leading investment banks and multibillion dollar hedge funds. (Shavit Capital 31.02)

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2.4 Foresight Increases Stake in RailVision Following Successful Developments

Foresight Autonomous Holdings has increased its stake in RailVision by exercising warrants into 2,704 of RailVision’s ordinary shares for an aggregate of $0.6 million. The exercise follows RailVision’s successful participation at the InnoTrans International Trade Fair for Transport Technology last September in Berlin, where RailVision demonstrated substantial technological and commercial progress. Following the exercise, Foresight holds 36.33% of the issued and outstanding share capital of RailVision and 33.78% on a fully diluted basis.

At the InnoTrans fair, RailVision presented its add-on big data module concept, enabling customized real-time and offline analysis of rail infrastructure and the surrounding ecosystems. The module concept is designed to carry out digital mapping of relevant areas, enabling infrastructure verification and behavioral and environmental trend analysis. In addition, it generates comprehensive, easy-to-view reports, supporting condition monitoring and predictive maintenance of infrastructure.

Ra’anana’s RailVision is a leading provider of cutting-edge cognitive vision sensor technology and safety systems for the railway industry. RailVision offers a solutions suite for mainline and shunting yard, equipped with deep learning technologies and designed to extend the locomotive driver’s visual range by up to two kilometers at all times of day and in all weather conditions. RailVision aims to improve the safety of trains operating at all speeds.

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2.5 Chinese Investors Participated in Three Out of the Four Largest Israeli Financing Rounds in 2018

A report by IVC Research Center indicates that Chinese investors are clearly favoring mature and profitable mainstream Israeli companies. According to the report, four Israeli high-tech deals raised over $100m each, with Chinese investors participating in three of them. They also participated in 35% of the largest Israeli deals in the first three quarters of 2018. Chinese investors’ activity has grown steadily though slowly over the past two years from 15 investments per quarter to about 20 investments. Analysis of their deal preferences has revealed a tendency for mainstream sectors such as software and life sciences companies. The expansion of Chinese investors’ activity in Israeli high-tech companies capital raising is evident in Q1 – Q3/18 as Chinese investors participated in all 17 companies, which raised over $20m each. In addition, IVC found that in the past five years, Chinese investors participated in 17 deals of over $50m each, with almost 60% of the deals in 2017–2018. (IVC 06.11)

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2.6 The Hyundai Motor Company Invests in allegro.ai

Hyundai Motor Company announced its strategic investment in allegro.ai. Established in 1967, Hyundai Motor Company is committed to becoming a lifetime partner in automobiles and beyond with its range of world-class vehicles and mobility services offered available in more than 200 countries. Hyundai explains that through this partnership, Hyundai aims to speed up the deployment of AI technologies across various business areas. Hyundai expects to provide safer driving experiences for its customers by adopting DL computer vision technologies from prominent firms such as allegro.ai in its vehicles. These technologies can be applied to autonomous driving systems to enhance road navigation and real-time decision making.

allegro.ai is proud to partner with Hyundai and share Hyundai’s belief that AI empowers the industry to provide greater road safety, autonomy, to better understand customers’ needs and to help broaden their experiences. With this addition of Hyundai Motor Company, allegro.ai’s investors now include MizMaa Ventures, Robert Bosch Venture Capital GmbH, Samsung Catalyst Fund, Hyundai Motor Company, Dynamic Loop Capital and Gandyr.

Ramat Gan’s allegro.aAI is a deep learning computer vision platform that provides a complete product lifecycle management solution for AI development & production, starting with computer vision. The company’s platform simplifies the process of developing and managing deep learning powered solutions – such as for autonomous vehicles, robotics, security cameras, logistics and others. (Allegro.AI 05.11)

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2.7 Linse Capital, Together with Oppenheimer Asset Management, Invested $63 Million in Valens

Valens announced that Linse Capital, joined by Oppenheimer Asset Management, invested a total amount of $63 million as part of this financing round. The company, whose chipsets simplify in-vehicle connectivity, is looking to accelerate the development of its portfolio for the autonomous vehicle sector and address the ongoing requirements of its automotive partners.

Since its latest funding in 2017, Valens, with strategic partnerships with leading OEMs and tier-1s, has identified significant opportunities in the autonomous sector. By raising additional capital, the company will be ramping up its activities in the sector, addressing in-vehicle high-performance computing, smart architectures and PCIe transmission, to realize the vision of the autonomous car.

Hod HaSharon’s Valens Automotive, a division of Valens, was established in 2015 with the singular goal of delivering the world’s most advanced audio/visual chipset technology to the automotive world. Valens HDBaseT Automotive chip technology enables unparalleled in-vehicle connectivity, converging audio & video, Ethernet, USB, controls, PCIe, and power over a single cable. Valens’ patented HDBaseT technology is used by the world’s largest audio/video component manufacturers, enabling the highest quality of connectivity without the limitations of legacy infrastructure. (Valens 07.11)

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2.8 Maverick Medical AI Raises $700,000

Tel Aviv’s Maverick Medical AI has announced that it has raised $700,000 from The Time, the leading Israeli technology incubator in the field of Artificial Intelligence, together with the Israel Innovation Authority. The funding will be utilized for the company’s development of its medical artificial intelligence-based solutions for identifying chronic disease in elderly populations based on text-based analysis of medical reports, and for implementing its solutions with U.S. healthcare providers and insurers.

Maverick AI is developing an advanced AI software system based on NLP (Natural Language Processing) and Machine Learning identifies clinical risk factors out of medical reports such as specialist and hospitalization reports. These risk factors are chronic diseases that may not be fully documented in the elderly patient’s medical record due to the excess of information available to the attending physician, and may therefore be overlooked. The Maverick AI system assists physicians, healthcare providers and insurers to identify these risk factors thereby ensuring better medical care to the patient and to reduce medical care costs by preventing complications. The benefits offered by the system provide substantial value to the Medicare Advantage Plans and other value-based care programs.

The technology at the core of the company’s system is geared to specific elements in medical reports. It allows the system to analyze medical reports written in unstructured text and to convert them into actionable diagnoses which are then presented to the physician. The system is being developed based on large databases (millions of specialist reports) that are required in order to train neural networks. (Maverick Medical AI 05.11)

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2.9 Mueller Water Products to Acquire Krausz Industries

Atlanta’s Mueller Water Products has signed a definitive agreement to acquire Tel Aviv’s Krausz Industries, a manufacturer of pipe couplings, grips and clamps, for $140 million in cash. Krausz Industries provides a full suite of innovative and proprietary pipe couplings, grips and clamps under the HYMAX brand for the global water and wastewater industries. The Company was founded in 1920, with manufacturing operations in Israel, distribution facilities in the U.S., and 300 employees world-wide. Krausz had net sales of approximately $43 million in 2017 with approximately 75% of its sales generated in North America. The transaction is subject to customary closing conditions and is expected to close in December 2018.

Once the transaction has closed, Krausz Industries will become part of Mueller Water Products’ Infrastructure segment. Krausz’s product line of pipe couplings, grips and clamps are designed to address repair or pipe connection needs across a broad range of applications, pipe sizes and pipe materials. Krausz has a history of growth, profitability, and execution through new product development. The acquisition aligns with Mueller Water Products’ strategic focus on product and geographical expansion, and is complementary from product, distribution, customer and manufacturing perspectives. This acquisition will also position Mueller in the growing pipe repair market. (Mueller Water Products 05.11)

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2.10 Overwolf Raises $16 Million in Series B Funding Led by Intel Capital

Overwolf announced a $16 million round of funding led by Intel Capital, with additional investments from Liberty Technology Venture Capital as well as existing investors. Overwolf is building an open platform of game apps and in-game services, with over 10 million monthly active players across mobile and desktop. Overwolf’s mission is to generate value for every gamer in every game by empowering 3rd-party creators and developers. Overwolf provides gamers hundreds of useful apps for popular PC and mobile games, from real-time coaching services, analytics solutions, video recording tools and much more.

Being an open platform obsessed with the developer experience, Overwolf intends to heavily invest into new and innovative tools that give developers a best-in-class app publishing experience. Overwolf’s goal is to generate more value for developers of all sizes – from private independent contributors to venture-backed startups and large corporate developers. This is Overwolf’s third investment round after a seed round in mid-2011 and a series-A round at the end of 2013. The company is growing swiftly and recruiting for its Tel Aviv site.

This round of funding comes shortly after the announcement of a joint fund of over $7M by Intel and Overwolf, for the purpose investing in apps and mods for hardcore gamers.

Tel Aviv’s Overwolf‘s mission is to provide value for every gamer in every game by empowering third party developers. Working with passionate creators, venture backed startups and large corporates, Overwolf helps developers unlock new game features that improve game experiences and support the game publishers. Overwolf’s partners include Intel, OP.GG, NVIDIA, Cloud9, Team Liquid, Riot Games, Logitech and many others. (Overwolf 07.11)

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2.11 Checkmarx Acquires Custodela to Bring Enhanced Automation to DevSecOps Programs

Checkmarx has acquired Custodela, an Ontario-based provider of software security program development and consulting services focused on DevSecOps. The acquisition positions Checkmarx to uniquely empower CIOs and CISOs in accelerating the maturity of their DevSecOps programs with expert services for software security deployment and automation.

Only Checkmarx enables businesses to take a comprehensive, unified approach to managing software exposure at the speed of DevOps. Unlike siloed, gate-based application security approaches, Checkmarx gives organizations a more holistic, platform-centric approach where security is driven from a business context perspective and implemented effectively and continuously through automation. In turn, Checkmarx supports all stages of the software development lifecycle while bridging the gaps between senior management and business stakeholders, development, DevOps and operations.

Ramat Gan’s Checkmarx is the Software Exposure Platform for the enterprise. Over 1,400 organizations around the globe rely on Checkmarx to measure and manage software risk at the speed of DevOps. Checkmarx serves five of the world’s top 10 software vendors, four of the top American banks, and many government organizations and Fortune 500 enterprises, including SAP, Samsung, and Salesforce.com. (Checkmarx 07.11)

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2.12 Turbonomic Expands In EMEA to Address Growing Demand for SMART Workloads

Boston’s Turbonomic, the leader in workload automation for hybrid cloud and three-time ranking Forbes Cloud 100 company, is expanding its international footprint in EMEA opening its first Center of Cloud Excellence (CoCE) in Tel Aviv, Israel. Focused on research and development (R&D), the CoCE will ensure the highest level of cloud innovation, support and expertise to help customers advance and achieve their Microsoft Azure and Amazon Web Services (AWS) cloud strategy goals. Additionally, in support of a doubling of the number of alliances in the region over the past year, a new representative office in Paris, France will support the Company’s growing European sales, alliances and channel and marketing organizations.

Turbonomic workload automation for hybrid cloud continuously assures that all workloads get precisely the resources needed to ensure performance and eliminate overspending while maintaining policy compliance. Founded in 2009, Turbonomic is one of the fastest-growing technology companies, trusted by thousands of enterprise organizations to activate their hybrid cloud journey. (Turbonomic 05.11)

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2.13 ForeScout Acquires SecurityMatters

ForeScout Technologies announced it has acquired SecurityMatters, a global leader in operational technology (OT) network protection, for approximately $113 million in cash, subject to customary adjustments. The acquisition will bolster ForeScout’s global leadership position in agentless device visibility and control across the extended enterprise with expanded capabilities and advanced features to secure OT and industrial environments.

Founded in 2009, SecurityMatters provides organizations with device visibility, continuous network monitoring, and threat and anomaly detection specific to operational technology and industrial environments using passive collection techniques that don’t impact operations. Its solution protects networks from the widest range of threats utilizing patented technology and with a library of over 1600 ICS-specific threat indicators.

Tel Aviv’s ForeScout Technologies helps make the invisible visible. The company focuses on providing Global 2000 enterprises and government agencies with agentless visibility and control of traditional and IoT devices the instant they connect to the network. Our technology integrates with disparate security tools to help organizations accelerate incident response, break down silos, automate workflows and optimize existing investments. (ForeScout 08.11)

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2.14 Vitec Group Buys Amimon in $55 Million Cash Deal

London-listed Vitec Group has acquired Israel-based chipmaker Amimon Inc in a $55 million cash deal, Vitec announced in a filing to the London Stock Exchange. Including added expenses such as employee retention costs, the deal is valued at $59.9 million.

Herzliya’s Amimon, headquartered in San Jose, California, but the majority of its 60 employees are employed in its Israeli research and development center. The company develops chipsets and modules for real-time wireless video transmission. The company registered revenues of $18.6 million and an operating loss of $0.7 million for 2017, and revenues of $13.4 million for the first three quarters of 2018, according to Vitec.

Vitec, which has been a customer of Amimon since 2012, announced it will integrate the company into its creative solutions division. The integration is expected to increase the division’s EBITDA by $4 million in 2019, $7.5 million in 2020 and $9 million in 2012, Vitech said. (Vitec 11.11)

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2.15 Technion Launches t-hub, a New Center for Entrepreneurship and Innovation

Technion – Israel Institute of Technology won a NIS 10 million grant for the advancement of entrepreneurship and innovation as part of a “New Campus Vision” competition of the Council for Higher Education. The grant will be used to establish t-hub – The Technion Entrepreneurship and Innovation Center, based on the strategic plan for entrepreneurship and innovation formulated by the university during the past two years. Technion is the only academic institution to win the competition individually.

Since its establishment, the Technion has championed the integration of basic science and applied research, striving to advance scientific knowledge while cultivating the desire to exploit it for the benefit of humanity. Technion has nurtured entrepreneurial thinking for many years and has pioneered the development of curricula for all students. The first entrepreneurship course was founded 30 years ago on campus.

t-hub will serve as a focal point for all entrepreneurial activities of Technion faculties; will encourage entrepreneurial thinking through teaching, research, and practical experience; and enable each student, faculty member, and others to experience entrepreneurial activities through centralized activities as well as by encouraging local initiatives. The Technion’s Entrepreneurship and Innovation Center has many partners among Israel’s leading industrial and hi-tech companies including Teva, Rafael and Alpha Omega. (Technion 12.11)

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2.16 RADA Announces $12 Million in New Orders

RADA Electronic Industries announced the receipt of over $12 million in new orders, in recent weeks. Out of these, over $5 million were orders for RADA’s software-defined radars for counter rocket artillery and mortar (C-RAM), counter UAV and short range air defense (SHORAD). The majority of these orders were from new and strategic defense organizations, and these orders represent initial orders with potential for much greater follow-on orders in the future. Portions of the orders were follow-ons from customers that have placed initial orders earlier this year. Almost $7 million out of the $12 million, were follow-on orders for RADA’s legacy avionics, including avionics for UAVs, helicopters, digital video recorders, and ongoing maintenance orders for RADA’s wide installment base of core avionics for military platforms.

Netanya’s RADA Electronic Industries, a defense electronics company, specializes in the development, production, and sales of Tactical Land Radars for Force and Border Protection, and Avionics Systems (including Inertial Navigation Systems) for fighter aircraft and UAVs. (RADA 12.11)

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2.17 XM Cyber Closes $22 Million in Series A Funding

XM Cyber has closed a $22 million Series A funding round with the participation of Macquarie Capital, Nasdaq Ventures, Our Innovation Fund, LP and UST Global, among others. The company has now raised a total of $32 million, following a previous seed round of $10 million from Swarth Group.

XM Cyber will use the funding to accelerate its strong growth through expanded sales, marketing and engineering programs. The company, a leader in the “Breach and Attack Simulation” category, has already received 16 industry awards this year on the strength of its HaXM platform, including being recognized as a “Technology Pioneer” by the World Economic Forum. XM Cyber’s customers include leading financial institutions and critical infrastructure organizations across North America, Europe, Israel and Australia.

Herzliya’s XM Cyber provides the first fully automated APT simulation platform to continuously expose attack vectors, above and below the surface, from breach point to any organizational critical asset. This continuous loop of automated red teaming is completed by ongoing and prioritized actionable remediation of security gaps. In effect, HaXM by XM Cyber operates as an automated purple team that fluidly combines red team and blue team processes to ensure that organizations are always one step ahead of the attack. (XM Cyber 13.11)

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2.18 Cognigo Secures $8.5 Million Series A Round to Transform Data Protection & Privacy via AI

Cognigo announced the completion of a $8.5 million Series A round. The round was led by OurCrowd.com, with Prosegur and State of Mind Ventures. The new funding will be used to support Cognigo’s global sales and marketing expansion and product development, as well as further fuel investment in its Cognitive Computing technology, which helps organizations achieve data protection and privacy regulatory compliance (such as GDPR, PIPEDA, CCPA and others).

Tel Aviv’s Cognigo is the world’s first AI-driven platform for data protection and compliance, offering a single point of control to manage and secure critical data, sensitive assets and PIIs. Cognigo’s AI-driven solution provides a human-free data discovery, classification and protection platform, which supports structured and unstructured data – both for on premise and cloud data silos. (Cognigo 13.11)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 ICONS Coffee Shop Chain Eyes 40 Arabian Gulf Outlets by 2020

ICONS Coffee Couture, a health conscious lifestyle coffee shop chain, is planning to open 40 stores across the Arabian Gulf region by 2020. Through a partnership with ABL Company, the retailer is currently looking at an expansion across Kuwait with six branches. The brand is also looking at a 10 company-owned store expansion in the UAE within the next six months, of which the newest Icons Branch just opened its doors at Manar Mall, Ras Al Khaimah.

ICONS said its vision is to be pivotal in creating healthier communities around its coffee shops through nutritious and balanced food offerings, and education and promotion of an active lifestyle. The chain is now available in six countries including the UAE, Qatar, Saudi Arabia, Bahrain, Oman and Austria. (AB 10.11)

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3.2 BECO Capital Receives $15 Million from IFC

IFC, a member of the World Bank Group, is investing a total of $15 million in a pair of investment funds managed by Dubai’s BECO Capital, part of an effort to support technology startups and drive innovation across MENA. IFC invested $5M in BECO Capital’s inaugural $50M investment vehicle, launched in 2012. IFC has also invested $10M in BECO’s newest venture capital fund, which is expected to reach up to $100M. BECO Capital has been an early backer of some of the region’s most successful technology companies including Careem, Property Finder, and Vezeeta. Such early support is considered crucial in a region where many entrepreneurs struggle to get the funding they need to turn their ideas into reality.

To-date, BECO’s inaugural fund has supported 16 technology companies, which have collectively created more than 6,000 direct jobs and raised $750M from other investors. IFC’s investment in BECO’s first fund will help provide follow-on funding to high-potential portfolio companies.

BECO’s 2nd fund is expected to support 24 startups over 5 years. IFC’s support for the 2nd fund has helped mobilize investments from other large investors such as RIMCO (a subsidiary of Rashed Al Rashed, a Saudi conglomerate) and Bahrain Development Bank’s Al Waha Fund of Funds.

IFC has invested in startup incubators in places like Egypt, Judea & Samaria and Gaza; while also investing larger venture capital funds, including the pan-MENA Wamda and the Egypt-focused Algebra Ventures. (ArabNet 31.10)

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3.3 Cvent Continues Global Expansion with Opening of First Office in Dubai

Virginia’s Cvent, a market leader in meetings, events and hospitality technology, announced the opening of its first office in the Middle East. Located in the heart of Dubai, the new location will serve as a regional hub enabling the company to service current clients more quickly and address the growing demand for its event and hospitality cloud platforms in the Middle East and Africa. With more than 100 customers in the region, Cvent has established a strong client base including top brands and leading luxury hotels such as PwC, Qatar Foundation, Arabian Exhibition Management, Marriott Hotels, Shangri-La Hotel, and Atlantis-The Palm. Opening this office in Dubai showcases the region’s thriving MICE industry and highlights Cvent’s ongoing expansion and growing customer base across the globe.

With the upcoming World Expo 2020, Dubai is poised for incredible growth in the tourism and hospitality sectors, offering more opportunities to attract group and corporate travel to the region. In response to increased MICE interest and RFP volume going into the Middle East and Africa (MEA) region, Cvent for the first time launched a separate category for MEA in its annual list of the Top Meetings Destinations. Additionally, Dubai properties took 17 of the top 25 spots in Cvent’s inaugural Top Meeting Hotels list in Middle East & Africa, further illustrating the region’s growing impact as a leading tourism and business travel destination. (Cvent 05.11)

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3.4 Andersen Global Announces Expanded Presence in Saudi Arabia

Andersen Global furthers its expansion into the Middle East with news that the leading independent tax consulting firm in Saudi Arabia (KSA) has become a collaborating firm of Andersen Global. Alrikaz Tax Consultants has signed a Collaboration Agreement with Andersen Global, expanding Andersen Global’s presence in the country with the largest economy in the region, and paving the way for continued growth. Alrikaz has five offices and nearly 100 employees across major economic hubs of KSA, including Jeddah, Riyadh and Al Khobar. Andersen Global’s expansion in the Middle East has been significant this year and includes added presence in UAE, Kuwait, Jordan and Lebanon. Andersen Global is an international association of legally separate, independent member firms comprised of tax and legal professionals around the world. (Andersen Global 08.11)

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3.5 Saudi Cinema Revenues Forecast to Hit $1.5 Billion by 2030

While the Arabian Gulf will see the development of more than 1,000 new cinema screens in the next three to five years, total cinema revenue in Saudi Arabia is expected to reach $1.5 billion by 2030. PwC Middle East forecasts are based on a projected 2030 population of 39.5 million, and 6.6 screens per 100,000 people. Based on global and regional benchmarks, PwC said it expects Saudi Arabia to accommodate between 300 and 370 cinema locations. Based on pricing of $11–$14 for lower end formats, and $40 for luxury formats, Saudi Arabia could generate $950 million in box office revenues by 2030. As other revenue streams typically account for 35% of overall revenues, this brings the total to $1.5 billion,

The Arabian Gulf region will see the development of more than 1,000 new cinema screens in the next three to five years, as developers and cinema operators announced massive investment plan at the forum that took place at the Grand Hyatt hotel in Dubai. The region has 1,300 cinema screens in operation. The announcement of 1,000 cinema screens will see more than 2,300 cinema screens in operations in the next five years, with the majority of the new screens to open in Saudi Arabia. Majid Al Futtaim, which operates 355 cinema screens, is investing AED2 billion in adding 600 cinema screens in Saudi Arabia. Novo Cinemas, which operates 124 screens in 10 locations with 19,000 seats, will also add more cinemas in the next few years.

Globally, the number of cinema screens has crossed 150,000, PwC Middle East said, adding that in the MENA region, box office revenue exceeded $500 million last year, up 3% from 2016. (AB 03.11)

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3.6 Saudi Car Sales Set to Rise 8% Courtesy of the New Women’s Market

Saudi Arabia’s automotive sector is set for a rapid transformation in the coming years, with 20% of the female population, or three million drivers, expected to be added to the kingdom’s roads by 2020, according to a new report. A whitepaper, published by global research company Aranca, said the lifting of the ban on women driving in Saudi Arabia, along with recovering oil prices and economic policies aimed at boosting consumer spending, will result in an 8% per annum increase of passenger vehicles sales until 2022. The report added that in addition to new car sales, the positive impact of a new customer segment over the next 1-3 years will be felt in the kingdom’s automotive aftermarket, which was valued at $7.4 billion in 2017.

According to Aranca, vehicles in operation in Saudi Arabia stood at 7.3 million in 2017, with 438,000 new passenger cars and 110,000 new commercial vehicles sold for the year. Tires accounted for the greatest slice of revenue in the Saudi’s spare parts market, with a 30% share in 2017 ($2.2 billion). Aranca said 10 million vehicles will ply Saudi roads by 2022, including 6.5 million passenger vehicles and 3.5 million commercial vehicles. It added that as a result, demand for spare parts and related auto services will grow six% annually, reaching a value of $9.8 billion in 2022.

Many of these opportunities will likely arise in Saudi’s western regions of Medina and Mecca, where more than one million women are expected to get behind the wheel by 2020. The whitepaper further stated that key industry players are already taking initiatives to capitalize on opportunities created by women being allowed to drive, including the creation of women-only car showrooms, auto-insurance claims centers and driving schools dedicated to women. (AB 03.11)

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3.7 Toys R Us Launches New Middle East E-Commerce Platform

Toys ‘R’ Us, the international children’s toy retailer, which closed down in the UK earlier this year, has launched a new e-commerce website to drive Middle East sales. Implemented by California’s Astound Commerce, the website is one of seven e-commerce platforms to be rolled out by the retailer in other Middle East and North Africa markets over the next five months

Launched by franchisee Al-Futtaim in 1995 in Dubai, Toys ‘R’ Us MENA is now present in 19 locations in the MENA region. To support its growth and deliver omnichannel capabilities to its customers, Al Futtaim Group has now sought to launch the new toysrusmena.com website. The new e-commerce site also includes a special gift finder, allowing customers to search for presents based on the age of the child and allocated budget. Additionally, customers can pay online using Samsung Pay. The first order was delivered just 12 hours after the site went live. (AB 31.10)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Dubai Expands Plan for Phase 4 of Giant Solar Park

On 3 November, the Dubai Electricity and Water Authority (DEWA) announced plans to expand the fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park. The state utility signed an amendment to the power purchase agreement with the consortium led by Saudi Arabia’s ACWA Power which includes adding 250MW of photovoltaic solar panels, at a cost of 2.4 cents per kilowatt hour. With this addition, the total capacity of the fourth phase of the solar park will rise from 700MW to 950MW, a statement said, adding that the total investment for the project has increased to AED16 billion ($4.36 billion).

Noor Energy 1 was launched in a partnership between DEWA, ACWA Power and China’s Silk Road Fund to build the fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park. The project will use three technologies to produce clean energy – 600MW from a parabolic basin complex, 100MW from a solar tower and 250MW from photovoltaic panels. The project will have the world’s tallest solar tower at 260 meters and the largest thermal energy storage capacity in the world of 15 hours, which allows for energy generation round the clock. The 13MW photovoltaic first phase became operational in 2013. The 200MW photovoltaic second phase of the solar park was launched in March 2017 while the 800MW photovoltaic third phase will be operational by 2020. (AB 03.11)

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4.2 Softbank Said to Plan $1.2 Billion Solar Power Plant in Saudi Arabia

SoftBank Group Corp is planning to develop a $1.2 billion solar power plant in Saudi Arabia, according to people with knowledge of the matter. The plant, to the north of Riyadh, would generate 1.8 gigawatts of power a year, the people said, asking not to be identified because the plans are private. SoftBank has started preliminary talks with banks and developers to gauge interest in the facility. Plans for the facility are at an early stage and SoftBank may decide to change the size of the plant or not proceed with it, the people said. The plant would be a pilot project for Saudi Arabia’s wider plans to build more solar power facilities.

The country’s Public Investment Fund is the largest investor in SoftBank’s $100 billion Vision Fund as Masayoshi Son forged personal ties to Saudi Crown Prince Mohammed bin Salman. The PIF continues to work with the SoftBank Vision Fund, and other parties, on a number of large-scale, multi-billion dollar projects relating to the solar industry, which will be announced in due course, including solar power generation.

Saudi Arabia and SoftBank signed a memorandum of understanding in March to develop 200 GW of solar power facilities, which would be larger than any other. SoftBank and the PIF last month said they’re continuing to collaborate on solar energy plans after the Wall Street Journal said their $200 billion development was put on hold. Saudi Arabia is seeking to overhaul its energy industry to stop burning oil and gas that are more profitable to export. As part of this strategy, it plans to build at least 16 nuclear reactors over the next 25 years, and is also developing its first wind power plant and a 300 MW solar plant. (AB 06.11)

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4.3 King Mohammed VI’s Renewable Energy Goals Reached Within Deadline

King Mohammed VI conducted a follow-up of the implementation of Morocco’s renewable energy strategy. This year, the objectives that the King set in April were achieved within the deadlines. These objectives included beginning the operation of Noor Ouarzazate, a 580MW solar energy complex. The Noor Ouarzazate III tower was successfully synchronized to the power grid, making it one of the largest solar multi-technology complexes in the world. Engineering and technology group Sener completed the first synchronization of the Noor III plant to the Moroccan grid in August. The company will start the final testing of Morocco’s Noor III solar power plant in Ouarzazate to prepare for commercial operation by the end of 2018.

Noor Laayoune I and Noor Boujdour I solar power plants were also completed for “a combined capacity of 100 MW.” These two power plants were built under an innovative financing plan that used the first green bond issue in the Kingdom. The plants, which are part of a new development model, paved the way for further progress to benefit the local population and economic stakeholders in Western Sahara.

Construction of the 180 MW Midelt wind farm and the 100 MW Taza wind farm will start in 2019. In 2019, a repowering project for the Koudia El-Baida wind farm, in the Tangier-Tetouan region, will be launched. The farm is the first wind project in Morocco and has been operating since 2000 through Morocco’s National Office of Electricity (ONEE). The repowering project will increase the farm’s capacity from 50 to 120MWs. The project will develop the wind energy resources in Morocco’s northern region. (MWN 02.11)

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Fiscal Deficit Up to $3.04 Billion by June 2018

According to the Ministry of Finance, Lebanon’s fiscal deficit expanded from $907.59M by June 2017 to $3.04B by June 2018. In fact, fiscal revenues witnessed an annual decrease of 1.97% to reach $5.94B while the government spending rose by a yearly 28.84% to stand at $8.98B. Lebanon’s overall primary balance which excludes Lebanon’s debt service posted a deficit of $155.41M, compared to a surplus of $1.63B by June 2017.

Tax revenues (constituting 76.91% of total revenues) declined by an annual 3.24% to $4.57B. Revenues from the VAT (27.19% of total tax receipts) climbed by 9.71% year-on-year y-o-y to $1.24B, and this can be largely attributed to the new VAT rate of 11%, increased from 10% starting January 2018. Meanwhile, customs’ revenues (14.53% of tax receipts) dropped by 3.92% (y-o-y) to $663.74M. As for Non-tax revenues (22.88% of total revenues), they witnessed a drop of 16.93 % to stand at $860.26M by June 2018. This can be linked to the yearly decrease of 26.02% in telecom revenues (constituting 37.04% of total non-tax revenues) to reach $318.61M by June 2018.

On the expenditures’ side, total government spending increased by a yearly 28.84% to hit $8.98B by June 2018. In details, transfers to Electricity du Liban (EDL) alone rose by 32.76% to reach $738.44M which followed the 35.08% annual rise in average oil prices to $71.16/barrel over the period. Moreover, total debt service increased by an annual 13.58% to reach $2.88B by June 2018. In details, interest payments rose by a yearly 13.92% to stand at $2.78B by June 2018 while the foreign debt principal repayment recorded an uptick of an annual 3.52% to reach $97.77M by June 2018. (MoF 13.11)

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5.2 Jordanian Parliament’s Committee Passes Draft Income Tax Law

Jordan’s Lower House of Parliament’s Committee on Economy and Investment approved a draft income tax law following weeks of debate and study of the bill. According to the new bill the committee has endorsed, the threshold for individuals will be JOD10,000 in 2019, but will go down to JOD9,000 in 2020. The tax threshold for households will be JOD20,000 in 2019 down to JOD18,000 in 2020. Under the new draft, households will have an exemption of JOD3,000 a year covering medical and education expenses as of 2020, in addition to JOD2,000 tax relief for the disabled. The committee introduced a JOD1 million exemption to farmers and revoked a proposed 20% tax on the industrial sector. Further, the committee canceled another proposed social solidarity tax and replaced it with a national contribution tax targeting those whose income exceeds JOD200,000 a year. The Lower House began debating the draft on 13 November in two morning and evening sessions. (AMMONNEWS 11.11)

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5.3 Iraq’s 2019 Draft Budget Analysis

Iraq’s first draft budget for 2019 shows an overall increase in spending of 23% compared to 2018. Oil revenues still dominate sources of revenue, projected at 89% of government finances. The Iraqi government, with help from international creditors, has been aiming to increase non-oil sources of income. In 2019 however, non-oil income reduces by IQD 2.65 trillion ($2.24b), or a decline of 18%.

Spending on energy, security and defense as well as social services remains a priority ahead of other sectors. Notably, the state’s planned spending on capital projects will grow by 32% and liberated provinces are included again in planned financial allocations after years of war, an important progression on 2018. However, Iraq’s greatest challenge of reducing its operational expenditure is still unresolved as it expands by 21% in 2019 and dominates 75% of total expenditure. This will of course leave the country extremely vulnerable to another fall in oil prices. (IEI 30.10)

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5.4 Iraq Granted Exemption from US Sanctions on Iran’s Energy Exports

Iraq will continue to have access to the energy it needs from Iran to generate and supply electricity, the US State Department said. Iraq is still importing natural gas and electricity from neighboring Iran and has set up a bank account to process payments in Iraqi dinars. Iraq’s central bank officials said in August that the country’s economy is so closely linked to Iran that Baghdad would ask Washington for permission to ignore some US sanctions. Iraq imports crucial supplies from its neighbor including gas for power stations. (Tasnim 08.11)

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5.5 South Korea Wins $500 Million Deal for Electricity in Iraq

South Korea’s STX Marine Service has reportedly won a contract to restore and operate diesel-fueled electric power plants in Iraq. According to Yonhap, the company said the $500 million deal will see it four 900 MW electricity generation units over five years. It calls for 100 South Korean engineers to be dispatched by STX, along with the hiring of 500 local workers. The company said work started on 1 July. (Yonhap 01.11)

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►►Arabian Gulf

5.6 Bahrain’s Growth Accelerates as Non-Oil Sector Expands

Bahrain’s headline real growth rate increased sharply in Q2/18 to an annual rate of 2.4%, according to Bahrain Economic Development Board (EDB). Its Bahrain Economic Quarterly Report showed a significant acceleration of growth from the previous quarter, underpinned by both the normalization of oil production and markedly faster non-oil growth. The report also noted that the regional economic recovery is progressing somewhat more slowly than initially expected. While GCC growth is expected to accelerate to 2.5% this year and 3% in 2019, this is below historical levels, it said.

The report added that business confidence has varied month to month while the growth of the non-oil sector has proved less pronounced that the expansion in the oil sector. This has prompted a number of governments to initiate economic stimulus programs after a period of fiscal retrenchment. The report also predicted that renewed regional spending power will drive growth in cross-border tourism as the Bahraini tourism industry continues to grow across a broad range of metrics. Visitor numbers are up 5.8% year-on-year and the average number of nights spent in Bahrain per visitor jumped by 16%.

According to the quarterly report, Bahrain’s non-oil GDP expanded by an annual 2.8% in the second quarter, driven by the construction (up 6.7%) and manufacturing sectors (up 4.5%). The total value of foreign direct investment is also continuing to increase with the total value of projects facilitated by the EDB in the first nine months of 2018 being 138% higher than a year earlier. Of the companies attracted by the EDB in the first three quarters of 2018, 31 out of the 76 companies fall in the manufacturing sector, the report added. (AB 31.10)

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5.7 Dubai’s Nine-Month Trade Figure Exceeds $262 Billion

Dubai’s external non-oil trade for the first nine months of 2018 reached AED965.3 billion ($262.8 billion). Re-exports registered 13% growth to touch AED299.2 billion, while imports reached AED592.2 billion, and exports AED97.7 billion, according to official figures from Dubai Customs. Dubai Customs said that the trade performance reflects “the success of government policies and initiatives and strategic sustainability development plans to support the growth of various economic sectors”. China maintained its position as Dubai’s biggest trading partner in the first nine months of 2018 with AED102.9 billion worth of trade. Trade with India registered 16% growth to reach AED86.2 billion, followed by the US in third place with AED59.6 billion. Saudi Arabia remains Dubai’s largest Arab trade partner and its fourth largest global trade partner with AED38.6 billion.

Phones of all types topped the list of commodities in Dubai’s foreign trade in the first nine months of 2018 with AED111 billion worth of trade, followed by gold with AED110 billion and jewelry (AED78 billion).

The figures showed that trade through free zones grew 22% to reach AED394.3 billion in the first nine months of 2018. Direct trade touched AED562.8 billion while customs warehouse trade weighed in at AED8.3 billion. Dubai’s seaborne trade grew 4.1% to AED362 billion and airborne trade grew 2.3% to AED449.4 billion. However, trade conducted through land transportation declined 13.6% to AED153.8 billion. (AB 06.11)

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5.8 Saudi Budget Deficit Shrinks as Revenues Surge

Saudi Arabia’s finance ministry announced that the budget deficit dropped sharply in the first nine months of 2018 on the back of a surge in oil and other revenues. Saudi Arabia, which has introduced economic reforms aimed at reducing its dependence on oil, has benefited from a sharp rebound in energy prices on world markets. The budget shortfall in the first three quarters of 2018 was $13.1 billion, a 60% drop from the same period last year. Oil revenues rose 47% year-on-year to $120.6 billion while non-oil income jumped 48% to $56.3 billion.

The kingdom, the world’s top crude oil exporter, has posted a budget deficit every year since oil prices crashed in 2014. In the past four fiscal years, it posted a total shortfall of around $260 billion and has projected a deficit of $52 billion for 2018. The Finance Ministry said that expenditure in the first nine months of 2018 rose by 25% to $190 billion.

The rise in non-oil income is significant after Riyadh has increased the prices of fuels and power and imposed a 5% value-added tax (VAT) in addition to fees on around 11 million expatriates in the country. Saudi Arabia has also increased its oil production by over 500,000 barrels per day to more than 10.5 bpd since June and the price of oil has surged to over $80 a barrel. (AB 31.10)

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►►North Africa

5.9 Egypt’s Foreign Reserves Rise to $44.5 Billion in October

Egypt’s foreign currency reserves spiked by $42 million to reach $44.501 billion in October against $44.459 billion in September, the Central Bank of Egypt (CBE) announced. Reserves have been climbing since Egypt agreed a $12 billion three-year loan program with the International Monetary Fund in late 2016, part of efforts to attract foreign investors and revive the economy. (CBE 05.11)

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5.10 Egypt’s Non-Oil Business Activity Slows Slightly in October

Egypt’s non-oil private-sector activity weakened slightly in October to reach its lowest level of 2018. The Emirates NBD Egypt Purchasing Managers’ Index (PMI) for the non-oil private sector weakened to 48.6 in October from 48.7 in September, below the 50 mark that separates growth from contraction. September’s return to contraction followed expansionary readings in July and August.

The PMI has had an average reading of 47.9 since the International Monetary Fund reform program began. The non-oil private-sector sector saw a decline in output for the second consecutive month, which companies attributed to lower demand for goods and services due to challenging market conditions. Companies also saw a decrease in export orders in October, though at a slower pace than seen in September, which they linked to challenging economic conditions in international markets. Egypt’s fiscal year runs from July to June.

Egypt has been implementing a series of tough economic reforms as part of the three-year $12 billion deal with the IMF. Measures included devaluing the Egyptian pound, slashing energy subsidies and imposing new taxes in an attempt to draw back investors who fled during the 2011 uprising. (Reuters 05.11)

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5.11 More Foreign Debt for Egypt?

Egypt’s foreign debt reached $92.6 billion by the end of June, recording an increase of $13.6 billion, or 17.2%, on the end of June 2017, according to the monthly report published by the Central Bank of Egypt (CBE). A marginal part of the increase was caused by a rise in the exchange rates of foreign currencies used in borrowing against the US dollar, accounting for $0.4 billion. The bigger chunk of the increase, $13.2 billion, is the result of an increase in debt-servicing costs over the past year, including paid instalments of $11.1 billion and interest payments of $2.1 billion.

An analysis of the development of Egypt’s foreign debt-to-GDP ratio over consecutive years, and that of debt-servicing to imported commodities and services, points to a considerable rise in the foreign debt-to-GDP ratio, recording 37% and up from 15.1 in 2014. The foreign debt-servicing to total imports ratio almost quadrupled from 7.4% in 2014 to 28% in 2018.

The government has set a ceiling for foreign borrowing at $16.733 billion for the current fiscal year, which ends in June 2019. $10.51 billion of this is to pay back foreign debt instalments. The sum does not include a $3.3 billion Kuwaiti deposit that is due in 2018-19, based on a government document. Total foreign debt is expected to reach $98.863 billion during fiscal year 2018-19.

The rapid increase in total foreign debt since 2014 points to the government’s choice of foreign borrowing to meet the rising costs of its foreign debt, against a backdrop of economic reforms to lower the budget deficit. CBE data shows Egypt’s foreign debt-to-GDP ratio exceeded the expectations of the International Monetary Fund, set at 34.5% for this year and based on the third revision of the loan deal signed with Egypt in November 2016 and released in July. (Al-Ahram 01.11)

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5.12 Morocco Jumps 9 Places, Ranks 60th in World Bank ‘Doing Business’ Report

Morocco ranked 60th in the World Bank’s Doing Business 2019 report out of 190 countries, jumping 9 places. Improving its 2018 global ranking of 69th by nine places, Morocco owes its score of 71.02 out of 100 to several new entrepreneurship-friendly policies. Due to these reforms, Morocco ranked the 2nd best country for doing business in the MENA region behind the United Arab Emirates, which came 11th worldwide and just ahead of Bahrain, which ranked 62nd. Morocco came 3rd in Africa behind Mauritius, which ranked 20th globally and Rwanda at 29th. Morocco came ahead of South Africa, which ranked 82nd globally.

According to the report, Morocco has made it easier to start a business by reducing registration fees, easier to register property by streamlining procedures and easier to resolve insolvency. The report also noted that Morocco made exporting and importing easier by implementing a paperless customs clearance system and improving infrastructure at the port of Tangier. (MWN 01.11)

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5.13 Morocco’s Trade Deficit Widens as FDI Drops by 2.7%

Morocco’s foreign direct investment (FDI) flows were down by 2.7% compared to the same period of the previous year, the Foreign Exchange Office (FEO) reported. The increase in the deficit is caused by a larger increase in imports, up MAD 31.39 billion, than in exports, up MAD 21.81 billion. Morocco’s debt-service coverage ratio was 77.7% in the period, compared with 78.4% in the previous year. Morocco’s increase in imports was mainly driven by the purchases of energy products, up 19.6%; raw materials, up 19.1%; capital goods, up 10%; food products, up 8.5%; and finished consumer products, up 6.8%.

Exports also increased by 7.9% to MAD 298.2 billion in the first nine months of 2018. The rise can be attributed to increased exports in all sectors, but particularly that of phosphates and derivatives, up 16.8%; automobiles, up 14.7%; aeronautics, up 14%; and agriculture and food, up 6.3%.

FDI inflows amounted to MAD 19 billion in the 12-month period up to September 2018, down 2.7% compared to the same 12-month period of the previous year. The drop is the result of a higher increase in spending, up 43.6%, than in revenues, up 8%. Spending on FDI in the 12-month period amounted to MAD 8.5 billion; 37.1% of the spending was on debt repayments.

Overall revenues from Moroccans residing abroad (MREs) were slightly down by 0.2% at MAD 49.7 billion in the first nine months of 2018. MREs returning home had spent a net balance of MAD 40.3 billion in the same period, compared to MAD 41.8 billion a year earlier. (MWN 06.11)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkey’s Inflation Hits 25% in October, Highest in 15 Years

Turkish annual inflation surged to 25% in October, the Turkish Statistical Institute (TUIK) announced on 5 November, hitting its highest rate in 15 years. Month-on-month, Turkish consumer prices jumped 2.67%, while core inflation surged by 24.34% in annual terms. October inflation was driven by a 12.74% month-on-month surge in clothing and shoe prices and a 4.15% rise in housing prices. On a yearly basis, the biggest price hike was in furnishing and household equipment in October with 37.92%.

Last month, Turkey’s central bank left its benchmark interest rate unchanged, after a mammoth hike in September and as tensions with the United States eased, helping the Turkish Lira gain some ground. The currency has recently recovered some losses from a sell-off driven by concerns over central bank ability adequately respond to rising inflation and deteriorating ties with Washington. The rising inflation in October means the central bank’s real interest rates – the level once price rises are taken into account – has been pushed further into negative territory, another issue investors have expressed concern about. (TUIK 05.11)

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6.2 Turkey’s Automotive Exports See Second-Highest Monthly Figure – $2.9 Billion in October

One of the driving forces of the Turkish economy, automotive industry exports hit $2.9 billion in October, marking a year-on-year rise of 11%. This figure was the second-highest export figure after the record of $3.1 billion in March on a monthly basis, according to the Automotive Industry Exporters’ Association. Meanwhile, the share of the automotive industry in total exports stood at 19%. As far as product groups go, exports by the automotive subindustry grew by 3% to $939 million, private car exports by 10% to $1.19 billion, motor vehicles for goods transport by 5% to $471 million and bus-minibus-midibus by 26% to $178 million.

On the country basis, exports to Germany, the largest market, decreased by 2%, while exports to the U.S. rose by 24%, to Poland by 15%, to Morocco by 40%, to Algeria by 122% and to Slovenia by 48%. Also, exports to Romania, Spain and Iran, which are among the major markets, dropped by 12%, 10% and 75%, respectively. Exports to the European Union, the largest market on the basis of the groups of countries, went up by 13%, reaching $2.27 billion in October. European Union countries had a 78% share in exports. While exports to African countries, which are among alternative markets, soared by 60%, exports to Middle Eastern countries plummeted by 41%.

The automotive industry exported $433 million worth of goods to Germany, up by 4%, which is the largest market on a national basis, followed by Italy, the second-largest market, with $278 million with a 3% rise. On the other hand, exports to France tumbled by 7% to $269 million. (DS 05.11)

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6.3 Greece Slips in World Bank’s Ranking on Ease of Doing Business

Greece dropped five places in this year’s World Bank’s annual “Doing Business Index,” ranking 72nd, down from 67th place last year. Greece’s score of 68.08 represents a decline of 0.12 points compared to last year’s index. The annual World Bank report reports that obstacles to doing business increased in Greece in the past year. While many other countries moved ahead in fighting bureaucracy, Greece has added more layers of red tape to dealings between entrepreneurs and the state.

Although Greece has made progress in its building permit system, it has increased the burden on citizens and businesses by requiring more documents for the registration of real estate. At the same time, the Greek state has not fully implemented previously-announced reforms, such as the simplification of export procedures or the reduction of documentation needed for establishing a corporation.

Once again, Greece ranks as one of the least attractive countries in the European Union for conducting business, with the second worst score among the 28 member states of the bloc. Only Malta fared worse than Greece, ranking in 84th place with 65.43 points. Greece has fared worse than some Balkan and Mediterranean countries. For instance, the Former Yugoslav Republic of Macedonia (FYROM) ranked in 10th place, Portugal in 34th place, Serbia in 48th place and Romania in 52nd place.

Greece declined in the index measuring the ease of starting a new business, dropping from 37th to 44th. In the index ranking the ease of registering real estate, Greece plunged to 153rd place from 145th last year after introducing a new mandatory certificate to the existing required paperwork for registering and transferring property. In regards to the ease of opening a new account with the electric utility, Greece dropped from 76th to 79th place. Greece also dropped in the index measuring business access to bank loans, from 90th to 99th place. Greece also slipped in the index measuring protection of minority shareholders, from 43rd to 51st place, while Greece’s position in the index measuring the ease of conducting cross-border transactions fell from 29th to 31st. The only index where Greece recorded significant progress in the past year was the ease of obtaining a building permit. Greece ranked 39th in the recently-released rankings, compared to 58th last year. (Various 01.11)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Forty Two Countries to Participate in Tel Aviv Eurovision Song Contest

In 2019, 42 countries will be travelling to Israel for the Eurovision Song Contest in Tel Aviv, the European Broadcasting Union (EBU) has announced. Some 36 countries will perform in the semifinals on 14 and 16 May, hoping to qualify for the final on 18 May. Host country Israel and the ‘Big Five’ countries – France, Germany, Italy, Spain and the UK – automatically qualify for the final at the Expo Tel Aviv (International Convention Centre). The three shows will be co-produced by the EBU and the Israel Broadcasting Corporation – KAN. Last year Israel’s Netta Barzilai won the contest in Lisbon, bringing it to Israel for 2019. (Globes 07.11)

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*REGIONAL:

7.2 UAE Private Sector to Get Long Weekend for Mawlid Al Nabi

UAE Ministry of Human Resources and Emiratisation announced that Sunday, 18 November, will be a holiday for private sector workers. This will mean a three-day weekend with work resuming on Monday, 19 November. Earlier, it was announced that ministry and federal authority staff in the UAE will be given a holiday on that Sunday. The occasion has been expected to fall on Tuesday, 20 November. It is one of a series of important dates in the country. (AB 06.11)

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7.3 QS Reveals the Best Universities in the Arab Region

The Arab Region has a new top university, according to the latest edition of an independent ranking of the region’s institutions. The 2019 QS World University Rankings: Arab Region sees Saudi Arabia’s King Fahd University of Petroleum and Minerals take the regional top spot. It replaces Lebanon’s American University of Beirut, which now places second. QS uses ten indicators to compile the ranking (https://www.topuniversities.com/arab-region-rankings/methodology).

Saudi Arabia dominates with 23 ranked universities, and three of the region’s top 10 institutions, with King Abdul Aziz University (3rd), which exchanged places with King Saud University (4th). Egypt’s top university is the American University in Cairo, which falls from 6th to 8^th. The UAE is home to two top-10 universities: United Arab Emirates University remains 5th, while American University of Sharjah rises from 8th to 7th.

Oman and Jordan can lay claim to one of the region’s top 10 institutions: University of Jordan maintains its rank of 9th, while Omar’s Sultan Qaboos University is unchanged in 10th. Though Saudi Arabia is the dominant higher education system, Egypt’s universities have made consistent progress, with seven in the top 50, five of which improve their rank this year. The UAE is also home to a number of upwardly-mobile universities, with Khalifa University (joint-15th) and the University of Sharjah rising into the regional top 20. (QS 30.10)

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7.4 UAE Now Requires Pre-Approval to Bring Personal Medicines Into the Country

Middle East Medical Portal reported that as of October 2018, anyone entering the UAE now needs pre-approval to bring personal medicines with them. The new legislation is especially strict on narcotic drugs, controlled, and semi-controlled drugs. A visitor can bring enough personal use medicines to last three months for non-controlled medicines and one month for controlled and semi-controlled ones. To get pre-approval, one is required to show a prescription and report issued by a doctor, as well as a passport. The process may take up to ten days.

The Pharmacy Federal Law No 4 of 1983 and Narcotic Law 14, of 1995, regulate the import of medicines (Narcotics I Psychotropic I General I and any controlled medicines) in to the UAE. While the majority of medicines used worldwide are available in community pharmacies and hospitals in the UAE, travelers carrying personal medicines are advised to seek permission from Registration and Drug Control Department, MOH, prior to travelling in to the UAE. Officially, any personal medicines carried by travelers will be subjected to inspection by the Ministry of Health Inspectors and the Customs Department at the port of entry in to the UAE.

Of particular concern to UAE authorities is the entry of narcotic drugs with visitors who are entering or transiting through the UAE. A traveler should have in their possession a valid medical prescription, if the original of the prescription is retained in the pharmacy that dispensed the preparation. The documents should be in the traveler’s possession during the stay in the UAE and should be available on request for presentation to the authorities.

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7.5 Half of Moroccan University Students Drop out Before Graduation

While the unemployment rate for Moroccan graduates with higher education degrees is double the unemployment rate for the general population, nearly half of university students will not go on to get a degree. Moroccan universities currently have 860,000 students, 42% of whom are female students and 244,000 of whom are freshmen.

Morocco still has a comparatively low rate of students in higher education. Only 37% of the Moroccan population aged 18 to 22 choose to enroll in universities, according to the Ministry of Education. The ministry pointed out that 16.5% of university students drop out in their first year and 8.1% drop out in the third. Some dropouts, 7.8%, choose to leave for smaller training institutions. Over the past five years, student enrollment has increased by 42%. However, the number of professors has only increased 17% and available seats in classrooms only 28%.

Morocco will need to employ 2,488 university professors to join new educational institutions to prevent overcrowding because of the 18% increase in baccalaureate graduates. The higher education and scientific research sector, with a budget of MAD 11.3 billion according to the 2019 Finance Bill, is experiencing a decline in student costs over the past years, from MAD 14,000 per student in 2013 to MAD 11,000 in 2017. The government allocated MAD 70 billion in 2018 specifically to improve material resources and educational quality for university students. (MWN 07.11)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 iCAN Signs Bilateral Service Agreement With Global Technology Company

iCAN: Israel-Cannabis signed a bilateral service agreement and strategic alliance with Theracann International Benchmark Corporation to assist in promoting the Company’s many incubated technologies and cannabis services globally. Theracann a technology, operations and analytics company with operations in North American, Oceania and South America provides regulatory services and advanced technology to the cannabis industry. The agreement will allow iCAN to deliver Theracann’s technology to emerging markets in Europe, Africa and Asia while allowing Theracann clients and projects access to iCAN’s deep technology pipeline and expertise.

iCAN is a technology incubator and service provider based in Israel, known globally for their CannaTech conferences dedicated to accelerating cannabis innovation. iCAN was formed to build a global cannabis eco-system, connecting stakeholders from all aspects of the industry. CannaTech is powered by iCAN. CannaTech is the premier international cannabis summit held annually in Tel Aviv, and internationally in London, Panama, and for the first time in Sydney, Australia in October 2018 and Hong Kong in November 2018. (iCAN 01.11)

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8.2 Zion Medical Announces Results of First Human Clinical Trial of HIV drug Gammora

Zion Medical announced the results of the first clinical trial of HIV-drug Gammora, eliminating up to 99% of the HIV virus within four weeks of treatment. The Investigational Medicinal Product (IMP) Gammora is a synthetic peptide compound derived from the HIV enzyme integrase, which is responsible for inserting the virus’s genetic material into the DNA of the infected cell. Gammora stimulates the integration of multiple HIV DNA fragments into the host cell’s genomic DNA, to an extent that triggers the self-destruction of the infected cell, called apoptosis. The peptide, produced by San Diego, California -based PolyPeptide Labs, has the potential to cure HIV infected patients, by destroying all cells carrying the HIV virus-genome. As opposed to the commercially available retroviral treatments, the so-called “cocktail,” which merely suppress the spreading of the virus, but do not cure the infection.

Between July and August 2018, Zion Medical conducted a Phase 1/2a human clinical trial of Gammora, reaffirming results of prior preclinical tests that had showed the safety and effectiveness of the drug in killing HIV-infected cells. Through the 10 weeks, patients in both studies demonstrated that Gammora is a safe and well-tolerable drug, exhibiting no side effects. Patients showed a significant increase of the CD4 cell count – up to 97 % from the baseline. CD4 cells, also referred to a T cells or T helper cells, play an important role in the body’s immune system and are an indicator of its overall health.

Abraham Loyter, professor at the Hebrew University of Jerusalem, first started research on this novelty drug about 10 years ago, having been granted patents for the peptide in 2015 and 2017 (U.S. Patent No. 9163067, 9738878). Zion Medical in-licensed the compound and has been continuing research and development through pre-clinical and clinical stages, building an entire team of researchers around the development of Gammora. On 31 August 2018, Zion Medical filed another patent application with the U.S. Patent and Trademark Office for an updated version of the peptide and final drug composition.

Israel-based Zion Medical was established in 2014 with the mission to develop groundbreaking medical solutions for HIV/AIDS and cancer. It is known for its patented synthetic peptide Gammora, which is derived from the HIV enzyme integrase, and has been proven to be effective in killing HIV-infected cells, and which has also shown promising results with some types of cancers cells. (Zion Medical 31.10)

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8.3 Sweetch Partners With WellSpan Health to Help Fight Diabetes

Sweetch is partnering with integrated health care system WellSpan Health of York, Pennsylvania. The partnership’s first phase will provide Sweetch’s mobile health app to WellSpan Health’s 15,000 employees, including 200 primary care and specialty physicians and advanced practice clinicians in central Pennsylvania and northern Maryland.

Using its proprietary machine learning algorithm, Sweetch accurately quantifies personal diabetes risk which is critical for enabling early and effective prevention. On the personalized prevention front, Sweetch’s mobile health app with its connected bluetooth digital scale monitors and analyzes the user’s personal, environmental and behavioral digital bio-markers. This results in contextual, real-time specific and detailed recommendations that guide the user towards achieving disease prevention goals. This could include advising the user to take a five-minute walk to a nearby coffee shop in the middle of the day based on his calendar availability, to achieve their 20-minute activity goal. By applying predictive analytics, Sweetch continuously optimizes the user’s goals and messages, in order to predict which of these messages will trigger action with an emphasis on long-term engagement.

Jerusalem’s Sweetch Health is the creator of Sweetch, an AI-driven mobile platform for large scale prediction, prevention and outcome improvement of chronic diseases including diabetes, hypertension, ischemic heart disease, hyperlipidemia and obesity. (Sweetch Health 31.10)

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8.4 FruitSpec Completes Successful Field Studies

Misgav’s FruitSpec, a portfolio company of The Trendlines Group completed successful field studies with its solution for fruit yields estimates/projections. The trials, which used FruitSpec’s hyperspectral machine vision technology, resulted in estimates that were more than 90% accurate. FruitSpec’s hyperspectral machine vision technology consists of specially designed sensor pods mounted on any vehicle that scans the trees in the orchard. Applied computer vision and a hyperspectral algorithm automatically count and estimate fruit number and size, focused at the green fruit stage. Accurate yield estimates offer fruit packing houses and growers a service that enables them to make sound decisions which impact revenues and financial stability, without adding to the workload.

Recently, FruitSpec completed two international field studies, predicting yields six months before picking. FruitSpec’s early estimations demonstrated a more than 90% accuracy rate compared with the orchard’s actual yield. In September 2018, FruitSpec was granted a United States patent for its method and system for crop yield estimation. The patent granted re-affirms the company’s technology. (FruitSpec 31.10)

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8.5 Cellect Receives Multiple Patent Grants

Cellect Biotechnology received a formal Notice of Allowance from the Japanese and Australian Offices for Patents & Trademarks (Japanese Application No. 2014-560516; Australian Application No. 20132s29008) covering a key composition of matter and method of use of Cellect’s ApoGraft technology in devices for stem cell selection. The current patent significantly enhances Cellect’s protection of its core technology and its commercial applications by covering the various devices using the ApoGraft for a positive selection of stem cells.

The device can enable cell selection in a simplified and affordable setting using an off-the-shelf product – a solution that currently does not exist and potentially covering a wide range of unmet medical needs. Furthermore, it brings a first in kind method for obtaining of raw material (specific cell types) for many of the cell therapeutics and therefore is anticipated to take a pivotal role in the fast growing cell therapy market. The devices covered by the patent are essentially containers (a bag, column, tube, bottle, vial or flask) comprised of a biocompatible material and a biologically active cell surface apoptosis-inducing ligand immobilized to a surface that is adapted for cell selection by elimination of apoptosis-sensitive cells. Specifically, the patent protects the company’s planned devices and any devices planned by other companies adapted for selection of cells that are resistant to receptor-mediated apoptosis and a method for using the device.

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8.6 Taranis Gets $20 Million Series B for its Crop-Monitoring Technology

Taranis has raised a $20 million Series B led by Viola Ventures. Existing investors Nutrien (one of the world’s largest fertilizer producers), Wilbur-Ellis venture capital arm Cavallo Ventures and Sumitomo Corporation Europe also participated. Tel Aviv-based Taranis says its aerial imaging technology, carried on high-speed drones or manned aircraft, is currently used by farms in Argentina, Brazil, Russia, Ukraine and the United States. It plans to expand into more countries with this round of funding, including Australia.

Founded in 2015 to increase food production, Taranis’ software targets commodity crops like corn, cotton, wheat, soybean, sugarcane and potatoes. It identifies potential crop issues, including insect damage, nutrient deficiencies and diseases, and provides farmers with magnified, high-resolution images that are detailed enough to (for example) let them see what bugs are eating their plants.

Traditional crop monitoring is labor-intensive and not always accurate, even with the use of sensors to track soil quality, fertilizer levels, insects and other issues. Other venture capital-backed startups using computer vision and AI-based technology to make the process more efficient (a growing field referred to as “precision farming”) include Prospera, which is also based in Tel Aviv, Arable and Ceres Imaging. (Taranis 06.11)

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8.7 PolyPid Raises $15 Million

PolyPid has completed a financing round of $15 million at a company value of $180 million. Polypid is a portfolio company of Xenia Venture Capital, which made the announcement of the capital raising. Xenia did not itself invest in the financing round.

Petah Tikva’s PolyPid is a clinical stage drug development company focused on manufacturing and commercializing noval, locally administered therapies using PLEX (Polymer-Lipid Encapsulation matriX) technology. The company’s product pipeline candidates are designed to address unmet medical needs by pairing PLEX technology with approved pharmaceuticals which are delivered locally at predetermined release rates and duration over periods ranging from days to several months. PLEX technology has the potential to improve patient outcomes and lower the overall cost of treatment by enabling customizable, controlled local delivery of drugs, thereby addressing many of the shortcomings of systemic administration and existing localized delivery systems.

Xenia specializes in investing in medical device and biotech companies and earlier this week, another portfolio company Medi-tate, which has developed a medical device to treat prostate cancer, has raised $20 million from Japanese company Olympus. (Xenia 08.11)

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8.8 ConTIPI Medical Raises $11 Million

Caesarea’s ConTIPI Medical, which has developed non-surgical and disposable vaginal solutions for women with various Pelvic Floor Disorders (PFD’s), has completed a $3 million financing round, bringing the total amount raised for its new product to $11 million. The latest round was from both new and previous investors: company founder, medical director, and CEO Dr. Elan Ziv, medical investor Zeev Bronfeld, Boris Krasny, Capital Point and New Pharm. The company said that the round was bringing it closer to competing the product’s development.

ConTIPI Medical is a continuation of Contipi, which was active in various areas and was sold to Kimberly Clark for $90 million. Contipi developed a disposable quasi-tampon for preventing urinary incontinence. After the company was sold, the new ConTIPI Medical was founded by more or less the same staff and investors in order to continue development of the product line begun by the original company.

Organ prolapse is a more serious problem than urinary incontinence; treating requires diagnosis by a doctor. As with the product for preventing urinary incontinence, however, ConTIPI Medical hopes to develop a product that women can use to treat themselves. The existing treatment for organ prolapse is surgical insertion of a net to support the organs. The net itself, however, is attached to tissue that is not strong and is liable to be damaged by this. A pessary, a rubber ring in the vagina on which the organs rest, can also be used. The problem is that inserting and removing it without a physician is difficult, and it is therefore replaced every three months.

ConTIPI’s solution to this problem superficially looks similar to its solution for urinary incontinence: a tampon-like product inserted into the vagina, where it expands into a supporting ring. As soon as a prescription is obtained, the patient can use the product by herself. The product has already been approved for marketing in Europe and is in clinical trials for obtaining approval from the US FDA. ConTIPI has other products that it has not yet revealed, and will develop them after this product is sold or commercialized through a marketing company. (ConTIPI Medical 07.11)

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8.9 Alpha Tau Medical Launches New Clinical Trials in Italy with Leading Cancer Centers

Alpha Tau Medical has announced the initiation of two new clinical trials evaluating the efficacy of the Alpha DaRT (Diffusing Alpha-emitters Radiation Therapy) with two leading medical centers in Rome, Italy. Following the approval from the Institutional Review Board (IRB), La Sapienza is initiating Alpha Tau’s clinical trial protocol for SCC of the Skin, and IFO is conducting their first study of Alpha DaRT for the treatment of CMN.

Alpha DaRT enables the first alpha-radiation-based cancer treatment for all types of solid tumors. The team hopes that the study’s outcome will further reinforce the promising early results from the ongoing SCC study at the Rabin Medical Center, Israel and the IRST, Italy. Results showed all patients’ tumor sizes reduced and more than 70% of patients’ tumors completely disappeared within a few weeks after treatment. The company is collaborating with key cancer physicians worldwide to investigate the Alpha DaRT as a treatment for additional indications.

Founded in 2016, Tel Aviv’s Alpha Tau Medical is a medical device company that focuses on research, development and commercialization of the Alpha DaRT for the treatment of solid cancer. Initially developed in 2003 from Tel Aviv University, Alpha DaRT delivers high-precision alpha radiation, which is released when radioactive substances decay inside the tumor. The short-range alpha particles effectively kill the cancer cells while sparing the surrounding healthy tissue. (Alpha Tau Medical 07.11)

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8.10 MaxQ AI Receives FDA Clearance for Accipio Ix Intracranial Hemorrhage Platform

MaxQ AI announced that its revolutionary Accipio Ix intracranial hemorrhage (ICH) detection software has received 510(k) clearance from the U.S. FDA. The clearance paves the way for healthcare providers and physicians in acute care settings to have access to this artificial intelligence (AI) software designed to aid in prioritizing the clinical assessment of adult non-contrast head computed tomography (CT) cases that exhibit indications of intracranial hemorrhage (ICH), commonly known as a brain bleed.

Earlier this year, MaxQ announced CE Mark approval and commercial availability in the European Union. Now, Accipio Ix, is cleared for commercial sale within the United States. Accipio Ix leverages artificial intelligence technology to automatically analyze non-contrast head CT images without workflow impact to the reader, altering the original series or storing Protected Health Information (PHI). The AI-powered Accipio Ix, part of MaxQ’s unique Accipio INSIGHT platform, is designed to be highly sensitive to the presence of ICH, identifying and prioritizing patients with ICH for the treating physician. It provides a capability for rapid escalation and prioritization of the patient and can be natively integrated into CT and PACS systems using the imaging industry-standard DICOM, installed both on-premise and cloud-capable.

Tel Aviv’s MaxQ AI is at the forefront of transforming healthcare by empowering physicians to provide ‘smarter care’ with artificial intelligence (AI) clinical insights. Their team of deep learning and machine vision experts have developed clinical diagnostic intelligent software solutions that enable timely and more accurate diagnosis. (MaxQ AI 07.11)

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8.11 HemoScreen Hematology Analyzer for Point of Care Receives FDA 510(k) Clearance

PixCell Medical announced that The HemoScreen Hematology Analyzer received FDA 510(k) clearance, enabling commercialization in the USA. The HemoScreen is a miniature portable hematology analyzer that uses disposable cartridges; each cartridge includes all necessary reagents and is designed to accept a drop of blood taken from the finger. The operation of the device is exceptionally simple and requires minimal training or expertise. Once the cartridge is inserted into the reader, the blood sample is automatically processed and analyzed within the cartridge and thus the concept is termed by the company “Lab On a Cartridge”.

In contrast to existing solutions, the HemoScreen requires no maintenance or calibration which is extremely important in such settings. The HemoScreen should empower physicians to make validated, data-driven decisions: referring patients to the ER, prescribing antibiotics and other medication, ordering additional specific tests while reducing redundant tests and by that greatly improve patient care and workflow efficiency.

Yokneam’s PixCell Medical develops innovative POC diagnostic devices. The HemoScreen is designed to simplify blood testing, making it extremely accessible anywhere and to anyone. Future tests are expected to enable early detection of the most critical health threatening diseases including cancer, infection and heart failure. PixCell’s technology is based on patented method called Viscoelastic Focusing and on a proprietary microfluidic based disposable. (PixCell Medical 07.110

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Camilyo Scores a Triple Win at the SIINDA Industry Excellence Awards 2018

Camilyo was recently honored with three Industry Excellence Awards by SIINDA, the Search and Information Industry Association. The Awards were granted at the SIINDA Local Search Summit held in Dubrovnik, Croatia last month. The prestigious Industry Excellence Awards are granted to SIINDA member companies in recognition of advancements in mixed media, local search innovation and technology. The independent judging panel consisted of industry experts and media professors from across Europe. Camilyo won the following Awards:

-Platinum Industry Excellence Award – Mobile Products for the Camilyo Mobile Action Center

-Platinum Industry Excellence Award – Sales and Marketing Automation for the Email and SMS marketing campaigns

-Silver Industry Excellence Award – Mobile Products for the DASH SMB mobile app for digital agencies

Tel Aviv’s Camilyo is a rapidly growing software company with offices in the US, Europe and Israel. Since 2010, Camilyo has partnered with leading vendors worldwide to equip SMBs with white-labeled, fully-integrated presence, marketing, sales and business management tools that enable them to successfully compete online. In 2017, Camilyo was named one of the 50 fastest growing technology companies in Israel by Deloitte. (Camilyo 01.11)

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9.2 Gilat to Provide the Ground Network for China Satcom’s ChinaSat-18

Gilat Satellite Networks’ ground network will be provided for China Satcom’s ChinaSat-18 (CS-18). The nationwide Ka-band coverage, now to be provided by CS-18 and ChinaSat-16 (CS-16), will be uniquely supported by Gilat’s single platform supporting multiple applications all over China. China Satcom’s CS-18 Ka-band will be launched in mid-2019, thus completing the company’s Ka HTS coverage over all of China, which is critical for broadband applications requiring continuous service.

Gilat’s multi-application platform, SkyEdge II-c, has been deployed in China over CS-16 to provide IFC, rural broadband, cellular backhaul and maritime applications. With the launch of CS-18, Gilat will deliver Ka-band high throughput and highly efficient connectivity across the rest of China.

Petah Tikva’s Gilat Satellite Networks is a leading global provider of satellite-based broadband communications. With 30 years of experience, we design and manufacture cutting-edge ground segment equipment, and provide comprehensive solutions and end-to-end services, powered by our innovative technology. Delivering high value competitive solutions, our portfolio comprises of a cloud based VSAT network platform, high-speed modems, high performance on-the-move antennas and high efficiency, high power Solid State Amplifiers (SSPA) and Block Upconverters (BUC). (Gilat 01.11)

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9.3 KPN Chooses Allot Service Gateway to Deliver Superior Network Performance

Allot Communications announced that KPN, a Tier 1 Dutch internet and communications technology (ICT) provider has selected the Allot Service Gateway (SG) for its data center. KPN chose Allot’s solution to meet the mounting service expectations of their growing business user base and its resulting increased network traffic. The Allot Service Gateway, a proven carrier-class solution, prevents costly downtime by managing the KPN’s high-rate bandwidth across multiple IP addresses, while simultaneously identifying bandwidth anomalies and enforcing Service Level Assurance (SLA) requirements for application performance.

KPN serves millions of fixed, mobile and Internet subscribers throughout the Netherlands, Germany, Belgium, France, and Spain with business network services and data transport throughout Europe. With this large and growing customer base depends on the ICT provider for uptime and accessibility, KPN selected Allot to meet a variety of service expectations, such as reducing time-to-market for new services and preventing any costly impact of malicious traffic.

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9.4 Elbit Systems to Provide Maritime UAS to the European Union Maritime Safety Agency

Elbit Systems was awarded a framework contract to provide maritime Unmanned Aircraft System (UAS) patrol services to be provided by the European Maritime Safety Agency (EMSA) to countries in the European Union. The contract that will be executed in cooperation with CEiiA is for a two-year base period and two single year option periods. If fully ordered, the total contract value is €59 million (approximately $68 million).

Under the contract and in cooperation with CEiiA, a leading engineering company in Portugal, Elbit Systems will lease and operate its Hermes 900 Maritime Patrol and its Ground Control Station. A persistent long-range unmanned maritime surveillance system tailored for littoral and blue water operations, the Hermes 900 Maritime Patrol will feature maritime radar, an Electro Optic payload, Satellite Communication and an Automatic Identification System (AIS) receiver. Thus configured, the Hermes 900 Maritime Patrol will enable persistent monitoring of vast swathes of sea and long coastlines and effective identification of suspicious activities and potential hazards.

Haifa’s Elbit Systems is an international high technology company engaged in a wide range of defense, homeland security and commercial programs throughout the world. The Company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance (C4ISR), unmanned aircraft systems, advanced electro-optics, electro-optic space systems, EW suites, signal intelligence systems, data links and communications systems, radios and cyber-based systems. The Company also focuses on the upgrading of existing platforms, developing new technologies for defense, homeland security and commercial applications and providing a range of support services, including training and simulation systems. (Elbit Systems 01.11)

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9.5 Ladingo Takes Top Prize at Retail Disrupt Startup Competition

Master of the global fulfillment of international purchases of large-sized items, Ladingo was awarded first place at the 2018 Retail Disrupt startup competition. Ladingo pitched its global shipping optimization platform to the competition’s panel of seasoned retail technology leaders and decision makers, including top executives from Asos.com Uniqlo.com JD.com, winning their attention and their respect.

Ladingo is the first company to offer a technological solution that enables the simple, straightforward and automated purchase of large items to end customers via online-shops to be shipped internationally. The innovative platform introduces the possibility of the low-cost, international shipping of large items purchased through B2C e-commerce channels. With Ladingo, buying large items, such as furniture, bikes or home appliances, from international online shops is as easy as ordering a t-shirt online.

Taking first place at the Retail Disrupt startup competition, Ladingo was awarded access to several key networking opportunities in the coming year. The prize includes a booth at ShopTalk 2019, participation in the Merage Institute Leadership Program, and a booth and speaking session at Retail Disrupt’s 2019 conference.

Hod HaSharon’s Ladingo enables online-retailers to sell large items to international shoppers via ocean freight by utilizing its container-sharing optimization algorithms. With Ladingo, buying a sofa from overseas is as easy as buying an iPhone case and shipping costs are lower than ever. (Ladingo 31.10)

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9.6 VoiceSense Launches Speech-based Predictive Analytics Solution for Human Resources

VoiceSense has launched a new speech-based predictive analytics solution for human resources. The new VoiceSense solution for human resources dramatically streamlines recruitment processes by automatically and objectively filtering large volumes of applicants and providing a short list of the most relevant candidates for a position. This solution uses applicant voices only and eliminates the need to manually evaluate hours of video and audio interviews to find appropriate candidates, which is a time-consuming process that is easily influenced by subjective factors that lead to inaccurate outcomes.

The technology behind the VoiceSense solution works by analyzing the prosodic parameters of a person’s speech, which are the non-content features of speech, such as intonation, pace and emphasis. VoiceSense’s technology assesses over 200 prosodic speech parameters and builds an AI-driven personality profile of an individual’s working characteristic, such as temperament, ambition, cooperation, communication, dependability, creativity and others.

With VoiceSense’s solution, human resource teams can upload individual or large volumes of candidate video and audio interview files through an API to the VoiceSense Cloud. The VoiceSense solution then runs its signal processing to analyze the prosodic parameters of each applicant’s speech and applies behavioral models in order to output a specific job match score for each candidate, which are automatically sent back to the human resource database. The job match score can also include the complete working profile report of each candidate’s tendencies. Human resources teams can then create a short list of the best candidates per position for further evaluation and consideration.

Herzliya’s VoiceSense specializes in speech-based predictive analytics with a groundbreaking approach to forecast individuals’ behavioral tendencies. The technology uses AI techniques to link data generated from non-content aspects of speech, such as intonation, pace and emphasis, to behavioral and personal characteristic, resulting in predictions of individual behavior. (VoiceSense 31.10)

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9.7 2bPrecise Honored as One of Israel’s Top Startups

2bPrecise was named one of nine finalists in Israel’s “most promising startup” competition. Sponsored by Calcalist, Israel’s leading financial daily news publication, the contest drew more than 50 nominations. Along with eight other finalists, 2bPrecise presented its precision medicine business model and technology platform to a panel of 10 judges at Calcalist’s eighth annual digital and mobile conference, INSPIRE Digital@Mobile.

2bPrecise was established in 2015 with the objective of bridging the final mile between the science of genomics and making that data useful at the point of care. Leadership assembled a team with deep experience with complex ontologies and clinical integration to create a cloud-based platform that delivers previously inaccessible genomic data within the patient context.

Beer Sheva’s 2bPrecise precision medicine platform harnesses the power of genomics to help healthcare providers identify patients at risk for disease, and more effectively determine optimal preventive, diagnostic and therapeutic care. Vendor-agnostic and cloud-based, 2bPrecise consumes data from any lab or knowledge source and delivers it into the clinical workflow of any EHR, in an actionable format and in a vocabulary meaningful to clinicians. Its robust data model future-proofs the solution and enables clients to customize their strategic precision medicine strategy, starting where it makes most sense for them and scaling across the entire enterprise. (2bPrecise 02.11)

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9.8 IDRRA Named a “Cool Vendor” by Gartner for 2018

IDRRA has been selected by Gartner as a Cool Vendor in a report titled “Cool vendors in security and risk management, securely scaling digital businesses” by Gartner analysts. IDRRA is a scalable, AI-powered assessment platform that automates manual cybersecurity consulting practices. It enables enterprises to streamline their cybersecurity, data protection, and privacy compliance across their organization and their supply-chain while eliminating labor intensive costs.

In the report, Gartner identified several challenges in the IT security and risk management field, including that, “traditional approaches of IT and security risk management — focusing on point-in-time assessments, qualitative risk assessments and based on operational insights — are insufficient to provide assurance to CISOs, particularly those facing big data issues.” Specifically, within the area of vendor risk management (VRM), Gartner identified that, “third-party security due diligence is in a state of chaos, caused mostly by lengthy, subjective questionnaires. IT compliance professionals spend over 25% of their time assessing external controls, and they want a better approach.”

Gartner selected IDRRA as a cool vendor because, “IDRRA has brought a modern solution to the security risk assessment market by incorporating consulting intellectual property into an algorithm and layering this algorithm into a chatbot. An automated security or vendor risk assessment is done based on the creative use of chat bots, NLP and security consulting intellectual property designed into the native algorithm.”

Tel Aviv’s IDRRA is an AI powered platform for automating security, data protection and privacy related risk analysis for organizations. The IDRRA platform enables enterprise to rapidly adopt risk management programs for VRM and internal compliance and achieve better oversight of risk. IDRRA supports leading regulatory frameworks, security best practices, and enables customization to automate their self compliance for numerous industries, including: financial services, technology, industrial and healthcare. (IDRRA 05.11)

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9.9 Moovit Partners with Microsoft to Provide Public Transit Data for Azure Maps

Moovit announced that it is integrating its people-driven transportation platform into Microsoft’s Azure Maps. Tel Aviv-based Moovit has built a mapping tool for public transportation. The company uses crowdsourced data from millions of users to map routes for buses and metros around the world. It also leverages that data via a service it provides to urban planners called Smart Transit Suite. The partnership with Microsoft will allow developers who use Azure Maps to hook into Moovit’s transit data.

For Moovit, a partnership with a tech giant like Microsoft offers one more avenue to increase its visibility and gain new users, who can contribute more data. Over time, Moovit will migrate its products and services to Microsoft Azure, and it will potentially incorporate services such as Microsoft Cortana to deliver real-time transit information for a user’s commute. The company says it now has 300 million registered users in 2,600 cities and 85 countries, and it has attracted 450,000 editors who help monitor and improve the data being contributed to the platform.

Moovit, founded in February 2012, released its first version of the basic transportation app in January 2013. Since then, the company has raised $133 million in venture capital, which includes a $50 million round led by Intel Capital earlier this year. (Moovit 06.11)

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9.10 Innoviz’s Solid-State LiDAR Wins CES 2019 “Best of Innovation” Award

Innoviz Technologies announced that its InnovizOne automotive-grade solid-state LiDAR and Computer Vision software have been awarded the elite 2019 CES® “Best of Innovation” honor, given to only the highest-rated product or technology in each category, underscoring the company’s key technology contributions to the mass commercialization of autonomous vehicles.

The first and only LiDAR capable of delivering a commercially viable, automotive-grade, solid-state sensor, InnovizOne represents an unprecedented combination of safety, reliability, compact size and affordability together in one of the most high-performance 3D sensing solutions in the industry. Hailed as the most outstanding product in the “Vehicle Intelligence and Self-Driving Technology” category by the Consumer Technology Association (CTA), Innoviz will be showcased at the upcoming CES 2019 in Las Vegas. The annual CES Innovation Awards program – judged by an expert team of industrial designers, independent engineers and members of the trade press in the autonomous vehicles sector – celebrates outstanding product design and engineering in new technology products.

Innoviz’s LiDAR solution offers unique solid-state, MEMS-based design, providing the superior depth perception necessary for Levels 3 – 5 of autonomous driving. Combined, InnovizOne and Innoviz’s Computer Vision software deliver a complete software stack for autonomous vehicles, turning the LiDAR’s superior data and 3D point cloud into meaningful driving decisions through industry-leading object detection, classification, tracking, lane marking, simultaneous localization and mapping (SLAM) software and more – all while meeting or exceeding the stringent requirements of OEMs and technology companies.

Kfar Saba’s Innoviz is a leading provider of cutting-edge LiDAR remote sensing solutions and Computer Vision software designed to enable the mass commercialization of autonomous vehicles. The company’s LiDAR products deliver superior performance at the cost and size required for mass market adoption. Available now, InnovizPro offers unrivaled angular resolution at the highest frame rate of any LiDAR solution currently on the market. (Innoviz Media 08.11)

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9.11 CloudAlly Introduces a Backup Solution for Dropbox Business

CloudAlly announced the addition of Dropbox Backup to its growing list of secure automated online backup services. Available immediately, the new service ensures the ability to quickly recover critical data stored within Dropbox in the event of data loss. In many enterprise companies Dropbox Business is used as the primary storage location for critical business documents, but it lacks the backup and recovery features needed to recover data that has been accidentally or maliciously destroyed.”

Company CIOs and IT managers who rely primarily on the Dropbox Trash folder simply risk data loss occurrences, since this folder is automatically purged after 120 days. Once purged, the data is gone forever, without the ability to restore. CloudAlly’s automated daily backups of Dropbox folders & files enables businesses to quickly recover data from any point in time. The service is compatible with the Dropbox Business and Enterprise plans, and allows Admins to backup all or selected Dropbox users within the organization.

Founded in 2011, Ra’anana’s CloudAlly‘s ISO 27001 certified and GDPR / HIPAA compliant cloud-to-cloud backup and recovery solution performs automated daily backups of leading SaaS applications to Amazon S3 secure storage and makes it available for restore or export from any point in time. (CloudAlly 08.11)

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9.12 Foresight’s QuadSight Vision System Wins Prestigious 2019 CES Innovation Award

Foresight Autonomous Holdings announced that its QuadSight vision system has been named a 2019 CES Innovation Award honoree in the Vehicle Intelligence and Self-Driving Technology category. Foresight’s quad-camera vision system was selected from a highly competitive pool of participating innovative CES products.

Focused on the stringent demands of autonomous vehicle vision needs, QuadSight is designed to achieve near-100% obstacle detection with near-zero false alerts under all weather and lighting conditions, including complete darkness, snow, rain, fog, sandstorms and blinding glare. Leveraging decades of field-proven security technology and highly advanced image-processing algorithms, Foresight’s quad-camera technology combines two pairs of long-wave infrared (LWIR) and visible-light stereoscopic cameras to achieve an unprecedented performance standard for autonomous vehicle vision.

Ness Ziona’s Foresight Autonomous Holdings is a technology company engaged in the design, development and commercialization of stereo/quad-camera vision systems for the automotive industry based on 3D video analysis, advanced algorithms for image processing and sensor fusion. The company, through its wholly owned subsidiary Foresight Automotive, develops advanced systems for accident prevention, which are designed to provide real-time information about the vehicle’s surroundings while in motion. (Foresight 09.11)

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10: ISRAEL ECONOMIC STATISTICS

10.1 The Composite State of the Economy Index for September 2018 Increases by 0.3%

The Bank of Israel’s Composite State of the Economy Index for September 2018 increased by 0.3%. The growth rate of the Index is similar to the pace that has characterized it in recent years. The Index was positively impacted by the increase in imports of manufacturing inputs and in the job vacancy rate for September, and by the sharp rise in industrial production and the rise in services revenue in August. In contrast, the declines in goods exports and consumer goods imports moderated the Index’s rate of growth this month. (BoI 31.10)

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10.2 Israel’s Budget Deficit Climbs by 3.6%

Israel’s government budget deficit over the past 12 months (November 2017 – October 2018) climbed to 3.6% of GDP, the Ministry of Finance announced on 5 November. A NIS 38.5 billion deficit, 2.9% of GDP, was planned for 2018, but the actual deficit is NIS 9 billion higher. The past 12 months include December 2017, when tax revenues were exceptionally low. State tax revenues totaled NIS 28.1 billion in October.

Ministry of Finance sources attributed the rise in the deficit to a technical reason, but the decline in tax revenues continues. The sources said that the rise in the deficit resulted from a NIS 4 billion one-time provision for the property tax fund in December 2017, added that the deficit would fall next month. Nevertheless, the Ministry of Finance declined to state what the budget deficit would be at the end of the current year two months from now. The budget deficit target for 2018 is 2.9% of GDP.

The government budget deficit in October was NIS 800 million. The Ministry of Finance explained that an estimated NIS 6.1 billion in tax payments was put off from September to October because of the Jewish holidays in September. Excluding this postponement, the October deficit was NIS 6.9 billion. Tax revenues totaled NIS 256 billion in January-October 2018, 2.9% less in nominal terms than in the corresponding period last year.

Government spending totaled NIS 33 billion in October: NIS 26.6 billion in spending by government ministries, NIS 2.8 billion in interest payments on the government debt, and NIS 3.6 billion in repayment of principal and interest to the National Insurance Institute. Government spending totaled NIS 306.4 billion in January-October 2018. 81.1% of the original budget and 7.2% more than in the corresponding period last year. Defense spending rose 3.5%. It should be noted, however, that starting in 2018, revenue from the Israel Land Authority designated for projects in the Ministry of Defense listed in economic vacating agreements is included in the budget deficit calculation. (Globes 06.11)

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10.3 Israel Improves Ease of Doing Business Ranking

On 31 October, the World Bank announced its Ease of Doing Business ranking; Israel rose five places to rank 49th in the world. This year’s advance follows consecutive declines in recent years. The World Bank Ease of Doing Business Index is considered the most important index in the world for measuring the bureaucratic burden on businesses, and a country’s ranking carries great symbolic importance. The index was launched in 2006, when Israel was ranked 26th. Since then, Israel has slipped in the rankings, reaching 54th place last year.

Israel scored very poorly in some of the sub-rankings of which the final ranking is composed. Last year, Israel was ranked 130th (and almost last) for registering property, 99th for paying taxes and 92nd for enforcing contracts. In the current rankings, Israel has risen 41 places for registering property (to 89th), thanks to the introduction of on-line Land Registry (Tabu) entries.

Israel improved 24 places, from 65th to 41st, for dealing with construction permits. On the other hand, it is still ranked low for enforcing contracts and paying taxes (90th in both categories). In categories in which Israel scored well in the past, it has declined, falling seven places (from 16th to 23rd) for protecting minority investors, and eight places (from 37th to 45th) for starting a business. Israel fell to 60th place from 55th for getting credit, and three places to 29th for resolving insolvency. The ranking, it should be pointed out, is relative, and Israel is in competition with other countries that are also working to improve their rankings on the index. (Globes31.10)

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11: IN DEPTH

11.1 JORDAN: Moody’s Affirms Jordan’s B1 Ratings, Maintains Stable Outlook

On 8 November 2018, Moody’s Investors Service affirmed the Government of Jordan’s long-term issuer and senior unsecured ratings at B1 and maintained the stable outlook.

The decision to affirm Jordan’s B1 ratings reflects credit challenges posed by an increasingly adverse global financing and trade environment, in the context of very large current account deficits and declining foreign exchange reserves, and rising domestic social pressures. It also takes into account credit supports such as the government’s proven commitment to fiscal consolidation, strong and broad-based international commitment to support Jordan’s economic, financial and social stability, and reforms of Jordan’s energy sector and changes in energy sources that will reduce the sovereign’s vulnerability to higher oil prices.

The stable outlook balances Moody’s view that the planned fiscal reforms will set the government’s elevated debt-to-GDP ratio on a gradually declining path in the next several years against the risk that weak growth and high unemployment cause delays or partial reversals in the government’s fiscal consolidation strategy. The stable outlook also balances better prospects for growth in merchandise exports and tourism receipts, due to the improving security situation in Iraq and Syria, against the balance-of-payments and external liquidity pressures posed by higher oil prices and rising global interest rates.

Moody’s has also affirmed the B1 backed senior unsecured foreign currency rating and maintained the stable outlook on the Development and Investment Projects Fund of the Jordan Army. In Moody’s view, this is ultimately the obligation of the Government of Jordan which, acting through the Ministry of Finance, unconditionally and irrevocably ensures the due payment of this debt.

Jordan’s country ceilings are unchanged. The foreign currency bond ceiling remains at Ba1/NP, the foreign currency deposit ceiling at B2, and the long-term local currency bond and deposit ceilings at Ba1.

Ratings Rationale

Rationale for Affirming the B1 Ratings: Increasingly Adverse Global Financing and Trade Backdrop, Rising Domestic Social Pressures Heighten Jordan’s Persisting Vulnerabilities

Higher energy prices compared to 2017 and the ongoing tightening of global financial conditions compound pressures associated with Jordan’s long-standing credit challenges such as persistently very large current account deficits and a high government debt burden. Moody’s expects that these challenges will continue to constrain Jordan’s creditworthiness in the next several years.

With a nearly 35% increase in global oil prices relative to 2017, Moody’s expects that Jordan’s fuel imports will rise by around 2.5% of GDP from this year, exerting negative pressure on an already large current account deficit, expected to average around 11% of GDP in 2018 and 2019. In the first half of 2018, less than a third of Jordan’s current account deficit was financed by foreign direct investment, highlighting the country’s reliance on external debt financing. In the absence of sovereign external borrowing in 2018, foreign exchange reserves have declined by around 13% during the first nine months of this year. Although at $11.7 billion (excluding gold and SDRs) in September 2018, reserves cover nearly 6 months of imports of goods and services, Moody’s expects that they will continue to fall in the next couple of years, increasing Jordan’s external vulnerability. Moody’s projects Jordan’s External Vulnerability Indicator, the ratio of external debt repayments due over the next year to foreign exchange reserves, to rise to 127% in 2019 from 95% in 2017.

Meanwhile, rising global borrowing costs will increase the cost of external and domestic debt for Jordan. Although the government’s debt affordability, measured by the ratio of interest payments to government revenue, is currently better than for most similarly-rated sovereigns with comparable debt loads, Jordan’s elevated debt burden and relatively short average maturity of debt, at around 5 years, heighten the sovereign’s fiscal strength sensitivity to a higher cost of debt and contribute to pressure on government liquidity.

Aside from an increasingly febrile global environment, Jordan’s credit profile will be increasingly constrained by growing social pressures due to high unemployment, which reached 18.7% in the second half of 2018, and relatively weak growth of only around 2%. Rising social and political pressures became most evident in May this year when the government’s proposed new income tax law triggered widespread street protests. The protests led to a government reshuffle and a withdrawal of the proposed law from parliament. Although the new government has since submitted a revised income tax law with a similar positive fiscal impact, this episode suggests that rising social and political opposition to austerity measures will complicate fiscal consolidation efforts in the coming years.

Proven Commitment to Fiscal Reforms, Strong International Support and Improving Regional Security Buttress Jordan’s Credit Profile

Jordan’s creditworthiness is supported by the government’s proven commitment to fiscal reforms, significant and continued financial support from a range of bilateral donors and lenders, and by reforms to its energy sector and changes in energy sources which have already muted the impact of higher oil prices on the budget and will, over time, reduce the country’s external position’s vulnerability to oil price increases.

Despite some setbacks during 2018 in implementing fiscal measures planned under the current IMF Extended Fund Facility arrangement, the Jordanian authorities remain committed to gradual fiscal consolidation. For instance, the new income tax law is planned to be included in the 2019 budget. Moody’s expects that the law will be implemented broadly as currently proposed or that the government will put in place other compensatory fiscal measures in order to maintain a small primary fiscal surplus during 2019. Such compensatory measures were implemented in the past when planned fiscal reforms had been delayed or revenue collection outcomes underperformed budget projections.

Jordan’s credit profile is also underpinned by enduring, strong and broad-based international commitment to support the Kingdom’s economic, financial and social stability, including through budgetary grants, loan guarantees, concessional financing and both technical and military assistance. Aside from the United States (Aaa stable), which in February 2018 committed to increase its annual assistance to Jordan by close to a third, Jordan receives bilateral grants and other financial and economic support from the European Union (Aaa stable) as well as the Gulf Cooperation Council (GCC) states. Following the street protests in May 2018, Saudi Arabia (A1 stable), Kuwait (Aa2 stable) and the UAE (Aa2 stable) announced a new $2.5 billion support package, designed to shore up Jordan’s economy through investments and to bolster central bank foreign exchange reserves. Separately, Qatar (Aa3 stable) announced a $500 million aid package that includes investments and project finance in addition to the commitment to employ ten thousand Jordanians in Qatar.

Moreover, while Jordan’s balance of payments remains vulnerable to a sustained rise in oil prices, its fiscal vulnerability to oil price fluctuations has been significantly reduced by structural reforms implemented during the past several years. These reforms include the elimination of general fuel subsidies in 2012, diversification of the energy sources from more expensive heavy oil to LNG during 2015, and the introduction of an automatic electricity tariff adjustment mechanism in 2016, which is intended to avoid large operating losses for the National Electricity and Power Company. Moody’s estimates that these reforms will ensure that the oil price increases seen since the middle of 2017 will not weigh on the government’s budget.

Furthermore, Moody’s expects that in the next two years the negative balance-of-payments impact of higher oil prices will be at least partly mitigated by the planned replacement of LNG imports with cheaper piped natural gas from Israel (A1 positive) and Egypt (B3 positive), with the first deliveries expected to start in 2019 and 2020, respectively, and by a greater reliance on renewables, which the authorities expect to supply up to 20% of Jordan’s electricity demand by 2020 compared to 10% in 2017.

Rationale for the Stable Outlook

Moody’s projects government debt to decline to 93% of GDP in 2020 from 94.3% in 2017 and then further to 91% by 2022. Should GDP growth be durably slower than Moody’s currently expects, with limited scope for the government to implement significant new revenue-raising measures or expenditure cuts, government debt would likely remain at least around the current levels for longer, heightening Jordan’s sensitivity to a marked increase in interest rates.

The stable outlook also balances better prospects for merchandise exports and tourism receipts, due to the improving security situation in Iraq and Syria, against the balance-of-payments and external liquidity pressures posed by higher oil prices and rising global interest rates.

Conflicts in Syria and Iraq have significantly reduced Jordan’s exports during the past five years. Direct exports to Iraq and Syria accounted for about a fifth of Jordan’s exports in 2013 (equivalent to 4% of GDP), but declined to less than 9% of total exports (1.4% of GDP) in 2017 due to the deterioration of security situation and a closure of all border crossings since 2015. Furthermore, the war in Syria affected trade with third counties by interrupting the key trade routes to Lebanon, Turkey and Europe. The reopening of the border crossings with Iraq (in August 2017) and Syria (in October 2018) should, over time, lift Jordan’s exports, boost growth and help to contain further increases in unemployment.

Despite the steps taken to ensure access to energy sources that are either cheaper or less correlated with global oil prices, in the near term, the balance-of-payments gains from improved security in Iraq and Syria could be offset by materially higher oil prices than Moody’s currently assumes. In turn, wider current account deficits would heighten pressure on the country’s foreign exchange reserves which could weaken global investors’ confidence, raise the cost of government debt and heighten pressure on government liquidity.

What Could Change the Rating Up

A sustained downward trend in the government’s debt burden, with a reduced sensitivity to potential increases in interest rates, would likely lead Moody’s to upgrade the rating. Over time, the rating would likely be upgraded if Jordan’s external position strengthened markedly, through increased regional trade and/or a durably lower energy import bill.

What Could Change the Rating Down

While Moody’s expects some further erosion of Jordan’s external buffers, a significantly faster decline in foreign exchange reserves than currently anticipated would likely lead to a downgrade, in particular if such a weakening in the country’s external position pointed to a likely loss of investors’ confidence that raised pressure on government liquidity. A reversal of the improvement in the security situation in Iraq and Syria or other negative geopolitical developments in the region could be factors leading to a weaker external position for Jordan.

A further material increase in domestic social pressures, due to elevated unemployment and weak growth, would likely lead to a rating downgrade should they point to renewed, lasting, increase in government debt. (Moody’s 08.11)

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11.2 UAE: Fitch Affirms Abu Dhabi at ‘AA’; Outlook Stable

On 5 November 2018, Fitch Ratings affirmed Abu Dhabi’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘AA’ with a Stable Outlook.

Key Rating Drivers

Abu Dhabi’s key credit strengths are its strong fiscal and external metrics and high GDP per capita, balanced by high dependence on hydrocarbons and a relatively underdeveloped economic policy framework. Sovereign net foreign assets are estimated to be the third-largest among Fitch-rated sovereigns, at over 190% of GDP in 2018, and government debt is the second-lowest, at around 7% of GDP. Oil and gas contribute around 80% of fiscal revenue, making it highly volatile. UAE governance scores remain below the ‘AA’ median, although they are the best in the Gulf Cooperation Council (GCC).

Higher oil prices are leading to a rapid rebound of revenue and continued increases in government spending. We expect a fiscal surplus of 2.7% of GDP in 2018, from a deficit of 3.5% of GDP in 2017. Higher oil prices will drive a 30% increase in revenue, while spending will rise by about 8%, after nearly identical increases in revenue and spending in 2017. Our fiscal numbers include the estimated investment income of Abu Dhabi Investment Authority (ADIA) in government revenue but treat any transfers from ADIA as financing items.

We expect the budget will slip back into a deficit of 3.3% of GDP by 2020, as Brent oil prices fall back to our long-term baseline assumption of an average of $57.5/bbl and moderate spending growth continues, partly reflecting the three-year AED50 billion (5% of GDP) stimulus package announced by the Crown Prince in June. The full composition of the AED50 billion is unclear, but AED10 billion will be in the form of loan guarantees for SMEs, and AED20 billion will be spent in 2019.

The increased expenditure, which constitutes a loosening of underlying fiscal policy, follows significant structural fiscal reforms and spending cuts undertaken in 2015 and 2016 and the resulting slowdown of growth. Government spending was cut by a cumulative 25% between 2014 and 2016. Utility prices were raised for non-nationals, and various new fees and levies were introduced, including taxes on hotel stays, a tax on expat rental contracts introduced in 2017 and increased this year, and a proposed road tax. The UAE reformed petrol subsidies in 2015, putting in place a robust benchmark-linked pricing system that has continued to operate. The UAE government introduced 5% VAT in 2018, after introducing excise tax in October 2017.

We estimate that Abu Dhabi’s fiscal financing requirement (or cumulative deficit excluding estimated ADIA income) will total $32 billion for 2018-2020. We estimate that ADIA interest and dividend income may be enough to offset this, and we do not assume any further bond issuance after the $10 billion in October 2017. Local-currency issuance at the Abu Dhabi level remains a remote prospect. Strong financial market returns may have allowed ADIA to mostly preserve the value of its assets in recent years, even as they have been used to finance the deficit. We estimate ADIA foreign assets at $523 billion (nearly 200% of GDP) in 2018.

We expect real GDP growth of 2.0% in 2018, from a decline of 0.5% in 2017 led by oil production cuts. We forecast only a moderate pick-up of Abu Dhabi’s non-oil growth to 2.5% in 2018 and 3.5% in 2019-2020, from 1.8% in 2017. The renewed expansion of the budget will support economic activity and confidence, but government spending growth did not prevent the economic slowdown in 2017. Short-term economic indicators have remained muted, and residential real estate prices have been falling. On the oil side, we only assume an production increase of 100k bbl/day in 2H2018, and the planned expansion of oil production capacity to 3.5m bbl/day represents an upside risk to headline growth and government finances.

Long-term growth potential is supported by continued public sector investments in the stock of capital, although a return to looser fiscal policy might delay the economy’s transition away from a growth model that is reliant on government projects and immigration. The government is also undertaking structural reforms, which over time could help build momentum in the non-oil economy. The UAE has continued to pull ahead of its GCC peers on indicators of Doing Business, climbing to 11th place in the World Bank’s 2019 ranking.

Contingent liabilities are high compared with peers but manageable in the context of Abu Dhabi’s fiscal resources. We estimate state-owned and government-related-entity debt including banks and the Abu Dhabi National Oil Company at around 38% of GDP. The IMF estimates Dubai public sector debt at around 60% of Abu Dhabi GDP. UAE banking system assets are around 280% of Abu Dhabi GDP (Fitch’s average Viability Rating for UAE banks is ‘bbb’). However, we note that while Abu Dhabi is committed to the financial stability and health of the UAE, it was demonstrated in 2009-10 that support for Dubai and the UAE banking system is selective and narrowly delineated.

In our view, geopolitical risks are elevated relative to ‘AA’ peers. Tensions between Iran and Saudi Arabia and the US pose a risk to the region, in particular Dubai as a trade and financial hub. The UAE, led by Abu Dhabi, remains embroiled in the Yemen civil war and is taking part in the ongoing boycott of Qatar.

Rating Sensitivities

The main factor that could lead to positive rating action is:

-Improvement in structural factors such as a reduction in oil dependence, and a strengthening in governance, the business environment and the economic policy framework.

The main factors that could lead to negative rating action are:

-Erosion of fiscal and external positions, for example due to a sustained period of low oil prices, or a materialization of contingent liabilities.

– Spill-over from a regional shock that impacts economic, social or political stability. (Fitch 05.11)

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11.3 EGYPT: IMF Agreement on the Fourth Review for Egypt’s Extended Fund Facility

An International Monetary Fund (IMF) team visited Egypt on 18 – 31 October 2018 to conduct the fourth review of Egypt’s economic reform program supported by a three-year Extended Fund Facility. At the end of the visit the IMF issued the following statement:

“The IMF staff team and the Egyptian authorities have reached a staff-level agreement on the fourth review of Egypt’s economic reform program, which is supported by the IMF’s SDR 8.597 billion (about $12 billion) Extended Fund Facility arrangement. The staff-level agreement is subject to approval by the IMF’s Executive Board. Completion of this review would make available SDR 1,432.76 million (about $2 billion), bringing total disbursements under the program to about $10 billion.

“The Egyptian economy has continued to perform well, despite less favorable global conditions, supported by the authorities’ strong implementation of the reform program. GDP growth accelerated from 4.2% in 2016/17 to 5.3% in 2017/18 while unemployment declined to below 10%. Meanwhile, the current account deficit narrowed to 2.4% of GDP in 2017/18 from 5.6% the year before, primarily driven by strong remittances and a recovery in tourism. Gross general government debt declined from 103% of GDP in 2016/17 to about 93% of GDP in 2017/18, supported by fiscal consolidation and higher growth.

“The Central Bank of Egypt’s (CBE) prudent monetary policy helped bring down annual inflation from 33% in July 2017 to 11.4% in May 2018. However, inflation increased again to about 16% in September 2018, reflecting the pass-through from energy price increases in June and a stronger than expected increase in volatile food prices in September. In the medium term, the CBE aims to reduce inflation to single digits. Meanwhile, in the current external environment of tighter financing conditions for emerging markets, the CBE’s commitment to a flexible exchange rate policy will help enhance competitiveness, protect Egypt’s foreign reserves, and cushion against external shocks. Egypt’s banking system remains liquid, profitable, and well capitalized.

“Egypt’s fiscal policy in 2018/19 and beyond will continue to aim at keeping general government debt on a clearly declining path and achieving a primary surplus of 2% of GDP. The government also remains committed to continuing energy subsidy reforms and raising revenues which will help create fiscal savings to invest in a well targeted social safety net, human development including health and education, and infrastructure. To improve fiscal transparency and public access to information, the authorities have continued to expand the data disseminated on the budget process and execution throughout the year.

“We welcome the authorities’ comprehensive efforts to improve the living standards of the most vulnerable. These efforts include: Takafol and Karama, which has expanded to cover around 10 million individuals; Forsa, which has created job opportunities for graduates of the Takafol program; and Mastoura, which provides microfinancing to women for sustainable income generation. These programs are being complemented with the Sakan Karim program to provide clean drinking water and sanitation to rural areas. Moreover, a social package consisting of an additional increase in the salaries of public servants, an increase in pensions, and a progressive increase in tax credits has been implemented.

“The government continues to make efforts to implement reforms that aim to help the private sector invest and create the jobs needed to achieve more inclusive and sustainable growth for Egypt’s young and growing population. These reforms include: improving access to industrial land; promoting competition; improving transparency and accountability of state owned enterprises; and fighting corruption. (IMF 31.10)

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11.4 MOROCCO: Fitch Affirms Morocco at ‘BBB-‘; Outlook Stable

On 13 November, Fitch Ratings affirmed Morocco’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BBB-‘ with a Stable Outlook.

Key Rating Drivers

Morocco’s ‘BBB-‘ rating is supported by a track-record of macroeconomic stability, comfortable external buffers and a low share of foreign-currency debt in public debt. This is balanced against weak development and governance indicators, high government debt and budget and current account deficits (CAD) that are wider than rating peers.

The government will miss its target of narrowing the central government (CG) budget deficit to 3.0% in 2018 from 3.6% of GDP in 2017. Fitch projects it will widen to 3.8% of GDP, against a revised government estimate of 3.5%. The upsurge in hydrocarbon prices will lead to a 0.4% of GDP overshoot in spending on subsidies as Morocco continues to support the prices of butane gas as well as those of wheat and sugar. Moreover, disbursements of Gulf Cooperation Council (GCC) grants will fall short of projections and the receipts of the corporate income tax will undershoot budget forecasts. Fitch forecasts the general government (GG) deficit, which also includes social security, local governments and extra-budgetary units, to widen to 2.5% of GDP in 2018 from a government estimate of 2.2% in 2017.

The government has prioritized social policies in the 2019 budget. It envisages an overhaul of social programs as well as measures to support consumer purchasing power, spur employment and reduce regional disparities. Despite strong investments in infrastructure and manufacturing capacities in recent years, Morocco’s non-agricultural activity has failed to accelerate and job intensity of growth remains low, resulting in only small improvements in employment and social indicators. This has contributed to social discontent, which is illustrated by recurrent protests in peripheral regions since 2016 and a boycott movement targeting some consumer products earlier in 2018.

Fitch projects a broadly stable CG deficit of 3.7% of GDP in 2019 (GG: 2.5%) reflecting a halt in consolidation efforts. The government is seeking to accommodate social priorities while containing pressures on the budget deficit by closing tax loopholes and raising some direct and indirect tax rates. It expects to limit the CG deficit to 3.3% of GDP by raising MAD5 billion from planned privatizations but Fitch treats privatization receipts as a below-the-line financing item rather than budget revenues. The CG deficit will narrow slightly to 3.5% of GDP in 2020 (GG: 2.4%) under Fitch’s forecasts, mostly on lower on-budget capital spending/GDP. A further rise in oil prices would exert pressures on the budget.

The government’s stated goal of reducing CG debt to 60% of GDP in 2021 is unlikely to be achieved. Fitch projects CG debt will rise to 67.6% of GDP in 2020 from 65.1% in 2017. CG debt has been on an upward trajectory since it reached its low point of 45.4% of GDP in 2008, reflecting moderate growth and slow and intermittent progress on fiscal consolidation. GG debt will rise from 51.1% of GDP in 2017 to 53.3% in 2020. Refinancing risks are low as debt is mostly dirham-denominated, while 76.7% of external public debt is owed to official creditors.

The debt of state-owned enterprises’ (SOEs) is high, at 26% of GDP at end-2017, of which 16.9% of GDP is owed to external creditors. Government guarantees on SOE debt amounted to 14.3% of GDP at end-2017. The government is currently working on a draft law to streamline the governance and oversight of SOEs and strengthen their balance sheets.

GDP growth will average 3.2% in 2018-2020, in line with the current ‘BBB’ category median of 3.3%. Following a bumper harvest in 2017, crop production has further increased during the current season due to supportive weather conditions and improved productivity, but unfavorable base effects mean that GDP growth will slow from 4.1% in 2017 to 3.3% in 2018 and 2.9% in 2019 as agricultural value-added contracts assuming a normalization of harvests.

Activity in the non-agricultural sector is underpinned by continued foreign-financed investments in the automotive and aeronautic industries, steady growth in mining production and strong tourism. However, the medium-term outlook for non-agricultural activity remains constrained by structural impediments, including weak education outcomes, skill mismatches and low participation rates. The government is intensifying efforts to reduce the long payment delays in the economy, which are a key constraint for private sector activity.

The CAD will average 4.2% of GDP in 2018-2020, up from 3.6% in 2017 and well above the current ‘BBB’ median of 1.6%. These forecasts reflect a larger trade deficit and lower disbursement of GCC grants. Rising imports are driven by the upsurge in oil prices given the high dependence on energy imports, strong domestic demand and assembling industries inputs. They will be only partly offset by strong export performance lifted by sales of phosphates and transport equipment.

Foreign direct investments will average 1.7% of GDP in 2018-2020. Wider CADs against the background of a pegged exchange rate will result in a fall in FX reserves to 4.9 months of current account payments in 2020 from 5.9 months in 2017, assuming a Eurobond issuance by the sovereign in 2019. Net external debt will also rise to 15.6% of GDP in 2020 from 14.6% in 2017, above the current ‘BBB’ median of 5.8%, based on Fitch’s projections. Morocco’s two-year precautionary liquidity line (PLL) with the IMF expired in July and the government has applied for a successor arrangement with the Fund. A new precautionary arrangement would offer a safety net against risks of external stress.

Bank profitability is steady, supported by wide interest margins, and the deposit-based funding structure is stable. However, the sector’s capitalization is below the ‘BBB’ median and provides only thin buffers given asset risks. Loan concentration is high, despite tighter regulatory rules and non-performing loans were 7.5% of total loans in 2017 versus a ‘BBB’ category median of 4.2%. The transition to the IFRS9 accounting standards that started in January is putting pressure on capitalization ratios but the central bank has allowed a five-year transition period for compliance.

Structural features are a major constraint on the ratings, as governance and development indicators are well below ‘BBB’ and ‘BB’ medians. Continued tensions between some of the members of the ruling six-party coalition persist, but will not impact policy-making in the short to medium term, in Fitch’s view. Negotiations over the long-simmering conflict in the Western Sahara region have reached a standstill since 2012 but renewed UN efforts could lead to the resumption of talks in the coming months. Although Fitch does not expect a prompt resolution to the conflict, a reactivation of the peace process would contribute to reducing regional geopolitical tensions.

Rating Sensitivities

The main factors that may, individually or collectively, lead to positive rating action are as follows:

-Fiscal consolidation leading to a trend reduction in government debt/GDP;

-Sustained improvement in the current account balance consistent with declining net external debt-to-GDP;

-Over the medium term, stronger growth potential and an improvement in development indicators.

The main factors that may, individually or collectively, lead to negative rating action are as follows:

-An increase in government debt/GDP driven by the fiscal stance or a materialization of contingent liabilities;

-Security developments or social instability affecting macroeconomic performance or external balances or leading to significant fiscal slippages;

-Weakening of medium-term growth prospects leading to a widening of the gap between Morocco’s development indicators and the ‘BBB’ category medians.

Key Assumptions

We expect global economic trends and commodity prices to develop as outlined in Fitch’s latest Global Economic Outlook. We assume that oil prices will decline from $70/barrel in 2018 to $65 in 2019 and further to $57.5 in 2020. (Fitch 13.11)

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11.5 TURKEY: Turkey’s Crisis-Hit Construction Sector Threatens Big Fallout

Mustafa Sonmez noted on 1 November in Al-Monitor that Turkey’s construction sector, the backbone of Ankara’s growth policies for the past decade and half, stands out among the earliest victims of the country’s economic crisis, rapidly contracting and threatening to drag others down with it.

The sector, including realty, accounted for 15.7% of Turkey’s $851.5 billion in gross domestic product (GDP) last year, almost on par with the manufacturing sector, which accounted for 18.5% of GDP. After impressive expansion, sales are now shrinking rapidly for homes and offices, leaving builders with swelling stocks. Housing demand, in particular, has fallen sharply, hit by the slump of the Turkish lira and the ensuing increase in interest rates. Building companies are struggling to decrease stocks and repay bank loans. Despite government incentives, including tax cuts and cheaper loan campaigns, the sector remains in turmoil and the circle appears to be tightening.

In the first nine months of the year, home sales decreased 2.7% compared to the same period last year. Mortgaged home sales, meanwhile, were down 29.4%, largely the result of the increase in interest rates. The rate on home loans hit 25.2% in September, up from 12.9% in September 2017, before climbing further to 29% in October.

The overstock problem has also strained the government’s Housing Development Administration (TOKI) and its affiliated Emlak Konut, the country’s biggest real estate investment trust. Founded in 1984 to develop land with infrastructure and provide loan support to mass housing builders, TOKI turned to high-profit housing after the Justice and Development Party (AKP) came to power in 2002. Since 2008, it has also focused on the construction of public buildings, including hospitals and schools. As of June, TOKI had 142,000 homes for sale. Since 2003, it has sold about 696,000 of the nearly 838,000 homes it built, but it is now struggling to attract buyers, and the number of its new projects has visibly decreased.

Sales figures in branded projects developed by Emlak Konut also indicate a slowdown. Nearly half of Emlak Konut homes, offices and shops remained for sale during the first half of 2018, according to a company activity report released on the Public Disclosure Platform.

Shrinking demand has also led to tangible drops in home prices. As a result, the annual increase in housing prices has fallen well behind the increases in overall consumer and producer prices. As of August, the 12-month increase in housing prices stood at only 3.8% in Istanbul, 8.6% in Ankara and 15.7% in Izmir, according to central bank data. Producer inflation was 32% for the same period, a striking sign of how the increase in housing prices was not even half of the inflation rate.

Hardship in selling or renting finished homes and offices has forced an abrupt halt in new investments. Another major factor is the spike in construction material prices amid the rapid increase in foreign exchange prices and interest rates over the past several months. The construction cost index by the Turkish Statistical Institute indicates that the prices of construction materials soared 44% over the last 12 months, with overall producer inflation reaching 46% in the same period. In 2016 and 2017, the increase in construction material prices stood at 13% and 27%, respectively. The soaring costs have not only discouraged new investments but have also dealt a heavy blow to ongoing projects.

A sharp downturn is seen for infrastructure as well. Public construction investments have rapidly slowed, and the so-called megaprojects, launched as public-private partnerships (PPP), have also fallen into crisis. PPP projects, including airports, highways, bridges and hospital campuses, many of them in and around Istanbul, have been hit by foreign currency losses due to the meltdown of the Turkish lira, which has aggravated the debt burden stemming from the foreign loans acquired. The increasing costs are hard to cope with for those projects as well.

Dozens of construction companies have already thrown in the towel, lining up for bankruptcy protection in commercial courts. The hardest blows, however, are being felt by the sector’s workers, from blue-collar laborers to architects and engineers. Employment figures in the sector are falling. Moreover, the increase in labor costs trails well behind consumer inflation, indicating a meltdown in the real income of construction workers. As of July, the 12-month increase in labor costs stood at 17%, compared to a nearly 20% increase in consumer prices for the same period.

When the AKP come to power in early elections in November 2002, it was handed a rehabilitated economy on a silver platter, while the three outgoing coalition partners were ousted from parliament, paying the penalty for the International Monetary Fund-backed austerity measures that put the economy back on track after a severe crisis in 2001. Drawing on this precious inheritance, the AKP government was able to attract an extraordinary inflow of foreign funds, including in the aftermath of the 2008 global crisis, until 2014. Thanks to those foreign funds, obtained mostly through borrowing, it achieved high rates of economic growth, which relied largely on the domestic market and was heavily driven by construction. The government paid no mind that construction was not generating much-needed foreign exchange, enjoying the political returns of the building frenzy.

Turks were impressed by the grandiose airports, bridges and buildings springing up before their eyes, rewarding the AKP at the ballot boxes. In further electoral gains for the party, the construction boom meant jobs for the most unqualified and neediest breadwinners, while part of the foreign funds flowing into the country became housing loans to make large numbers of Turks homeowners.

Another reason to opt for construction-centered growth was to create the AKP’s own bourgeois, with the building spree proceeding along with nepotistic construction permits and public land allocations by local administrations and the central government. As such, the construction sector provided the funds to build a party state through the control of crony business people of varying caliber.

This wheel, which relied on foreign funds to continue spinning, began to slow as money became more expensive after 2014 before hitting a downturn and then crisis. Due to its links with many industrial subsectors and service sectors, among them financing, real estate marketing and advertising, the crisis-hit construction sector has begun to drag the entire economy down.

A fresh takeoff can be achieved only with the revival of domestic demand, which, in turn, requires reducing inflation to single digits, getting loan interests to reasonable rates, restoring foreign investor confidence in Turkey and the flow of external funds and dispelling the general fog of economic uncertainty. In short, it all depends on seeing a light at the end of the tunnel, which is likely to take several seasons. Before anything else, however, the AKP government needs a clear roadmap to begin climbing out of the hole. Some may claim the worst is now behind, but the truth is, Turkey has not hit bottom in the current crisis.

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Fortnightly, 28 November 2018

November 28, 2018, 6:27 am

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28 November 2018
20 Kislev 5779
20 Rabi Al Awwal 1440

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Knesset Committee Approves Cannabis Export Bill
1.2  Cabinet Approves Amir Yaron as Bank of Israel Governor
1.3  PM Netanyahu Meets with Mississippi Governor Phil Bryant
1.4  President of Muslim-Majority Chad Arrives to Reestablish Ties with Israel
1.5  Agreement Reached on Israel-Europe Gas Pipeline

2: ISRAEL MARKET & BUSINESS NEWS

2.1  Tel Aviv University and Northwestern University Launch Joint Nanoscience Program
2.2  Habana Labs Secures $75M in Series B Financing Led by Intel Capital
2.3  Velox Completes $32 Million Investment Round
2.4  Votiro Secures an $8 Million Investment
2.5  Franklin Templeton Opens Israel office
2.6  AdaSky Adds $20 Million from Lead Investor, South Korea’s Sungwoo Hitech
2.7  Israeli App Developer Smart Media Racks Up 100 Million Downloads
2.8  Tamar Partners Sign Additional $200 Million Jordanian Gas Deal
2.9  Lightricks Secures $60 Million to Change How the World Creates Content
2.10  Quantum Machines Raises $5.5 Million to Develop Next Generation for Quantum Computers

3: REGIONAL PRIVATE SECTOR NEWS

3.1  Bahrain’s Mumtalakat Signs Deal to Acquire US Office Buildings
3.2  UAE-Based Startups Dominate the MENA Fintech Sector
3.3  Dubai’s dnata Expands US Services with Los Angeles Launch
3.4  Urban Outfitters to Make Arabian Gulf Debut in 2019
3.5  Lockheed Martin to Build Multi-Mission Surface Combatant Ships for Saudi Arabia
3.6  Volt Lines Raises $1.28 Million Pre-Series A from Dubai Angel Investors

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Construction Starts on Saudi Arabia’s First Solar Energy Project

5: ARAB STATE DEVELOPMENTS

5.1  Lebanon’s Average Inflation Up by 6.31% in October 2018
5.2  Lebanon’s Trade Deficit Widened by 3.93% to $12.96 Billion in September 2018
5.3  Jordan’s PM Razzaz Launches Amman’s 2019 – 2020 Priorities Plan
5.4  Jordan’s Income Tax Law Passed With Amended Taxability Threshold
5.5  IMF’s Lowered Growth Projections for Jordan Realistic
5.6  Libya Agrees to Pay Medical Dues to Jordanian Hospitals for Treating Injured Libyans
5.7  Jordan’s New Labor Draft Law May Increase Women’s Economic Participation

Arabian Gulf

5.8  Bahrain Signs $912 Million Deal for Attack Helicopters
5.9  RTA Unveils $160 Million Plan to Expand Dubai Smart Traffic Systems
5.10  Oman Announces Merger to Create New Oil Giant
5.11  Saudi Oil Output Said to Surge to Record High Amounts in November

North Africa

5.12  Egyptian Exports Decline by 12.2% in August
5.13  Remittances from Egyptians Abroad Increase 20.4% on Annual Basis in September
5.14  Egypt’s Employment Rate Increases to 10% in Third Quarter
5.15  King Mohammed VI Inaugurates New Large-Scale Railway Projects

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkish Jobless Rate Rises to 11.1% in August, Highest Since Early 2017
6.2  Turkey’s Health Spending Exceeds $38.5 Billion in 2017
6.3  Cyprus’ Utilities & Housing Costs Lift Inflation by 1.9%
6.4  Tourist Arrivals to Cyprus Stand at an All Time High
6.5  Greece Grants Country’s First Medical Cannabis Licenses
6.6  Greek Current Account Surplus Shrinks in September While Tourism Revenues Stay Steady

7: GENERAL NEWS AND INTEREST

ISRAEL

7.1 Chanukah Celebrated in Israel & the World Over

REGIONAL

7.2  Tunisia Appoints First Jewish Minister in Decades
7.3  Greek Population May Shrink by 1.4 Million by 2035
7.4  Athens Technical University to Offer Joint Degrees with Columbia University

8: ISRAEL LIFE SCIENCE NEWS

8.1  Aurum Ventures and Direct Insurance Join Investment in KidneyCure
8.2  Salt of the Earth Expands Global Availability
8.3  Evogene Establishes Ag-Chemicals Subsidiary – AgPlenuss
8.4  BioLineRx Receives FDA Designation for Novel Cancer Immunotherapy Candidate AGI-134
8.5  E-Motion Receives CE Mark for Its Stimulation Therapy for Patients With Acute Digestive Dysmotility
8.6  Mazor Robotics Shareholders Approve Merger Agreement With Medtronic
8.7  Aidoc and SaferMD Team Up to Close the Loop of AI Radiology Medicare Payments
8.8  BrainStorm Cell Therapeutics Submits IND for NurOwn for Treatment of Progressive Multiple Sclerosis
8.9  BGU Shows that Heating Raw Human Excrement Could Provide a Reusable Energy Source
8.10  Ireland’s Medtronic to Acquire Nutrino Health
8.11  CytoReason Model Overcomes Cross-Species Drug Development Barriers
8.12  Merchavia Signs MoU for First Investment in the Medical Cannabis Sector
8.13  CannaLean Develops New Cannabidiol Formulation to Safely Lower Cholesterol Levels

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Darillium Emerges from Stealth to Help Multi-Platform & Multi-Cloud Management
9.2  Transmit Security Wins Javelin’s 2018 Mobile Biometrics Platform Leader Award
9.3  Abellio London Reduces Collisions & Injuries Via Mobileye Safety Trial
9.4  CyberArk Named a Leader in Privileged Identity Management by Independent Research Firm
9.5  Pioneering a New Era in 3D Printed Production Metal Parts
9.6  AppNexus Mobilizes Anodot’s Autonomous Analytics to Improve Customer Service
9.7  Techniplas’ Illuminated Steering Wheel Designed Using Nano Dimension’s DragonFly Platform
9.8  Maytronics Dolphin iO Wins 2018 Piscine Global Innovations Trophy for Smart Pool Products
9.9  OptimalPlus’ “Test Data Analysis as a Service” Complements Internal Semiconductor Teams
9.10  Wi-Charge Unveils Wireless Power Kit for Amazon Echo Dot and Google Home Speakers
9.11  Safe-T Recognized by Gartner as One of Seven Representative SDP Vendors
9.12  vHive Releases Autonomous Drone Solution for Complex Cell Tower Inspection
9.13  Team8 Launches Portshift, a New Breed of Automated Application Security
9.14  ELTA Unveils Next Generation Drone Guard to Counter Unmanned Aircraft System (C-UAS)
9.15  Phone Calendar Launches Timeet, a Free Mobile App That Makes Your Calendar Social
9.16  Altair Semiconductor and JIG-SAW Partner on LTE-Enabled Sensors for Industrial IoT
9.17  Finscend’s AI Technology is Revolutionizing the Way Banks Process Credit Card Disputes
9.18  BigID Achieves Certification in the Amazon Web Services Partner Network
9.19  MazeBolt Launches Definitive DDoS Knowledge Base
9.20  GetSAT Selected as SatCom Component for U.S. Coast Guard Airborne Missions

10: ISRAEL ECONOMIC STATISTICS

10.1  Israel’s CPI Rises by 0.3% in October
10.2  Israel’s Economy Grew By 2.3% in Third Quarter
10.3  Israel’s Composite State of the Economy Index for October 2018 Increased by 0.3%
10.4  CreditEase Israel Innovation Fund Second Most Active Chinese Investment Institution in Israel

11: IN DEPTH

11.1  ISRAEL: The State of Medical Cannabis
11.2  IRAQ: For the Iraqi Prime Minister, a Slew of Economic Challenges
11.3  QATAR: IMF Staff Completes Visit to Qatar
11.4  SAUDI ARABIA: Fitch Affirms Saudi Arabia at ‘A+’; Outlook Stable
11.5  ALGERIA: Breaking Algeria’s Economic Paralysis
11.6  MOROCCO: Moody’s Changes Outlook on Morocco’s Rating to Stable, Affirms Ba1 Rating
11.7  TURKEY: Turkey & Russia Finish New Gas Pipeline

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Knesset Committee Approves Cannabis Export Bill

On 15 November, the Knesset Internal Affairs and Environment Committee approved a bill to allow medical cannabis exports from Israel for its first reading in the Knesset plenum. The bill is designed to give Israel Police the supervisory authority needed to open the medical cannabis market for export without jeopardizing public security. Minister of Public Security Erdan and Internal Affairs and Environment Committee chairperson Kisch (Likud) agreed to promote the bill, which will allow exports of medical cannabis and give the police the necessary tools for supervising the medical cannabis industry and preventing dangerous drugs from getting outside Israeli territory.

In August 2017, an inter-ministerial committee recommended legalizing cannabis exports from Israel. Some 280 farmers and 100 companies obtained preliminary permits from the state to establish farms for growing medical cannabis designated for export. Prime Minister Netanyahu, however, recently suspended this decision, thereby increasing pressure on the cannabis sector on the TASE. While the Israeli cannabis industry spent recent months hoping that the Prime Minister would approve the beginning of exports, it now appears that the situation is more complicated. (Globes 15.11)

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1.2 Cabinet Approves Amir Yaron as Bank of Israel Governor

On 18 November, the Netanyahu government approved the appointment of Prof. Amir Yaron as Governor of the Bank of Israel. The cabinet also approved his request to continue to serve as a member without payment of three economic research institutes in the field of financing. The appointment will come into effect some time in December when Yaron is sworn in as Governor by President Rivlin. Until then Dr. Nadine Baudot-Trajtenberg will serve as Acting Governor. Baudot-Trajtenberg was deputy governor until Dr. Karnit Flug ended her five year term of office earlier this month. (Globes 18.11)

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1.3 PM Netanyahu Meets with Mississippi Governor Phil Bryant

On 20 November, Prime Minister Netanyahu met with Mississippi Governor Phil Bryant at the Prime Minister’s Office in Jerusalem. The governor is on his fourth trip to Israel and arrived shortly after winning his second term. On 19 November, he spoke at a defense conference in Tel Aviv, discussing his state’s role in researching and building unmanned aerial vehicles. Joining Bryant on the trip to Israel are his wife, Deborah; Secretary of State Delbert Hosemann; and Mississippi Development Authority director Glenn McCullough and two employees of his agency’s trade division. Representatives of the Mississippi State Port Authority and the State Workforce Investment Board are also on the trip, as are Mississippi Manufacturers Association president and CEO Jay Moon and executives from Airbus Helicopters, which has a plant in Columbus, and Huntington Ingalls Industries, which has a Pascagoula shipyard that is one of Mississippi’s largest private employers. (MFA 25.11)

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1.4 President of Muslim-Majority Chad Arrives to Reestablish Ties with Israel

On 25 November, Chad President Idriss Déby met Prime Minister Benjamin Netanyahu in Jerusalem on the first-ever visit of the president of that Muslim-majority African country with whom Israel has no relations. The visit was kept carefully under wraps for days, with Netanyahu’s office only announcing it right before it took place. The two men gave statements to the press, announcing the establishment of formal diplomatic ties. On26 November, Déby visited the Yad Vashem Holocaust memorial and museum.

Since becoming the first Israeli prime minister in July 2016 to visit Africa in some three decades, Netanyahu has place improved ties with Africa high on the country’s diplomatic agenda. Since that visit he has made two other trips to Africa. Chad – which has found itself on the front lines in the battle against Islamic extremists – severed ties with Israel in 1972 after coming under intense pressure from its Arab neighbors, Libya and Sudan. Chad is a member of the 57-nation Organization of Islamic Cooperation.

In 2016, then-Foreign Ministry Director General Dore Gold ‎visited ‎Chad and met with Déby to discuss restoring ‎diplomatic ‎ties with Israel. ‎ At the time, Gold declined to comment on the visit, saying only that it was in line with Netanyahu’s diplomatic efforts ‎in Africa. ‎ Chad, with which Israel had previously maintained close relations, wields considerable regional power and currently holds ‎the presidency of the African Union, in which Israel seeks to obtain ‎observer status. ‎ (Various 26.11)

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1.5 Agreement Reached on Israel-Europe Gas Pipeline

After two years of intensive discussions, Israel, Cyprus, Greece and Italy, with the backing of the EU, have reached an agreement on laying the world’s longest underwater pipeline for the export of gas from the Eastern Mediterranean to Europe. Israel, Cyprus, Greece and Italy first signed a Memorandum of Understanding on the matter in December 2017. Over the past year, the countries have worked out details about the pipeline, which will be brought for approval by the EU soon. The agreement should be signed in February 2019. Estimates are that it will take one year to arrange the financing for the project and five years to lay the pipeline, so that if all goes according to plan, the pipeline could be in place by 2025.

The project, which will cost an estimated NIS 25 billion, was initiated by Minister of National Infrastructures, Energy and Water Resources Steinitz, who first presented it at a conference in Abu Dhabi two years ago. The project entails the most complex engineering with the pipeline laid at a depth of 3-3.5 kilometers beneath the sea over a distance of 2,100 kilometers. The EU has spent $100 million to date in feasibility tests and so far, according to the Ministry of National Infrastructures, Energy and Water Resources, the results have been positive.

Under the terms of the agreement, exports of gas to the European market from Israel and Cyprus will be given preferential status. Other countries can be allowed to link up to the pipeline with the agreement of the founding countries. The pipeline, which will have a capacity of 10-20 billion cubic meters of gas, will be laid from Israel’s economic water to Cypriot waters and across Cyprus and via sea onto Greece, Crete and Italy.

The agreement will enable Israel to become an energy supplier to Europe, and that has both economic and political importance. This will be the first time ever that Israel has joined with the EU on any major infrastructure project. (Globes 25.11)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Tel Aviv University and Northwestern University Launch Joint Nanoscience Program

A new collaborative venture between Northwestern University and Tel Aviv University brings together researchers and students in the field of nanotechnology through joint research and development projects, student exchange programs and research grants. Under the new partnership, two researchers from each university will receive post-doctoral fellowships supporting two years of research at the partner institution. The fellowships, which cover approximately 75% of the total cost of the research, were paid for with funding provided by philanthropist and businessman Roman Abramovich. The respective hosting laboratories will provide for remaining expenses.

The new joint Northwestern-TAU venture also includes a student exchange program, which will allow three graduate students from each institution to study at the partner university and attend an annual nanotechnology workshop and international conference on cutting-edge breakthroughs in the field. The new nanotech collaboration is slated to offer up to two research grants a year to support pilot projects that bear unique commercial potential. TAU’s Center for Nanoscience and Nanotechnology and Northwestern’s International Institute for Nanotechnology will together select the winning projects, which will receive funding to cover the costs involved with completing proof of concept.

In 2020, TAU and Northwestern exchange students will all have the opportunity to study at TAU’s new Center for Nanoscience and Nanotechnology building. The ambitious center is expected to be the leading facility of its kind in the Middle East. The new building will span over 75,300 square feet (7,000 square meters) and house core research labs, quantum effects labs, medical nanosystems labs and smart biotechnology labs, as well as a prominent visitors center, which will be open to the general public.

American Friends of Tel Aviv University supports Israel’s most influential, comprehensive and sought-after center of higher learning, Tel Aviv University (TAU). TAU is recognized and celebrated internationally for creating an innovative, entrepreneurial culture on campus that generates inventions, startups and economic development in Israel. TAU is ranked ninth in the world, and first in Israel, for producing start-up founders of billion-dollar companies, an achievement that surpassed several Ivy League universities. To date, 2,500 US patents have been filed by Tel Aviv University researchers — ranking TAU #1 in Israel, #10 outside of the US and #43 in the world. (AFTAU 13.11)

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2.2 Habana Labs Secures $75M in Series B Financing Led by Intel Capital

Habana Labs has secured $75 million in an oversubscribed series B funding, led by Intel Capital, to fuel its continued growth. The round is joined by WRV Capital, Bessemer Venture Partners, Battery Ventures and others, including existing investors. Since inception, the company has raised a total of $120 million.

Habana Labs has already started production of its first Goya inference processor PCIE card and delivered it to customers in multiple geographies and market segments. The Goya processor silicon has been tested since June of 2018 and is production-qualified by now. The Gaudi training processor solution is slated to sample in the second quarter of 2019. Goya has set two industry records, by delivering 15,012 images/second throughput with 1.3msec latency on the ResNet-50 benchmark, and by attaining an unmatched power efficiency record of 150 images/second/watt, which are approximately one to three orders of magnitude better performance than solutions commonly deployed in data centers today.

The Goya inference solution is ideally suited for the most demanding AI applications in the industry, including private and cloud data centers, autonomous vehicles, factory and warehouse automation robots, high end drones, and others. The Goya solution consists of a complete hardware and software stack, including a high-performance graph compiler, hundreds of kernel libraries, and tools necessary to integrate with the software frameworks that customers use to optimize the deployment of AI inferencing.

Tel Aviv’s Habana Labs was founded in 2016 to unlock the true potential of AI by providing an order of magnitude improvements in processing performance, cost and power consumption. The company set out to develop AI processors from the ground up, optimized for the specific needs of training deep neural networks and for inference deployment in production environments. Habana Labs is a fabless semiconductor company, employing over 120 people worldwide. It is led by top technologists and entrepreneurs that built multiple successful semiconductor companies and is backed by premier venture capitalists. (Habana Labs 15.11)

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2.3 Velox Completes $32 Million Investment Round

Velox completed a $32 million funding round. The round was co-led by JAL Ventures and O.R.T. Technologies, and joined by strategic investors ALTANA, Evonik, as well as existing investors Michael Ilan Management & Investments Ltd. (MILMI), Dr. Shlomo Shamir, and additional private investors. With equipment commercially deployed, and multiple high-value strategic global accounts secured, Velox is seen as an industry standout. Velox’s uniquely formulated inks and proprietary printing process enables it to take digital printing from the domain of special-editions-only into the mass packaging decoration mega market.

Velox’s industrial digital decoration solution offers an end-to-end replacement to existing decoration technologies in terms of quality, production speed, and total cost-of-ownership in addition to utmost agility and efficiency.

Rosh HaAyin’s Velox develops and manufactures industrial-grade direct-to shape digital decoration solutions for the rigid container industry. Its proprietary DTS-Inkjet technology, based on uniquely formulated inks and dedicated deposition architecture, introduces an entirely new approach to digital printing that is disrupting the packaging decoration market. Velox’s industrial-grade digital decorator delivers, at full production speed, superior decoration quality and capabilities that outstrip the benefits of analog printing solutions, while allowing a more efficient and flexible production process and a low total cost-of-ownership (TCO). (Velox 13.11)

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2.4 Votiro Secures an $8 Million Investment

Votiro Cybersec Global Limited announced a $8 million investment by Senetas Corporation Limited, an Australian public listed company and a leading developer of network and data encryption solutions.

Votiro’s File Disarmer automatically scans and sanitizes each and every file sent or shared with the organization, and reconstructs a fully functional, threat free file in less than a second. Votiro is recognized as a leading solution to protect organizations against undisclosed, zero-day exploits and other ongoing cyber threats. Available for web, email, content collaboration platforms, removable devices and file transfers, the Votiro File Disarmer ensures you can safely store, share, and use files via any platform, no matter their type or where they came from. Votiro’s worldwide customers include government, finance, healthcare, and insurance organizations. Senetas’ strategic investment will fund Votiro’s growth in sales and marketing activities as the business scales.

Tel Aviv’s Votiro is an award-winning cybersecurity company with a mission of securing organizations throughout their digital transformation journey. Its proprietary next-generation CDR technology allows users to safely open email attachments, download and transfer files, share content, and use removable media, while keeping performance and functionality intact. (Votiro 14.11)

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2.5 Franklin Templeton Opens Israel office

Franklin Templeton Investments entered the $67 billion Israeli retail market on 13 November after the government allowed foreign firms to offer offshore products directly to investors. Previously, such investments had to be distributed in Israel through a local manager or bank, which increased fees and made them more expensive for Israeli investors.

Although assets under management of domestic funds investing in foreign securities have more than doubled in the past three years to $7.7 billion, a lack of choice means they still account for only 12% of total assets,. Franklin Templeton, which has $724 billion in assets under management, appointed Uzi Yitzhak to head its business in Israel. The firm also announced the registration of two mutual funds in Israel: Franklin US Opportunities Fund and Templeton Global Total Return Fund.

Franklin Templeton executives also gave prospective Israeli investors their views on a number of markets during the opening. (Franklin Templeton 13.11)

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2.6 AdaSky Adds $20 Million from Lead Investor, South Korea’s Sungwoo Hitech

AdaSky has secured $20 million from lead investor, Sungwoo Hitech Co., a leading global automotive supplier. The investment is part of a larger round of funding, signifying industry endorsement of AdaSky’s technology and will enable the company to expand globally. AdaSky’s solution, Viper, is an all-in-one, complete solution for autonomous vehicles, combining FIR camera technology with fusion-ready, deep-learning computer vision algorithms.

The FIR market has seen incredible growth over the past five years. AdaSky plans to continue to work on R&D projects and trials with OEMs and will expand its product feature roadmap, including new features and integrations to be introduced at CES 2019. Sungwoo Hitech is the lead investor, and the initial closing of this $20 million is the first part of a larger investment round.

Yokneam’s AdaSky leads the FIR revolution by bringing a high-resolution thermal sensor to the automotive market, enabling autonomous vehicles to see better and understand more. AdaSky’s founding team is made up of veterans from the semiconductor, thermal sensor, image-processing, and computer vision markets. They have been developing state-of-the-art FIR sensing solutions for the last decade. Now, the company’s multidisciplinary team of experienced engineers has adapted the solution to the specific needs of self-driving cars, making AdaSky’s solution a critical addition to cars to eliminate vision and perception weaknesses for fully-autonomous vehicles. (AdaSky 15.11)

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2.7 Israeli App Developer Smart Media Racks Up 100 Million Downloads

Smart Media, Israeli app developer, announced today that its games and apps have crossed 100 million downloads on Google Play and iOS. Smart Media operates as a mobile internet company worldwide. The company provides app utilities and free-to-play casual gaming apps. The company’s products include TapVPN, a free VPN and privacy protection tool for mobile devices; Tap Scanner, a document scanning and managing app; Yoob, a unique casual gaming app containing over 200 games in a single app, which provides personalized gaming experience.

Beer Sheva’s Smart Media is the premier provider of over 50 games and innovative mobile applications for intelligent business Delivering simple yet effective applications for use across Android and iOS. They have more than 10 million monthly active users regularly downloading and returning to engage in Smart Media’s offerings. (Smart Media 16.11)

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2.8 Tamar Partners Sign Additional $200 Million Jordanian Gas Deal

The quantity of natural gas that Israel will export to Jordan is likely to rise substantially, starting next year, according to the reports published by Tamar Petroleum. In October, the Tamar partners signed another agreement to supply gas to Jordanian customers Jordan Bromine Company and Arab Potash Company. The interruptible agreement is for up to 1 BCM, meaning that the Jordanians are not obligated to buy the entire amount. The deal, whose value is likely to reach $200 million, will go into effect in Q1/19 and continue until the supply termination date in the 15 year agreement signed by the companies in 2017 (i.e. until the end of 2032). The agreement can become a binding agreement. Jordan has no energy resources itself; it currently buys liquefied gas from Qatar at high prices, so Israeli gas can be a worthwhile alternative for the country.

Delek Group and Noble Energy founded Tamar Petroleum as a special purpose vehicle (SPV) in 2017 for buying 9.25% of the rights in the Tamar reservoir. After this deal was completed in March, Tamar Petroleum bought 7.5% more of the rights, giving it a current holding of 16.75% in the reservoir. (Globes 19.11)

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2.9 Lightricks Secures $60 Million to Change How the World Creates Content

Jerusalem hi-tech company, Lightricks, known for its content creation mobile apps, has announced a $60 million funding round led by Insight Venture Partners, with participation from Claltech. Part of the funding will be used to acquire shares from founders, employees, and investors in a secondary transaction. Lightricks is growing profitably and will use the funding to build more products and to double in size, recruiting a total of 300 employees for its Jerusalem and London offices.

Lightricks is set on bringing creativity to everyone. The company designs and develops fun & powerful content creation tools, including global hit portrait editing brand Facetune and the Enlight Creativity Suite. Together, Lightricks apps have about 100 million downloads worldwide and nearly 1 million subscribers and have won prestigious awards including Apple’s 2015 App of the Year, Apple’s Best of 2017 and the 2017 Apple Design Award. Lightricks’ most recent app, Enlight Pixaloop, released in mid-September, became an instant hit with over 6 million users and nearly 200,000 paying subscribers in just two months.

This is Lightricks’ second investment round, following its initial $10 million funding round from Viola Ventures. Since the first investment in 2015, Lightricks has expanded its team from 30 employees to 150. Lightricks’ revenue is growing 270% year over year and the company is profitable. In 2016, the company released Facetune2 with a revamped business model, moving from one-time paid apps to a more lucrative subscription model. Lightricks is projecting revenue to exceed $100 million in 2019. (Lightricks 19.11)

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2.10 Quantum Machines Raises $5.5 Million to Develop Next Generation for Quantum Computers

Quantum Machines has raised $5.5 million in seed financing from venture-capital firms TLV Partners and Battery Ventures. TLV led the round. The firm was founded three physics Ph.D.’s with long track records in the fields of quantum computing and quantum electronics. QM was founded in order to build the classical hardware and software that will allow organizations across industries to realize the potential of quantum processors. Quantum computers hold a great promise to deliver immense computational power, as they will enable organizations to solve computing problems far more quickly than traditional technology. This computational power stems from the exotic behavior of the fundamental building blocks of the quantum processors – the quantum bits (qubits). Ultimately, QM envisions selling its technology to companies now developing quantum processors – including the world’s largest Internet companies – as well as academic organizations.

The three founders bring together the experience of working on an incredible range of quantum technologies, including superconducting qubits, nano-wires, quantum optics, atomic clocks, etc. They have spent many years in top universities working on the cutting-edge of quantum computing, including Yale University, University of Washington, Oxford University and the Ecole Normale Superieure. The funding will allow QM to develop its first system, OPERATOR-X. The company is already working with leading quantum-computing groups worldwide.

Quantum Machines is a Tel Aviv-based startup working on the frontiers of quantum computing. The company was founded by three Ph.Ds. with extensive backgrounds in quantum computing and quantum electronics, including two who previously founded and managed the entrepreneurship center of the Weizmann Institute, one of the most prestigious research institutes in Israel. Quantum Machines is backed by TLV Partners and Battery Ventures. (Quantum Machines 21.11)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Bahrain’s Mumtalakat Signs Deal to Acquire US Office Buildings

Bahrain Mumtalakat Holding Company, the sovereign wealth fund of the kingdom, has announced the acquisition of office buildings in Charlotte, North Carolina. The transaction marks Mumtalakat’s second investment in the US commercial real estate market this year in partnership with Sentinel Real Estate Investment Corporation. This follows the acquisition alongside other strategic investors of Lenovo global headquarters in Raleigh-Durham, North Carolina in February. Mumtalakat has adopted a real estate strategy for the acquisition of high quality, well occupied, long-term yielding properties in growing cities with solid economic and market fundamentals in the United States. The 421,863 square foot property consists of two newly-constructed buildings, which are occupied by The Lash Group, a pharmaceutical and healthcare service provider. (AB 20.11)

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3.2 UAE-Based Startups Dominate the MENA Fintech Sector

Excluding Israel, the MENA Fintech sector has been witnessing major growth in the number of startups founded yearly. In 2017 alone, 20 Fintech startups were founded in the MENA region – the highest number of startups founded in a year over the period covered by a recent study (2001 until 2017) by ArabNet.

Up until the end of 2017, over 100 Fintech startups were founded in the MENA region. Those Fintech startups are concentrated in four main countries (UAE, Egypt, Lebanon and Jordan) that contribute to 83% of the total number of startups. The UAE hosts the largest ratio of all Fintech startups (38%), while Egypt, Lebanon, and Jordan together add up to another 45%.

With the introduction of UAE’s 2020 Vision, the UAE has been increasing the number of Fintech startups founded each year to achieve their vision of being coming cashless by the year 2020. Fintech startups in the UAE have been creating innovative alternatives, especially for payments, to reach the country’s goal. Not only are digital payment services the most founded Fintech startups in the UAE, but they also dominate the Jordanian and Egyptian markets as these countries are shifting from being cash-dependent to becoming cashless. Lebanon, on the other hand, exhibits the highest number of digital banking startups as people are resorting to the use of digital banking transactions. (ArabNet 14.11)

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3.3 Dubai’s dnata Expands US Services with Los Angeles Launch

Dubai-based air services provider dnata has launched operations at Los Angeles International Airport as it continues to expand in the United States. The company said it now provides ground handling and cargo services at 20 airports in the country. To establish operations in Los Angeles, dnata said it has invested $8 million in infrastructure and resources, creating more than 350 local jobs. Serving six airlines, including Austrian Airlines, Iberia, Japan Airlines, Lufthansa, Swiss International Air Lines and Qantas, dnata will initially handle 4,600 flights a year.

dnata commenced ground handling and cargo operations in the United States by the acquisition of industry players in 2016. Since then, the company has invested more than $35 million in facilities, equipment, training and technology. Earlier in 2018, dnata has opened a cool-chain perishable cargo facility at Dallas Fort Worth International Airport, established operations at Nashville International Airport, diversified its service portfolio by launching passenger handling services at New York JFK Airport, and most recently commenced services at Concourse G at San Francisco International Airport. Including Los Angeles International Airport, dnata’s global ground handling and cargo network now consist of 87 airports in 13 countries. (AB 24.11)

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3.4 Urban Outfitters to Make Arabian Gulf Debut in 2019

Multi-national retail brand Urban Outfitters will make its debut in the Arabian Gulf next year under an agreement with Azadea Group. The company will manage the brand’s regional expansion program, with the first store scheduled to open in Dubai in 2019. The latest addition to Azadea’s portfolio, Urban Outfitters is dedicated to inspiring customers through a unique combination of product, creativity and cultural understanding. The Urban Outfitters brand operates more than 240 stores globally with an online channel offering a well-curated mix of on-trend women’s and men’s apparel and accessories, as well as beauty, intimates and a collection of handpicked vintage clothing. (AB 16.11)

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3.5 Lockheed Martin to Build Multi-Mission Surface Combatant Ships for Saudi Arabia

Lockheed Martin Corp. of Baltimore, Maryland was awarded a $282,085,646 not-to-exceed un-definitized contract action modification to previously-awarded contract N00024-18-C-2301 for long-lead-time material and detail design in support of the construction of four Multi-Mission Surface Combatant ships (MMSC). The MMSC is a lethal and highly maneuverable surface combatant capable of littoral and open-ocean operation. This contract involves foreign military sales to the Kingdom of Saudi Arabia. Work will be performed in Marinette, Wisconsin (55%); Baltimore, Maryland (23%); Herndon, Virginia (11%); Moorestown, New Jersey (6%); Manassas, Virginia (1%); San Diego, California (1%); and various places below 1% (3%), and is expected to be completed by October 2025. Foreign military sales funding to Saudi Arabia worth $124,201,733 will be obligated at the time of award and will not expire at the end of the current fiscal year. This contract was not competitively procured, in accordance with 10 U.S. Code 2304(c)(4) (international agreement). The Naval Sea Systems Command, Washington, District of Columbia, is the contracting activity. (DoD 20.11)

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3.6 Volt Lines Raises $1.28 Million Pre-Series A from Dubai Angel Investors

Volt Lines, Turkey’s leading subscription-based transportation service, raised $1.28m pre-Series A round led by Dubai Angel Investors with follow-on from MEVP and Hedef Filo. The round was led by DAI and its members with $780K, while the rest came as follow-on from MEVP, Hedef Filo, and Wassim Matar. Volt Lines plans to use the funding to more than double its engineering team, accelerate its growth in Istanbul and finalize plans for a MENA expansion. Together with this round, the startup has raised a total of $1.65M since incorporation exactly a year ago.

Founded by Lebanese transportation tech entrepreneur Ali Halabi, and backed by a mix of Turkish and MENA investors, Volt Lines went into operations in April 2018, and now operates 150+ lines in the city, crossing $1.1m of annual recurring revenue in less than 6 months of market entry. The startup covers the commute of employees from their homes to the office and back by providing transportation along express lines operated by 16-seater mini-buses. The Volt Lines network can be imagined as a smart public transportation network of buses that dynamically change depending on demand and a population’s commute patterns. (ArabNet 14.11)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Construction Starts on Saudi Arabia’s First Solar Energy Project

The ground-breaking ceremony for the 300MW Sakaka PV IPP, the first renewable energy project under King Salman Renewable Energy Initiative, was recently held. The SR1.2 billion ($320 million) solar plant is expected to start commercial operations next year and upon completion, will supply 45,000 households with power in Al Jouf, while offsetting over 430,000 tonnes of carbon dioxide a year. The project will also create new employment opportunities in fields including construction and operations, said ACWA Power, the company behind the project. The event took place following an announcement of the successful financial closure of the project. (AB 21.11)

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Average Inflation Up by 6.31% in October 2018

According to the Central Administration of Statistics (CAS), consumer prices in Lebanon grew by 6.31% in the first 10 months of 2018 since the average Consumer Price Index (CPI) reached 106.28 by October 2018. In reality, consumer prices went up across all sub-categories. The average costs of Housing and utilities (water, electricity, gas and other fuels) constituting a combined 28.4% of the CPI, rose by 7.08% year-on-year (y-o-y) by October 2018. Owner-occupied rental costs rose by 4.05% y-o-y. As for the average prices of water, electricity, gas and other fuels (11.8% of the total CPI), they increased by an annual 11.10% by October 2018. This rise can be linked to the jump in average oil prices from $53.03/barrel by October 2017 to $73.49/barrel over the same period this year. In turn, the average prices for Food and non-alcoholic beverages (constituting 20% of the CPI), Transportation (grasping 13.1% of the CPI), and Health costs (7.7% of CPI) registered yearly rises of 4.90%, 8.81%, and 5.52% by October 2018. (CAS 22.11)

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5.2 Lebanon’s Trade Deficit Widened by 3.93% to $12.96 Billion in September 2018

Lebanon’s trade deficit widened by 3.93% year-on-year (y-o-y) to reach $12.96B by September 2018. Total imports increased by a yearly 4.86% to $15.16B by September 2018 and exports recorded a yearly rise of 4.14% to $2.20B over the same period. Specifically, the value of imported mineral products (grasping 21.14% of total imported goods) stood at $3.20B by September 2018, recording a yearly rise of 0.87%, owing it to a 25.9% y-o-y decline in their imported volume to 5.97M tons by September 2018. Meanwhile, the average price of oil increased by 35.51% y-o-y to $72.73/barrel over the same period.

As for the value of machinery and electrical instruments (some 11.7% of the total imported goods), it recorded a rise of 23.6% y-o-y to settle at $1.77B. Moreover, the value of imported products of the chemical or allied industries (grasping 10.91% of the total imported goods) also increased by 5.93% to $1.65B over the same period. In terms of top trade partners, Lebanon primarily imported from China, Greece, Italy and the US with shares of 10.18%, 8.48%, 7.65% and 7.34% in the total value of imports, respectively, by September 2018. As for exports, the value of pearls, precious stones, & metals (holding 22.97% of the total export goods) rose by an annual 9.66% to reach $505.38M by September 2018. In turn, the value of base metals and articles of base metal (holding 13.39% of the total export goods) climbed by a yearly 20.76% to $294.53M. Meanwhile, the value of prepared foodstuffs, beverage, and tobacco (holding 13.37% of the total export goods) decreased by 12.01% y-o-y to $294.18M. In September 2018, the UAE, followed by South Africa, Saudi Arabia and Syria were Lebanon’s top four export destinations, respectively constituting 14.54%, 7.49%, 6.92% and 6.36% of the total value of exports. (Blom 26.11)

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5.3 Jordan’s PM Razzaz Launches Amman’s 2019 – 2020 Priorities Plan

On 19 November, Jordanian Prime Minister Razzaz announced a wide range of priorities his government will work to realize over the next two years with the aim of uplifting public services, creating more job opportunities and reinvigorating the economy among other priorities. He said finance needed to achieve these priorities has been earmarked in the 2018 general budget and that a time-framed and measureable performance indicators program is already in place to monitor the implementation of the plan. Regarding employment, the prime minister indicated that a total of 30,000 job opportunities will be created in addition to the 35,000-40,000 jobs the economy is estimated to generate.

Razzaz also announced that his government will launch a program dubbed “Khidmat Watan” (Serving the Nation) that seeks to provide vocational and military training to 20,000 young men and women. On education, he said the government will work to make sure that children’s enrollment in kindergartens rises to 70%, adding that 120 new schools will be built. The government will do whatever necessary to increase foreign direct investments by 10% and national exports by 5% annually, the prime minister also pledged. By the end of 2020, Razzaz said, 35% of the Kingdom’s electric power production will come from national resources, including shale oil and renewables. (Petra 19.11)

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5.4 Jordan’s Income Tax Law Passed With Amended Taxability Threshold

The Lower House on 18 November passed the controversial 2018 Income Tax Law with parliamentary-committee amendments raising the income thresholds for taxability from the ones set by the government. Under the House’s amendments, the income threshold was raised from an annual JOD18,000 (to go down to 17,000 in 2020) as in the government’s version of the law to JOD20,000 for families and from JOD9,000 to JOD10,000 for individuals. Under the existing law, the figure is JOD24,000 for households with JOD4,000 in exemptions on VAT medical and educational receipts and invoices, and JOD12,000 for individuals.

The MPs also raised the VAT exemption in the new law to reach JOD2,000 instead of JOD1,000 in the government’s proposed bill for families, and to JOD1,000 for individuals, provided that such expenses are covered by bills for health, education, loan interests or murabaha (an Islamic finance and investment instrument). As per MPs’ amendments, income tax on banks will remain at 35% as in the original law and not 37% as proposed by the government.

The House also went back on its decision to grant full exemption to agricultural inputs and outputs from income tax, endorsing instead the government’s amendments under which exemptions are granted to individual farmers and agricultural companies whose annual income is less than JOD50,000 and JOD1 million respectively. The bill was passed in the Senate on 26 November. (Petra 27.11)

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5.5 IMF’s Lowered Growth Projections for Jordan Realistic

The International Monetary Fund (IMF) lowered its projection for Jordan’s economic growth from 2.5% to 2.3% in 2018, which economists said was “realistic” and “based on external and internal factors”. In its 2018 Regional Economic Outlook: Middle East and Central Asia, which was issued this month, the IMF also lowered its projections for economic growth in Jordan for 2019, dropping it from its previous outlook of 2.7% to 2.5%. The IMF report also anticipated a decline in the Kingdom’s consumer price index from 4.5% in 2018 to 2.5% in 2019, attributing those forecasts to the impact of regional conflicts.

Violent conflicts in the Middle East and central Asia impose vast humanitarian and economic costs, the report indicated, noting that, while the direct effects are concentrated in just a few countries — Afghanistan, Iraq, Syria and Yemen accounting for more than 90% of conflict-related deaths in the region in 2017 — the indirect effects spill across the region. It highlighted the challenges host countries, including Jordan, face in light of these circumstances and the huge flow of refugees it had created across the region.

In its reports, the IMF stressed that even if consolidation efforts go as planned in 2018, debt will remain very high in a number of countries such as Bahrain, Egypt, Jordan, Lebanon, Mauritania, Morocco, Pakistan, Sudan and Tunisia, expecting it to remain above the 60% vulnerability threshold for emerging market economies. A large section of the regional economy is dominated by low-productive informal sectors, with the formal sector accounting for only a third of employment in the region, the report claimed, adding that businesses with five or fewer employees dominate the private sector in Jordan accounting for about 40%.

However, the informal sector has difficulty accessing credit, market opportunities and government services, which limits the vibrancy of the private sector, the report continued, stating that tight labor market regulations impede firms from expanding and gaining economies of scale, constraining most small businesses to informality. Moreover, the government loses out on revenues since this sector remains largely untaxed. Growth in the region is projected to reach 4.5% in 2018, up from 4.1% in 2017, before moderating to 4% in 2019, according to the IMF report. (IMF 15.11)

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5.6 Libya Agrees to Pay Medical Costs to Jordanian Hospitals for Treating Injured Libyans

The Libyan government has reached an agreement with Jordan to pay medical costs to Jordanian hospitals for treating injured Libyans. The Libyan authorities agreed to reimburse the association an amount of $250 million for the medical services the Jordanian hospitals have offered to Libyan nationals who were wounded or fell ill as a result of the 2011 war in Syria. The medical bills were the subject of continuous negotiations between Jordan and the Libyan government since 2013. The bills will be paid back in three stages. The first sum of $125 million will be paid in December, while the rest will be paid during next year. (AMMONNEWS 25.11)

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5.7 Jordan’s New Labor Draft Law May Increase Women’s Economic Participation

The Lower House is currently reviewing the 2010 temporary Labor draft law which includes important amendments that will positively affect the economic participation of women. During the National Forum for Pay Equity, held on 15 November, Jordanian Labor Minister Murad said that the government is an avid advocate of gender pay equity. For her part, Norwegian Ambassador to Jordan, Tone Allers, lauded Jordan for being the first Arab country to join the National Council on Pay Equity, noting that this makes Jordan a leading example in the region, stressing that equity pay is important to motivate woman to participate on the economic level. Allers said, based on a Norwegian point of view, that creating economic motivations for women to work has contributed to changing customs and preferences, expressing her contentment that the Jordanian NCPE has achieved palpable results. (Petra 15.11)

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►►Arabian Gulf

5.8 Bahrain Signs $912 Million Deal for Attack Helicopters

Bahrain has signed a $912 million deal with US-based Bell Helicopter to buy 12 AH-1Z Viper helicopters. The GCC nation will receive the first batch from the American aerospace manufacturer by the end of 2022. The news came during a news conference held by Air Vice-Marshal Sheikh Hamad bin Abdullah bin Al-Khalifa, the commander of Bahrain’s royal air force, at Bahrain International Airshow. The deal came on the same day that the US Senate rejected a long-shot effort to block $300m in arms sales to Bahrain, as the bill’s opponents stressed the island nation was a critical ally hosting an American naval base. (BNA 19.11)

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5.9 RTA Unveils $160 Million Plan to Expand Dubai Smart Traffic Systems

The Roads and Transport Authority (RTA) has endorsed an AED590 million ($160.6 million) project for the expansion of smart traffic systems in Dubai. The project comes as part of plans to broaden the scope of smart traffic systems in support of efforts to rank Dubai as the smartest city worldwide, said Mattar Al Tayer, director-general and chairman of the RTA. The project envisages lifting the smart system coverage of Dubai roads network from the present 11% to 60%. He added that the project will also cut the time of detecting accidents and congestion, accelerating the response time. It will also provide instant traffic information to the public about the network via new messaging signs and smart apps. The initial stage will be split into five key bundles – the first of which covers traffic monitoring and data capturing systems such as cameras, vehicle detection devices as well as Bluetooth devices and weather sensors.

The second bundle relates to the installation of 112 message boards while the third bundle involves constructing the infrastructure such as civil works, fiber optic lines, and electricity distribution network. The fourth bundle covers the advanced central traffic system while the fifth bundle covers the construction of the traffic control center at Al Barsha South. (AB 19.11)

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5.10 Oman Announces Merger to Create New Oil Giant

The largest Arabian Gulf producer that’s not an OPEC member is combining state-run oil investment and refining companies to form a business that spans pumping crude and natural gas to processing and trading fuels. Government-owned Oman Oil Co and Oman Oil Refineries & Petroleum Industries Co named Musab Abdullah Al Mahruqi as chief executive officer of the merged group starting from 2 December. It marks a further step in combining their management and operations, according to a joint statement. The merged company will have combined stakes in about 1.1 million barrels per day of refining capacity in Oman, India and Hungary. (AB 19.11)

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5.11 Saudi Oil Output Said to Surge to Record High Amounts in November

Saudi Arabian oil production surged to a record near 11 million bpd this month after the kingdom received stronger-than-usual demand from clients preparing for a disruption in Iranian supplies, according to industry executives who track Saudi output. Riyadh has been pumping about 10.8 million to 10.9 million bpd of crude, while on some days, more than 11 million bpd were supplied to the market by drawing down domestic and overseas stockpiles. The International Oil Daily, a trade publication, reported Saudi production numbers earlier on 21 November.

It’s unclear if Riyadh plans to sustain its elevated production and supply rates for the whole month, or output will taper off in the second half of November, lowering the monthly average. The November surge will come into the spotlight when OPEC meets on 6 December in Vienna to discuss its 2019 production strategy. Riyadh has already indicated it supports a deep output cut and as a first step will reduce its shipments by 500,000 bpd in December from November.

Saudi Arabia told OPEC that it produced about 10.65 million barrels a day in October. The country’s oil minister, Khalid Al-Falih, said earlier this month that the kingdom would be producing more in November than October, but declined to provide an estimate.

Riyadh plans its production level about four to five weeks before the start of any given month as it receives requests from clients – “nominations” in the industry jargon. When the nominations for November were submitted, in the first week of October, the market was grappling with concerns of a large reduction in Iranian supplies, prompting buyers to request unusually large volumes. At that point, the White House had threatened to cut the Islamic Republic’s oil exports to zero. A few weeks later the US granted surprise waivers to buyers of Iranian crude including China, India, Japan and South Korea, easing supply fears.

Saudi Arabia set an oil production record of 10.72 million bpd in November 2016 just before the kingdom led a group of OPEC and non-OPEC countries in cutting output. After the agreement, Riyadh slashed production dramatically over the next two months, with output dropping to 9.8 million bpd by January 2017. The surge in Saudi output in early November means that the world’s top three oil producers – the US, Russia and Saudi Arabia itself – are now pumping at, or near, record levels. (AB 21.11)

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►►North Africa

5.12 Egyptian Exports Decline by 12.2% in August

According to the Central Agency for Public Mobilization and Statistics (CAPMAS) bulletin on foreign trade for August 2018, exports value decrease by 12.2%, falling to $1.98 billion during August 2018, versus $2.26 billion for the same month of the previous year. This is due to the decrease in the value of some commodities such as garments 19.3%, plastics in primary forms 22.6%, food preparations 5.6% and carpets 20.1%. Meanwhile, exports value of some commodities increased during August 2018, versus the same month of previous year such as crude oil by 22.5%, fertilizers by 19.3%, petroleum products by 86.2% and flat rolled iron products by 29.2%.

The CAPMAS added that imports value increased by 0.3% reaching $5.94 billion during August 2018, versus $5.92 billion for the same month of the previous year, due to the increased value of some commodities such as crude oil by 83.7 %, raw iron and steel by 0.3%, vehicles by 29.2%, and pharmaceutical products by 2.6%. Imports of some commodities decreased in August 2018, versus the same month of the previous year such as petroleum products by 8.6%, plastics in primary forms by 6.1%, wheat by 31.7% and meat by 15%. (CAPMAS 15.11)

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5.13 Remittances from Egyptians Abroad Increase 20.4% on Annual Basis in September

Remittances from Egyptians abroad rose 20.4% year-on-year in September to $1.8 billion, according the Central Bank of Egypt. The figure means remittances grew by 1.5% in the first quarter of the 2018/19 financial year to $5.9 billion. Remittances in September of last year were at $1.5 billion and stood at $5.8 billion in the first quarter of the 2017/2018 fiscal year. Egypt’s fiscal year runs from July to June.

Remittances have become a crucial source of hard currency for the import-dependent country, which has struggled to boost exports or foreign direct investment despite economic reforms tied to a $12 billion IMF loan program it began in late 2016. (CBE 16.11)

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5.14 Egypt’s Employment Rate Increases to 10% in Third Quarter

Egypt’s unemployment rate registered 10% of the total labor force in third quarter (Q3), while it was 9.9% in Q2 2018, which is an increase of 0.1% and a decrease of 1.9% from the same quarter last year, according to Central Agency for Public Mobilization and Statistics (CAPMAS). The CAPMAS said that the labor force was estimated at 29.215 million individuals (23.447 million males and 5.768 million females) with an increase of 179,000 individuals by 0.6% compared to Q2/18. This is due to the inflow of graduates and the start of the work season, with a decrease of 257,000million individuals by 0.9% compared to the same quarter last year.

The CAPMAS added that the number of unemployed individuals reached 2.920 million (1.602 million males, 1.318 million females), 10% of the total labor force, and an increase of 45,000 unemployed individuals by 1.6% compared to Q2/18, a decrease of 593,000 unemployed individuals by 16.9% compared to the same quarter of the previous year. (CAPMAS 15.11)

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5.15 King Mohammed VI Inaugurates New Large-Scale Railway Projects

King Mohammed VI inaugurated the tripling of the Casablanca – Kenitra railway tracks, the complete doubling of the Casablanca – Marrakech railway tracks, the stations dedicated to high-speed trains (Rabat-Agdal, Tangiers, Kenitra and Casa-Voyageurs), and the new stations of Oujda and Benguerir. These large-scale projects required a global investment of MAD 10.5 billion.

The tripling of the Casablanca-Kenitra railway tracks, which required MAD 5.2 billion, will enable the desaturation of the Casablanca railway junction and multiply the capacity of this line by 2.5, thus offering the possibility to schedule up to one departure every 3 minutes. Eighty percent of the project’s construction works were achieved by national companies, mobilizing 3 million working days and generating 280 jobs during the exploitation stage. The complete doubling of the Casablanca – Marrakech railway tracks (174 kilometers), which required MAD 3 billion, will allow the increase of the capacity of the tracks by more than 100 pc, in addition to environmental benefits (6.5 million tons of greenhouse gas emissions avoided per year).

As part of its development strategy, Morocco’s Railway Office (ONCF) has carried out an ambitious program of modernization and construction of small, medium and large train stations. The new stations of Oujda (MAD 170 million) and Benguerir (36 MAD million) are among these stations. These two train stations will improve the conditions of reception and comfort of travelers, respond to the growth of passenger traffic and support the urban development of the cities served. (MWN 17.11)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkish Jobless Rate Rises to 11.1% in August, Highest Since Early 2017

Turkey’s unemployment rose to 11.1% in the July-September period, official data showed on 15 November, hitting its highest level since early last year and up from a revised 10.6% in the June-August period. The figure was up 0.5% compared to the same month a year earlier, according to data from the Turkish Statistical Institute (TUIK).

The non-agricultural unemployment stood at 13.2% on average during the July-September period, the data also showed. The youth unemployment rate—persons aged between 15 and 24—was 20.8%, indicating an increase of 0.2-percentage points on a yearly basis in August. TUIK said unemployment for the 15-64 age group went up 0.6% annually to 11.4% in August. The number of unemployed persons aged 15 years and over increased by 266,000 year-on-year to reach 3.67 million in August. In August, the employment rate rose by 0.3%age points from the same month last year up to 48.3%. (TUIK 15.11)

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6.2 Turkey’s Health Spending Exceeds $38.5 Billion in 2017

Turkey’s health expenditures jumped 17.4% in 2017, compared with the previous year, the Turkish Statistical Institute said on 15 November. Total costs reached 140.65 billion Turkish liras ($38.53 billion) last year, TurkStat said, up from around 120 billion Turkish liras ($39.6 billion) in 2016. The institute said that health expenditure per capita increased to 1,751 Turkish liras ($479.7) in 2017 from 1,511 Turkish liras ($498.7) in 2016. The proportion of total health expenditure of the country’s GDP was 4.5% last year and 3.5% in 2016.

Out-of-pocket health expenditures made by households for treatment, pharmaceuticals etc. reached 24.4 billion Turkish liras ($6.7 billion) with an increase of 22.7% in the year 2017. The proportion of household health expenditure to total health expenditure was 17.1% in the year 2017. The proportion of general government health expenditure to total health expenditure was 78% in last year and 78.5% in 2016.

Turkey operates 894 hospitals, 7,950 family health centers, nearly 2,700 emergency health stations, and 171 community mental health centers with around 1 million medical personnel. The number of doctors per 100,000 population was 186 in the country, under the OECD average of 351 per 100,000 population. Life expectancy at birth is 78, baby mortality rate per 1,000 live birth is 6.8 while mother mortality rate per 1,000 live birth is 14.6. Turkey has also general health insurance system to protect all citizens’ health. (TurkStat 15.11)

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6.3 Cyprus’ Utilities & Housing Costs Lift Inflation by 1.9%

Cyprus’ Harmonized Index of Consumer Prices climbed by 1.9% in October 2018, compared with the respective period of last year, due to increases in prices for housing, water, electricity and gas. According to Cystat, compared with October 2017, the highest positive change was recorded in energy products with a rise of 16.8%. Compared to September 2018, harmonized inflation declined by 0.3%. Prices in clothing and footwear increased by 5.2%, while prices in restaurants and hotels declined by 3.9%, marking the highest reduction among the economic categories. For the period from January to October, HICP rose by 0.7% compared with the respective period of 2017. (CAN 19.11)

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6.4 Tourist Arrivals to Cyprus Stand at an All Time High

Tourist arrivals in Cyprus for the period of January – October 2018 increased by an annual 7.8% to 3.67 million, marking a new record for tourist arrivals for the first ten months of the year. According to the Cyprus Statistical Service (Cystat), in October 2018 tourist arrivals amounted to 433,617 marking an increase of 6.6% compared with October 2017.

The United Kingdom continued to constitute Cyprus’ main tourist market with 34% for the ten-month period, compared with 34.5% in January – October 2017, with Russia the second highest market with its share dropping to 20.5% compared with 23.2 in January – October 2017. Israel was the third largest source of tourism for Cyprus with its share declining to 5.90% compared with 8.1% in 2017, followed by Germany whose share in the tourist market decreased marginally to 4.6% in January – October 2018 compared with 5.0% in the respective period of 2017.

For the period of January – October 2018 tourist arrivals from the UK increased by 6.1%, tourists from Greece rose by 9.0% year on year, while tourist from Switzerland increased by 29.1% and tourist from Denmark by 22.4%. During the period of January – October 2018 tourists from Russia declined by 4.9% compared with the respective period of 2017, from Israel by 11.4% and by 1.8% from Germany.

In October 2018, tourist arrivals from the UK increased by 12.4% compared with October 2017, while tourist inflow from Sweden increased by annual 4.8% and from Greece by an annual 2.0%. Tourist arrivals from Russia in October declined by 4.5% compared with October 2017, while arrivals from Germany declined by 19% compared with the respective period of 2017, Cystat said. (Cystat 20.11)

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6.5 Greece Grants Country’s First Medical Cannabis Licenses

Eight months after green-lighting the cultivation and production of medical cannabis, Greece’s leftist-led government has issued the first licenses to two private firms for growing hemp in the country. The announcement was during a joint press conference in Athens by Health Minister Andreas Xanthos, Deputy Economy Minister Stergios Pitsiorlas and Deputy Agricultural Development Minister Vassilis Kokkalis. It involves a €9.5 million investment in Larissa, central Greece, and a €12.5 million investment in Corinth, in the Peloponnese.

Officials said up to 12 more licenses could be granted by the end of the year, creating about 770 new jobs and representing a total investment of €185-200 million. Most of the investment is expected to come from Canada and Israel.

Meanwhile, authorities are taking steps to include medical cannabis products in the country’s electronic prescription system. However, while products will be available on prescription from pharmacists, they will not be covered by state health insurance. (Various 20.11)

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6.6 Greek Current Account Surplus Shrinks in September While Tourism Revenues Stay Steady

Greece’s current account balance showed a smaller surplus in September compared to the same month a year ago on the back of a wider deficit in the balance of goods, driven by a rise in oil imports, the Bank of Greece announced. Central bank data showed the surplus shrank to €551 million from a surplus of €978 million in September 2017. At constant prices, exports of goods decreased by 1.8%, while imports of goods increased by 11.3%, the bank said. Tourism revenues remained steady at about €2.4 billion. In 2017 as a whole, Greece’s current account deficit reached €1.5 billion, down by €418 million year-on-year. (Reuters 20.11)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Chanukah Celebrated in Israel & the World Over

On Sunday evening, 2 December, the Jewish world began the observance of the eight day Chanukah holiday. From the Hebrew word for “dedication” or “consecration”, Hanukkah marks the rededication of the Temple in Jerusalem after its desecration by the forces of Seleucid Greeks and commemorates the “miracle of the container of oil”. The re-dedication followed the liberation of Jerusalem by the Jewish forces, or Maccabees, who were fighting to regain their independence against the Greek invaders. There was only enough consecrated olive oil to fuel the eternal flame in the Temple for one day. Miraculously, the oil burned for eight days, which was the length of time it took to press, prepare and consecrate fresh olive oil. The holiday also celebrates the military victory and the restoration of Jewish independence. The holiday lasts until 20 December.

Though business is permitted during this holiday, the week in Israel is marked by many leaving work early to be with the family at nightfall, in time to light the chanukiah or menorah, an eight branched candelabra. The primary observance is to light a single light each night for eight nights. As a universally practiced “beautification” of the mitzvah, the number of lights lit is increased by one each night. There is also a custom of eating foods fried in oil as a culinary way of commemorating the Chanukah miracle after the Maccabees won the war against the Greeks, liberating Israel. While the favored fried Chanukah treat of Israelis is the jelly doughnut, most North American Jews prefer latkes, a grated potato-and-onion pancake fried in oil and served with sour cream or apple sauce.

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*REGIONAL:

7.2 Tunisia Appoints First Jewish Minister in Decades

Tunisia on 13 November approved a cabinet reshuffle that included Jewish businessman Rene Trabelsi as minister of tourism. The reshuffle of 10 new ministers was proposed by Prime Minister Youssef Chahed last week, in hope of injecting fresh names into his government amid a political and economic crisis.

Trabelsi is the third member of the country’s small minority of 2,000 Jews to join Tunisia’s cabinet since its independence in 1956. Albert Bessis served in the 1955 government that led to the country’s independence, while Andre Barouch was a close aide to president Habib Bourguiba in 1956.

The tourism minister is from the island of Djerba, known as the heartland of Tunisia’s Jewish community and site of pilgrimage, which attracts a number of tourists every year. The island is recovering from a 2002 terrorist attack on the famous Ghriba synagogue that killed 21 people, including German tourists. Trabelsi’s father, Perez Trabelsi, is the president of the synagogue and has been the leader of the community since 1985. He has played a vital role in organizing the pilgrimages and is known for efforts to promote Jewish-Muslim coexistence in the region.

Tunisia is home to one of North Africa’s largest Jewish community. The group has lived in the country since the Roman era and their community once numbered 100,000. But fear and poverty pushed several waves of emigration after the re-birth of Israel in 1948. Many Jews left the country after the 1967 Arab-Israeli war, with most going to France or Israel. (Various 13.11)

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7.3 Greek Population May Shrink by 1.4 Million by 2035

Greece’s population could decrease by between 450,000 and 1.4 million by the end of 2035, according to a parliamentary committee’s recently published report. The report shows that Greece’s population may shrink to between 9.5 and 10.4 million in 2035 – compared to 10.9 million in 2015 – and shrink even further to between 8.3 and 10 million by 2050. A special committee of experts commissioned by the Greek Parliament published the findings 18 October. The report follows other researchers’ similar warnings regarding Greece’s dwindling population and also raises alarm over the aging of the country. It forecasts that 65+ year-olds will make up 30.1-33.3% of the population by 2050 — compared to 20.9 in 2015 — while the working-age population (20-69 years old) will shrink from 7.1 million in 2015 to 5.7 million in 2050. (GN 12.11)

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7.4 Athens Technical University to Offer Joint Degrees with Columbia University

For the first time in Greek higher education, a major university will now offer joint programs with Columbia University of New York City. According to a new agreement between the National Technical University of Athens (NTUA) and the US-based university, the two educational institutions will now offer joint undergraduate degrees to their best students. There will be no tuition fees for NTUA students who finish their education at Columbia because the Athenian university has agreed to cover the cost with scholarships and sponsorships. The agreement was reached between Athens Polytechnic Chancellor Giannis Gkolias and the officials at Columbia university. The program will begin in 12 months and will be tailored to meet the needs of honors students. The agreement is expected to be extended to the postgraduate level as well, with students from one University being able to attend the classes of the other. (Various 22.11)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Aurum Ventures and Direct Insurance Join Investment in KidneyCure

KidneyCure completed a round of financing from Aurum Ventures, a venture capital firm, and Direct Insurance Financial Investments. The new investors join KidneyCure’s strong team of existing investors including Jonathan Leitersdorf, Prof. John Finberg and Gilad Altshuler Holdings. The investment from Aurum Ventures and Direct Insurance brings the total amount raised by KidneyCure to $4 million. Aurum provides KidneyCure and its board with a strong professional track record and knowledge of the relevant industry.

KidneyCure is developing cell-based personalized medicine therapy designed to compensate for renal cell depletion by administrating autologous, revitalized renal progenitor cells. Upon administration, these cells are expected to significantly improve kidney function, prevent the formation of fibrotic renal tissue and delay the progression of the disease. The major benefit is expected to be a substantial delay in the need for dialyses and kidney transplantation.

Tel Aviv’s KidneyCure is developing proprietary cell therapies aiming to prevent progression of Chronic Kidney Disease. The scientific basis and motivation for KidneyCure’s approach was provided by a world-renowned authority in Nephrology Prof. Benjamin Dekel, through genuinely pioneering research carried in his laboratory at Sheba Medical Center in Israel, one of the world’s leading medical centers. KidneyCure’s unique 3D renal cell cluster technology is expected to significantly delay the need for dialysis and transplantation and give millions of patients an opportunity to live longer higher quality lives. (KidneyCure 19.11)

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8.2 Salt of the Earth Expands Global Availability

Salt of the Earth announced new, exclusive distribution agreements for Australia, Poland, South Africa and Thailand of its clean-label Mediterranean Umami savory flavor enhancement and sodium reduction ingredient. The company is expanding offerings of the plant-based ingredient by partnering with leading food ingredient distributors around the world. These global deals have served to underline the broad functionality of this ingredient and have elicited the company to identify several key factors for marketing Mediterranean Umami in the four new countries.

Mediterranean Umami is a distinctive blend of simple, consumer-friendly ingredients based on natural plant extracts combined with sea-salt. It was granted an IFT17 Innovation Award and provides multiple functions as a savory flavor enhancer, a salt-reduction agent, and a sugar reduction ingredient. In addition to existing agreements for the four new countries as well as North America, the UK, and Benelux, Salt of the Earth continues to seek additional distribution partners

With innovation and quality as its driving principles, Atlit’s Salt of the Earth has been producing sustainable sea salt solutions for the global food industry since 1922. Salt of the Earth’s customers span more than 20 countries on 5 continents. The company controls and tracks sustainable salt resources and works to promote balanced salt consumption through innovative sodium reduction solutions. (Salt of the Earth 20.11)

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8.3 Evogene Establishes Ag-Chemicals Subsidiary – AgPlenus

Evogene announced the establishment of a new subsidiary – AgPlenus. All of Evogene’s ag-chemical activities focusing on the design and development of effective and safe next generation agro-chemical products are being transferred to the new subsidiary, along with access to Evogene’s Computational Predictive Biology (“CPB”) platform.

The ag-chemical activities being transferred to AgPlenus, which were initiated in 2014, now consist of a substantial internal and collaborative product pipeline focusing on herbicides and insecticides with a clear go-to-market strategy. This rapid product candidate discovery and early stage development was achieved through the use of Evogene’s CPB platform, a well-established disruptive technology platform. AgPlenus’ promising product candidate pipeline includes advanced hits for potential new Mode-of-Action herbicides and new Sites-of-Action for key insecticidal targets. Evogene’s existing ag-chemical collaborations with world leading crop protection companies such as BASF and ICL will also be transferred to the new subsidiary.

Rehovot’s AgPlenus, a fully owned subsidiary of Evogene, aims to discover, develop and bring to the market effective and safe agrochemical products utilizing proprietary computational predictive technologies. The Company aims to develop agrochemicals: herbicides, insecticides, fungicides and crop enhancers. AgPlenus will continue ongoing collaborations with industry leaders such as BASF and ICL.

Rehovot’s Evogene is a leading biotechnology company developing novel products for major life science markets through the use of a unique computational predictive biology (CPB) platform incorporating deep scientific understandings and advanced computational technologies. Today, this platform is utilized by the Company to discover and develop innovative products in the following areas (via subsidiaries or divisions): ag-chemicals, ag-biologicals, seed traits, integrated castor oil ag-solutions and human microbiome based therapeutics. (Evogene 19.11)

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8.4 BioLineRx Receives FDA Designation for Novel Cancer Immunotherapy Candidate AGI-134

BioLineRx announced that the U.S. FDA has granted the Biological Product Designation for AGI-134, the Company’s novel immunotherapy compound. This designation provides the Company with eligibility to obtain 12 years of market exclusivity upon approval of the product for commercial use by the FDA. This regulatory market exclusivity adds an incremental layer of protection in addition to that afforded by existing patents granted in the United States and Europe, and pending in other countries, covering the use of AGI-134 for the treatment of solid cancer tumors. These patents are valid until May 2035, with a possible term extension of up to five additional years.

Pre-clinical studies have demonstrated that treatment with AGI-134 leads to complete regression of primary tumors, prevents growth of untreated distal secondary tumors, and triggers a vaccine effect that may prevent the development of future metastases. Furthermore, in prior studies, the combination of AGI-134 with an anti-PD-1 immune checkpoint inhibitor demonstrated a synergistic effect in protection from secondary tumor growth. BioLineRx recently initiated a Phase 1/2a study of this promising product in solid tumors, as both monotherapy and in combination with checkpoint inhibitors, and anticipates initial top-line results from this important study by the end of 2020.”

Tel Aviv’s BioLineRx is a clinical-stage biopharmaceutical company focused on oncology and immunology. The Company in-licenses novel compounds, develops them through pre-clinical and/or clinical stages, and then partners with pharmaceutical companies for advanced clinical development and/or commercialization. (BioLineRx 20.11)

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8.5 E-Motion Receives CE Mark for Its Stimulation Therapy for Patients With Acute Digestive Dysmotility

E-Motion Medical has received CE Mark approval for its lead product, the E-Motion System, providing stimulation therapy that restores the natural motor function of the digestive system for patients with acute gastrointestinal dysmotility (GID). Acute GID is common in neurological, trauma, surgical, geriatric and severe diabetic patients. It manifests itself as reduction in, or lack of, motility in the digestive system, and leads to increased risk of complications and longer recovery time.

To restore motility to the digestive system, the E-Motion System delivers unique patterns of electrical stimulation to the esophagus. The stimulation is applied to the esophagus using the Company’s proprietary applicator, the E-Motion Tube, which is easily placed by the nursing staff in the same manner as a regular feeding tube. The applied stimulation generates contractions, which restore natural function to the digestive system and promote motility throughout the gastrointestinal tract.

Founded in 2011, Tel Aviv’s E-Motion Medical developed the first non-pharmaceutical therapy for restoring the natural motor function of the digestive system for people suffering from digestive dysmotility. The CE Mark approved E-Motion System was successfully tested in clinical trials in Europe and Canada. (E-Motion Medical 20.11)

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8.6 Mazor Robotics Shareholders Approve Merger Agreement With Medtronic

Mazor Robotics announced that at a Special General Meeting of Shareholders, Mazor Robotics shareholders approved the previously announced definitive merger agreement with wholly-owned subsidiaries of Medtronic. Approximately 53% of Mazor Robotics ordinary shares were represented in the meeting. Approximately 95% of the shares represented in the meeting which are neither held by a Medtronic affiliated party nor by a controlling shareholder of the Company or a shareholder with a personal interest in the merger proposal, were cast in favor of the merger. The transaction remains subject to certain closing conditions and is expected to close during Medtronic’s third fiscal quarter ending January 25, 2019.

Caearea’s Mazor Robotics believes in healing through innovation by developing and introducing revolutionary technologies and products aimed at redefining the gold standard of quality care. Mazor Robotics Guidance System enables surgeons to conduct spine and brain procedures in an accurate and secure manner. (Mazor 19.11)

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8.7 Aidoc and SaferMD Team Up to Close the Loop of AI Radiology Medicare Payments

Tel Aviv’s Aidoc, a leading provider of AI radiology solutions, announced a partnership with New York’s SaferMD to provide the first complete solution to use AI to both improve clinical performance and reward radiologists with higher scores in the Medicare Merit-Based Incentive Payments System (MIPS). This can enable them to earn positive payment adjustments for Medicare procedures. Under MIPS, healthcare providers can earn positive payment if they demonstrate that they provide high-quality, efficient care.

SaferMD’s Radiology Qualified Clinical Data Registry (QCDR) is approved by the Centers for Medicare & Medicaid Services (CMS) for 2018-2019 MIPS reporting. It currently offers 19 high priority measures and eight sub-measures that reflect communication performance for critical and actionable results in imaging exams. Radiologists can use SaferMD and Aidoc’s combined solution to automatically generate the data they need to report MIPS and show the value of AI-based imaging analysis. Aidoc’s AI-driven radiology solution immediately flags critical conditions and moves them to the top of the work list, speeding diagnosis and treatment times for the most serious cases. It already has FDA clearance for detecting intracranial hemorrhage in Head CTs. (Aidoc 19.11)

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8.8 BrainStorm Cell Therapeutics Submits IND for NurOwn for Treatment of Progressive Multiple Sclerosis

BrainStorm Cell Therapeutics has submitted an Investigational New Drug (IND) application with the U.S. Food and Drug Administration (FDA) to initiate a Phase 2 study of NurOwn® in patients with progressive multiple sclerosis (MS). MS affects approximately 1 million individuals in the U.S. and 2.3 million individuals worldwide. Approximately half of affected individuals will eventually develop progressive disease, which may lead to increasing levels of motor, visual, and cognitive functional impairment and disability.

Petah Tikva’s BrainStorm Cell Therapeutics is a leading developer of innovative autologous adult stem cell therapeutics for debilitating neurodegenerative diseases. The Company holds the rights to clinical development and commercialization of the NurOwn technology platform through an exclusive, worldwide licensing agreement. NurOwn has received Fast Track designation from the U.S. FDA in ALS and orphan status by the U.S. FDA and the European Medicines Agency (EMA). BrainStorm is currently enrolling a Phase 3 pivotal trial in ALS (NCT03280056), investigating repeat-administration of NurOwn at six sites in the U.S., supported by a grant from the California Institute for Regenerative Medicine (CIRM CLIN2-0989). The pivotal study is intended to support a filing for U.S. FDA approval of NurOwn in ALS. (BrainStorm 19.11)

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8.9 BGU Shows that Heating Raw Human Excrement Could Provide a Reusable Energy Source

For the first time, a Ben-Gurion University pilot study has demonstrated that raw human excrement can potentially be converted to a safe, reusable fuel and a nutrient rich fertilizer, thus addressing two major worldwide issues of sanitation and fuel for energy. According to the groundbreaking study published in the Journal of Cleaner Production, researchers at BGU’s Zuckerberg Institute for Water Research have refined a process using hydrothermal carbonization (HTC) to heat solid human waste in a designated “pressure cooker” and convert excreta into hydrochar, a safe, reusable biomass fuel resembling charcoal. The BGU researchers conducted similar research last year on turkey and other poultry excrement.

The development addresses two challenges prevalent in the developing world: sanitation and growing energy needs. While access to waste treatment worldwide has expanded significantly in recent years, approximately 2.3 billion people still lack basic sanitation services, according to the World Health Organization. This includes 892 million people – mostly in rural areas – who defecate in the open. The Bill and Melinda Gates Foundation sees sanitation as a major world health issue and has Reinvent the Toilet Challenge to address this problem.

In the pilot and laboratory study, the researchers subjected the raw waste material through HTC to three temperatures (180, 210 and 240 °C) and reaction times (30, 60 and 120 min.). The solids become dehydrated, creating a substance known as hydrochar, a combustible solid, as well as a nutrient-rich aqueous (liquid) phase. The researchers said the reaction that creates the hydrochars sterilizes the waste material, so it becomes safe to handle. The “coals” can potentially be utilized for household heating and cooking, while the liquid byproduct, (the aqueous phase) can be used as liquid fertilizer. The study was funded by the Rosenzweig-Coopersmith Foundation and the Israel Water Authority. (BGU 15.11)

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8.10 Ireland’s Medtronic to Acquire Nutrino Health

Dublin’s Medtronic, a global leader in medical technology, and Nutrino Health announced the companies have entered into a definitive agreement under which Medtronic will acquire Nutrino. Given that food and nutrition are central components in effective diabetes management, the companies recognized an opportunity to improve clinical outcomes for people with diabetes by integrating Nutrino’s extensive food analysis infrastructure, nutrition science expertise and artificial intelligence (AI)-driven personalized insights with Medtronic’s technology and future innovations.

The Diabetes Group at Medtronic is focused on innovating diabetes management resources to improve the lives of people with diabetes. Medtronic will add Nutrino’s comprehensive food database, food analysis system and nutrition-science expertise to its capabilities, upon closing of the transaction. In addition, Nutrino has been developing algorithms to predict glycemic responses to food. By leveraging Nutrino’s technology and infrastructure with continuous glucose monitoring (CGM) and industry-leading closed loop systems, Medtronic can help reduce the substantial physical and mental burden of food and nutrition management for people with diabetes. The acquisition is expected to close in Medtronic’s third fiscal quarter, ending January 25, 2019, subject to the satisfaction of certain customary closing conditions.

Tel Aviv’s Nutrino is a leading provider of nutrition-related data services, analytics and technologies. At its core, Nutrino strives for improved universal health by enabling AI-led analysis of how nutritional intake will affect a person’s health. Nutrino has also built a leading food database and nutrition data insights platform, collating data from millions of access points and food items globally. Nutrino helps people discover their FoodPrint, a personalized assessment of their personal response to different foods. (Medtronic 21.11)

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8.11 CytoReason Model Overcomes Cross-Species Drug Development Barriers

CytoReason announced publication of a groundbreaking new model for translating data from mouse models to human disease. Described in Nature Methods, the mouse to human model (Found In Translation or FIT), proved its ability to more accurately and effectively extrapolate results from the mouse-based research that is a vital, and necessary, part of every drug discovery and development program.

Much of what we know about disease is rooted in research done using mouse models (mice bred specifically to have the characteristics of the disease being studied). Furthermore, every single new drug will have first had to demonstrate some level of safety and efficacy on mice. But mice are not humans, and cross-species differences have consistently been a major stumbling block to translating lab-based research into something that will be meaningful for patients and clinicians.

Until now, knowledge of species differences has not been systematically incorporated into the interpretation of animal models. In trying to overcome this huge issue, scientists from CytoReason and the Systems Immunology and Precision Medicine Lab at the Technion Faculty of Medicine, developed their mouse to human model. This new model builds on CytoReason’s mission of driving biological insights that transform drug discovery and development, lifting analysis of datasets out of an isolated vacuum and applying the full context of existing knowledge, in a similar way to CytoReason’s Cell-Centered Models of the immune system do in terms of identifying and understanding gene/cell/cytokine relationships.

At the heart of the process is the pairing of human and mouse model datasets with a human-disease dataset of comparable conditions to produce cross-species pairings. For each cross-species pairing in each species the difference was calculated between disease and control samples, which was then used to study how different human and mouse genes express under similar conditions and fed into the mouse to human model.

Tel Aviv’s CytoReason has a singular focus on re-defining understanding of the immune system at a cellular level. CytoReason’s technologies, data and process are all unique and proven. They lie at the heart of CytoReason’s ability to map the correlation and causality of gene/cell/cytokine relationships that are central to understanding diseases, and their treatment – and do so faster and more accurately than ever before. (CytoReason 26.11)

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8.12 Merchavia Signs MoU for First Investment in the Medical Cannabis Sector

Ramat Gan’s Merchavia Holdings and Investments, an Israeli investment company specializing in early-stage life science sector companies, has signed a non-binding Memorandum of Understanding (MoU) in an Israeli company developing a medical device that will allow the measured and precise consumption of medical cannabis, according to a pre-defined dosage and without the need of heating. According to the MoU, the company will invest a total of $400,000 in exchange for shares representing about 20% on a fully diluted basis.

This step is part of the implementation of the company’s business strategy to invest in breakthrough technologies, with major worldwide potential and in high growth markets. As part of this strategy, and following the company’s announcement one month ago, about its intention to begin investing in companies in the Cannabis field, when the deal becomes a binding agreement, Merchavia will invest for the first time in the aforementioned company. According to Merchavia’s information, the medical cannabis market is expected to grow to about $55 billion in 2024. Sales of cannabis concentrates on the cannabis market are expected to exceed $3 billion by the end of 2018.

As part of its investment in companies in the medical cannabis sector, Merchavia will realize its capabilities in the sector through life sciences and technology investments and fulfill its investment policy in this field, as well as its international connections with leading enterprises, which are also in the field of medical cannabis with an emphasis on R&D companies. The company is conducting talks with several other companies with R&D activities related to medical cannabis. (Merchavia 26.11)

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8.13 CannaLean Develops New Cannabidiol Formulation to Safely Lower Cholesterol Levels

CannaLean has completed in vivo studies showing a significant decrease in cholesterol/triglyceride, demonstrating the potential clinical effect of the novel patent-protected formulation. When lifestyle changes are insufficient to reduce lipid levels (including cholesterol and triglycerides), statins are the most common treatment. While statins are highly effective, they often cause side effects, such as memory loss, muscle pain, digestive problems, and, in the worst cases, liver damage and death. CannaLean is developing an alternative to statins for the reduction of lipids using CBD as the active ingredient. CannaLean has developed a novel formulation of Cannabidiol (CBD), with chitosan, a biocompatible, non-toxic, and non-immunogenic compound that enhances the potential of CBD to significantly reduce cholesterol and triglycerides. Their preliminary in vivo results in animal models show the effect of the novel formulation on cholesterol and triglycerides reduction, as compared to controls and each compound alone.

Founded in 2017, Bnei Brak’s CannaLean is committed to the research and development of a novel proprietary formulation of Cannabidiol (CBD) and Chitosan that will potentially benefit millions of patients suffering from dyslipidemia. CannaLean has completed various in vivo studies showing a significant decrease in cholesterol triglyceride blood levels, demonstrating the potential clinical effect of the novel patent-protected formulations. CannaLean has established an active partnership with one of their shareholders – MOR Research Applications, the tech transfer company of Clalit Health Services. (CannaLean 26.11)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Darillium Emerges from Stealth to Help Multi-Platform & Multi-Cloud Management

More than 80% of enterprises take a multi-cloud approach and spread their workloads across several public and on-premise platforms instead of going all in on a single cloud. The complexity and costs of managing multi-cloud workloads delays new product releases. It’s a challenge that Tel Aviv-based start-up Darillium is tackling with its flagship product, Galaxy.

Fresh from stealth mode, Darillium, alongside large enterprise partners will solve this multi-platform problem. The company announced on 15 November that it has raised a $2 million seed round lead by Hanaco Ventures and joined by JANVEST Capital Partners. Darillium’s first product, Galaxy, allows customers to deploy applicative workloads and support new business services across multiple platforms and clouds. Darillium’s unified API and Artificial Intelligence-driven recommendation engine enable cross platform functionality and are designed to support both technical and business teams.

Tel Aviv’s Darillium is on a mission to enable enterprises to design and release new business services faster and with less risk across multiple platforms and clouds. Leading venture capital investors include Hanaco Ventures and JANVEST Capital Partners. (Darillium 15.11)

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9.2 Transmit Security Wins Javelin’s 2018 Mobile Biometrics Platform Leader Award

Transmit Security, the identity orchestration company, has been named a leader in the inaugural edition of the Javelin Strategy & Research Mobile Biometrics Platform Scorecard. The Transmit Security Platform earned the “Leader” award in all three of the report’s categories: Functional, Innovative and Tailored. Javelin evaluated twelve leading mobile biometric platform providers with an emphasis on how well they support multiple biometric modalities across a variety of channels.

Transmit SP was named leader in each of the following categories for:

-Functional: Its broad support for a range of biometric modalities and providing a one-stop shop for biometric authentication and risk assessment.

-Innovative: Cutting-edge biometric modalities and analytics features that operate behind the scenes.

-Tailored: Providing robust, flexible and configurable implementation options that enable the platform to adapt to the needs of customers and end users.

Tel Aviv’s Transmit is the leader in identity orchestration. The company’s technology enables large enterprises to standardize and simplify their identity infrastructure to accelerate and reduce the cost of new account opening, authentication, authorization, compliance and fraud prevention related initiatives. (Transmit Security 15.11)

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9.3 Abellio London Reduces Collisions & Injuries Via Mobileye Safety Trial

Abellio London, one of London’s leading bus operators, has launched a major trial of safety technology from Mobileye, an Intel company. The trial is supported by Transport for London (TfL) through a grant from its Bus Safety Innovation Fund. Focused on reducing bus collisions with cyclists, motorcycles, pedestrians and other road users, the trial’s findings to date show the Mobileye collision avoidance technology has reduced avoidable collisions by 29% and reduced injuries from such collisions by 60%.

Abellio London’s safety technology trial is employing Mobileye’s aftermarket collision avoidance technology, which is engineered by the same team developing some of the world’s most sophisticated advanced driver assistance systems (ADAS) and autonomous vehicle technology. The solution can be retrofitted to almost any vehicle already on the road. For bus drivers, in particular, the Mobileye system provides critical audio and visual alerts that assist in preventing or mitigating collisions. (Intel 14.11)

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9.4 CyberArk Named a Leader in Privileged Identity Management by Independent Research Firm

CyberArk was named a Leader in “The Forrester Wave: Privileged Identity Management, Q4 2018.” Based on Forrester’s evaluation of the 11 most significant privileged identity management vendors, CyberArk ranks highest in both the current offering and market presence categories.

According to the report, “The [CyberArk] solution has strong password safe, session management, and privileged threat analytics, as well as the broadest DevOps support of any vendor evaluated in this Forrester Wave.” CyberArk received the highest possible score in report criteria including customer satisfaction; privileged threat/behavior analytics; privilege delegation and escalation; privileged session monitoring plans; and container support plans. The CyberArk Privileged Access Security Solution is the most comprehensive solution on the market for protecting against the exploitation of privileged accounts, credentials and secrets anywhere – including on the endpoint and across on-premises, hybrid cloud and DevOps environments.

Petah Tikva’s CyberArk is the global leader in privileged access security, a critical layer of IT security to protect data, infrastructure and assets across the enterprise, in the cloud and throughout the DevOps pipeline. CyberArk delivers the industry’s most complete solution to reduce risk created by privileged credentials and secrets. (CyberArk 14.11)

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9.5 Pioneering a New Era in 3D Printed Production Metal Parts

Helping customers pioneer a new era in additive manufacturing for production-grade metal parts, Stratasys is releasing further details of its new platform currently being developed and designed for short-run metal applications. First unveiled earlier this year, the additive platform is based on Stratasys’ innovative, first-of-its-kind “Layered Powder Metallurgy” (LPM) technology, designed to make production of metal parts quicker, easier and more cost-effective than ever before.

Intended to disrupt conventional manufacturing approaches, the advanced platform is being developed to combine the value of additive manufacturing with short-run metal parts production. The innovative technology is built to drive improved efficiency and cost savings using standard Powder Metallurgy (PM) alloys, mechanical properties with high accuracy and controlled shrinkage, as well as extremely fast throughput.

Developed internally over the past several years, Stratasys’ platform incorporates the company’s proprietary jetting technology and commonly-used powder metallurgy, starting with offering Aluminum powders. The LPM solution includes a 3-step, additive manufacturing process combining traditional powder metallurgy with Stratasys’ PolyJet robust ink-jet technology. The process includes printing of boundaries with proprietary thermal ink, powder dispensing and spreading, and then compaction of the powder layer to achieve high-density and controllable shrinkage.

Rehovot’s Stratasys is a global leader in additive manufacturing / 3D printing technology, and is the manufacturer of FDM and PolyJet 3D Printers. The company’s technologies are used to create prototypes, manufacturing tools and production parts for industries, including aerospace, automotive, healthcare, consumer products and education. (Stratasys 13.11)

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9.6 AppNexus Mobilizes Anodot’s Autonomous Analytics to Improve Customer Service

Anodot announced that AppNexus, a Xandr company, is leveraging Anodot’s Autonomous Analytics platform to detect and resolve business incidents in real-time, alerting customer-facing teams of problems that impact customers’ revenue-generating ads. Ad tech leaders like AppNexus and its customers depend on “viewability” metrics to estimate the value of a given digital ad impression. Ads buried at the bottom of web pages, obscured from view by competing site content, or un-loaded due to rapid user navigation have been constant challenges in an ever-shifting digital landscape of rich media content. Anodot Autonomous Analytics ensures that AppNexus’ viewability measurements continually enhance its customers’ digital advertising performance, promoting optimal engagement from end-users.

Anodot uses automated AI and machine learning to help companies all over the world run their business better to achieve more predictable results. Its patented algorithms enable the fastest time to detection and root cause analyses, saving strategic time and energy in determining the scope and source of problems in ways that traditional BI tools and dashboards just can’t deliver.

Ra’anana’s Anodot applies automated AI to deliver autonomous analytics in real-time, across all data types, at enterprise scale. Unlike the manual limitations of traditional BI, we provide analysts mastery over their business with a self-service AI platform that runs continuously to eliminate blind spots, alert critical issues and investigate root causes. Anodot has nearly 100 customers in digital transformation industries like eCommerce, FinTech, AdTech, Telco, Gaming, including Microsoft, Lyft, Waze, Pandora, Appnexus, Wix and King. (Anodot 15.11)

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9.7 Techniplas’ Illuminated Steering Wheel Designed Using Nano Dimension’s DragonFly Platform

Nano Dimension announced that Techniplas, a leading global design and manufacturing provider of automotive products and services, today unveiled a new steering wheel concept that incorporates its proprietary cognitive lighting technology with 3D printed electronics. Using a Nano Dimension DragonFly Pro 3D printer, Techniplas engineers directly printed conductive paths into a concept wheel in a single step.

A leading additive electronics provider, Nano Dimension joined the Techniplas Open Innovation Program earlier this year to make additive electronics available for the first time to the automotive industry for the prototyping and manufacturing of conductive components, encapsulated sensors and smart surfaces. Both companies believe that the combination of smart lighting with additive electronics can shape and transform the future of mobility enabling the creation of customized and short run functional electronics such as sensors, conductive geometries, antennas, molded connected devices, printed circuit boards and other devices.

Ness Tziona’s Nano Dimension is a leading electronics provider that is disrupting, reshaping and defining the future of how cognitive connected products are made. With its unique 3D printing technologies, Nano Dimension is targeting the growing demand for electronic devices that require increasingly sophisticated features. Demand for circuitry, including PCBs – which are the heart of every electronic device – covers a diverse range of industries, including consumer electronics, medical devices, defense, aerospace, automotive, IoT and telecom. (Nano Dimension 15.11)

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9.8 Maytronics Dolphin iO Wins 2018 Piscine Global Innovations Trophy for Smart Pool Products

Kibbutz Yizreel’s Maytronics, the global leader in robotic pool cleaners, was chosen co-winner of the Piscine Global 2018 Pool Innovations Trophy in the Smart Pool Category. The award-winning product is the Maytronics Dolphin iO, the first-ever robotic pool cleaner powered by Opteq, a self-learning artificial intelligence technology featuring 3D digital mapping of the pool. The trophy was presented on 13 November at Piscine Global in Lyon, France, Europe’s leading swimming pool and wellness event, in recognition of outstanding innovation in new products or sustainable development solutions for the pool.

With the iO, Maytronics is the first company to leverage artificial intelligence for pool cleaning, bringing robotic pool cleaning into the age of smart, self-learning devices. Powered by Maytronics’ revolutionary Opteq technology, the iO knows its exact location in the pool and can navigate to any point in the pool as if it has an underwater GPS system. This enables it to automatically determine the most efficient way to clean each pool in accordance with the pool shape, structure, obstacles and requested cleaning mode. It defines the scanning path and time required to cover all surfaces and can provide tangible proof of complete coverage of the entire pool surface, including floor, walls, and waterline. End-users can fully control the cleaner from anywhere via a mobile app, including setting it to navigate to any point in the pool, clean only certain parts of the pool, go to a pre-defined location at the end of the cleaning operation, or climb to the waterline at a pre-defined precise location. The Maytronics Dolphin iO will be introduced for select partners and pool owners for evaluation during 2019. General availability to the market is expected in Europe and North America in 2020. (Maytronics 14.11)

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9.9 OptimalPlus’ “Test Data Analysis as a Service” Complements Internal Semiconductor Teams

OptimalPlus will be offering its analytic-driven insights for semiconductor teams as a Service. The company pairs unprecedented visibility into the entire electronics supply chain with advanced data science and domain expertise to enable customers to enhance their production metrics and ensure overall product reliability. OptimalPlus’ standalone offering includes its extensive expertise supporting semiconductor customers with access to its experts, methodologies, and best practices, allowing them to pair that data with information collected by in-house analytic teams.

In today’s world semiconductor companies rely on experienced in-house engineers to manage product yield, efficiency and quality. While requirements are ever-growing, there aren’t enough in-house experts to address them. Test Data Analysis is a service aimed to scale and complement product engineering and supply chain teams. OptimalPlus’ veteran data scientists and semiconductor engineers will analyze customers’ test data and identify areas for improvement. These insights and recommendations help companies prioritize internal resources and focus on the highest-value items.

Holon’s OptimalPlus is the established leader of lifecycle analytics for the electronics industry and its entire supply chain. The OptimalPlus open platform pairs unprecedented visibility into the entire electronics supply chain, with advanced data science and domain expertise. This unique platform enables OptimalPlus customers to enhance their production metrics and ensure overall product reliability. (OptimalPlus 14.11)

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9.10 Wi-Charge Unveils Wireless Power Kit for Amazon Echo Dot and Google Home Speakers

Wi-Charge announced an innovative Wireless Power Kit that transforms – within minutes – an existing wired Amazon Echo Dot or Google Home Mini smart speakers into a beautiful, fully functional, wire-free product. The transformed product can be placed and used anywhere without cables or proximity to a power outlet. Once the smart speaker transformation is complete, there are no wires. Consumers are not asked to change the way they use the product. Instead, they gain dramatic new freedoms on placement options. Previously, one needed to place the speaker near a power outlet and then route or hide the power cord. With the Wireless Power Kit, that is no longer a problem. The smart speaker can be on a table, hang on a wall, or work practically anywhere in the room.

Wi-Charge also announced today the “Powered by Wi-Charge OEM Program,” a new program aimed at helping select partners bring wirelessly-powered products to market. Such products might be wireless smart home speakers, home security devices, phone charging solutions and many additional innovative products that were previously constrained by battery power or power cords. To ensure the success of OEM partners in this program, Wi-Charge will be accepting a limited number of partners into the program at this stage. OEMs interested in participating can contact Wi-Charge for additional details, including costs and logistics. The Wireless Power Kit is available as a reference implementation for manufacturers that seek to incorporate Wi-Charge long-range wireless power modules into their product line.

Rehovot’s Wi-Charge is the long-range wireless power company, founded with the goal of enabling automatic charging of phones and other smart devices. Their patented infrared wireless power technology can deliver several watts of power to client devices up to 10 meters away. The company developed remote charging solutions that enable mobile and wireless devices to seamlessly recharge themselves without user intervention. (Wi-Charge 16.11)

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9.11 Safe-T Recognized by Gartner as One of Seven Representative SDP Vendors

Safe-T has been included in Gartner’s recent “Fact or Fiction: Are Software-Defined Perimeters Really the Next-Generation VPNs” report on software defined perimeters (SDPs). Safe-T is the only Israeli company, listed as a Representative Vendor. In addition to defining SDP and comparing and contrasting with other access solutions such as a VPNs, the report recognizes seven SDP vendors, including Safe-T. Within the list, Safe-T is included as one of the three vendors offering stand-alone SDP products and is the only one of those that does not require any client installed on the end-user’s machine.

Herzliya’s Safe-T Group is a leading provider of software-defined access solutions which mitigate attacks on enterprises’ business-critical services and sensitive data. Safe-T solves the data access challenge by masking data at the perimeter, keeping information assets safe and limiting access only to authorized and intended entities in hybrid cloud environments. Safe-T enhances operational productivity, efficiency, security, and compliance by protecting organizations from data exfiltration, leakage, malware, ransomware, and fraud. (Safe-T 19.11)

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9.12 vHive Releases Autonomous Drone Solution for Complex Cell Tower Inspection

vHive announced the enhancement of its fully automated workflow for cell tower inspection using drones to also support guy wire towers. vHive enables enterprises to scale their drone operations, which uniquely empowers field technicians to fly autonomous, off-the-shelf drones, generating data in a fraction of the time and cost required by human operators.

vHive provides solutions to companies in a variety of industries ranging from telecom towers, to rail, bridges and civil engineering. vHive enables tower companies and mobile network operators to gain intelligence on their infrastructure by capturing field data in minimal time and generating 2D and 3D tower models to visualize, analyze and share. Safely handling the complexity of autonomous flight and data acquisition in a guy wire tower environment further enhances the company’s solution for the telecom industry, enabling customers to address a variety of asset types that they need to digitize.

Herzliya’s vHive is the developer of cloud-based AI that enables enterprises to operate autonomous drone hives for the acquisition, management and processing of field data. vHive’s Mission AI uniquely enables organizations in a variety of industries such as infrastructure, telecom, rail and civil engineering to scale their drone operations. (vHive 19.11)

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9.13 Team8 Launches Portshift, a New Breed of Automated Application Security

Team8, the leading think tank and company-creation platform specializing in cyber resilience and data science, announced the official launch of Portshift, a cloud-workload protection platform backed with $5.3 million in seed funding. Portshift introduces a new IT security paradigm in which developers can deploy applications at efficiency and speed with security built-into the deployment rather than layered on after. The solution offers continuous security from code to run-time. While operating in stealth mode, Portshift is already working with several large organizations across multiple sectors with massive deployment in the cloud in both US and Europe.

Portshift is built on the premise that the world of IT has changed dramatically, defined by unprecedented and unmanageable infrastructure complexity that render traditional legacy systems as obsolete. Infrastructure that ran for months before being updated or changed is now replaced with ongoing deployments of new applications and hourly updates of granular compute units. Whereas security signoff was previously required for firewall rules to be configured, and servers to be installed, today developers enjoy the agility to deploy new applications at scale, independent of the traditional security checkpoints. Security teams are left behind with the old network rules and firewalls that cannot keep up with the pace of change. The result is a loss of ownership and lack of control of what is happening in the enterprise networks.

Portshift is an identity-based cloud workload protection platform that secures applications from CI/CD to runtime. Portshift enables organizations to know which applications are running on their cloud environments, to see and enforce how the applications communicate and to easily find information that is associated with their development and deployment cycles enabling DevOps teams to orchestrate security as part of their day-to-day job. Portshift’s unique model introduces security that is decoupled from the network and operations that is decoupled from security

Tel Aviv’s Team8 is a leading think tank and company creation platform specializing in cyber resilience and data science. Leveraging the expertise of former leaders from Israel’s elite military intelligence Unit 8200, Team8 is supported by an in-house team of top researchers, engineers and analysts. Team8 combines its in-depth understanding of the attacker perspective, data science AI to develop disruptive technologies and category-leading companies that enable businesses to reap the benefits of digital transformation in an agile and secure manner. (Team8 20.11)

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9.14 ELTA Unveils Next Generation Drone Guard to Counter Unmanned Aircraft System (C-UAS)

ELTA Systems, a division and subsidiary of Israel Aerospace Industries (IAI), has unveiled a new and enhanced configuration of its Drone Guard system which detects, identifies and disrupts the operation of UAS and small drones. With hundreds of units already operational across the world, the new modular configuration has added a Communication Intelligence (COMINT) system for more precise detection, classification and identification based on broadcast frequency and unique communication protocol analysis and verification for neutralizing threats. Furthermore, the Drone Guard’s 3D Radars, Electro-Optical (EO), and Jammer systems have all been upgraded with bolstered capabilities.

The use of commercially available UAS and small drones has increased dramatically over the past few years as these platforms have become a potential threat to sensitive facilities, crowds, high profile individuals and other aircraft, due to their small size, slow velocity, and low altitude flight. Small drones can be further used for hostile applications such as unwanted intelligence gathering, smuggling and even as weapon carriers.

ELTA has responded to these challenges with new and enhanced Drone Guard capabilities. In addition to the current radar, EO and jamming capabilities a hostile threat can now also be detected, classified, identified by means of the enhanced COMINT system. The system can effectively jam or disrupt the drone’s control channel and navigation, by supporting an array of communication protocols that can ‘fend off’ a single drone or even a swarm of drones from the guarded premises. (ELTA Systems 21.11)

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9.15 Phone Calendar Launches Timeet, a Free Mobile App That Makes Your Calendar Social

Phone Calendar released Timeet for iOS and Android. Timeet breaks down the barriers between IM platforms and personal calendars by enabling users to send and manage calendar invites to any phone contact or share through any messaging platform without the need for the meeting or event organizer to know invitees email addresses. Meetings and events typically involve discussion around logistics, format or agenda. By offering event-specific chat, Timeet significantly eases the entire scheduling process. Timeet enables schedule invites to be sent directly to any contact identified by their phone number without the need to know the e-mail addresses of any of the invitees. In addition, Timeet enables calendar events to be shared across any IM platform, offers event-specific real time chat and visual event branding and full two-way synchronization between existing calendar(s) and Timeet.

Founded in 2017, Hod HaSharon’s Phone Calendar seeks to create the de facto industry standards for calendars and scheduling technologies in the age of instant messaging and social communication. (Phone Calendar 21.11)

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9.16 Altair Semiconductor and JIG-SAW Partner on LTE-Enabled Sensors for Industrial IoT

Altair Semiconductor has partnered with Japan’s JIG-SAW, a leading provider of A&A (Auto sensoring and Auto Direction) solutions for IoT, to develop LTE-enabled sensors for a wide variety of global industrial IoT applications. The partnership combines Altair’s dual-mode Cat-M/NB-IoT ALT1250 chipset with JIG-SAW’s software control technology to enable developers to create new IoT business models that can drive new efficiencies across their organizations. Potential market applications include IoT sensors for warehouse site management, equipment monitoring, logistics and more. The collaboration will enable users with connected IoT devices to control and monitor individual devices and their statuses at all times via a modem chip connection. Additionally, auto-control services will enable users to address alerts in a timely manner.

Hod HaSharon’s Altair Semiconductor, a Sony Group Company, is a leading provider of LTE chipsets for IoT. The company’s flagship ALT1250 is the smallest and most highly integrated LTE Cat-M and NB-IoT chipset, featuring ultra-low power consumption, hardware-based security and a carrier-grade integrated SIM. Altair partners with leading global OEMs and ODMs, including Sierra Wireless, Murata and WNC, to provide low-power and cost-efficient modules for a range of industrial and consumer IoT applications such as trackers, smart meters, wearables and vehicle telematics. (Altair 21.11)

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9.17 Finscend’s AI Technology is Revolutionizing the Way Banks Process Credit Card Disputes

Finscend has reported a significant spike in interest in the solution from banks and other financial institutions that issue credit cards throughout Northern Europe. When a card holder requests the issuing bank to raise a dispute, BDP jumps into action to facilitate and streamline the entire system. What enables it to do so is a proprietary technology that incorporates machine learning and artificial intelligence while interacting seamlessly with all existing banking infrastructure. This synthesis allows BDP to automatically calculate a unique dispute-or-not score based on input it receives from hundreds of data points within the payment ecosystem. Based on the score, BDP generates an optimal result for the bank’s dispute department.

Beit Shemesh’s Finscend is revolutionizing the way disputes are processed by creating a solution that will streamline and simplify the entire process. The Finscend Bank Dispute Platform will reduce a bank’s dispute processing expenses by an estimated 25%. This will be accomplished by the creation of a seamless end-to-end system that begins with customer onboarding and extends all the way to chargeback processing (when needed). Moreover, it places all relevant information onto one clear dashboard that allows bank personnel to quickly process disputes and their managers to monitor workloads and analyze data. Additionally, the Finscend system provides an AI- generated score that indicates what the best outcome would be for any dispute. (Finscend 21.11)

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9.18 BigID Achieves Certification in the Amazon Web Services Partner Network

BigID has earned Advanced Partner status with Amazon Web Services (AWS) Partner Network (APN). With BigID, AWS customers can automatically perform discovery across the data estate at scale, index and inventory personal information by identity, and operationalize privacy compliance mandates, such as the EU’s General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA).

As more organizations migrate data to the cloud, it’s critical that they know what data they have, who it belongs to, and document how that data is being processed, shared or exposed. By achieving APN Advanced Partner status, BigID makes it easier to provide organizations a global view of their data across the data center, SaaS, and AWS environments, including AWS S3, Dynamo, Redshift, EMR, RDS, Aurora and Athena. Further, BigID improves detection of privacy violations based on policy orchestration and delivers privacy intelligence input to drive automated actions by AWS enforcement points.

The BigID platform leverages machine learning and identity intelligence to transform how enterprises protect and manage the privacy of personal data. Through data-driven inventory and mapping, BigID enables the automation and fulfillment of GDPR Data Subject Access Requests and Article 30 Record Keeping amongst other GDPR requirements.

Based in New York and Tel Aviv, BigID uses advanced machine learning and identity intelligence to help enterprises better protect their customer and employee data at petabyte scale. Using BigID, enterprises can better safeguard and assure the privacy of their most sensitive data, reducing breach risk and enabling compliance with emerging data protection regulations like the EU General Data Protection Regulation. (BigID 26.11)

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9.19 MazeBolt Launches Definitive DDoS Knowledge Base

MazeBolt Technologies announced the launch of the largest and most extensive Knowledge base, for all technical and operational related DDoS threat assessment materials. The Knowledge Base is designed to bridge a gap between customers & IT Network professionals, on the one hand, and DDoS mitigation vendors on the other, to help manage DDoS vulnerabilities most effectively. Furthermore, the Knowledge Base helps IT professionals identify attacks in real time by providing them with low level descriptions & packet captures (example from SlowLoris) of real DDoS attack vectors. MazeBolt’s Knowledge Base includes close to 100 articles about DDoS attacks, with an in-depth Technical Analysis, Screenshots as well as Analysis in WireShark – Filters and sample packet captures for each and every DDoS attack Vector.

Givatayim’s MazeBolt is an Israeli Cyber Security company that strengthens companies’ resistance to cyber-attacks. MazeBolt’s pioneering DDoS Testing & Phishing Simulation & Awareness solutions are used by Fortune 1000 & NASDAQ listed companies in over 50 countries and are operating in 20 languages. (MazeBolt 26.11)

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9.20 GetSAT Selected as SatCom Component for U.S. Coast Guard Airborne Missions

GetSAT announced that its MilliSAT L/W has been selected as the beyond line of sight (BLOS) SatCom component for U.S. Coast Guard Airborne Communications by Hughes Defense Systems in support of Intelligence, Surveillance and Reconnaissance (ISR), Humanitarian Aid, Search and Rescue (SAR), and Disaster Relief (DR) Missions. In partnership with systems integrator Hughes Networks Systems, a global leader in broadband satellite networks and services, GetSAT’s technology was selected from multiple competitors to support mission critical communications link by U.S. Naval Air Systems (NAVAIR).

GetSAT’s MilliSAT L/W (lightweight) provides the U.S. Coast Guard with a fully integrated airborne secure COTM applications. The company’s micronized communications terminal is based on a patented fully-interlaced InterFLAT panel technology for transmitting and receiving signals on the same panel. Meeting the demanding requirements of full-time usage in harsh environments, this rugged satellite on the move (SOTM) terminal in a super-light compact installation offers significant savings in size, weight, and power usage (SWaP).

A privately held company located in Rehovot, Israel, GetSAT Communications provides affordable, portable, and extremely efficient antenna and terminals that offer high-data-rate communications for ground, air, and maritime applications. GetSAT provides services for government and military use, enterprises, first responders, and nongovernmental organizations (NGOs) and humanitarian groups. (GetSAT 26.11)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israel’s CPI Rises by 0.3% in October

On 15 November, the Central Bureau of Statistics announced that Israel’s Consumer Price Index (CPI) rose by 0.3% in October. The increase is in line with market expectations. The rate of inflation in the twelve months to the end of October was 1.2%. Notable rises were recorded in October in the clothing and footwear item (8.1%) and fresh vegetables (1.5%). There were falls in fresh fruit (1.6%) and transport (0.5%).

The Home Price Index for August-September showed a rise of 0.1% in comparison with July-August. In the twelve months to the end of September, the index fell 1.9%. Prices of new homes fell 0.6% in August-September. The proportion of transactions under government subsidy schemes (the Buyer Price program and the Target Price program) was 34.1%. (CBS 15.11)

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10.2 Israel’s Economy Grew By 2.3% in Third Quarter

Israel’s GDP growth grew 2.3% in the third quarter of 2018, at an annualized rate, the Central Bureau of statistics has reported in its first estimate. The Central Bureau of Statistics has also revised downwards growth estimates for the first and second quarters. The second quarter growth estimate was revised down from 1.8% to 1.2% and the first quarter growth estimate was revised down from 5.1% to 4.6%. The Bank of Israel forecast for GDP growth in 2018 is 3.7%, although in light of these latest figures that forecast is likely to be lowered. (CBS 18.11)

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10.3 Israel’s Composite State of the Economy Index for October 2018 Increased by 0.3%

The Bank of Israel’s Composite State of the Economy Index for October 2018 increased by approximately 0.3%, a pace similar to the average of the past three months. The average growth rate of the Index since the beginning of the year is slightly lower than the rapid pace of the past two years, reflecting a rate that is similar to the long-term growth rate of the economy following the more rapid growth of the past two years. The Index was positively impacted by the increase in consumer goods imports and by the increase in exports. In contrast, the declines in industrial production and in indices of retail trade revenue and services revenue moderated the Index’s rate of growth this month. The Index reading for July was revised downward by approximately 0.1%. (BoI 21.11)

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10.4 CreditEase Israel Innovation Fund Second Most Active Chinese Investment Institution in Israel

IVC Research Center, a world-renowned Israeli venture capital research institute, released a list of the most active Chinese investment institutions in Israel’s high-tech venture capital market in the first three quarters of 2018. CreditEase Israel Innovation Fund (CEIIF) is ranked the second on the list, next to Horizons Ventures. The list represents an array of well-known Chinese investment institutions, such as Horizons Ventures, Alibaba Investment and Radiant Venture Capital. CEIIF’s presence together with these well-known investment institutions demonstrates the outstanding capability of CEIIF’s team in project acquisition and funding.

CEIIF, established in 2015, has completed two rounds of fund raising with a total size of $76 million, including RMB 200 million for round one, and $45 million for round two. CEIIF has invested in 20 high-tech start-ups in Israel. Currently, their projects are found in, among others, Corephotonics, a mobile phone dual-camera algorithm technology company, EarlySense, a medical IT company, WeedOut, a biotechnological company, and Kaminario, a big data storage technology company, engaged in fields ranging from digital medicine to artificial intelligence, network communication security, agricultural technology, cloud and data storage, etc. Many of these companies have the potential for growing into unicorns.

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11: IN DEPTH

11.1 ISRAEL: The State of Medical Cannabis

On 19 November, Globes surveyed Israel’s medical cannabis sector, in which more than 100 companies are already operating.

It sometimes seems as though the State of Israel inhaled something and woke up as the state of medical cannabis. More than 100 companies are currently active in this area, which only a few years ago was not even whispered of, but even if it looks that way, this industry did not spring up overnight but grew for years in the dark, chiefly in an overseas direction. The legalization of cannabis in several countries, the developing regulation of medical cannabis (in Israel too) and the opening of the local market to competition and expectations that the export market will be opened up as well have led to the current boiling point.

In the past five years, and particularly in the past two-three years, most of the attention has been on the companies in this field traded on the Tel Aviv Stock Exchange, twelve in number, but most of them are companies at the beginning of the road, and are focused on growing and processing the plant. There are also older agricultural and industrial companies, and technology companies. These develop cannabinoid-based drugs, delivery methods, technologies for improving plant growth and so on. Even if cannabis exports are prohibited, these companies can export their know-how.

Israel is at a unique nexus thanks to its expertise in advanced agricultural technologies, in research on the effect of cannabis on the human body (a field defined and established by Prof. Raphael Mechoulam of Hebrew University, who in the course of his career trained dozens of researchers who followed in his path); and in drug delivery – an area that the Israeli pharmaceutical industry has specialized in because it requires shorter development times and more inter-disciplinary thought than classic pharmaceuticals. Another area that Israel specializes in is medical equipment.

With the aid of a survey by Cann10 of the Shizim group, in collaboration with Deloitte and crowdfunding platform OurCrowd carried out in advance of an international conference held recently, Globes presents here the areas of activity and the outstanding companies in the cannabis industry, and analyzes the forces at work in the market.

The Growers: The Market Pioneers

Israel’s cannabis industry can be divided into several segments. The first is the growing companies. The leading company in this segment is Tikun Olam, the scope of whose activity was recently revealed after it emerged that it was a partner with several other companies around the world. One of them has already been sold for billions of dollars. Alongside Tikun Olam are the eight pioneers that received cannabis growing and marketing licenses before the government’s reform of the industry and have been active in the market for several years. Tikun Olam, the pioneer among pioneers, held 27% of the market and was the most prominent company in shaping the image of the market and its lobby, and in activity overseas. The remaining companies held 8-12% of the market each.

The best known are two companies that have linked up with public companies. One is BOL (Breath of Life) Pharma, which already produces its products, processes them in its own factory and distributes them through pharmaceuticals company Rafa. BOL had 10% of the Israeli market before the reform. The second is Canndoc, which held 8% of the Israeli market before the reform. Both companies plan to storm the global market shortly, but at present neither of them has overseas activity.

Among the eight growers is also Sech, which collaborates with Cann10. Sech grows cannabis and produces extracts from it at the factory of Panaxia (which is described in more detail below), and Cann10 markets them for it.

Unlike, BOL, Canndoc and Se?ch, Tikun Olam has as yet no GAP standard approval indicating that is products are produced in accordance with the Ministry of Health’s new standards, which came into force in April this year. It is working towards obtaining the standard for its new farm in Kfar Yehoshua. Earlier this month, the Ministry of Health shut down Tikun Olam’s farm in Biria, on the grounds that it did not meet ministry standards, but the company hopes that the farm will be restored to full activity shortly.

Other companies are Pharmocann, which makes medical cannabis products for cosmetic and dermatological use, and has started developing special compounds for products of this kind and to gear up for production of its cannabis strains in Australia; Better Cannabis; IMC (Israel Medical Cannabis); Teva Adir and Cannabliss.

Support Companies: Adapting Technologies

According to a report compiled by IVC last February, there were 68 active companies in the Israeli cannabis market at that time, and they had raised $76 million between them – not a large amount in relation to the number of companies, indicating an industry just starting out. Although many financing deals in this industry go unreported, and many more companies than in the biomedical sector in general get underway without raising external capital, this is still an industry mostly at the seed stage, as it were.

The companies supporting medical cannabis growing divide into several sub-categories: special lighting for growing in hothouses; sensors for the plants; new fertilizing methods; home growing kits; and environmentally friendly pest extermination methods. Most of the companies in these categories are just at the beginning, and their chances of success are similar to those of any Israeli startup. Some of them, however, have a distinct advantage: they started out in traditional agriculture, and have accumulated proven know-how that can be applied to cannabis growing.

One such company is humidity control equipment company DryGair, which exemplifies very well the unexpected connections that can give birth to an Israeli startup. The company’s CEO since it was founded has been Adv. Rona Orlicky, daughter of Dr. David Cohen, one of the pioneers of energy exploration in Israel, and she is a partner in her father’s business activity, which includes the Leviathan and Tamar offshore gas discoveries. DryGair was founded on the basis of agricultural technology developed at the Volcani Agriculture Institute. Its main shareholder is Lod-based Misha Refrigeration, which has been active for 60 years in installation of air conditioners and cooling systems for large customers. The company has a German investor by the name of Antan Group, a family fund that puts an emphasis on environmentally beneficial investment.

Seedo Lab is an example of a company that has circumvented the export barrier. It has developed an appliance for growing cannabis at home. The appliance is not designed solely for cannabis, but practically no other plant would justify investing $2,400 in a domestic appliance aimed at people who don’t like gardening. Since it is not necessarily connected to cannabis, it can be exported to the US without any problem and that is what the company does. Another company called Leaf has developed a similar appliance that can be operated using a smartphone, so that it also provides entertainment for the home grower.

Exporting Know-How Rather Than Cannabis

Three companies have so far completed construction of cannabis production facilities in Israel: Panaxia; Breath of Life Pharma and Bazelet, which is still waiting for approval for its facility. These companies will presumably be the spearhead when the time comes for exports. Panaxia was a pioneer in this area and as well as setting up its facility in Israel, it used its know-how to set up facilities in the US. The US does forbid cannabis imports, but know-how in the production process, from beginning to end, can be exported to it. Panaxia did so, and has been well rewarded. It has also set up a facility in South Africa.

Panaxia has used its pharmaceutical know-how to develop a range of cannabis products and production methods: pastilles for swallowing and for placing under the tongue, oils and essences, creams and patches, and even suppositories. The company’s delivery methods are patent-protected, and it plans to produce gels and a device for inhaling a product in powder form.

Panaxia does not grow cannabis itself, but since it has one of the few approved facilities in Israel, it collaborates with agricultural companies, among them Se?ch, Pharmocann, Teva Adir and Better Cannabis. Its products are marketed in Israel by Cann10 and Rafa. Together with its partners, it carries out clinical research to examine the use of its delivery methods for various diseases.

BOL has also built a manufacturing facility, which sells the products that the company develops. It is in fact the only company in Israel that covers the entire value chain. It recently received a loan of up to $30 million from Amir Marketing and Investments in Agriculture and from Super-Pharm owner Leon Koffler, and as part of the deal announced its intention of operating overseas. It also disclosed its financials, showing that in 2016 its revenue totaled NIS 8.7 million, on which it earned a tiny profit of NIS 0.1 million. In 2017, still before the cannabis reform in Israel, its revenue reached NIS 10.8 million, but it posted a loss of NIS 17 million, among other things because of the construction of its production facility, which gives some indication of the cost involved in that.

Bazelet Pharma has established itself as a distribution and service company in the cannabis industry and before the reform it was the distributor for Seàch, Canndoc, IMC and Better Cannabis, accounting for one third of the Israeli market. Bazelet also dealt in extraction for these companies, and in 2017 began setting up its new facility.

The company currently collaborates with Alvit LCS Pharma, which is about to merge its cannabis activity into listed company Tefen, on research and development for unique cannabis strains. For the purposes of setting up its facility, Bazelet received a loan, convertible to equity, from the Peninsula Fund, and it will become a significant player in distribution as well, alongside Cann10, Rafa and BOL.

A few TASE-listed cannabis companies said that they were interested in setting up cannabis processing factories. One of them has a relative advantage in this – CannAssure, which merged with stock exchange shell Direct Capital, is converting an existing factory for processing food supplements (which formerly belonged to Solbar Industries to medical cannabis.

Both the cannabis growing companies and companies that process cannabis are likely to succeed in creating differentiation in the market and become leading players overseas, even before they export. Tikun Olam has already demonstrated how an agricultural company that manages to brand its unique strains and growing methods can create partnerships with overseas growers. This know-how is worth percentages of a company and royalties, provided that the company does succeed in showing that it is unique. Many Israeli companies now offer knowledge and expertise of “Israeli cannabis” overseas, and the world is sympathetic, but not all of the companies have experts with the same degree of experience in growing high-quality medical cannabis. Not every company with connections to patients has derived information of the same quality from it – information about matching strains to diseases, about the side effects of strains and suitability for personal preferences, etc.

The processing companies are attractive because if exports from Israel are permitted, they will be in the forefront, the final station before the material is sent out. As of now, however, it appears that exports have been suspended for political reasons that no one has gotten to the bottom of, and there is therefore also no way of predicting if or when this bottleneck will be released. In such a situation, the operating companies will be interested in the global market only if they can assemble unique knowledge about cannabis production, as Panaxia is doing.

Software Companies: Unrealized Potential

Israel has “pure” software companies in the cannabis field, but it appears that this category has not yet developed as it could have in the Israeli ecosystem. Software activity can be relevant to matching cannabis strains to specific diseases, managing information about patients, researching the distinguishing effect of various materials within the plant, and to its genetic research.

Unsurprisingly, the companies in this sector include one founded by the former CEO of Compugen and Evogene, the leading big data biology companies in Israel. The company is NRGene and the founder is Dr. Gil Ronen. NRGene deals with genomics of a variety of agricultural plants and animals. In the cannabis sector, it has already signed a number of cooperation deals with growers in Israel, Europe and the US, which hope to develop cannabis strains with genes whose superiority has been demonstrated by software. NRGene’s main activity is still in non-cannabis agriculture.

Another prominent company is Cannabis Mercantile Trading Exchange, which developed a cannabis trading platform. The company’s founder and CEO, Saul Singer (not the founder of Start Up Nation Central), worked with software and tools for the diamond market, and built a leading commercial platform for the sector. He is now transferring the knowledge to another difficult-to-commercialize product. The company recently launched its first product.

Drug Delivery Companies: The Veterans Have Not Yet Taken Up Cannabis

Over the years, Israeli drug companies have developed expertise in drug delivery, which they are now applying to the cannabis sector. Intec is a good example. It developed the accordion pill that releases fixed dosages of active ingredients upon entering the intestine. Releasing the material in the intestine has special effects on both the probability that the material will be absorbed and the ability to control the dosage. Intec initially thought about going into the cannabis sector – it develops conventional drugs and is about to complete a clinical trials of its drug for Parkinson’s Disease – but cannabis was an opportunity for a company whose entry into the market is being delayed to develop a product that could rapidly contribute value to it and its share. Intec’s share indeed rose 14% on the day it announced that it was entering the cannabis field. The company recent completed Phase I trials of cannabis elements for treatment of pain.

Biota, founded at the Technion, Israel Institute of Technology, has worked for two decades in creating alginates used to deliver drugs on the tongue. The company, which conducted trials for years without attracting attention or reaching the market, recently began also developing cannabis products. Alginates are designed to reduce aftertaste, increase absorption speed, and reduce the amount of material in the liver.

Most of the well-known Israel drug delivery companies (e.g. NeuroDerm, Sol-Gel, Foamix Pharmaceuticals and PolyPid) have not yet made a move towards cannabis. Most of the companies operating in this category were founded by parties outside the pharma industry. The following are some of the most prominent.

Syqe Medical is one of the few startups in cannabis accessories to raise a substantial amount of capital. It develops a special inhaler that provides a fixed dosage of the material. The company has an agreement with Teva Pharmaceutical Industries, which distributes its products in hospitals. It has raised $32 million to date.

Brainose Technologies is a new company founded by Shizim and Nextar Chempharma Solutions, both of which have founded incubators. Brainose develops a new method of delivering cannabis molecules by sniffing through the nose. The V4-Twenty company markets vaporizing products marketed online described by users as “discrete and tailor-made,” in other words, designed mainly for the recreational cannabis market, not the medical one.

Trichome Shell developed technology for producing quasi-toothpicks made exclusively from active cannabis ingredients. The toothpick can be put into a cigarette and smoked. The technology for producing the toothpick can be exported, even if the product itself cannot.

Pharma Companies: Easy to Start Trials

Several companies are developing specific cannabis ingredients into a drug, but a drug has a long and expensive road to travel before it reaches the market, so most investors stay clear of this. At the same time, the sale several weeks ago of Therapix Biosciences, which develops a product for treatment of Tourette Syndrome (TS), for $48 million, shows that cannabinoid magic can also work in this sphere.

The advantage of cannabis over other drugs is that cannabis ingredients can be put into clinical trials more easily, without going through safety trials. It is particularly easy to reach human trials for cannabis in Israel, which is therefore developing an advantage in this sector.

CannRX, a subsidiary of Izun Pharma, located on Har Hahotzvim in Jerusalem, was founded for the purpose of “medicizing” herbal medicine. It recently completed Phase II clinical trials of a product for treatment of the mouth sores of cancer patients. CannRX applies its parent company’s capabilities in mapping the precise composition of the plant and its special extraction methods. CannRX hopes to develop cannabis products that will gain adherents in the health system.

Lumir Lab, a laboratory founded this year in order to estimate the quantities of the various ingredients in a plant for research purposes, has agreed on its first cooperation with Gynica, another Israeli company developing cannabis-based products for women’s health. The company also develops a product named Anandamide – an ingredient found in the cannabis plant that operates receptors in the brain for cannabis.

Cannabics developed a cannabis extract that the company is considering for cancer treatment. The extract showed activity of these ingredients against cancer cells in the laboratory.

Alvit Medical, founded five years ago, developed formulations for medical cannabis (tablets, suppositories, sprays, etc.). It is now merging cannabis growing and production into a stock exchange shell under its control. The idea is for the cannabis unit to operate independently in researching and developing its products. The company recently signed a cooperation agreement for researching and developing products with Bazelet. The companies’ joint products, which will be produced in Bazelet’s new factory, are projected to reach the market in 2019.

GemmaCert can also be included in the pharma category. The company, which develops a home kit for the small grower to test the active ingredients content of a plant, has already raised $5.3 million. Its products are currently marketed to the home market; it is possible that greater precision will be needed in the medical cannabis market. The company was founded on the basis of technology developed by Oded Shoseyov at Hebrew University.

Education & Research: Knowledge Converted to Cannabis

Shizim, a multidisciplinary medical group has a subcontracting company for clinical trials by other companies and by its own companies, founded in its incubator, which is not part of the Israel Innovation Authority’s network of incubators. The group also trains medical executives in both Israel and Poland. Shizim is now trying to apply this approach to the cannabis sector.

It began in training and study, as it also did in the medical sector to some extent. Cann10, one of the group’s companies, started the first training course for developing cannabis products with Technion. Initially, this respectable institution hesitated to enter this sphere, but cannabis became one of its most sought after degree tracks. This model of a degree course and international conference is now being reproduced by Cann10 in other countries.

The company also has a technology incubator in the cannabis field, and wants to establish an incubator outside Israel. It is conducting studies in the sector, and this year launched Cannarit, its own cannabis brand sold at pharmacies. In order to close a circle, the company is now building its own cannabis-growing site.

Another important company that came from the knowledge field and expanded its activity to incubators is Nextar, managed by chairperson and CEO Dr. Orna Dreazen. The company, which develops formulations for drug companies, is in an ideal position to specialize in development of reproducible and effective formulations in the cannabis-based ingredients field. Nextar founded Nextage Innovation, an incubator for cannabis startups interested in getting help from its analytic capabilities and capabilities in building chemical compounds. The incubator has already received its first investment from an Australian concern.

Another concern, iCAN, was founded by CEO Saul Kaye, a partner in several international and Israeli cannabis companies, for the purpose of giving cannabis companies consultation and related services, such as business intelligence and market research, negotiating with potential investors and formulations and clinical trials services. The company also holds an international conference, and has substantial holdings in two startups: CannRX in the formulations segment and Steep Hill in laboratory testing.

Which Israeli companies will succeed cannot be predicted at present: not those developing cannabis-based products, nor those making products tangential to the market, such as manufacturers of accessories for cannabis growing, nor developers of drug delivery systems, nor providers of other services. In the short term, the first group will reach a market with strong demand. In the long term, however, it will be difficult to generate differentiation in it. The second group can already export now, but it is by no means sure that profits on their products will continue to be high just because they are linked to the cannabis industry. Those who succeed in creating something unique in the market – special molecules, delivery systems with added value that cannot be easily imitated, truly unique knowledge about the connection between the plant’s composition and its effect on various diseases – will probably be the ones to stand out in the future cannabis market. Meanwhile, money available for investment in the market is plentiful at the moment. (Globes 19.11)

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11.2 IRAQ: For the Iraqi Prime Minister, a Slew of Economic Challenges

On 10 November, Ahmed al-Hajj posted in Fikra Forum that with economist Adil Abdul-Mahdi as the new Iraqi Prime Minister, he faces the daunting task of guiding the government through necessary economic reform, service quality improvement and reconstruction. Economic issues represent one of the most major challenges in Iraq today, and in order to truly effect change, Adbul-Mahdi must alter a single-source economy, major public debt, weak monetary policy, a fragile banking system and financial corruption. Though overcoming these obstacles is not impossible, the Prime Minister must act quickly and with the full support of both domestic and international forces if he is to change the course of Iraq’s economic system.

Debt and Capital Flight

Perhaps the most immediate challenge is accurately predicting government revenues. With oil making up some 93% of total revenues in the federal budget, Iraq’s economy has become especially unstable in the face of oil price volatility brought about by widespread challenges in the region. Moreover, according to the Parliament’s Financial Committee estimates, oil revenues are consistently overestimated in draft budgets, as the government rarely receives the full amount of projected oil revenues. The unofficial version of the 2019 General Budget estimated that non-oil revenue would cap out at $10 billion, down from $12 billion in 2018. The new prime minister must be especially cautious against overestimating revenue with figures unrepresentative of on-the-ground realities, as this would complicate all subsequent economic planning.

Understanding available revenue is especially vital due to Iraq’s massive public debts. This is an issue with which Abdul-Mahdi is intimately familiar: in 2004, he headed the Iraqi delegation to the Paris Club in an attempt to renegotiate Iraq’s debts, which then amounted to $39 billion. The negotiations were a success, and member states agreed to write off 80% of the country’s debt, reducing the total figure to just $7.8 billion. Yet in subsequent years, Iraq’s public debt crisis has returned and even worsened due to failed economic policies, declining oil prices, and the depletion of the country’s revenues in the war against the Islamic State.

Today, Iraq’s total public debt is estimated at $124 billion, three times as large as when Abdul-Mahdi arrived at the Paris Club almost fifteen years ago. According to the unofficial 2019 draft budget, Iraq will owe $3 billion in interest on loans alone, on top of $9 billion in payment installments this year. At a total of $12 billion, negotiations for debt servicing will present a difficult test for Abdul-Mahdi, especially given Iraq’s limited cash reserves.

As of late 2014, estimates placed these reserves at around $80 billion. However, the collapse of oil prices and increase in state expenditures have drained these reserves to less than half their 2014 numbers. The government’s indirect borrowing from the Central Bank – through its purchase of government securities in accordance with Article 26 of the Federal Central Bank Law – has only exacerbated the issue. The Central Bank announced last month that Iraq’s foreign reserves are at $60 billion.

Economists also question the common practice of foreign currency auction by the Central Bank, through which it maintains a fixed exchange rate. This practice, however, is conducive to financial corruption and capital flight. Foreign currency flight is a particular challenge for Iraq: figures provided by the late Chairman of the Parliamentary Finance Committee Dr. Ahmed Chalabi show that $312 billion has left the country from 2005 to 2014. While the prime minister could limit the outward flow of capital by abandoning fixed exchange rate in favor of a free-floating regime, such a reform would prove difficult since it collides with the vested interests of powerful figures benefiting from the corruption currency auctions allow.

Liquidity Shortfalls

It is equally challenging to translate the reserves that stay inside Iraq into a capital market. The country’s fragile and undeveloped banking sector – considered among the worst in the world – further restricts the wealth-inducing use of the currency actively in circulation. Most citizens do not trust banks, and consequently only a few thousand people per region have bank accounts. Limited reserves have rendered Iraqi banks unable to extend loans to investors who are in turn incapable of contributing to development projects. Even when loans are available, those taking out loans are often forced to pay a broker in order to actually retrieve the borrowed sums.

Neither has the Iraqi stock market been able to carry out its most basic functions of buying and selling bonds and shares. More broadly, most citizens only trust cash in their hands, reverting to electronic banking only rarely. Consequently, the Central Bank is pushed to continue printing paper money. The amount of Iraqi Dinars now totals IQD 60 trillion, with around IQD 39 trillion in circulation and IQD 21 trillion stored in the Central Bank’s vaults. Even so, approximately half of the currency in circulation is practically reserve stocks, stored in households and safes. In effect, more than half of all cash at people’s disposal is outside of economic activity.

This is clear result of a weak federal monetary policy, which has weakened the purchasing power of Iraqi currency. As a result, the Central Bank has committed itself to maintaining the currency’s value by selling dollars in the market and depleting the Bank’s foreign currency reserves, all in order to uphold monetary stability. Some traders try to protect themselves from exchange rate losses by dealing in foreign currencies rather than the local currency to buy and sell certain commodities. Therefore, weak monetary policy and the lack of monetary stability are key factors rocking the Iraqi economy. In order to reverse the current domestic purchasing power, the new Prime Minister must first create a sense of trust in the banking system. Federally mandated reforms structured to stimulate investment and achieve economic growth will go far towards helping in this respect.

A Menu of Options

As is evidenced above, Abdul-Mahdi faces a difficult test if he is to effectively implement economic reform inside Iraq. Nonetheless, the Prime Minister has a number of options available to begin situating Iraq on a path towards economic stability. Here, decisiveness is key: Abdul-Mahdi must quickly implement radical reforms of fiscal, monetary and credit policy, and he must ensure the participation and support of the parliament as well. These internal changes must be coupled with an advocacy of social reform, as trust in a system where Iraqis do not face discrimination because of their religion, denomination, nationality, ethnicity, or gender will also encourage them to engage in Iraq’s economic future.

Any reform, no matter how expansive, must also grapple with the realities of Iraq’s system of financial corruption. Iraq ranks a dismal 169th out of 180 countries on the 2017 Corruption Perceptions Index. Experts have pointed to a number of governmental contracts for oil export and infrastructure projects where billions of dollars have been wasted. Rahim al-Darraji, a member of the Parliament’s Integrity Committee, has confirmed that some $228 billion has been wasted on infrastructure contracts, most of which exist only on paper. The enormous scale of administrative corruption in Iraq has led to a lack of public services, deterioration of infrastructure and industrial and agriculture development. Corruption has understandably eroded trust among Iraq’s public and it is likely that any true reforms must dismantle this system in order to be effective.

In order to move forward on these monumental challenges, Abdul-Mahdi should work with international expectations and recommendations. Iraq should implement strict laws on money laundering and work towards compliance with international standards and commitments. The government should also work with both the International Monetary Fund and the World Bank, as they have stood with Iraq through adversity and played a role in writing off the Paris Club debts and others in 2004.

Finally, the new Iraqi government must abide by international transparency standards and allow international regulatory organizations, civil society organizations, and the media to participate in fighting corruption. Hopefully, these measures can create a sense of trust and confidence between the people and the government by involving non-governmental actors in the process of economic reform. In many ways, Abdul-Mahdi is responsible for ensuring that political actors take responsibility for that which they have always been historically responsible – the economic future of the country. While this is a tall order for Abdul-Mahdi, he may also represent the last chance for reform in Iraq and the overall preservation of the country.

Ahmed al-Hajj is an Iraqi economic expert, member of the Iraqi Federal Parliament, and member of the Governorate Council of Sulaymaniyah. He has published academic economic research in a number of articles and has appeared on a number of television programs. (Fikra Forum 10.11)

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11.3 QATAR: IMF Staff Completes Visit to Qatar

An International Monetary Fund (IMF) team visited Doha from 29 October to 4 November to assess recent economic developments and outlook since the completion of the 2018 Article IV consultation in May. At the end of the visit, the IMF issued the following statement:

“Qatar’s economic performance continues to strengthen. Non-hydrocarbon output grew by about 6% during the first half of 2018, as the economy recovered from the impact of the diplomatic rift and oil prices surged. However, hydrocarbon output fell by about 1.6% during the same period, culminating in overall real GDP growth of 2.3%. Real GDP growth of 2.4% is projected for 2018 as a whole up from 1.6% in 2017. Headline inflation remains subdued. Fiscal and external positions are strengthening, and the central bank’s foreign exchange reserves have increased. Monetary and financial conditions have improved significantly, with banks attracting non-resident flows and were able to reduce reliance on the financial support from the fiscal and monetary authorities. Excises would likely be put in place in 2019.

“The near- to- medium-term outlook for the Qatari economy is benefiting from increased oil prices and prudent macroeconomic policies. We anticipate overall real GDP growth of 3.1% in 2019, with still robust non-hydrocarbon growth and recovery in oil and gas production. Over the course of 2020 – 2023, real GDP growth of about 2.7% annually is projected, underpinned by still significant public infrastructure spending, expansion of liquid natural gas production, and the hosting of 2022 World Cup. The authorities’ plan to introduce a VAT, with an implementation target date towards the end of 2019 or early 2020. This is expected to slightly lift prices upon implementation. Fiscal and external balances will remain in surplus during 2019-2023, supporting additional foreign exchange accumulation by the central bank. Nonetheless, the outlook is subject to downside risks, including the economic and financial impact of escalated global trade tensions, tightened monetary policy stance in the U.S. and increased volatility in global financial markets.

“Despite higher oil prices, Qatar plans to pursue prudent fiscal policy while taking into consideration its associated impact on the economy. The 2019 budget is expected to contain overall expenditure growth, with continued emphasis on allocation to critical sectors (health and education. The current account surplus is projected at about 7% of GDP in 2019. QCB’s foreign exchange reserves are expected to increase further, reaching about $36 billion in 2019.

“Qatar’s banking sector remains sound. Foreign liabilities withdrawn in the immediate aftermath of the diplomatic rift have been partially replaced with greater attention being paid to the diversity of funding sources and deposit maturity structure. Official deposits placed with banks after the rift have been reduced. As higher oil prices and returning foreign liabilities have enhanced banking liquidity, credit to the private sector has been growing at a healthy pace. QCB continues to closely monitor developments in the real estate sector in view of the softening in prices and potential implications for the banking sector.

“Progress with structural reforms continues. The second national development strategy highlights the need for economic diversification. The strategy identifies priority sectors including manufacturing, financial services, and tourism, while emphasizing competitiveness and the role of the private sector. The Private Sector Committee is promoting public-private partnership in areas such as food security, manufacturing, health, and education. (IMF 14.11)

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11.4 SAUDI ARABIA: Fitch Affirms Saudi Arabia at ‘A+’; Outlook Stable

Fitch Ratings on 22 November affirmed Saudi Arabia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘A+’ with a Stable Outlook.

Key Rating Drivers

Saudi Arabia’s ratings are supported by strong fiscal and external balance sheets but weighed down by oil dependence, weak governance indicators compared with ‘A’ category peers and high geopolitical risks.

The fiscal break-even oil price, which we estimate at over $80/bbl, is higher than for many regional peers and above our forecast oil price levels. We forecast the central government deficit at 5.3% of GDP in 2018 (SAR152 billion), from 9.3% in 2017, as sharp increases in oil and non-oil revenue offset resurgent government spending. Underlying fiscal policy has become more expansionary as measured by the expected widening of the non-oil primary deficit in 2018. We expect this to be reflected in a renewed widening of the overall budget deficit to 7.5% of GDP by 2020 as oil prices moderate to our baseline assumption of an average of $57.5/bbl (for Brent). In the recent 2019 pre-budget statement, the medium-term forecast for government spending and revenue is 8%-9% higher than in the Fiscal Balance Program (FBP) update released alongside the 2018 budget. The 2018 FBP update had pushed back the target year for fiscal balance to 2023 from 2020.

The government has taken a number of measures to diversify its revenue base and trim the fiscal deficit. This year started with the introduction of a 5% VAT, a 130% hike to petrol prices, increases to household electricity tariffs as well as an increase in levies on expatriates. These measures contributed to a 48% jump in non-oil revenue in 9M18. We expect the full-year increase in 2018 to be a more moderate 21%, after 38% in 2017.

Some of the budgetary impact of structural non-oil revenue measures is being offset by additional spending to soften their social impact and support growth. The government has introduced means-tested transfers from the new SAR32 billion Citizen’s Account (expected to increase alongside further reforms affecting the cost of living). The 2018 budget also earmarked SAR72 billion of central government spending for a private sector stimulus program focused on infrastructure, SMEs and export financing. Another SAR50 billion stimulus package was announced shortly after the publication of the 2018 budget (to be funded by receipts from last year’s anti-corruption campaign and savings elsewhere).

There are prospects for spending to grow less than in our baseline forecast, helping to reduce the deficit further. Expenditure was 73% of the budget in the first three quarters of 2018, and 69% of the government’s updated fiscal projections. If full-year expenditure ends up being in line with the budget, the deficit could narrow to 2.7% of GDP in 2018. We estimate that an increase of oil prices by $5/bbl over our baseline forecast would lead to a 1.7% of GDP improvement in the fiscal balance.

Amid continued deficits, we expect that the government will continue to issue domestic and international debt. Under our baseline oil price assumptions, we see the central government debt ratio rising from a little over 17% in 2017 to about 34% of GDP in 2020, by which time debt net of general government deposits could turn marginally positive. Our fiscal forecasts imply net financing needs of about SAR176 billion in 2019 and SAR219 billion in 2020. The broader public sector balance sheet will remain a rating strength, underpinned by sovereign net foreign assets of 67% of GDP in 2018 (reflecting government, central bank and pension fund foreign assets less foreign debt).

We assume no proceeds from privatization in 2018-2020. The government’s privatization program unveiled in April this year targets proceeds of SAR40 billion by 2020 from selling or otherwise handing over to the private sector various government assets. The IPO of a 5% stake in Saudi Aramco has been pushed back to at least 2021.

We forecast Saudi Arabia’s current account surplus at 8.3% of GDP ($63 billion) in 2018 after 2.2% in 2017 as a result of a bounce back of hydrocarbon receipts. However, we expect central bank reserves to increase only by a modest $11 billion by year-end amid continued non-resident investments abroad (partly related to the Public Investment Fund). The level of central bank reserves in 2018 will remain exceptionally high at over 24 months of external payments. We expect the current account surplus to narrow by 2020, reflecting a moderation in oil receipts and a recovery in domestic demand, capital spending and imports. The financial account could have some support from a pick-up in inward FDI ($1.7 billion in H1/18 from a low of $1.4 billion in the whole of 2017), inward portfolio equity investment (related to Saudi Arabia’s inclusion in major equity indices) and public sector borrowing.

We expect growth to pick up to 2.2% in 2018 (from -0.9% in 2017) and stay in that range in 2019-2020. The fiscal expansion will accelerate non-oil growth to 1.8% (from 1.1% in 2017), but, in our view, it is still likely to be held back by high domestic uncertainty. Our forecasts incorporate oil GDP growth of 2.7% in 2018 (from -3.1% in 2017) related to continued growth in refining activity and a recovery in oil production. We assume that oil production will stay at its September 2018 level of 10.5 mmbbl/d and do not assume a new OPEC deal to cut output. Structural reforms under the “Vision 2030” program could boost growth over the medium term.

In our view, political risks are high compared with peers and historical norms, due to Saudi Arabia’s prominent role in a volatile region, the country’s increasingly assertive and unpredictable foreign policy and the rapid pace of change domestically. The potential for politics to harm growth, trade and investment has been highlighted by Saudi Arabia’s recent diplomatic rows with Canada and Germany, the international reaction to the murder of Jamal Khashoggi in the Kingdom’s consulate in Istanbul and the ongoing dispute with Qatar. Meanwhile, tensions between Saudi Arabia and Iran remain high over Yemen, Iran’s nuclear program and its influence across the region.

Rating Sensitivities

The following factors could, individually or collectively, trigger positive rating action:

– Fiscal consolidation or an extended rise in oil prices that generate a sustainable fiscal surplus and reverse the decline in the government’s net creditor position.

The following factors could, individually or collectively, trigger negative rating action:

– Failure to reduce the budget deficit and halt the deterioration of the public sector balance sheet; and

– Spill-over from regional conflicts or a domestic political shock that threatens stability or affects key economic policies or activities.

Key Assumptions

Fitch assumes that Brent crude oil prices will average $70/bbl in 2018, $65/bbl in 2019 and $57.5/bbl in 2020, in line with its Global Economic Outlook – September 2018. (Fitch 22.11)

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11.5 ALGERIA: Breaking Algeria’s Economic Paralysis

On 19 November, the International Crisis Group wrote that Algeria’s longstanding need to diversify its economy away from hydrocarbons has gained fresh urgency since oil prices started falling dramatically in 2014. New financial realities have rendered the preceding decade’s high spending unsustainable, rapidly emptying state coffers and increasing the deficit. But despite successive governments’ vows to implement reforms and rebalance state finances, political paralysis has militated against decisive policy. Recent history – memory of the economic recession of the 1980s and the ensuing political instability which led to civil war in the 1990s – hinders government efforts to seek a political consensus on reforms and implement them. Yet a failure to reform could precipitate a new period of instability. To resolve this conundrum, the government should pursue greater transparency and better communication about the economic challenges the country faces, greater inclusivity vis-à-vis socio-economic stakeholders, and a sharper focus on the youth demographic in particular.

Two chief obstacles stand in the way. Politically influential vested interests seek to protect the status quo, which benefits a state-dependent business class. Political factors dampen enthusiasm for a more aggressive approach: memory of the political turmoil and bloodshed that followed austerity measures and political reforms in the 1980s and 1990s lingers. Acknowledgement that generous state spending helped pacify the country in the aftermath of the “black decade” of the 1990s, when as many 200,000 Algerians died in fighting between the state and Islamist groups, has made the government understandably cautious to reverse it. The question of presidential succession and what legacy Abdelaziz Bouteflika, president since 1999 and the architect of national reconciliation, will leave behind looms large. Bouteflika appears intent on running for a fifth five-year term in elections next April, despite his poor health and public calls for him to pass the torch to a new generation, a factor that contributes to a general sense of paralysis.

Despite an increase in revenues in 2018 due to a recovery in oil prices (which might not last), a potential economic crisis could come as soon as 2019. It could thus overlap with tensions surrounding the presidential election (which Bouteflika is expected to win easily should, as expected, he run again) and, beyond that, a looming leadership transition. To stave off a crisis, the government has carried out successive rounds of spending cuts, which will take time to deliver results, and implemented an expansionary monetary policy, which fuels inflation and merely serves to buy the government time without addressing underlying problems. Although officials have outlined a broader agenda of industrial diversification and subsidy reform, among other measures, both local and foreign experts say an overarching strategy for reform is still missing. Entrenched political and business interests have too many incentives against change and are squandering the opportunity to get ahead of the curve of a potential fiscal crisis that, if handled too late, will demand more painful and destabilizing policies.

The political uncertainty surrounding economic policymaking was evident under Prime Minister Abdelmajid Tebboune in 2017, who was ousted after attempting aggressive changes to economic policy. His replacement, Ahmed Ouyahia, is a three-time former prime minister and a pillar of the establishment; what he lacks in novelty he makes up in experience and ability to navigate the government’s murky internal divides. Ultimately, however, any government is limited by the growing paralysis – whether on economic policy or elsewhere – of Algeria’s strongly presidential system, a reflection of Bouteflika’s health and the uncertainties around how his eventual successor will reshape the relationship between political power, the public sector and the private sector.

In time, Algeria will have to make more than marginal technical adjustments to its economic policy. It should seek to renegotiate an implicit social contract between the state and its citizens long constrained by the advantages (and disadvantages) of its oil-based “rentier” economy, namely that the state should provide and the people should abide. Cracks in that arrangement have become more apparent, manifesting themselves chiefly in frequent socio-economic protests across the country. However, since the late 1980s, contestation that expressed the desire for change – mass protests, calls for political reform and various other forms of activism that sometimes resulted in concessions from the state – often generated profound instability and conflict. Nearly twenty years after the end of the civil war of the 1990s, it is time to begin moving away from a model that, for all the stability and peace it brought, increasingly appears unsustainable. (ICG 19.11)

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11.6 MOROCCO: Moody’s Changes Outlook on Morocco’s Rating to Stable, Affirms Ba1 Rating

On 20 November, Moody’s Investors Service (Moody’s) has changed the outlook on the Government of Morocco’s long-term issuer ratings to stable from positive and has affirmed the Ba1 issuer ratings.

Moody’s decision to change the outlook from positive to stable reflects the agency’s view that the pace of fiscal consolidation will be slower than previously assumed, implying that the central government debt/GDP ratio will peak later and at a level that exceeds the median debt ratio of peers at similar rating levels. Lower than expected fiscal space will constrain the government’s capacity to absorb domestic or external shocks in a tightening global financial environment. The slower than expected pace of fiscal consolidation reflects a slight weakening of institutional strength, and specifically policy effectiveness, relative to Moody’s expectations when the positive outlook was assigned.

The affirmation of the Ba1 rating balances the credit challenges posed by comparatively low wealth levels against the demonstrated resiliency of Morocco’s credit profile, supported by the government’s access to relatively deep domestic capital markets that help to shield the government from international capital market volatility. It also reflects the continued expansion of the economy into higher value-added export segments in the automotive and aeronautics sectors, and the renewed build-up in foreign exchange reserves as a backstop to the gradual foreign-exchange liberalization introduced in January 2018.

The foreign and local-currency bond and deposit ceilings remain unchanged. Specifically, the foreign-currency bond ceiling remains at Baa2, the foreign-currency deposit ceiling at Ba2, and the local-currency bond and deposit ceilings at Baa1.

Ratings Rationale

Rationale for the Stable Outlook: Fiscal setback in 2018 and slower than anticipated pace of fiscal consolidation over the next three years diminishes fiscal space and capacity to absorb shocks

Budget execution data for 2018 point to an end-year deficit of 3.8% of GDP against a targeted 3%, resulting from weaker-than-budgeted corporate tax receipts and slower grant disbursements from the Gulf Cooperation Council (GCC) in addition to higher-than-targeted subsidy and investment bills. Moreover, the 2019 budget envisages a broadly unchanged fiscal deficit at 3.7% (excluding privatization receipts) and a slower than previously anticipated pace of fiscal consolidation over the next three years, implying a later and higher peak in the central government debt/GDP ratio at about 67% in 2020 and gradually declining thereafter. This contrasts with Moody’s expectation when the positive outlook was assigned that the debt ratio would peak below 65% at the end of 2016 and decline thereafter.

The budget focuses on social policies and targeted social support programs following public dissent especially in response to higher fuel prices in the wake of the price liberalization in 2015. Taking into account the debt trajectory’s high sensitivity to fiscal overruns, the erosion of fiscal space – as reflected in the higher debt ratio and in the interest/revenue ratio at over 10% – constrains Morocco’s future shock absorption capacity, especially in comparison to sovereigns rated Baa3 and above.

The slower than previously planned consolidation effort in the face of social demands suggests a marginal weakening in institutional strength, and specifically in policy effectiveness, relative to Moody’s expectations when the positive outlook was assigned. The willingness and capacity to articulate and implement credit positive economic and fiscal policies is an aspect of institutional strength that is a characteristic of sovereigns rated Baa3 and above; Moody’s decision to change the outlook to stable reflects in part the rating agency’s somewhat lower assessment of institutional strength than anticipated at the time the positive outlook was assigned in 2017. The current institutional strength assessment nevertheless recognizes the government’s coherent macroeconomic policies and fiscal reforms that have been implemented over the past few years, including the elimination of fuel subsidies, the enactment of parametric public pension reform and the implementation of the organic budget law.

Rationale for the Ba1 Rating: Demonstrated resiliency of Morocco’s credit profile, albeit constrained by comparatively low wealth, high debt burden and low productivity

Morocco’s main credit constraints are its comparatively low wealth levels with GDP per capita at $8,568 (on a Purchasing Power Parity basis) in comparison to Moody’s rated universe, the elevated debt burden which has risen quite materially over the past decade, and the relatively subdued trend growth compared to peers at similar income and development levels. Potential growth is constrained by rigid labor markets, skill mismatches and poor education standards by international comparisons, in addition to the very low labor force participation rate among women. These constraints result in a low productivity performance, making the growth trajectory dependent on continued capital deepening.

Set against those constraints, Morocco’s credit profile has proven quite resilient to changes in the domestic and external environment in recent years. Growth has remained positive in recent years, averaging about 3.5%. Inflation has remained low. The resilience of Morocco’s credit profile also reflects the government’s access to relatively deep domestic capital markets in local currency which shields the credit somewhat from any financial market volatility resulting from tightening international liquidity conditions. Moody’s estimates that the government’s gross borrowing requirements are in the 10-15% of GDP range, most of which is funded domestically. Both the foreign currency and external debt share in total central government debt are around 20%, reducing the debt trajectory’s sensitivity to exchange rate volatility and to adverse investor sentiment shifts.

The main driver of event risk is the banking system, with assets at over 120% of GDP which – while providing an ample funding base for the government in domestic currency – also represents a source of contingent liabilities. The largest banks’ expansion into Sub-Saharan Africa represents a potential source of risk although subject to the strict supervision of Bank Al-Maghrib.

Continued expansion in higher value-added automotive and aeronautics exports supports FX revenue generation capacity

The share of higher value-added exports in the automotive and aeronautics sectors continues to expand, enhancing access to foreign exchange with more limited exposure to commodity price volatility.

Based on Moody’s oil price assumption of $74 per barrel in 2018 and $75 in 2019, the current account deficit is likely to increase to 4.4% of GDP in 2018 and to 4.5% in 2019 from 3.5% in 2017, as expanding exports only partially offset the negative affect of higher oil prices. However, over the longer term, Moody’s expects the continued expansion in the share of renewable energy in electricity production, especially via wind and solar installations, to contribute to reducing Morocco’s high external sensitivity to oil prices.

The foreign exchange reserve buffer at 5 months of goods and service imports as of October 2018 provides an adequate backstop for the gradual foreign exchange rate liberalization introduced in January 2018. The new policy widens the daily trading band around the reference rate, which is pegged to a basket of 60% euro and 40% US dollars, to 2.5% in each direction, from 0.3% previously. Moody’s expects the higher degree of currency flexibility to support Morocco’s price competitiveness and external shock absorption capacity over the longer term.

What Could Change the Rating Up/Down

An upgrade would likely be predicated on action taken to address at least some of the key constraints noted above. That would most likely involve further policy action that ensures that the public debt ratio – including external debt guarantees from state-owned enterprises (SOEs) – is firmly positioned on a downward trajectory, supported by the continued implementation of fiscal and business environment reforms that improve the economy’s non-agricultural growth prospects. Together, such a policy mix would also support an increasingly positive view of Morocco’s institutional strength.

The credit profile’s resilience to fiscal and external shocks in recent years suggests there is limited likelihood of a downgrade in the next few years. That said, continued fiscal deterioration or the materialization of significant contingent liabilities emanating from SOEs or from the banking sector could lead to a downgrade. Similarly, an unforeseen and sustained deterioration in the external accounts would likely be more in line with a lower rating level. (Moody’s 20.11)

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11.7 TURKEY: Turkey & Russia Finish New Gas Pipeline

Jasper Mortimer posted in Al-Monitor on 19 November that Ankara and Moscow have inaugurated a portion of a natural gas pipeline under the Black Sea.

Turkey and Russia marked the completion of a natural gas pipeline under the Black Sea with a short ceremony in Istanbul on 19 November attended by their presidents. “TurkStream is a historic project and we put in a lot of effort to realize it,” President Erdogan said of the twin pipelines that run 930 kilometers (580 miles) from the Russian port of Anapa to the coastal village of Kiyikoy in northwest Turkey. When the onshore work is completed by the end of next year, the pipelines will deliver 31.5 billion cubic meters of natural gas per year.

At a time when US President Trump is scolding European countries for their dependency on Russian energy, Turkey has no qualms about increasing its purchase of natural gas from its big neighbor to the north. “Countries’ decisions on how to obtain natural gas according to their circumstances must be respected,” Erdogan said in a clear reference to Trump. “Pressure, which violates sovereign rights and prevents states from serving their citizens, will benefit no one.”

Turkish Energy Minister Fatih Donmez told the audience in the Istanbul Congress Center that the one pipeline will deliver 15.75 billion cubic meters for Turkey’s own consumption. The other will deliver an equal amount to customers in the Balkans and further afield. “The gas coming from the first pipeline can provide for the consumption of 15 million houses per year,” Donmez said. “We used to get gas via Russia, Ukraine, Romania and Bulgaria. Sometimes we had technical problems on the way but now, with the new pipeline, the distance will be shorter and we do not expect to have any technical difficulties with the supply,” the minister added.

After making short speeches in which they complimented each other, Erdogan and Russian President Putin stood together on the auditorium stage and spoke via video link to the Turkish and Russian chief engineers in the control room where the pipelines come ashore in Kiyikoy. The next stage of the project is to build the overland pipelines to Luleburgaz, a town 65 kilometers (41 miles) to the southwest. In Luleburgaz, the Turkish pipeline will be connected to the national grid, while the other pipeline will proceed either west to Greece or northwest to Bulgaria.

The route of the extension has not yet been determined and it is the decision of the Russian corporate supplier Gazprom. Putin said that after Luleburgaz, the second pipeline would go to “east and southern Europe.” Donmez said Turkey would earn transit fees from the second pipeline.

Putin announced that Russia would build TurkStream after a summit in Ankara in 2014. Gazprom began construction in May last year. The project followed years of tension between Moscow and Kiev over supplies of natural gas to Western Europe via Ukraine.

Russian supplies amounted to 51.8% of Turkey’s total imports of natural gas in 2017, according to the official Anadolu Agency. It is unclear as to how much this percentage will rise when the first TurkStream pipeline comes online as it will replace an existing pipeline.

Jasper Mortimer is a South African-trained journalist who works for France24 TV and GRN. While traveling the world, he was waylaid in the Middle East, married a Turkish woman and settled in Ankara in 2007. He covers the Kurdish issue, the Syrian war and Cyprus. (Al-Monitor 19.11)

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Fortnightly, 12 December 2018

December 12, 2018, 8:23 am

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12 December 2018
4 Tevet 5779
5 Rabi Al Akhar 1440

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Israel Becomes a Member of the FATF
1.2  Israel to Invest Billions to Upgrade Transportation Infrastructure
1.3  The Bank of Israel Commends the Establishment of the Financial Stability Committee
1.4  Israel & Brazil Sign R&D Collaboration Agreement

2: ISRAEL MARKET & BUSINESS NEWS

2.1  Israeli Auto Supplier Plans to Triple Hoosier Workforce in Indiana’s Wayne County
2.2  Israeli Gas Line to Jordan Lauded as Boost for Peace
2.3  Skoda Partners with Three More Israeli Startups
2.4  Israel Aerospace Signs Strategic Agreement with Boeing
2.5  Vietnam Airlines to Launch Tel Aviv – Hanoi flights
2.6  Newater Technology to Acquire AMS Technologies Int. to Expand into the Global Market
2.7  Playtika Buys German Games Company Wooga
2.8  WakingApp Announces a New Round of Funding
2.9  BIRD Energy to Invest $6 Million in Cooperative Israel-U.S. Clean Energy Projects
2.10  InnovoPro Raises $4.25 Million in Round Led by Swiss Retailer
2.11  TAL Education Group Buys Codemonkey for $20 Million
2.12  Jerusalem Leads World Cities in Tourism Growth for 2018
2.13  PepsiCo Completes Acquisition of SodaStream International
2.14  SOOMLA Raises $2.6 Million to Lift the Hood on the Black Box of In-app Advertising
2.15  El Al to Launch Tel Aviv – Las Vegas Flights
2.16  OpenLegacy Raises $30 Million from Worldwide Strategic & Financial Investors
2.17  TechSee Announces $16 Million Series B Led by Scale Venture Partners

3: REGIONAL PRIVATE SECTOR NEWS

3.1  Hyatt Regency Aqaba Ayla Resort Opens as the First Hyatt Regency Hotel in Jordan
3.2  Little Thinking Minds Raises $1.26 Million in Series A
3.3  FORBES Middle East Says COFE App “One of the Top 50 Startups to Watch For”
3.4  Tabeeby Secures $777,000 From Ground One Ventures
3.5  OnCost Cash and Carry Acquires Gulfmart
3.6  UAE’s Mubadala Invests in Leading Russian Fitness Center Brand
3.7  $4 Million in Fake Toyota Parts Seized in Raids Across the UAE
3.8  Dubai-Based Mobile Wallet App Beam Eyes Global Expansion
3.9  Nike Opens Largest Middle East Shop in Dubai
3.10  Competition Heats Up For Cairo’s Ride-Hailing Apps

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1  Dubai Tests New Bus Shelters Powered By the Sun
4.2  UAE Installs Hundreds of Artificial Caves to Boost Fishing Industry
4.3  Reverse Vending Machines to Boost Recycling In Malls Across Turkey by 2021
4.4  Morocco Ranks 2nd in Climate Change Performance Index

5: ARAB STATE DEVELOPMENTS

5.1  Lebanon’s Trade Deficit Widened by 3.93% y-o-y t $12.96 Billion in September 2018
5.2  Lebanon’s Balance of Payments Registered a Deficit of $5.62 Billion by October 2018
5.3  Number of Tourists Visiting Lebanon Rose 5% in October
5.4  Jordan’s Unemployment Rate Rises to 18.6%
5.5  Jordan’s First Nanosatellite Launched
5.6  Jordan’s PM Razzaz Opens Bashir Hospital’s New USAID Funded $25 Million Emergency Building

Arabian Gulf

5.7  Qatar to Leave OPEC and Focus on Gas
5.8  More Than Three Million Cars on UAE Roads
5.9  Dubai Welcomes 11.58 Million Visitors During First Nine Months of 2018
5.10  Dubai South to Host Fish Farm as UAE Scales Up on Aquaculture
5.11  Saudi Arabia Launches Two New Satellites into Space

North Africa

5.12 Fruits, Vegetables & Poultry Push Egypt’s Headline Inflation Down to 15.6% in November
5.13 After Poultry, US Beef to Start Entering the Moroccan Market

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkey’s Annual Inflation Rate Declines to 22% in November
6.2  Turkish Economy Grows by 1.6% in Third Quarter
6.3  Turkish Companies’ Arms Sales Rose 24% Last Year
6.4  Greek Inflation Rises by 1% in November

7: GENERAL NEWS AND INTEREST

ISRAEL

7.1 Fast of the 10th of Tevet‎

REGIONAL

7.2  UAE Cabinet Adopts New Policies to Empower Emirati Women
7.3  Egypt’s Growing Population Reaches 98 Million
7.4  Some 2.6% of Egyptians Had Disabilities in 2017
7.5  Egypt Approves Legalization of 168 New Churches
7.6  Greek Children Among the Most Overweight in Europe

8: ISRAEL LIFE SCIENCE NEWS

8.1  WeedMD Exports Cannabis Genetics to Israel’s Pharmocann
8.2  OWC Reports Progress in Clinical Trials for Ointment Care for Skin Diseases
8.3  Cannabics Files New Provisional Patent Application for Magnetic Targeting of Cannabinoids
8.4  Hadassah & IBM Establish Digital Health Accelerator
8.5  EZbra Breast Dressing Makes US Debut at Premier Aesthetic Surgery Conference
8.6  CLEW & UMass Memorial Medical Center Bring Predictive Analytics to Tele-ICUs
8.7  NRGene Announces Expanded Licensing Agreement with Bayer for the GenoMAGIC Platform
8.8  Phibro Animal Health Acquires Fish Vaccine Business of KoVax
8.9  Leviticus Cardio Announces Success of Groundbreaking Six Month Chronic Animal Study
8.10  CollPlant’s Vergenix STR Demonstrates Significant Clinical Improvements in Tennis Elbow
8.11  Successful First in Humans for ZygoFix’s Spinal Facet Joint Fixation System
8.12  dayzz Launches Personalized Sleep Training App Based on Big Data Analysis

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Silverfort’s First Holistic AI-Driven Authentication Engine for Securing Corporate Identities
9.2  eyeSight and Exsun Partner to Bring Life-saving AI Vision to China’s Trucking Industry
9.3  K2 OEMs Safe-T Data’s Software Defined Access to Securely Connect Cloud Services
9.4  Ecclesiastical Insurance Selects Sapiens’ Property Insurance Suite as Its New Core Platform
9.5  RFOptic Launches Its Latest Generation of 40GHz RFoF and ODL Solutions
9.6  SafeRide Technologies Joins GENIVI Alliance to Help Ensure Vehicle Security
9.7  BetterTrade.co – Tech for Traders: Artificial Intelligence to Predict Market Reaction
9.8  Syte Partners with Farfetch to Power Their New ‘See it, Snap it, Shop it’ Feature
9.9  Karamba Collaborates with Ficosa to Secure Smart Mobility Against Cyberattacks
9.10  Mellanox Ethernet Adapter Facilitates High Performance Network Solutions at Alibaba
9.11  Vayyar Launches New mmWave 3D Imaging System on a Chip (SoC) Evaluation Kit
9.12  Tracxpoint Signed a Major Agreement to Deploy its Artificial Intelligence Cart at CONAD
9.13  Finscend Wins Multiple Accolades at MoneyLIVE
9.14  Guardian’s Advanced Sensor Technology Now Helps Keep Driver’s Attention on the Road

10: ISRAEL ECONOMIC STATISTICS

10.1  UN Finds Wages in Israel Rising Faster than World Average
10.2  Israeli Startups Raised $600 Million in November
10.3  Israeli Home Sales Continue to Fall in Third Quarter

11: IN DEPTH

11.1  ISRAEL: A New Phase in Israel-Gulf Relations
11.2  JORDAN: Anger Simmers Again In Jordan Over Controversial Legislation
11.3  BAHRAIN: Bahrain ‘B+/B’ Ratings Affirmed; Outlook Remains Stable
11.4  EGYPT: Egypt Grapples With Economic Decisions Amid High Inflation Rates
11.5  TURKEY: Turks Cannot Pay Back Lavish Consumer Debts
11.6  TURKEY: Will China buy Turkey on the Cheap?
11.7  CYPRUS: IMF Executive Board Concludes 2018 Article IV Consultation with Cyprus

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel Becomes a Member of the FATF

On 10 December, Israel became a full member of the FATF with immediate effect, following the publication of its mutual evaluation report. Israel became an observer to the FATF in February 2016 and since then it has already been closely involved in the work of the FATF through its participation in the FATF-style regional body MONEYVAL. Since the start of its observer status in February 2016, Israel has worked to meet the requirements for full membership of the FATF, which include undergoing a successful mutual evaluation, which it has now done.

Israel has undergone a rigorous assessment of its measures to combat money laundering and terrorist financing. During this demanding process, the country demonstrated its commitment to protect the integrity of the financial system. Israel has established a robust anti-money laundering and counter terrorist financing framework that is achieving good results in identifying and responding to the risks the country is facing.

At the October 2018 Plenary, delegates discussed and adopted the joint FATF/MONEYVAL mutual evaluation report of Israel. In line with FATF’s procedures, the report underwent a quality and consistency review before publication on 10 December. With the publication of its mutual evaluation report, Israel became the 38th member of the FATF. (FATF 10.12)

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1.2 Israel to Invest Billions to Upgrade Transportation Infrastructure

To unclog the developed world’s most congested roads, the Netanyahu government will partner with private contractors and banks, both Israeli and foreign, marking a shift in policy after a series of transport projects were criticized for delays and mismanagement. Finance Ministry Accountant General Hizkiyahu, who oversees government spending, said the infrastructure push could double investment to some $16 billion a year. Projects like a Tel Aviv subway, expanding Jerusalem’s light rail system and construction of highways and toll roads are drawing interest from banks and global contractors.

Israel is a high-tech powerhouse but years of underinvestment and bungled state management have left its transport network lagging. Road traffic density, measured by the number of vehicles per kilometer of road, is three times the average among the 36 industrialized countries of the OECD. Road users lose on average an hour a day in traffic congestion, a hit to productivity that costs the economy about 1.5% of the annual GDP, according to the IMF. That is valued at some $5 billion. The new strategy, officials said, relies on the private sector to deliver efficiency. Until now the government has preferred to finance most projects through the state budget, giving it more control and access to cheaper financing than the private sector.

Last month, Israel chose Italy’s Impresa Pizzarotti and local engineering firm Shapir to build, fund and operate a new entry road into Jerusalem for more than $260 million. Bids for the $2.7 billion expansion of Jerusalem’s light rail will be taken in the first quarter of 2019. The Finance Ministry has already screened groups that include Canada’s Bombardier and Greece’s GEK Terna.

With the $4.6 billion first line of the Tel Aviv metro delayed and over budget, the next two lines, a combined investment of $7.6 billion, will be built in partnership with the private sector. Bidding is open until the end of January.

Israel says it will now consider public private partnerships, or PPP, for all projects over $67 million. Foreign banks are studying the market, with many willing to participate in a syndicate of lenders but not yet as arrangers. With only a limited number of Israeli institutional investors able to handle big projects, the sector is seeing growing interest from banks in Germany, Italy and Japan. Deutsche Bank tested the waters a few years ago when it helped finance some of the cross-Israel toll highway. (IH 29.11)

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1.3 The Bank of Israel Commends the Establishment of the Financial Stability Committee

The Bank of Israel commended the legislative amendment that was passed by the Knesset on 26 November, which established the Financial Stability Committee headed by the Governor of the Bank of Israel. This step, which the IMF recommended several years ago and which the Bank of Israel has worked consistently to carry out, is particularly important in view of the financial system reforms being formulated. The numerous participants in the credit market and the division of responsibility among the various regulators require a view of the overall system and close coordination among regulators. This is one of the lessons from the global crisis, with the ultimate contagion of the financial risk that materialized in certain financial institutions to the overall system in the US and other economies. The establishment of the Committee is an important to maintain financial stability and serves the economy.

In accordance with the law, the Financial Stability Committee members will be the Governor of the Bank of Israel (who will serve as Chairperson), the Director General of the Finance Ministry (alternate Chairperson), the Deputy Governor, the Finance Ministry’s Accountant General, the Supervisor of Banks, the Commissioner of Capital Markets, Insurance, and Savings, the Head of Payment System Oversight at the Bank of Israel, and the Israel Securities Authority Chairman. The Head of the National Economic Council will serve as an observer on the Committee. (BoI 27.11)

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1.4 Israel & Brazil Sign R&D Collaboration Agreement

On 10 December, the Israel Innovation Authority and the Brazilian Agency for Industrial Research and Innovation (EMBRAPII) announced the establishment of a new partnership that would see the two countries cooperate on technological innovation and industrial R&D. According to the memorandum of understanding, the collaboration between Israel and Brazil will promote activities in each country’s respective industrial sector, deepen cooperation in the fields of science and technology and facilitate specific projects between entities toward innovative processes and products. Both countries allocated a budget of $5 million over the next five years for the initiative which issued a first call for proposals late last month. The program will support large-scale collaboration projects in the fields of IoT, life sciences, energy, and agriculture.

Israel and Brazil are leaders in many rapidly advancing fields such as IoT, life sciences, energy and agriculture, and within these fields there are a great number of opportunities for collaboration between Israeli and Brazilian companies. This agreement is an important first step on the path of technological cooperation, and we envision an increase in joint Israeli-Brazilian technological collaboration in the coming years. (IIA 10.12)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Israeli Auto Supplier Plans to Triple Hoosier Workforce in Indiana’s Wayne County

Omen USA, a subsidiary of the Israel-based Omen Casting Group and a manufacturer of aluminum parts for the automotive industry, announced plans to expand its manufacturing operations in Richmond, Indiana, creating up to 200 new jobs by 2022. Indiana Governor Holcomb met with Israeli government officials and business executives like Omen Casting Group Owner Ben-Haim in Tel Aviv last spring to show the state’s appreciation for their contributions to the state.

Omen USA will invest more than $15 million to increase its production in Wayne County, expanding its 76,000 sq. ft. facility by an additional 21,000 sq. ft. and adding new production lines. The company, which announced plans in 2016 to locate its first North American operations in Indiana, plans to start work on the addition next spring in order to meet growing demand from automotive original equipment manufacturers in the U.S. and Germany for its aluminum drivelines, steering components and oil pumps. The company, which employs 100 associates in Indiana, plans to begin hiring for all levels of manufacturing positions in the spring of 2019.

Omen Casting Group, which is headquartered in Kibbutz Hatzor, Israel, was established in 1946 and now has operations in Israel, Portugal and Indiana. The company produces aluminum parts primarily for the automotive industry, providing steering, engine and driveline needs to manufacturers located across the U.S., Mexico, South America, Europe and Asia.

The Indiana Economic Development Corporation offered Omen USA up to $1.6 million in conditional tax credits based on the company’s job creation plans. These tax credits are performance-based, meaning until Hoosiers are hired, the company is not eligible to claim incentives. The Economic Development Corporation of Wayne County will provide a $237,000 general purpose grant for the company to use to offset expenses in building improvements, the purchase of new equipment or for the training of new employees. Omen USA will also seek real and personal property tax abatement.

Omen USA is one of eight Israeli business establishments with operations in Indiana, joining companies like Resin Home Design Products, ICL Performance, MCP USA, Taditel Automotive Electronics and Polyram Compounds. Together, these firms employ more than 500 Hoosiers around the state.

The Indiana Economic Development Corporation (IEDC) is represented in Israel by Atid, EDI, a Jerusalem based business consulting firm and it was through EDI’s efforts that this project was brought to Indiana. (IEDC 10.12)

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2.2 Israeli Gas Line to Jordan Lauded as Boost for Peace

Work on the natural gas pipeline running from Israel to Jordan is expected to conclude in the coming weeks, allowing for Israeli gas to be pumped into the Hashemite Kingdom and potentially from there to other countries in the region. In late September 2016, Israel and Jordan signed a landmark 15 year, $10 billion natural gas deal. Work on the pipeline is headed by Israel Natural Gas Lines. The project is expected to go online in late 2019, coinciding with the expected date that Israel’s Leviathan offshore natural gas field, which is slated to feed the pipeline, is also to become fully operational.

The work aims to both double the length of an existing pipeline running inside Israel along its border with Jordan, and add a new line running directly through the two countries’ mutual border. The plans are to extend the existing pipeline by some 32 kilometers (19 miles), essentially doubling it. The new, additional pipeline is expected to stretch across 23 kilometers. (IH 10.12)

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2.3 Skoda Partners with Three More Israeli Startups

Skoda’s Digilab Israel in Tel Aviv has formed partnerships with three more Israeli startups: Chakratec, Anagog and UVeye. Digilab was opened last year by Skoda in partnership with Champion Motors.

Chakratec has developed an innovative kinetic energy storage technology, with unlimited high-power charge and discharge cycles. In July 2018, Skoda acquired a stake in Anagog, which processes data from more than 100 smartphone apps with up to 10 million monthly active users by using Artificial Intelligence (AI) and then works out mobility patterns. With the use of this technology, Skoda AUTO DigiLab wants to offer services such as recommendations for parking spots. In cooperation with Anagog, Skoda AUTO wants to provide best dealership experience and personalized insurance to its customers.

Skoda is also collaborating with UVeye, which uses a 360-degree camera to scan the body, undercarriage and tires for damage and anomalies, producing a high-resolution 3D image within seconds. UVeye has significant potential to ensure vehicle safety in the vehicle return process at dealers, maintenance, car rental or leasing companies and is soon to be operating in the Czech Republic. (Globes 02.12)

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2.4 Israel Aerospace Signs Strategic Agreement with Boeing

On 28 November, Israel Aerospace Industries announced it signed a strategic agreement with Boeing, setting out principles of cooperation between the two companies in commercial and military aviation, in Israel and other markets around the world. According to the agreement, Boeing is expected to provide IAI with work packages totaling potentially billions of shekel, relating to potential future Boeing sales of defense products to Israel, including new tanker aircraft. The agreement also covers cooperation in other transactions Boeing expects to participate in worldwide. The term sheet agreement reflects Boeing’s commitment to the State of Israel and its activities here. The Israeli Air Force is evaluating the procurement of Boeing platforms that could total more than $10 billion, including the sale of fighter aircraft, helicopters, and tanker aircraft. IAI and the State of Israel have already cooperated for many years with Boeing in the development and manufacture of the Arrow system, production of parts for commercial airplanes, and a wide array of service activities. (IAI 29.11)

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2.5 Vietnam Airlines to Launch Tel Aviv – Hanoi flights

Vietnam Airlines is planning to launch two weekly flights between Tel Aviv and Hanoi starting September 2019. Sources inform “Walla” that flights will be scheduled for two months starting from the Jewish holidays and the Asian airline will then assess whether it is economically worthwhile to continue the flights. “Walla” reports that Vietnam Airlines CEO Thanh Tri Duong recently visited Israel the beginning of November for meetings about the inauguration of flights when he also signed a code-sharing agreement with El Al Israel Airlines. Israel’s Ambassador to Vietnam said his embassy had been contacted by Vietnam Airlines regarding what takeoff and landing time slots they could be allocated by Israel’s Civil Aviation Authority. (Globes 29.11)

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2.6 Newater Technology to Acquire AMS Technologies Int. to Expand into the Global Market

Yantai, China’s Newater Technology, a service provider and manufacturer of membrane filtration equipment and related hardware and engineered systems that are used in the treatment, recycling and discharge of wastewater, announced it acquired 100% of the equity of AMS Technologies. The Company was listed on the Nasdaq Capital Market in 2017 and believes this is a significant step to expand into the global market.

NEWA acquired 100% equity of AMS, a company that develops and markets chemically and thermally stable and resistant ultrafiltration and nanofiltration special membrane materials used in wastewater treatment. The total contract amount for this acquisition is approximately $13.5 million. The Company will acquire AMS with its working capital. The acquisition agreement was signed on 28 November 2018. All the due diligence has been completed and closing of the transaction is expected to occur in March 2019.

Or Yeuda’s AMS develops and markets chemically and thermally stable ultrafiltration (UF) and nanofiltration (NF) membranes. These membranes represent a technological breakthrough through significant improvement in the economics of inorganic compounds recovery. AMS offers a complete product line of extreme acid, alkaline, solvent, thermal and pressure stable membranes. Its core technology adds significant value in various applications and industries through cost savings, improved recovery rates, greater acid/alkali/solvent supply reliability and clear environmental benefits. (Newater Technology 01.12)

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2.7 Playtika Buys German Games Company Wooga

Berlin-based casual games maker Wooga has been acquired by Playtika. With the move, half of Playtika’s titles will now be casual games, as the company seeks to diversify into new genres. Terms of the acquisition were not disclosed, but Venturebeat reports that the purchase price is north of $100 million. Wooga recently restructured after unveiling a new strategy with a focus on narrative-driven games, resulting in a round of lay-offs.

The company still has 180 employees, which will be joining Playtika. Wooga’s founder and CEO Jens Begemann will continue to lead the games studio out of Berlin. Wooga was backed by the likes of Balderton Capital, Highland Capital Partners, Holtzbrinck Ventures and Tenaya Capital.

Herzliya’s Playtika was founded in 2010 and eleven months later, it was bought by US company Caesars Interactive Entertainment for $130 million, and in July 2016 is was again sold, this time to a private equity group from China led by Giant Interactive, for $4.4 billion. The company’s management headquarters nevertheless remain in Israel, and it employs some 500 people in the country, about a quarter of its global workforce. Most of its development work, however, is carried out at sites in Eastern Europe. Development in Israel focuses on data use and artificial intelligence tools. (Playtika 03.12)

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2.8 WakingApp Announces a New Round of Funding

WakingApp has secured $2.6M in funding led by Globis Capital Partners. This is in addition to the $9.5M in capital raised during their 5-year history. This comes on the heels of Vuzix’s signing last month of a multi-year strategic partnership with WakingApp. In addition to Vuzix also participating in the recent funding round, WakingApp will support Vuzix’s augmented reality (AR) Smart Glasses products, and Vuzix will distribute copies of limited term licenses of the ENTiTi AR Creator platform to Vuzix developers and customers.

Rosh HaAyin’s WakingApp has created an Augmented Reality (AR) toolset designed for and used by leading app design studios, social media app developers, architecture and construction firms. The WakingApp creator has been designed with the power to rapidly produce outstanding AR experiences as stand-alone apps or integrated into existing mobile apps (SDK). WakingApp has developed one of the industry’s most powerful 3D engines with physical based rendering (PBR) that has been specifically optimized for mobile. WakingApp has also developed ENTiTi 3.0 with image and QR tracking. (WakingApp 03.12)

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2.9 BIRD Energy to Invest $6 Million in Cooperative Israel-U.S. Clean Energy Projects

The U.S. Department of Energy (DOE) and Israel’s Ministry of Energy (MoE) along with the Israel Innovation Authority have selected seven clean energy projects to receive $6 million under the Binational Industrial Research and Development (BIRD) Energy program.

BIRD Energy began in 2009 as a result of the Energy Independence and Security Act of 2007. Since then, BIRD Energy has funded 43 projects, with a total investment of about $34 million, including the seven selected projects announced today which are valued at $12.4 million. Each project is conducted by a U.S. and an Israeli partner. Selected projects address energy challenges and opportunities of interest to both countries and focus on commercializing clean energy technologies that improve economic competitiveness, create jobs and support innovative companies. The seven approved projects are:

-Beam Semiconductors (Rehovot, Israel) and BannerSolar (Eagle, Idaho) will develop a 60 GHz active phased array module for wireless gigabit applications with autonomous solar power supply & storage.

-Brightmerge (Jerusalem, Israel) and Introspective Systems (Portland, Maine) will develop and test dynamic grid pricing with edge load responsive device control.

-mPrest Systems (Petah Tikva, Israel) and Southern Company (Atlanta, Georgia) will develop integrated primary and secondary volt VAR control and conservation voltage reduction for the distributed grid.

-Nostromo (Even Yehuda, Israel) and Centrica Business Solutions US (Bellevue, Washington) will develop IceBrick – shifting the electricity grid’s peak demand using disruptive ice-battery technology.

-OneOPI (Herzliya, Israel) and Presidio (Albany, New York) will develop an automated simulation system and service for intelligent microgrid systems.

-RazorLabs (Tel Aviv, Israel) and Exacter (Columbus, Ohio) will develop an AI based grid resiliency forecasting system.

-Technion Research and Development Foundation (Haifa, Israel) and Primus Power (Hayward, California) will develop a high energy density grid-scale storage battery.

Projects that qualify for BIRD Energy funding must include one U.S. and one Israeli company, or a company from one of the countries paired with a university or research institution from the other. The companies must present a project that involves innovation in the area of energy and is of mutual interest to both countries. BIRD Energy has a rigorous review process that selects the most technologically meritorious projects along with those that are likely to commercialize and have significant impact. Qualified projects must contribute at least 50% to project costs and commit to repayments if the project leads to commercial success. (BIRD F 03.12)

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2.10 InnovoPro Raises $4.25 Million in Round Led by Swiss Retailer

InnovoPro has raised $4.25 million in a funding round led by the investment arm of Migros, Switzerland’s largest retailer, and Jerusalem Venture Partners (JVP) founder and chairman Erel Margalit. Additional investors included Bits x Bites, China’s first venture capital fund that invests in food technologies, and Ran Tuttnauer, former owner of the Tuttnauer Group, ID Capital from Singapore and Yara ventures from Spain.

InnovoPro, which developed a 70% protein concentrate from chickpeas, said it will use the new capital to scale its production, support sales and expand into strategic global markets. InnovoPro has created sustainable food products made from the plant-based protein, including dairy and meat alternatives, snacks such as dairy-free pudding and ice cream, and condiments like egg-free mayonnaise. Its products are non-GMO, non-allergenic and gluten-free.

The market for plant-based protein is estimated today at $40 billion. However, InnovoPro is targeting the even-larger, $900-billion market of meat, fish and poultry, which is searching for new opportunities for providing protein-rich products. The first products based on chickpea proteins are being developed and will be launched in 2019.

Rishpon’s InnovoPro is committed to bringing unique plant-based protein ingredients to the global food market in order to create nutritious, tasty, safe, and sustainable food products. With an excellent nutritional profile, “free from” properties and wide usability in the food industry, InnovoPro’s chickpea protein is the best choice for the growing plant-based protein market. InnovoPro has been recognized as an innovator of disruptive technology in the food industry. (InnovoPro 04.12)

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2.11 TAL Education Group Buys Codemonkey for $20 Million

Nasdaq-listed, Beijing-headquartered educational service company TAL Education Group has bought Israeli game-based learning startup Codemonkey Studios Inc. for $20 million. TAL Education Group is an education tech company running learning centers in more than 40 cities in China which serve more than 2.3 million students. TAL also operates an online learning platform with more than 18 million users. The company is traded with a market capitalization of $16.7 billion.

Tel Aviv based Codemonkey develops game-like computer programming tutorials for children and markets its products in Israel, the U.S. and ten other countries in Asia, Europe and South America. In Israel, its tutorials have been incorporated into the national education system, with 250,000 students learning to code through the Codemoneky platform each year. Founded in 2013, the company raised $2 million to date. Codemonkey employs a team of 15 people. (Codemonkey 04.12)

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2.12 Jerusalem Leads World Cities in Tourism Growth for 2018

Jerusalem is poised to become the world’s leading city in tourism growth, according to a new report by leading market research firm Euromonitor. According to the report, the number of tourists around the world will hit 1.4 billion in 2018, an increase of 5% over last year. Jerusalem is set to lead in growth, with an expected 37.5% following a more modest increase of 32% in 2017. According to the report, Jerusalem owes its increasing popularity to relative stability and a strong marketing push. The Indian cities of Chennai and Agra took second and third place on the list, with 30.4% and 24.3% increase in growth, respectively.

The increase in tourism to Jerusalem is due to in part to a global marketing effort by the Tourism Ministry. According to the data, the ministry’s decision to offer special Black Friday discounts led to a 20% increase in inquiries to travel agents about purchasing plane tickets to Israel. The Black Friday digital campaign received over 157 million views, over 500,000 clicks and saw some 70,000 inquiries from points of sale about purchasing a ticket to Israel. Some of the deals offered on tourism to Israel on Black Friday included flights from Germany to Eilat for €9.90 ($11.20). Discount flights were also on offer from Vienna and London to the southern resort city. Tourism Ministry officials expect the 4 millionth tourist to arrive in Israel in 2018 to arrive this month. Israel is also expected to see Israel break its previous record for inbound tourism in 2018. (IH 05.12)

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2.13 PepsiCo Completes Acquisition of SodaStream International

PepsiCo announced that it has completed its acquisition of SodaStream International, as previously announced, acquiring all outstanding shares for $144 per share. The transaction is another step in PepsiCo’s Performance with Purpose journey, supporting health and wellness through environmentally friendly, cost-effective and fun-to-use beverage solutions, and the company’s Beyond the Bottle strategy to form a more sustainable beverage ecosystem. PepsiCo’s strong research and development capabilities, global reach, design and marketing expertise, combined with SodaStream’s differentiated and unique product range position SodaStream for further expansion and breakthrough innovation.

Israel’s SodaStream is the #1 sparkling water brand in volume in the world and the leading manufacturer and distributor of Sparkling Water Makers. They enable consumers to easily transform ordinary tap water into sparkling water and flavored sparkling water in seconds. By making ordinary water fun and exciting to drink, SodaStream helps consumers drink more water. Sparkling Water Makers offer a highly differentiated and innovative solution to consumers of bottled and canned carbonated soft drinks. (PepsiCo 05.12)

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2.14 SOOMLA Raises $2.6 Million to Lift the Hood on the Black Box of In-app Advertising

SOOMLA announced a Series A investment of $2.6 million led by JAL Ventures with additional funds coming from existing investors. The financing will be used to fund SOOMLA’s continued global expansion and for further investment in its proprietary technology platform.

Founded in 2012 in Tel Aviv, SOOMLA provides needed visibility into in-app advertising, helping mobile app publishers be data driven in areas they previously could not. Using its innovative ad tracking technology, SOOMLA delivers granular, impression level data, on more than 30 ad-networks and gives app publishers the flexibility to connect the data to their internal data warehouse as well as to a growing number of 3rd party analytics and attribution platforms. SOOMLA is already working with the top mobile app publishers and have analyzed more than 500M unique users in 180 countries since the beginning of the year.

Founded in 2012, SOOMLA is a market leader in monetization measurement. Its technology gives mobile app publishers insight into the revenue they are generating from advertising as well as critical visibility into what ads are placed in their app. The platform makes these insights accessible to customers specifically by tracking revenue per user, per segment, per cohort and per traffic source. SOOMLA is used by 8 of the top 50 game publishers, enabling them to make better monetization decisions. (SOOMLA 04.12)

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2.15 El Al to Launch Tel Aviv – Las Vegas Flights

El Al Israel Airlines is to launch a weekly non-stop flight from Tel Aviv to Las Vegas starting 14 June 2019. The new route will earn El Al the €250,000 grant paid by the Ministry of Tourism to carriers who inaugurate a direct route to a destination not yet serving Israel. Return fares on the new route begin at $1,300. Fares for a one-way ticket from Tel Aviv to Las Vegas on June 21 or 28 are $668 but jump to $1,000-1,400 on other dates. A single fare return from Las Vegas to Tel Aviv cost $630 on 3 July but can rise as high as $1,300 on other dates. The flights will operate using the recently delivered Boeing Dreamliner aircraft with tourist, premium and business class options.

The weekly flights will leave Ben Gurion airport on Friday mornings at 7 am and arrive at 11.15 in Las Vegas after a 14 hours 15 minutes flight. The return flight will leave Las Vegan on Saturday nights at 23.45 and arrive in Israel on Sunday at 22.15 after a 13 hours 30 minutes flight.

El Al also announced that it will launch its direct flights from Tel Aviv to San Francisco starting 13 May 2019. It will compete on the route with United Airlines, which operates daily flights between Tel Aviv and San Francisco. With the start of flights to Las Vegas and San Francisco, El Al will be operating direct flights to seven destinations in North America – New York (JFK and Newark), Boston, Miami, Toronto and Los Angeles as well as Las Vegas and San Francisco. (Globes 10.12)

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2.16 OpenLegacy Raises $30 Million from Worldwide Strategic & Financial Investors

OpenLegacy has closed a funding round of $30 million. The investment will further strengthen its premier market position of enabling established enterprises to go truly digital. OpenLegacy is mission critical for organizations with complex legacy environments, as experienced by its global tier 1 customers. It helps organizations quickly launch digital innovations by automating and standardizing the process of creating digital services using microservices-based APIs. With OpenLegacy, legacy systems can be integrated, leveraged, and extended in a fraction of the time compared to other solutions, all without changing the underlying systems.

The funding round brings together major global investors with added value in both funding and promoting the technology. Round participants include: Silverhorn Investment Advisors (lead investor); CommerzVentures, the VC unit of Commerzbank; C. Entrepreneurs, the VC created by BNP Paribas Cardif with Cathay Innovation; Leumi Partners; O.G. Tech Ventures – Eyal Ofer’s VC arm; Prytek-GFS Group; and RDC, a major investor from the seed stage, which is a joint venture between Elron and Rafael.

Petah Tikva’s OpenLegacy helps organizations quickly launch innovative digital initiatives by automating and standardizing the process of creating digital services. With OpenLegacy’s microservice-based APIs, even the most complex organizations can accelerate the delivery of new innovations without changing their back-end systems. OpenLegacy is a flagship company of “The Floor,” a global innovation platform, in partnership with leading banks such as HSBC, Santander, RBS, Intesa SanPaolo, Deutsche Bank, and SMBC alongside Intel, and Accenture. (OpenLegacy 28.11)

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2.17 TechSee Announces $16 Million Series B Led by Scale Venture Partners

TechSee closed a $16 million Series B funding round to further accelerate its global business growth and strengthen its breakthrough computer vision and augmented reality-powered visual customer assistance platform. The investment round is led by Scale Venture Partners, with participation of existing investors including Planven Investments, OurCrowd, Comdata Group and Salesforce Ventures.

TechSee bridges the visual gap in customer experience by enabling consumers to receive augmented reality-based visual guidance through their smartphones from a virtual technical assistant or a human agent. The TechSee Live platform delivers an interactive visual customer experience along the customer journey – from purchase, to product unboxing, usage, guidance and support. The platform not only enhances customer experience, but also enables scalable customer operations, increased sales and reduced cost of service.

As the pioneer in visual customer engagement, TechSee has established itself as the de-facto market leader. The new capital will help the company widen its competitive gap by fueling ongoing product development for its breakthrough platform, expanding marketing and sales efforts in the U.S. and other key markets, and accelerating rapid corporate growth to support customer demand.

Herzliya’s TechSee revolutionizes the customer experience domain by providing the first intelligent visual engagement solution powered by artificial intelligence and augmented reality. TechSee empowers enterprises across the globe to deliver a better customer experience and reduce costs. TechSee is led by industry veterans with years of experience in mobile technologies, computer vision, machine learning and big data. (TechSee 11.12)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Hyatt Regency Aqaba Ayla Resort Opens as the First Hyatt Regency Hotel in Jordan

Chicago’s Hyatt Hotels Corporation announced the official opening of Hyatt Regency Aqaba Ayla Resort, Jordan’s first Hyatt Regency hotel and second Hyatt-branded property, joining Grand Hyatt Amman. Hyatt Regency Aqaba Ayla Resort is the debut hotel to open within the prestigious Ayla development on the northern shores of Aqaba, marking an important step for Hyatt as it grows its brand footprint of resort hotels in the region. Each of the hotel’s 286 guestrooms and suites offer picturesque views of the azure lagoons, Aqaba’s towering mountains and the surrounding marina. Guests can take advantage of a myriad of retail, dining and entertainment venues and enjoy access to Jordan’s first 18-hole golf course. (Hyatt Hotels 01.12)

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3.2 Little Thinking Minds Raises $1.26 Million in Series A

Jordan-based Little Thinking Minds has raised $1.26 million in a Series A round led by Egypt’s Algebra Ventures with participation from Mindshift Capital and Al Turki Group. The education technology (edtech) company creates platforms and Arabic content aimed at school children across the Middle East and North Africa (Mena) region. Founded in 2004, it has launched several ‘edutainment’ apps and videos focused on early literacy and numeracy. The company’s digital platforms are currently used by more than 200 schools and 80,000 students across Mena. The investment will be used to expand Little Thinking Minds’ product portfolio and improve its current platform. (Various 09.12)

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3.3 FORBES Middle East Says COFE App “One of the Top 50 Startups to Watch For”

COFE App, an online coffee-centric marketplace, was the only Kuwait-based startup listed as one of the “Top 50 Startups to Watch in the Arab World” by FORBES Middle East. Conceptualized in Kuwait and developed in Silicon Valley, the app connects coffee house chains and specialty coffee roasters with coffee lovers through a seamless, easy and efficient user-interface. Created by a multinational team of technology professionals who are also coffee enthusiasts, the app has quickly penetrated the market. COFE App has carved itself a niche among coffee lovers and early adopters in a marketplace where coffee is an essential part of daily life and local culture.

The startup scene in Kuwait has witnessed a rise in venture capital (VC) investments led by local, regional and international investors. The recent $100 million acquisitions of local tech startups, such as Talabat and Carriage by Berlin-headquartered Rocket Internet/Delivery Hero, reflects the strength and potential of Kuwait’s startup scene. COFE App was Beta launched in February 2018 in Kuwait, and will soon be available in other countries. (COFE App 02.12)

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3.4 Tabeeby Secures $777,000 from Ground One Ventures

Tabeeby, a Kuwait-based social health network, secured a strategic investment of $770,000 from Ground One Ventures, a private investment company based out of United Kingdom. Tabeeby connects patients, doctors and health care providers across GCC anytime anywhere. Already with millions of users under its belt, Tabeeby has succeeded in raising the standard of medical and health awareness among the regional population.

Tabeeby is empowering patients to enjoy a better healthy lifestyle by providing a unique and innovative communication and engagement tool that allows direct and unlimited patient–to-doctor interactions. By using the state-of–the-art technology and real time social media innovations to highlight the concept of prime health, Tabeeby ensures easy, swift and fast access to thousands of verified and trusted doctors, medical entities and health events. The investment from Ground One Ventures will be used to further enhance Tabeeby’s healthcare technology platform and deliver new innovations to highlight the concept of prime health in our modern-day life. (Tabeeby 10.12)

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3.5 OnCost Cash and Carry Acquires Gulfmart

OnCost Cash and Carry, the first wholesale membership retail store in Kuwait, announced that it had acquired Gulfmart, the well-known supermarket chain that has been operating in Kuwait since 1999. Announcing the change in ownership, OnCost Cash and Carry said that once the transfer of shares process has been completed , Gulfmart and OnCost would merge and begin operating as a single entity within the span of the next six months. Once the merger is completed, Oncost will have a total of 20 branches spread across the country. Over the next 5 years, Oncost plans on increasing the number of branches to 35 and looks forward to entering the Saudi and the UAE markets through strategic partnerships with professional retail groups in those countries. With the acquisition of Gulfmart, the total market share of Oncost in the local food market would reach 4%.

Oncost, with its distinctive strategy of selling products to customers at wholesale prices in a household focused retail environment, has a pricing policy that focuses on competitive and wholesale prices. Oncost was established in 2010 as Kuwait’s first professional membership based wholesale center. It leveraged their strength in owning slaughter houses and operating Kuwait’s Central Vegetables and Fruits Market in Sulaibiya. The first branch opened in Alforda Market and became the first central market to provide everything and anything from fresh vegetables, fruits, meat and fish, to household cleaning and washing products to customers at wholesale prices all under one roof.

In addition to brick-and-mortar stores, they also have a ‘Baqal’ service that receives and delivers online orders from customers exclusively through the Talabat or Baqal mobile app. This service, which has nearly 30 delivery vehicles, promises to deliver orders within a maximum of 30 minutes of placing the order. (Oncost Cash & Carry 28.11)

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3.6 UAE’s Mubadala Invests in Leading Russian Fitness Center Brand

A consortium of investors including Abu Dhabi’s Mubadala Investment Company have announced investments in Russian Fitness Group (RFG), which manages the largest chain of fitness clubs in Russia under the World Class brand. The consortium, which also includes the Russian Direct Investment Fund (RDIF), Russia’s sovereign wealth fund, has acquired a 22.5% stake from VTB Capital. RDIF, Mubadala and co-investors intend to strengthen its position in various markets and to promote healthy lifestyles in Russia. Russian Fitness Group operates World Class and World Class Lite fitness clubs chains. Today it is the largest fitness corporation in Russia operating 39 own and 46 franchised clubs in 34 cities. (AB 28.11)

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3.7 $4 Million in Fake Toyota Parts Seized in Raids Across the UAE

Al-Futtaim Toyota, in partnership with government authorities, has completed a total of 16 raids on counterfeit car part dealers across the UAE. The raids, mainly in Dubai, Al Ain, Umm Al Quwain, Sharjah and Ajman to date, have resulted in more than 300,000 fake Toyota parts valued at over $4 million being confiscated and destroyed. The majority of the items were serviceable goods such as oil filters, fuel filters and spark plugs, a statement said. In 2017 Al-Futtaim Toyota and UAE Government officials successfully executed a total of 29 raids, resulting in the confiscation of goods worth more than AED41 million. (AB 28.11)

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3.8 Dubai-Based Mobile Wallet App Beam Eyes Global Expansion

Beam, a Dubai-based mobile payments platform, will expand in seven new markets in 2019. Since launching in the UAE in 2012, Beam has built a user base of approximately a million users and in the next six months the company plans to expand into Belgium, the Netherlands, Luxembourg, Portugal, Ukraine, Azerbaijan and Uzbekistan. The firm already has a presence in Sweden and Australia.

Beam enables retailers to accept mobile payments and engage with customers directly through their smartphones. The payment and rewards platform, which already has a partner network of more than 2,000 stores in the UAE alone, will enhance shopping experience, allowing customers to pay by phone, while earning cash back on their purchases, the company said in a statement. Beam Wallet is a global tech startup with offices in Dubai, Sydney and Gothenburg. Currently, the leading mobile wallet app in the UAE, Beam is changing the payments and rewards landscape one city at a time. (AB 08.12)

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3.9 Nike Opens Largest Middle East Shop in Dubai

US sportswear giant Nike, in partnership with its local distributor Sun and Sands Sports, has opened its largest store in the Middle East at The Dubai Mall. Sprawling across 3,290 square meters, Nike Dubai serves as a platform for consumers to celebrate sports and collaborate through creative workshops. The store has a customization space that provides the opportunity to personalize Nike items all year round, with customers invited to design their sneakers and apparel with a variety of tools and accessories such as laces, straps, buttons, markers and tongue labels.

Nike Dubai also has an area that is designed specifically for women and features an intimate lounge area where women can hang out, play their own music and shop in full privacy along with their friends. It also includes a flexible trial space which is designed as a small basketball court, inspiring Dubai youth to try out their new gear. Nike Dubai will have a full agenda of sport and cultural events, varying from Nike+ Training Club and Nike+ Training Club sessions to athlete talks, artist sessions and stylist workshops. (AB 04.12)

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3.10 Competition Heats Up For Cairo’s Ride-Hailing Apps

The first announcement at this year’s RiseUp Summit in Cairo came from Halan, a motorcycle and tuk-tuk-hailing app. Competition for the market segment unable to afford taxis or private ride-hailing apps daily, has intensified in the historic city as both Careem and Uber both launched bus services to compete with local players Swvl and Buseet, both of which announced significant recent investment rounds. Careem is targeting the 40% of Egyptian society that want to avoid public transport or driving their own cars.

With a population of almost 10 million in Cairo alone and close to 25 million in the Greater Cairo area, the city has become an attractive test-bed for ride-hailing and ride-sharing apps. Halan launched 18 months ago in Cairo and has since completed more than three million rides across Egypt and Sudan. Swvl, a bus-booking app closed its series B round this week valuing the company at close to $100 million. Founded last year, it operates across Cairo and Alexandria with more than a million users. The round of recent investments concluded with Buseet, another Cairo-based bus-booking app, which raised seed investment from Saudi Arabia’s Vision Ventures. (Wamda 09.12)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Dubai Tests New Bus Shelters Powered By the Sun

Dubai’s transport authority has started a pilot project to build bus shelters that run on solar power. The Roads and Transport Authority (RTA) said work has started on the construction of a model for two shelters powered by solar energy as a solution for shelters in locations off the electric power grid. Solar power generated would be used to operate lights, air-conditioners and billboards. The RTA has also started the construction of a further 48 air-conditioned shelters in Dubai, with another 10 in the pipeline, which would bring the total number to 884 in the city. More than 1.2 million people current use bus shelters every month. The new shelters cover Dubai Investment Park, Dubai Academic City – Aviation College, Higher Colleges of Technology, Dubai Industrial City, Dubai Internet City and JLT. Over the next few months, RTA will start the construction of 10 more with each having eight seats and catering to the needs of people of determination. (AB 04.12)

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4.2 UAE Installs Hundreds of Artificial Caves to Boost Fishing Industry

The UAE’s Ministry of Climate Change and Environment (MOCCAE) has teamed up with Fish Farm to install 20 artificial caves in Khorfakkan’s Al Badiyah Island in a bid to help replenish fish stocks in the UAE’s waters. The step is the second part of a multi-phase agreement between MOCCAE and Fish Farm to install 500 artificial caves.

The first phase, which was carried out in May 201, saw 300 artificial caves installed at 30 sites in the UAE, including Al Badiyah Island and Sharjah’s Loulouiya Harbor. The locations were chosen for their proximity to the UAE’s coastline, with the stated aim of bringing fishing areas closer to show to reduce the operational costs of fishing trips and eliminate the risks associated with deep-sea fishing. The artificial caves form part of a larger MOCCAE effort to support fishing and ensure the long-term viability of the UAE’s fishing industry. (AB 06.12)

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4.3 Reverse Vending Machines to Boost Recycling In Malls Across Turkey by 2021

Reverse vending machines will be put in shopping malls across Turkey by 2021 in order to facilitate more recycling, the head of Turkey’s Chamber of Environmental Engineers recently announced. In line with the new regulations on packaging waste control that be become effective in the new year, shopping malls will be required to have reverse vending machines. The reverse vending machines are automatic recycling machines that transform recyclable materials and in return give credit or money, depending on how they are designed. Mandating the machines, it is hoped this will open a new opportunity for domestic machinery manufacturers to meet the new demand.

The Turkish government has recently supported recycling campaigns across the country as one of the goals of its environmental policy. In late November, Parliament passed a new environmental law including a landmark restriction on plastic bags. Under new amendments, sellers will be obliged to sell plastic bags for TL 0.25 (approximately $0.05 cents) and they will be fined if they give bags for free to customers.

Environment and Urbanization Minister Kurum said the charge will come into effect in January. He said that every Turkish citizen uses, on average, 440 bags a year, adding that Turkey aims to reduce this number to 40 by 2025. Istanbul Metropolitan Municipality (IBB) also introduced “Smart Mobile Waste Transfer Machines” in September that put a refund for plastic bottles onto the recycler’s transportation card. The goal is to have at least 100 machines installed across the city by the end of the year. (DAILY SABAH 11.12)

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4.4 Morocco Ranks 2nd in Climate Change Performance Index

Morocco has moved up one place to become the second-best performing country in the Climate Change Performance Index (CCPI) for the year 2019, behind Sweden. Germanwatch, the NewClimate Institute, and the Climate Action Network published the 2019 CCPI report Monday, December 10.

Sweden scored the highest in the annual ranking with 76.28 points, followed by Morocco (70.48) and Lithuania (70.47). The survey showed that the UK, India, Norway, Portugal, and the European Union were also among the top countries and regions with a “high” ranking. Saudi Arabia, the US, Iran, South Korea, and Taiwan scored very low in the overall climate change index ranking among a list of 56 countries. In addition to Morocco, the North African countries included in the ranking were Algeria, which ranked 44th and scored low, and Egypt, which ranked 21st and rated medium.

Morocco ranks “high” in all CCPI categories, including greenhouse gas (GHG) emission, renewable energy, energy use, and climate policy. The index, which evaluates and compares the climate protection performance of 56 countries and the EU, stated that Morocco’s renewable energy projects and goals resulted in a high rating in the climate change ranking.

The survey noted that with the connection of Noor Solar Project, “the world’s largest solar plant and multiple new wind farms to the grid, the country is well on track for achieving its target of 42% installed renewable energy capacities by 2020 and 52% by 2030.”

The index also looked at Morocco’s progress in reducing greenhouse gas emissions, energy use, and climate policies. Since the energy sector contributes greatly to the carbon dioxide (CO2) emissions of a country, Morocco scored a low GHG emission level. Morocco hence contributes to limiting global warming effects in the world because it is one of the 56 countries and the EU which are together responsible for over 90% of global GHG emissions. (MWN 10.12)

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Trade Deficit Widened by 3.93% y-o-y t $12.96 Billion in September 2018

Lebanon’s trade deficit widened by 3.93% year-on-year (y-o-y) to reach $12.96B by September 2018. In fact, total imports increased by a yearly 4.86% to $15.16B by September 2018 and exports recorded a yearly uptick of 4.14% to $2.20B over the same period.

In details, the value of imported mineral products (grasping 21.14% of total imported goods) stood at $3.20B by September 2018, recording a yearly downtick of 0.87%, owing it to a 25.93% y-o-y decline in their imported volume to 5.97M tons by September 2018. Meanwhile, the average price of oil increased by 35.51% y-o-y to $72.73/barrel over the same period.

As for the value of machinery and electrical instruments (11.7% of the total imported goods), it recorded a rise of 23.62% y-o-y to settle at $1.77B. Moreover, the value of imported products of the chemical or allied industries (10.9% of the total imported goods) also increased by 5.93% to $1.65B over the same period.

In terms of top trade partners, Lebanon primarily imported from China, Greece, Italy and USA with shares of 10.18%, 8.48%, 7.65% and 7.34% in the total value of imports, respectively, by September 2018.

As for exports, the value of pearls, precious stones, & metals (holding 22.97% of the total export goods) rose by an annual 9.66% to reach $505.38M by September 2018. In turn, the value of base metals and articles of base metal (holding 13.39% of the total export goods) climbed by a yearly 20.76% to $294.53M. Meanwhile, the value of prepared foodstuffs, beverage, and tobacco (holding 13.37% of the total export goods) decreased by 12.01% y-o-y to $294. By September 2018, the UAE, followed by South Africa, Saudi Arabia and Syria were Lebanon’s top four export destinations, respectively constituting 14.54%, 7.49%, 6.92% and 6.36% of the total value of exports. (LC 26.11)

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5.2 Lebanon’s Balance of Payments Registered a Deficit of $5.62 Billion by October 2018

According to the Central Bank of Lebanon, Lebanon’s Balance of Payments (BoP) witnessed a deficit of $5.62B by October 2018 compared to $1.07M deficit recorded during the same period in 2017. In details, the Net Foreign Assets (NFA) of BDL and those of commercial banks slipped by $1.30B and $4.31B respectively, by October 2018. Moreover, the BoP recorded a monthly deficit of $1.81B in October 2018 alone, compared to a deficit of $887.8M in October 2017. In fact, the NFAs of BDL and commercial banks’ dropped by $373.9M and $1.43B respectively, in October 2018. (CBdL 06.12)

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5.3 Number of Tourists Visiting Lebanon Rose 5% in October

According to the Ministry of Tourism, the number of tourists visiting Lebanon in the first ten months of 2018 rose by 5% year-on-year (y-o-y) progress, where the total number of tourists went up from 1,592,301 to 1,671,891. This increase is owed to the yearly growths recorded in tourist arrivals from Europe and North America, which together comprised 54.4% of total tourists in Lebanon. Geographically, Lebanon saw growth in the number of European tourists that constituted 35.9% of the total; growing by 9.63% y-o-y to 600,205 by October 2018 on the back of the rise of the number of tourists from the majority of the European countries. There was growth in the number of tourists coming from UK, Italy, France, Turkey and Germany by 12.97% to 67,840, 7.06% to 30,733, 6.68% to 154,780, 5.73% to 26,342 and 4.33% to 92,195 respectively. This was better than the drop of 3.60% recorded by entries from Sweden, which stood at 33,757. Arab countries, representing 28.1% of all tourists, recorded a decrease of 2.63% to stand at 470,526 by October 2018. This drop was heavily influenced by the number of Iraqi and Saudi incomers, which recorded an annual decrease of 4.76% and 16.86% to stand at 184,923 and 48,885 respectively in October 2018. Moreover, the number of tourists from Jordan, Kuwait and the UAE dropped by 0.32% to 78,277, 12.56% to 32,897 and 20.01% to 1,415 respectively. On the contrary, the number of incomers from Egypt recorded an annual increase of 6.51% from 70,213 to from 74,784. As for the numbers of American and Asian travelers, they respectively rose by 8.61% and 1.49% y-o-y to 309,575 and 116,267 tourists. (MoT 10.12)

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5.4 Jordan’s Unemployment Rate Rises to 18.6%

The unemployment rate in Jordan for Q3/18 has reached 18.6%, an increase of 0.1% compared to the same period of 2017, according to a report issued by the Jordanian Statistics Department. The report noted that the unemployment rate among men was 16.3%, compared to 27.1% among women during the period of the study. This indicates that unemployment among men increased by 0.9%, while it declined among women by 2.8%, compared to Q3/17.

The report also said that unemployment was high among holders of bachelor’s or higher degrees in comparison with other educational levels. The results indicated that 58.2% of unemployed people hold a secondary education certificate or a higher degree. Among males, who hold an undergraduate degree or higher, the rate of unemployment reached 28.1%, while among females it stood at 80.1%. The age group which recorded the highest rate of unemployment was 15-19 years, with a rate of 46.9%, followed by 20-24 years, for which the rate stood at 37.7%. (JSD 03.12)

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5.5 Jordan’s First Nanosatellite Launched

On 3 December, Jordan’s Crown Prince Foundation announced the launch of Jordan’s first nanosatellite, as part of its Masar initiative. “JY1-SAT”, which orbits the Earth at 600 km above the Earth’s surface, was named in the memory of the late King Hussein, who held the call sign of JY1. The launch of the Jordanian satellite aims firstly to achieve educational and research purposes. It will also promote tourism in the Kingdom by broadcasting images of tourist and heritage sites, as well as wireless communication with ground stations around the world. In addition, it will broadcast a message of peace recorded by Prince Al Hussein Bin Abdullah II, the Crown Prince, destined for the world to be available for reception by all terrestrial receivers in the world. (Petra 03.12)

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5.6 Jordan’s PM Razzaz Opens Bashir Hospital’s New USAID Funded $25 Million Emergency Building

On 3 December, Jordanian Prime Minister Razzaz said that Amman will conduct periodical and surprise visits to Al Bashir Hospital as a measure to ensure that it becomes “an icon public hospital and a model for public health in the Kingdom”. The new emergency building was constructed at a cost of $23 million and funded by the United States Agency for International Development (USAID). It will be equipped with the latest and most advanced equipment, with a capacity of 147 beds. The Health Minister highlighted that the new addition meets the urgent needs of Al Bashir Hospital due to the growing number of patients it receives, noting that the public hospital deals with some 50,000 cases per month. The hospital, which was inaugurated in 1954 and is considered one of the ministry’s largest hospitals in the Kingdom, has 1,110 beds, employs 3,125 people and received 584,000 patients through its emergency department and 560,000 through the outpatient clinics in 2017. (JT 04.12)

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►►Arabian Gulf

5.7 Qatar to Leave OPEC and Focus on Gas

Qatar said on 3 December that it was quitting the Organization of the Petroleum Exporting Countries (OPEC) from January to focus on its gas ambitions. Doha is one of OPEC’s smallest oil producers but the world’s biggest liquefied natural gas (LNG) exporter. Qatar said its surprise decision was not driven by politics but pundits feel it reflects tensions with Saudi Arabia.

Delegates at OPEC, which has 15 members including Qatar, sought to play down the impact. But losing a long-standing member undermines a bid to show a united front before a meeting that is expected to back a supply cut to shore up crude prices that have lost almost 30 per cent since an October peak. It highlights the growing dominance over policy making in the oil market of Saudi Arabia, Russia and the United States, the world’s top three oil producers which together account for more than a third of global output.

Riyadh and Moscow have been increasingly deciding output policies together, under pressure from US President Trump on OPEC to bring down prices. Benchmark Brent is trading at around $62 a barrel, down from more than $86 in October.

Qatar, which has been a member of OPEC for 57 years, has oil output of just 600,000 bpd, compared with Saudi Arabia’s 11 million bpd. Doha is an influential player in the global LNG market with annual production of 77 million tonnes per year, based on its huge reserves of the fuel in the Gulf. Doha’s move is related to the country’s long-term strategy and plans to develop its gas industry and increase LNG output to 110 million tonnes by 2024. Doha also plans to build the largest ethane cracker in the Middle East. (Reuters 03.11)

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5.8 More Than Three Million Cars on UAE Roads

There are almost three million cars on UAE roads, a World Health Organization report has announced. According to the Global Status Report on Road Safety 2018, the total registered vehicles was almost 3.4 million, with cars and light vehicles accounting for the largest proportion of the figure. The report also said that there were 725 deaths from road traffic accidents in 2016, of which more than three quarters of the victims were men, according to figures from the Ministry of Interior.

The largest number of deaths were among car drivers and pedestrians, and there were around five deaths recorded per 100,000 people. Road deaths have dropped significantly since 2007, when there were almost 17 deaths per 100,000 people; however, WHO has targeted the UAE with getting the current figure down to three. The report pointed out that across the world, the number of road traffic deaths has continued to increase, although it has remained relative to population growth.

The report also revealed that the UAE is among the hardest places to get away with speeding, with the highest possible rating of 10 — with eight being categorized as ‘good’ — for the enforcement of road safety laws alongside Ireland, Norway, Oman and Turkmenistan. The UAE also scored 10s for the enforcement of drink-driving laws, the national motorcycle helmet law and seat-belt law, but scored a seven for child restraint law. The ratings were assigned by National Data Co-ordinators who compiled the report after being nominated by their governments. (AB 10.12)

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5.9 Dubai Welcomes 11.58 Million Visitors During First Nine Months of 2018

Visitor numbers to Dubai remained steady as it welcomed 11.58 million visitors in the first nine months of 2018, according to figures by the emirate’s Department of Tourism & Commerce Marketing (Dubai Tourism). India retained its position as Dubai’s leading source market, followed by Saudi Arabia and the UK. Russia, China and Germany followed suit, each recording double-digit growth compared to the same period in 2017.

Tourism from Russia grew 60% year-on-year, with visitor numbers rising to 460,000 in the first nine months of 2018. An increase in Russian overnight guests was the result of 19% growth in air capacity across non-stop flights, as well as ease of travel following the introduction of visa-on-arrival facilities in the last two years. China also benefited from the visa-on-arrival scheme, boasting 641,000 visitors to Dubai this year, a 12% increase from 573,000 for the same period last year. Moreover, the number of German tourists grew 15% to reach 388,000 visitors during the first nine months. Further visitor growth is expected thanks to initiatives including the stopover visa which exempts transit passengers from all entry fees for the first 48 hours of their stay.

The growth in tourism has led to an increase in hospitality offerings, with 706 establishments offering a total of 112,381 available rooms in Dubai as of September 2018, a 4% increase compared to 678 establishments, and 6% increase compared to 106,167 available rooms in 2017. Average occupancy for the hotel sector stood at 75%, with establishments delivering a combined 21.89 million occupied room nights during the first nine months of 2018. (AB 09.12)

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5.10 Dubai South to Host Fish Farm as UAE Scales Up on Aquaculture

The UAE’s Ministry of Climate Change and Environment (MOCCAE) signed a memorandum of understanding (MoU) with Dubai World Central (DWC), also known as Dubai South, to boost the local aquaculture industry by setting up a fish farm. Under the agreement, MOCCAE will facilitate the registration and licensing procedures for the DWC fish farm and provide consultancy advice. Following a feasibility study of proposed species with regard to their local market value, the Ministry will select the species best suited for cultivation. The MOCCAE will identify the key challenges that the aquaculture industry faces in the UAE and share the findings with DWC. (AB 04.12)

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5.11 Saudi Arabia Launches Two New Satellites into Space

On 7 December, two Saudi-designed satellites were launched into space from China. The satellites, which were developed by the King Abdulaziz City for Science and Technology, will be used to provide high-resolution images of the planet’s surface from low earth orbits, help with urban planning, monitor movements and changes on the earth’s surface, and provide government agencies with services, in particular, high-resolution images. Known as Sat 5a and Saudi Sat 5b, the satellites were launched from Jiuquan Satellite Launch Center and will join the second generation of Saudi Arabia’s high-accuracy remote-sensing satellites.

King Abdulaziz City for Science and Technology has launched 13 satellites to date, and participated in the exploration mission of “Changi 4” Satellite with the Chinese side. KACST provided the advanced services for the remote-sensing system, and launched a developed system for satellite-tracking and controlling of commercial ships which includes a comprehensive daily coverage of ship traffic of up to 30,000 ships around the world. The launch of the two new satellites comes as part of the Kingdom Vision 2030 aiming to localize strategic technologies, maximize local content and empower the Saudi youths gain knowledge of advanced technologies in the development and manufacture of satellites. (AB 07.12)

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►►North Africa

5.12 Fruits, Vegetables & Poultry Push Egypt’s Headline Inflation Down to 15.6% in November

The decrease in the prices of fruits, vegetables, and poultry led to a decline in Egypt’s annual headline rate of inflation down to 15.6% by the end of November against 17.7% in October, according to the Central Agency for Public Mobilisation and Statistics (CAPMAS). CAPMAS noted that the Consumer Price Index (CPI) recorded 309.1 points in November, down by 0.7% in November against 2.6% in October. The CAPMAS explained that this decline in inflation is due to lower prices of vegetables, listed in the basket of goods, which measures inflation, by 3.4%; fruit prices down by 8.9%, and poultry prices down by 1.7%.

Meanwhile, the CAPMAS noted that milk, cheese, and egg prices increased by 0.6%, while the prices of clothing and shoes increased by 1.8%.

Monthly core CPI inflation, computed by the Central Bank of Egypt, recorded 0.5% in November 2018, compared to 1.0% in October 2018. The annual core inflation rate recorded 7.9% in November compared to 8.9% in October. The inflation outlook continues to accumulate the upwardly revised Brent crude oil prices at $76.7 per barrel during FY 2018/19, which had reflected in a rise of the inflation outlook.

International food price forecasts, relevant to Egypt’s consumption basket, were upwardly revised primarily due to of higher prices of wheat and sugar as a result of bad weather conditions affecting production prospects for both crops.

The decrease in inflation further consolidates uncertainty about the upcoming decision of the Central Bank of Egypt (CBE) on interest rates when the Monetary Policy Committee (MPC) meets on 27 December. It added that current policy rates remain in line with achieving single digit inflation as soon as the effects of fiscal consolidation measures dissipate. The ministry of finance is targeting to achieve a primary surplus of 2% of GDP in FY 2018/19, up from a preliminary 0.2% in the previous year. (CAPMAS 11.12)

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5.13 After Poultry, US Beef to Start Entering the Moroccan Market

After Morocco’s agreement to allow US poultry import in August, the US will gain a new access to export its beef into the Moroccan market. The US Trade Representative (USTR) and the US Department of Agriculture (USDA) announced that the Moroccan government “has agreed to allow imports of U.S. beef and beef products into Morocco,” under the terms of the US-Morocco Free Trade Agreement (FTA). Earlier this year, Morocco also approved the import of Russia’s beef products and Ukraine’s beef and poultry.

Moroccan imports of agricultural products from the US exceeded $512 million as of November this year. The Trump administration estimates the North African country would represent an $80 million market for US beef and beef products.

In August, the USDA announced that Morocco will import US poultry, opening up an estimated $10 million market. Morocco’s agriculture ministry stated that imports of poultry meat and poultry products from the US are only frozen products. The ministry imposed health conditions on poultry imports saying, they must be accompanied by a halal slaughter certificate and a health certificate. The poultry and beef deals are a follow-up of the free trade agreement (FTA) between Morocco and the US being implemented, signed 15 June 2004 and effective since 1 January 2006. (MWN 07.12)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkey’s Annual Inflation Rate Declines to 22% in November

Turkey’s consumer price index has seen a 21.62% annual hike in November, the Turkish Statistical Institute (TUIK) said. The annual inflation fell by 3.62% from 25.24% in October. The highest price increase on a yearly basis was seen in furnishing and household equipment with 32.73% in November. Miscellaneous goods and services with 27.87%, food and non-alcoholic beverages with 25.66%, housing with 24.76% and recreation and culture with 21.18% were the other main groups where high annual increases realized.

The economic program, announced by Treasury and Finance Minister Albayrak on 20 September forecasts that inflation would rise to 20.8% this year before dropping to 15.9% in 2019 and 9.8% in 2020. (TUIK 03.12)

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6.2 Turkish Economy Grows by 1.6% in Third Quarter

Turkey’s economy grew by 1.6% in the third quarter of 2018 compared with the same period of last year, TUIK announced on 10 December. The economy expanded at 7.2% and 5.3% in the first and second quarters, respectively. Calendar adjusted gross domestic product (GDP) in the third quarter of 2018 increased by 2.1% compared with the same quarter of the previous year. Seasonally and calendar adjusted gross domestic product decreased by 1.1% compared with the previous quarter. TUIK data also showed that households’ final consumption expenditure increased by 1.1% in the third quarter. Government final consumption expenditure increased by 7.5% while gross fixed capital formation declined by 3.8% in the third quarter of 2018 compared with the same quarter of the previous year. (TUIK 10.12)

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6.3 Turkish Companies’ Arms Sales Rose 24% Last Year

The arms sales of Turkish companies rose by 24% in 2017, according to a report released on 10 December by the Stockholm International Peace Research Institute (SIPRI). The data includes the combined arms sales of the two Turkish companies in the Top 100 lists, namely ASELSAN, which produces electronics, and Turkish Aerospace Industries, which produces aircraft. According to SIPRI data, ASELSAN’s sales increased by 29% to $1.42 billion in 2017 while sales by Turkish Aerospace Industries stood at $1.22 billion last year, a 19% increase from 2016.

When unveiling his government’s ambitious 100-day action plan in August, President Erdogan said that 48 out of the total 400 projects to be carried out under the plan are regarding the defense industry as his government aimed to zero its dependence on foreign supplies. (SIPRI 10.12)

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6.4 Greek Inflation Rises by 1% in November

Greek inflation, or the adjusted index of consumer prices, showed an increase of 1.1% in November over levels of a year ago, according to Greek Statistical Authority (ELSTAT) data. The average annual inflation rate for the period between December 2017 and November 2018 shows an increase of 0.8% over the same twelve-month period between 2016 and 2017.

Average inflation in the Eurozone reached 2% in November, which was down by one fifth of a point compared to October 2018. Greece is still below the average inflation rate of all of the 19 member states of the Eurozone. (ELSTAT 10.12)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Fast of the 10th of Tevet‎

The tenth of Tevet (Asarah B’Tevet), the tenth day of the Hebrew month of Tevet, is a fast day ‎in Judaism. Falling this year on 18 December, it is one of the minor fasts observed from before ‎dawn to nightfall. This observance is one of four public fasts (Asarah B’Tevet, Tzom Gedaliah, Shiva Asar B’Tammuz, and Ta’anit Esther) which are alike in that there do not apply any additional physical constraints, such as the prohibition of washing or of wearing leather shoes, etc.

The fasting commemorates the beginning of the siege of Jerusalem by ‎Nebuchadnezzar II of Babylon, an event that eventually culminated in the destruction of ‎Solomon’s Temple (the First Temple) and the conquest of the Kingdom of Judah (today in ‎south-central Israel). In the State of Israel, Kaddish (the Jewish prayer for the deceased) is recited on this day for people whose date or place of death is unknown. Consequently, many rabbis have designated it as a day of remembrance for the Holocaust.

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*REGIONAL:

7.2 UAE Cabinet Adopts New Policies to Empower Emirati Women

The UAE Cabinet has adopted a new package of new national legislative policies and initiatives aimed at empowering Emirati women. In a special session chaired by Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, the Cabinet approved the empowerment bundle in line with the directives of UAE President Sheikh Khalifa bin Zayed Al Nahyan. The new empowerment package is based on three principal axes of Legislation and Policy, Services and International Representation. It said all axes include resources to support the advancement of Emirati women as active partners in local, regional and global arenas. The new initiatives will see women’s increased participating in diplomatic missions, as well as an increased representation in judicial and legal affairs. The decision will also set legislative frameworks concerning domestic violence. New policies will also ensure the increased participation of female diplomatic missions and representatives of international organizations, including UN peace-keeping missions. (AB 04.12)

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7.3 Egypt’s Growing Population Reaches 98 Million

Egypt’s population, growing at an annual rate of 3.5%, mostly lives along the Nile River, poses a significant challenge to such strategic goals, and threatens the beneficial impact of economic development. In September 2017, Egypt’s population was estimated to be 94.8 million, with another 9.4 million abroad, according to CAPMAS, the country’s official census institution. The country’s internal population has just reached 98 million.

Experts on population studies remain skeptical on the possibility to reduce growth rates in the next decade, estimating figures to reach at least 150 million by 2050. They point out to two further population problems besides rapid growth: geographical misdistribution, and degrading demographic characteristics.

Stalled fertility levels between 1995 and 2005 increased after the 2011 revolution, from 3 to 3.5 child per women in 2014. A slight decrease occurred in the past year. The state’s developmental approach is focusing on balancing population growth with the available resources, while maximizing the benefit from human resources. Despite an increase in the GDP, people are unable to properly spend on health, education, transportation, or housing as the state’s vision aims to stop population growth from bypassing its abilities to provide services.

To address controlling population growth and fertility rates, the Egyptian government strategy is focusing on the empowerment of women, by enrolling them into the workforce and encouraging SMEs, in order to reduce birth rates, and contribute to a higher GDP. Women represent half of Egypt’s population. The age average for marriage was estimated by the CAPMAS in 2015, at 24.5 for women compared to 30 for men. Female in labor force statistics were 23.6%. The CAPMAS figures for 2016 put the illiteracy rate at 14.4% for males, and 26% for women. Activists call for more awareness campaigns to overcome the problem of people considering children as sources of income. Some 111,000 girls under 18 are married in Egypt. (Various 09.12)

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7.4 Some 2.6% of Egyptians Had Disabilities in 2017

The Central Agency for Public Mobilisation and Statistics (CAPMAS) announced that in 2017, 10.67% of Egyptian s who are five years and older, have disabilities ranging from some difficulties to cannot do at all, while 2.61% of Egyptians, who are five years and older, have severe disabilities. In terms of sexual abilities, the CAPMAS declared that 53.9% of those with disabilities are males, versus 46.1% of females.

The CAPMAS stated that the percentage of people with disabilities in Arab countries is low in general, elaborating that the highest percentage is in Morocco with 5.1%, and Sudan with 4.8%. Meanwhile, the percentage ranged between 2-3% in Egypt, Jordan, Bahrain and Yemen, while it is less than 2% in other countries. (CAPMAS 03.12)

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7.5 Egypt Approves Legalization of 168 New Churches

A committee headed by Egyptian Prime Minister and Housing Minister Mostafa Madbouly approved the legalization of 168 churches and buildings on 30 November. The committee officially legalized 151 churches and the remaining 17 are still awaiting required documents to be fully legalized. Studies were carried out over the past two months on the conditions of the churches that have requested legalization, which were reviewed by the legalization committee in a meeting attended by ministers of justice, antiquities, and parliamentary affairs, as well as other concerned authorities.

In August 2016, the Egyptian Parliament passed a new law on the construction of churches in an effort to ease the process of obtaining a license to build a church. Egypt’s former Prime Minister Sherif Ismail recently called for the ‘speeding up’ of the process of legalizing unlicensed churches. Yet, earlier this month, the Christian community in a Minya village faced a mob of extremists attacking their church after it received approval.

Christians are a religious minority in Egypt, most likely account for about 10 – 15% of the country’s population, yet there are only 2,869 churches in the country, according to the Central Agency for Public Mobilisation and Statistics (CAPMAS). (ES 02.12)

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7.6 Greek Children Among the Most Overweight in Europe

According to an alarming recent study published in the Athens-Macedonian News Agency (AMNA), experts claim that Greek children are prone to obesity, anemia, and even nutrient deficiency because of improper diet. The Pan-Hellenic Study on Nutrition and Health, which examined the habits of 4,600 individuals of all ages, showed disturbing results for the health of the entire Greek nation.

The average eating habits of most Greeks includes a great deal of fat, saturated fat and even too much protein. Greeks overall also show a very low intake of many vitamins and minerals in their diet. Almost none of the participants tested had enough vitamin D, and 70% had low folate levels. Some 60% of people had low calcium and potassium levels, and about 30% of women of reproductive age had low iron levels. Sodium intake was found to be particularly high.

The same poor eating habits applied to Greek children as well, leading to them being among the most overweight in Europe. The experts pointed out that frequent consumption of sugar-rich beverages more than doubles the risk of obesity. Just as importantly, it also leads to the reduction of consumption of healthier beverages such as milk, water or juice.

Internationally, four out of ten children drink sugary beverages on a daily basis. A third of children worldwide also do not eat a single fruit daily, according to the World Health Organization (WHO). An analysis of over 23,000 packaged food products showed that 69% of them are of relatively low nutritional value, according to the report. (AMNA 03.12)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 WeedMD Exports Cannabis Genetics to Israel’s Pharmocann

Aylmer, Ontario’s WeedMD, a federally-licensed producer and distributor of medical-grade cannabis, has exported its cannabis genetics to Israel’s Pharmocann, a privately-held pharma-agricultural medical cannabis producer working under the authorization of Israel’s Ministry of Health and widely recognized as a pioneer in the worldwide medical cannabis industry. Pharmocann selected WeedMD’s genetics to strengthen its robust genetics library. Pharmocann is at the forefront of cannabis production and development, and together with WeedMD, they share a common goal of producing premium brands for their patients. Building a genetic library with quality strains from WeedMD will help Pharmocann advance its product offerings and give its patients greater access to clinically-validated and cost-effective medicine.

Pharmocann, one of the pioneers of Israeli medical cannabis farms, was established in 2008. Located in the valley of Jezreel, the Galilee in the north of Israel, at the height of 350 meters above sea level, it is ideally situated for the growth of cannabis. The farm extends over 8 acres, offering hothouses for growth and flowering of cannabis plants, a research and developing hothouse for cannabis strains and all the facilities required for the cultivating, harvesting and producing the unique strands that our farm is famous for, nationwide. Servicing a community of over 3,000 patients monthly and yielding about 2 tons of the highest quality medical cannabis yearly, Pharmocann has acquired a vast knowledge and experience that enables the firm to leap forward towards becoming a major player in the international medical cannabis market. (WeedMD 27.11)

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8.2 OWC Reports Progress in Clinical Trials for Ointment Care for Skin Diseases

OWC Pharmaceutical Research Corp. reported that the last healthy volunteer in its first ever safety study of cannabis-based topical ointment, was recently admitted in trial which is being conducted at Sheba Medical Center, Tel HaShomer, Israel. OWC Pharmaceutical is pleased with the progress on this trial. Recruiting has now been completed and completion of the trial is expected by the end of December.

Ramat Gan’s OWC Pharmaceutical Research Corp., through its wholly-owned Israeli subsidiary, One World Cannabis, conducts medical research and clinical trials to develop cannabis-based pharmaceuticals and treatments for conditions including multiple myeloma, psoriasis, fibromyalgia, PTSD and migraines. OWCP is also developing unique and effective delivery systems and dosage forms of medical cannabis. All OWC research is conducted at leading Israeli hospitals and scientific institutions and led by internationally renowned investigators. (OWC 29.11)

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8.3 Cannabics Files New Provisional Patent Application for Magnetic Targeting of Cannabinoids

Cannabics Pharmaceuticals announced that it has filed a provisional patent application with the US Patent office. The patent covers the Company’s novel drug targeting technology accustomed to deliver cannabinoid compounds. Utilizing magnetic delivery system, this innovative non-invasive approach allows external and internal systemic delivery of cannabinoids to the actual area of tumors within the patient.

Headquartered in Tel Aviv, Cannabics Pharmaceuticals is a U.S public company that is developing a platform which leverages novel drug-screening tools and artificial intelligence to create cannabinoid-based therapies for cancer that are more precise to a patient’s profile. By developing tools to assess effectiveness on a personalized basis, Cannabics is helping to move cannabinoids into the future of cancer therapy. The company’s R&D is based in Israel, where it is licensed by the Ministry of Health to conduct scientific and clinical research on cannabinoid formulations and Cancer. (Cannabics Pharmaceuticals 28.11)

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8.4 Hadassah & IBM Establish Digital Health Accelerator

Hadassah Medical Center in Jerusalem and IBM Israel have announced the establishment of a special accelerator for startups in which the startups can develop advanced technological solutions and services in digital medicine. Startups that have completed a post-seed financing round will be eligible for the program. The accelerator was announced at an event launching the eighth class of the IBM Alpha Zone accelerator, which operates in all of the IBM’s fields of business in Israel. Alpha Zone also deals with digital medicine; the 45 Alpha Zone graduates include Nutrino, acquired this week by global company Medtronic.

The new accelerator, to be built by the LR group on the premises of the Biohouse technology incubator in the Hadassah Ein Kerem Medical Center, will also be supported by the Jerusalem Development Authority. The accelerator program, scheduled to begin in Q1/19, will last six months. It will provide companies with easy access to hospital resources and medical and expert professional staff. IBM will provide technological advice from its experts and free access to its advanced technological tools, including hosting on IBM Cloud.

Hadassah said that it had selected IBM to lead the program because IBM Alpha was a global leader with experience in digital medicine. For the medical center, closer ties with entrepreneurs for the purpose of promoting tomorrow’s medical innovation and development will advance treatment of patients in the future at Hadassah and other hospitals around the world, Hadassah said. (Globes 29.11)

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8.5 EZbra Breast Dressing Makes US Debut at Premier Aesthetic Surgery Conference

EZbra Advanced Wound Care announced its official entry into the US market. The company made its debut at the Aston Baker Cutting Edge Aesthetic Surgery Symposium, in New York, NY. Every year, more than 13 million breast procedures are performed worldwide, for either medical or aesthetic reasons, and yet, there is no standard of care for post-op breast dressings.

EZbra is a proprietary sterile disposable all-in-one advanced breast dressing, offering a state-of-the-art solution to address the challenges that arise following all breast procedures (aesthetic, biopsy, lumpectomy, mastectomy, and reconstruction) – helping surgeons, both US and worldwide, address patient discomfort as well as save time in the operating room. Additionally, the disposable and sterile qualities of EZbra may help decrease the risk of infection during recovery. Earlier this month EZbra successfully raised $3 million in funding as part of their series A round, which will be leveraged for its US commercialization.

Tel Aviv’s EZbra, a women lead company and Femtech industry innovator, aspires to create a uniformly accepted high-quality breast dressing for the more than 13 million breast procedures performed annually. The company’s flagship product is an innovative and patented disposable post-surgical breast dressing that provides soft absorbent protection and compression. To date, the company has raised $4.7 million. (EZbra 02.12)

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8.6 CLEW & UMass Memorial Medical Center Bring Predictive Analytics to Tele-ICUs

CLEW announced its partnership with UMass Memorial Medical Center, one of the largest academic medical centers in Massachusetts. CLEW’s platform analyzes the hundreds of thousands of data points the average critical care patient in a US hospital provides every minute, to help clinicians make timely decisions with actionable clinical, operational and financial insights. The company’s innovative prediction models and advanced analytics engine detects deterioration in real-time, and delivers predictive warnings during all phases of a patient’s Tele-ICU stay. CLEW’s AI platform will provide UMass Medical with the tools to enhance its patient care, and reduce costs by preventing clinical deteriorations, while maximizing healthcare resources.

Through this partnership, CLEW will expand its advanced clinical trials for its real-time, patient-level predictions based on AI algorithms, and customized physiological models, at UMass Memorial. These predictions will be based on clinical data leveraged from UMass Medical Center’s Tele-ICUs, monitoring five different facilities, and approximately 150 patients in real-time.

Netanya’s CLEW Medical (formerly Intensix) is a real time AI analytics platform designed to predict life threatening complications across various medical care settings, and help providers make better informed clinical decisions, improve outcomes and safety, streamline patient care, efficiently handle regulations and penalties, and lower the cost of care. The platform uses machine learning and data science technology to develop physiological, predictive models at the level of each individual patient in order to deliver predictive warnings during all phases of a patient’s stay. Originally developed and proven in the ICU, these models optimize scarce clinical resources and guide health care providers in predicting patient deterioration, across all care settings. (CLEW Medical 29.11)

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8.7 NRGene Announces Expanded Licensing Agreement with Bayer for the GenoMAGIC Platform

NRGene announced a key milestone in its multi-year licensing agreement with Bayer for the use of GenoMAGIC, a cloud-based big data analytics platform to support the company’s molecular breeding program within its Crop Science Division. Bayer has completed a one-year evaluation of GenoMAGIC and has tested its usability to compare genetic makeup and select the best candidates for molecular breeding. The licensing agreement was originally signed by Monsanto Company prior to its acquisition by Bayer.

Bayer’s R&D pipeline encompasses a broad range of solutions to help farmers mitigate the complex challenges they face on the farm – whether caused by pests, disease or weather – while improving their productivity and environmental sustainability. GenoMAGIC delivers greater breadth and depth to Bayer’s ability to discover traits, enhance genomes, and for genomic selection.

Ness Ziona’s NRGene is a Genomics company that provides turn-key solutions to leading breeding companies. Using advanced algorithmics & extensive proprietary databases, they empower breeders to reach their full potential by achieving stronger and more productive yields in record time. NRGene’s tools have already been employed by some of the leading agribiotech companies worldwide, as well as the most influential research teams in academia. (NRGene 03.12)

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8.8 Phibro Animal Health Acquires Fish Vaccine Business of KoVax

Teaneck, New Jersey’s Phibro Animal Health Corporation has acquired the assets of KoVax, an Jerusalem, Israel-based developer and manufacturer of vaccines for the global aquaculture market. The acquisition strengthens Phibro’s position in fish vaccine innovation and expands its portfolio of aquaculture products. KoVax’s research and development team has joined Phibro’s biological R&D team, and will focus on developing a pipeline of innovative vaccines for the aquaculture market. Phibro’s first commercial aquaculture vaccine is KoVax’s “KV3” vaccine, which helps prevent Koi Herpes Virus, a highly contagious disease that can cause significant mortality in common carp farms.

Phibro Animal Health Corporation is a diversified global developer, manufacturer and supplier of a broad range of animal health and mineral nutrition products for livestock, helping veterinarians and farmers produce healthy, affordable food while using fewer natural resources. (Phibro 06.12)

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8.9 Leviticus Cardio Announces Success of Groundbreaking Six Month Chronic Animal Study

Leviticus Cardio announces the successful completion of a 180-day preclinical chronic animal study to evaluate its CET technology in combination with a commercial heart pump. Leviticus’ CET technology compliments a LVAD made by Jarvik Heart, which is equipped with a post auricular pedestal, acting together as a hybrid system for the subject. The ongoing trial is being conducted at a renowned animal facility operated by the Catholic University of Leuven, Belgium. This comes as Leviticus has raised additional funds to proceed with the first in human (FIH) trial.

Founded in 2008, Petah Tikva’s Leviticus Cardio is a medical device company dedicated to improving the clinical outcome for patients with an implanted left ventricular assist device (LVAD) for the treatment of impaired cardiac function. The Company has received funding from The Trendlines Group, a leading Israeli early-stage investor, a consortium of acclaimed cardiovascular physicians, private investors and Israel’s Innovation Authority. (Leviticus Cardio 06.12)

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8.10 CollPlant’s Vergenix STR Demonstrates Significant Clinical Improvements in Tennis Elbow

CollPlant announced a clinical trial published regarding its VergenixSTR in the treatment of tennis elbow. The peer reviewed paper titled, “First clinical experience with a new injectable recombinant human collagen scaffold combined with autologous platelet-rich plasma for the treatment of lateral epicondylar tendinopathy (tennis elbow)” was published in the Journal of Shoulder and Elbow Surgery.

VergenixSTR is an injectable gel comprised of cross-linked bioengineered recombinant human type I collagen combined with autologous platelet-rich plasma (PRP). VergenixSTR forms a collagen-matrix that serves as a scaffold for cell recruitment.

The clinical trial, which was concluded in August 2016, enrolled 40 patients and evaluated three key measures of tennis elbow at 6 months post-treatment. The mean Patient-Rated Tennis Elbow Evaluation score showed a 59% improvement (reduction) from baseline at 6 months. Grip strength increased by 28% from 28.8 kg at baseline to 36.8 kg at 6 months. In 68% of patients, improvements in sonographic tendon appearance were evident. No systemic or local severe adverse events were reported. VergenixSTR has a CE mark and is currently sold in Europe. CollPlant plans to conduct a pre-submission meeting with the U.S. FDA in the coming weeks.

Ness Ziona’s CollPlant is a regenerative medicine company focused on 3D bio-printing of tissues and organs, and on developing and commercializing tissue repair products for orthobiologics, and advanced wound care markets. Their products are based on rhCollagen (recombinant human collagen) that is produced with CollPlant’s proprietary plant based genetic engineering technology. (CollPlant 10.12)

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8.11 Successful First in Humans for ZygoFix’s Spinal Facet Joint Fixation System

Misgav’s ZygoFix, a portfolio company of The Trendlines Group, announced the successful start of a first In human clinical study for its zLOCK spinal facet joint fixation system. The clinical study comprised several procedures to date and a 6-month follow-up of the first case. The first case, a fusion procedure using the zLOCK system, was performed on a 67-year-old female suffering from severe back and leg pain. The patient reported a drop in her VAS (Visual Analog Scale of 0-10 for pain measurement) from 9 pre-operation, to 1 one day post-operation and to 0 at 6 months post-op.

The zLOCK implant is designed as a miniature facet fusion cage to stabilize the segment. Its unique combination of rigid and flexible elements withstands loads and accommodates the anatomy of any facet joint. zLOCK utilizes the natural anatomy of the spine to form a “bridge” between the two adjacent vertebrae, without screws and rods. A percutaneous approach allows placement of zLOCK with only one small incision per side, making it significantly less invasive than the standard pedicle screw procedure. (ZygoFix 10.12)

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8.12 dayzz Launches Personalized Sleep Training App Based on Big Data Analysis

Innovative corporate sleep solution provider dayzz launched today its sleep training app built for enterprise workforces, which will help improve sleep while reducing employer costs related to decreased productivity, accidents and inefficient health care utilization. dayzz’s vision is to bring better sleep to everyone while significantly decreasing sleep-related costs.

Along with proper nutrition and exercise, getting quality sleep is an important pillar of health. dayzz has created a personalized sleep training app that evaluates a number of sleep issues and offers a complete, holistic sleep improvement solution. It is a unique new service in the sleep app landscape, relying on evidence-based protocols and backed by leading physicians and therapists. Treating sleep problems takes more than a single solution, and each one needs to be tailored to each user’s lifestyle and sleep needs.

dayzz provides a complete plan, integrating what customers need in a personalized and gradual manner using big data analysis. The app incorporates data from a variety of sources, including mobile behavior (ex. phone usage), mobile sensors (ex. light, noise), and monitoring devices such as Fitbit®. Analyzing the varied amount of data allows dayzz to provide users with a personalized experience, which includes appropriately timed tasks, reminders and motivation boosts based on their sleep habits, lifestyle, location, motion and activity. Along with a human sleep trainer available for employees via chat, and an upcoming sleep support group feature, dayzz’s solution is easy to follow and adhere to.

Herzliya’s dayzz is an innovative corporate sleep solution, providing personalized sleep training plans to employees across the US. Based on big data analysis, dayzz offers its mobile app to US employers as a way to increase productivity for their employees, enhance performance and wellbeing, optimize usage of the healthcare system, and reduce costs by allowing for fewer accidents and days off work. The company was established in 2017 by Maabarot Products, leading Israeli nutrition and health product developer, manufacturer and marketer, and is led by an experienced team in the fields of business, technology and clinical treatment. (dayzz 11.12)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Silverfort’s First Holistic AI-Driven Authentication Engine for Securing Corporate Identities

Silverfort announced a first-of-its-kind AI-based risk engine that analyzes activities across all on-premises and cloud environments, to dynamically calculate the most accurate risk score per user, device and resource, and apply effective authentication policies.

Most Multi-Factor Authentication (MFA) solutions were designed as point solutions for specific systems or for certain types of assets (e.g., web applications). As such, the risk analysis and adaptive policies they can offer are limited to the specific systems they protect. Unlike these point solutions, Silverfort’s approach is fundamentally different. Silverfort looks at authentication at the network level instead of integrating MFA into each individual asset. This holistic approach enables unified authentication policies, visibility, user experience and risk analysis across all systems and environments. Silverfort’s agentless architecture and holistic approach offer a big advantage over other solutions as they enable unparalleled visibility into all user activities, across all systems and environments, continuously analyzing risk for every authentication request with unmatched accuracy. Silverfort’s risk engine combines 3 core components that continuously analyze authentication activities in real time to detect a wide range of malicious behaviors and threats.

Tel Aviv’s Silverfort delivers strong authentication across entire corporate networks and cloud environments, without deploying any software agents or inline proxies. Using patent-pending technology, Silverfort enables adaptive multi-factor authentication for all sensitive users, devices and resources, including systems that don’t support it today, such as IoT devices, critical infrastructure, file systems and more. Silverfort allows organizations to prevent data breaches and achieve compliance instantly, by preventing identity-based attacks even across complex, dynamic networks, including hybrid and multi-cloud environments. (Silverfort 27.11)

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9.2 eyeSight and Exsun Partner to Bring Life-saving AI Vision to China’s Trucking Industry

eyeSight has teamed up with top Chinese GPS and telematics firm Exsun to make trucking safer, helping commercial trucks comply with new Chinese regulations which came into place in order to reduce accidents caused by driver drowsiness and inattentiveness.

More than a quarter of a million people a year (over 700 a day) are killed in traffic accidents in China, according to the WHO, and millions more are injured. Chinese authorities are demanding that trucking companies combat this danger. Shenzhen, one of China’s largest and fastest-growing cities, recently passed a law requiring all heavy trucks to have Driver Monitoring Systems (DMS) installed by this coming June. To meet these new safety requirements, Eyesight and Exsun have signed a multi-million dollar deal to produce an aftermarket Driver Monitoring System. Eyesight’s camera and Computer Vision AI will be part of Exsun fleet management and telematics solutions, which are installed in hundreds of thousands of trucks. Eyesight’s technology tracks the driver’s gaze direction, pupil dilation, eye openness, blink rate and head position to determine in real-time if the driver is drowsy, inattentive or unfocused on the road.

Tel Aviv’s eyeSight creates advanced edge-based Computer Vision and AI solutions that improve daily life experiences in the car, home, and with other consumer electronics. The company’s technology uses proprietary algorithms to deliver a range of applications, from user recognition and gaze tracking to active interactions using touch-free gesture control. With Eyesight’s technology devices both “see” and “understand” their users, unlocking a world of enhanced user experiences. (eyeSight 28.11)

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9.3 K2 OEMs Safe-T Data’s Software Defined Access to Securely Connect Cloud Services

Safe-T announced that K2, a Washington state digital process automation platform, will bundle Safe-T’s Software-defined Access (SDA) solution with K2’s Cloud offering. Incorporating SDA will enable K2 to securely connect to customer on-premises data and resources as a cloud service and overcome the biggest cybersecurity challenge in hybrid cloud infrastructure.

Safe-T’s SDA solution closes the security gap that prevents organizations from taking a hybrid cloud approach by being tightly integrated and white-labeled into K2 Cloud for quick and easy deployment by customers, many of which are in highly regulated sectors like government, finance and healthcare. Safe-T’s patented Reverse Access technology eliminates the need for opening ports and does not require VPNs, which often leave systems vulnerable to attacks. The integration with K2 Cloud provides customers with a seamless experience that enables them to utilize the platform without making any changes to their security infrastructure.

Herzliya Pituah’s Safe-T®, a wholly-owned subsidiary of Safe-T Group, is a leading provider of zero trust access solutions which mitigate attacks on enterprises’ business-critical services and sensitive data. The company’s software-defined access (SDA) platform reduces the attack surface, empowering enterprises to safely migrate to the cloud and enable digital transformation. With Safe-T’s patented, multi-layer software-defined access, financial services, healthcare, utility companies and governments can secure data, services, and networks from internal and external threats. (Safe-T 28.11)

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9.4 Ecclesiastical Insurance Selects Sapiens’ Property Insurance Suite as Its New Core Platform

Sapiens International Corporation announced that Ecclesiastical Insurance Office PLC (Ecclesiastical) has selected Sapiens IDIT suite for property and casualty/general insurance and Sapiens Reinsurance to replace Ecclesiastical’s existing general insurance systems. Ecclesiastical selected Sapiens as part of its strategic drive to transform its UK and Ireland business and grow its book. Investing in the Sapiens general insurance suite will deliver a range of benefits for the group, enhancing the customer and broker experience. The specialist financial services group has a strong portfolio of insurance, investment management, broking and advisory businesses in the UK, Ireland, Canada and Australia.

Sapiens IDIT is a component-based software solution suite that enables insurance carriers to meet critical and long-term business goals, with extensive multi-company, multi-branding, multi-currency and multi-lingual capabilities. The suite is built on open technology and is backed by Sapiens’ 30+ years of unmatched delivery expertise and global presence. Its field-proven, modular components support all core operations of personal, commercial and specialty lines of business.

Holon’s Sapiens International Corporation is a leading global provider of software solutions for the insurance industry. The company offers software platforms, solutions and services, including a full digital suite, to satisfy the needs of property and casualty/general insurers, and life, pension and annuity providers. Sapiens also services the reinsurance, workers’ compensation, financial and compliance, and decision management markets. The company’s portfolio includes policy administration, billing and claims, underwriting, illustration and electronic application. The digital suite features customer and agent portals, and a business intelligence platform. (Sapiens 28.11)

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9.5 RFOptic Launches Its Latest Generation of 40GHz RFoF and ODL Solutions

RFOptic, a leading provider of RF over Fiber (RFoF) and Optical Delay Line (ODL) solutions, has launched its latest generation of 40GHz ultra-wideband solutions. RFOptic has launched its next generation of 40GHz RF over Fiber compact modules with superior features for telecommunications and defense applications, satellite, point-to-point remote antennas and broadcast.

This latest generation of 40GHz Optical Delay Line (ODL) modules is based provide a high performance solution for testing and calibrating radar systems or RF communication equipment. The ODL converts analog RF signals to optical signals, and introduces an optional constant gain with true time delay ranging from nanoseconds to hundreds of microseconds. At the output, the signals are converted back into the RF domain. The 40GHz Optical Delay Line is a com
pact solution, which provides superb performance and includes accurate time delay and ultra-silent operation. It can be ordered with an integral switch unit supporting up to 8 predefined additive time delay sections in a single ODL unit as well as more delay states when using a Progressive ODL architecture.

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9.6 SafeRide Technologies Joins GENIVI Alliance to Help Ensure Vehicle Security

SafeRide Technologies, provider of industry-leading multi-layer cybersecurity solutions for connected and autonomous vehicles, has joined the GENIVI Alliance, a non-profit alliance focused on delivering open source, in-vehicle infotainment (IVI) and connected vehicle software. SafeRide’s vSentry cybersecurity software will be available on the GENIVI platform, joining over 140 companies in the alliance. All members will now be able to easily implement and use SafeRide’s technology in order to secure connected and autonomous cars from both known and unknown cybersecurity threats.

Tel Aviv’s SafeRide Technologies is the provider of vSentry, the industry-leading multi-layer cybersecurity solution for connected and autonomous vehicles that combines state-of-the-art deterministic security solution with a groundbreaking AI profiling and anomaly detection technology to provide future-proof security. SafeRide provides OEMs, fleet operators and automotive suppliers early detection and prevention of cyberattacks, and helps to avoid financial damage, prevent reputation loss and save lives. (SafeRide 30.11)

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9.7 BetterTrade.co – Tech for Traders: Artificial Intelligence to Predict Market Reaction

The markets react based on new information and traders lack the ability to analyze the market in real time. A lot of new information streams into the markets all the time, digesting this information is difficult for a human. BetterTrader’s AI can process a huge amount of data in a short period of time and generate trade ideas. The most essential barrier is that development of AI infrastructure which is critical for effective work of AI, is extremely expensive.

BetterTrader.co is an AI-powered information platform – an analysis tool that interprets market data into accurate trading decisions in real-time. The main goal of BetterTrader is to reveal the most relevant trade ideas and new opportunities on the market. BetterTrader AI algorithms monitor a variety of news and data sources across the world in real-time. The data from various sources is fed into a central server, where it is analyzed by our AI engine for patterns, relationships, and opportunities.

BetterTrader.co is a group of former professional day traders and statistics specialists with years of trading and coding experience. They created this program to provide their traders with statistically back-tested trade ideas using artificial intelligence algorithms, sending you analyzed information about macro events at the exact moment they are released. BetterTrader.co’s technology then calculates the magnitude of these events using historical data and artificial intelligence to predict market reaction. Additionally, BetterTrader.co helps traders to react to market movements with price-driven trade ideas which are detected by their own artificial intelligence algorithms. (BetterTrade.co 03.12)

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9.8 Syte Partners with Farfetch to Power Their New ‘See it, Snap it, Shop it’ Feature

Syte, the leading visual AI startup, has partnered with Farfetch, the global technology platform for the luxury fashion industry, to power their new in-app visual search feature on iOS. Farfetch has innovation at its core and a key area of focus for the business is implementing new technologies to enhance customer experience. Its implementation of visual search on the Farfetch app is the next step to creating a cohesive retail environment. By updating the Farfetch app with this new “See it, Snap it, Shop it” feature, Farfetch hopes to empower their customers to interact with, and engage with, all of the day-to-day style inspiration they come across. Whether it’s a screenshot from social media, a photo of a friend’s envy-inducing closet, or a favorite blogger, there is a lot of style inspiration going untapped.

Tel Aviv’s Syte is a visual AI technology provider that improves retailer’s site navigation, product discovery and user experience by powering solutions that engage and convert shoppers. With Syte, retailers can leverage shoppers’ inspiration and existing product interest to ensure they present the right products at the right time. Partnerships with technology innovators such as Microsoft, SAP, Naver and Oracle have establish Syte as a leader in the market. Powering the visual search within Samsung and other leading phone manufacturers allows Syte to increase the reach of their retail clients. Brands currently using Syte’s technology include Farfetch, Marks & Spencer, boohoo and more. (Syte 07.12)

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9.9 Karamba Collaborates with Ficosa to Secure Smart Mobility Against Cyberattacks

Karamba Security announced that Spain’s Ficosa, a top-tier global provider for the automotive and mobility sectors, is partnering with Karamba Security to harden its Telematics Control Unit (TCU) and keep vehicles protected from cyberattacks when communicating with the internet. Ficosa, through Onboard Ventures, its Open Innovation initiative, has identified Karamba Security’s Carwall solution as an effective hardening software that is seamlessly integrated into the vehicle Electronic Control Units (ECU’s), without disrupting the development process or delay the vehicle’s time to market.

Karamba Security’s software prevents in-memory cyberattacks, by hardening the ECU’s according to developers’ intentions and autonomously prevents unauthorized deviations from factory settings. Karamba’s software introduces Control Flow Integrity (CFI) which is automatically embedded in Ficosa’s development process, not relying on source code, with negligible runtime performance impact. Having secure, hardened ECU’s is a major differentiator for Ficosa, offering out-of-the-box, automatically secured, ECU’s. With Karamba’s Embedded Runtime Integrity solution, Ficosa will propose self-protected ECU’s to its OEM customers that will deterministically prevent cyberattacks, without false positive alerts or major investments in costly data analytics and security updates.

Hod HaSharon’s Karamba Security provides industry-leading automotive cybersecurity solutions for autonomous and connected cars. Its Autonomous Security software products, including ThreatHive, Carwall, and SafeCAN, provide end-to-end in-vehicle cybersecurity for the endpoints and the internal messaging bus. Karamba Security’s award-winning solutions prevent cyberattacks with zero false positives and secure communications, including OTA updates, with negligible performance impact. Karamba is engaged with 17 OEM and tier-1 customers and received numerous industry awards. (Karamba 05.12)

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9.10 Mellanox Ethernet Adapter Facilitates High Performance Network Solutions at Alibaba

Mellanox Technologies announced that its RDMA over Ethernet (RoCE) 25Gbps ConnectX network adapters have been successfully deployed in Alibaba Infrastructure Services’ production network. Alibaba, one of the world’s largest online and mobile e-commerce companies, leverages RDMA’s high throughput and low latency to accelerate the performance of a wide range of applications, including its key online services.

RDMA technology provides Remote Direct Memory Access from the memory of one host to the memory of another host without involving the operating system and CPU, therefore boosting network and host performance with low latency, low CPU load and high bandwidth. RoCE is an industry standard protocol which allows all the advantages of RDMA on existing Ethernet infrastructures. RoCE has been a natural choice for deployment of distributed cloud storage customers searching for solutions to take advantage of improved storage media performance and the growth of node storage capacity.

Yokneam’s Mellanox Technologies is a leading supplier of end-to-end Ethernet and InfiniBand smart interconnect solutions and services for servers and storage. Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability. Mellanox offers a choice of fast interconnect products: adapters, switches, software and silicon that accelerate application runtime and maximize business results for a wide range of markets including high performance computing, enterprise data centers, Web 2.0, cloud, storage and financial services. (Mellanox 05.12)

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9.11 Vayyar Launches New mmWave 3D Imaging System on a Chip (SoC) Evaluation Kit

Vayyar Imaging announced the launch of its new mmWave Evaluation Kit (EVK), Walabot-60Ghz. Walabot-60Ghz provides users with the groundbreaking capabilities of Vayyar’s high-resolution 3D imaging chip, alongside an SDK/API, facilitating rapid development, integration and scaling of products. The kit includes a highly advanced chip with a 40 Transceivers array (40 Tx/Rx), complete with FOV embedded antennas and wide-band 60 GHz imaging radar.

The Walabot-60Ghz EVK delivers an exceptionally wide field of view along with high-resolution imaging. This gives users unprecedented capabilities, enabling the development of advanced applications for smart home, robotics, retail, medical and many other industries. Potential uses include obstacle avoidance, perimeter protection, ultrasonic replacement, automatic door openers, people tracking, posture detection, short range imaging and even point cloud technologies.

Yehud’s Vayyar Imaging is changing global markets with its cutting-edge 3D imaging sensor technology. Its elite, proprietary sensors quickly and easily look into objects or any defined volume and detect even the slightest anomalies and movements to bring highly sophisticated imaging capabilities to users’ fingertips. Utilizing a state-of-the-art embedded chip and advanced imaging algorithms, Vayyar’s mission is to help people worldwide improve their health, safety and quality of life using mobile, low-cost, and safe 3D imaging sensors. (Vayyar 10.12)

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9.12 Tracxpoint Signed a Major Agreement to Deploy its Artificial Intelligence Cart at CONAD

Tracxpoint announced an agreement to roll out its Artificial Intelligence Cart (AiC®) at CONAD DEL TIRRENO, one of the seven cooperatives of CONAD’s chain with more than 3,000 supermarket stores in Italy. This is a major milestone for the Israeli startup in its mission to establish the AiC® platform as the most powerful, accessible and comprehensive solution for self-checkout and personalized in-store engagement on the market today. CONAD DEL TIRRENO will start implementing the AiC® ecosystem during 2019.

In direct contrast to capital-intensive and smaller store concepts like Amazon Go or its imitators that rely on ceiling cameras for location-based processing, the Tracxpoint AiC platform uses a first of its kind AI connected shopping cart that leverages on-cart cameras coupled with built-in weight sensors and powerful GPUs. The AiC will identify each item added to and deducted from the cart and automatically process on-cart transactions and payment upon leaving the store.

Nesher’s Tracxpoint is a leading global provider of next-generation self-checkout grocery solutions. Its unique Artificial Intelligence Cart (AiC®) platform offers convenient personalized online shopping experiences to grocery shoppers like never before. Established in 2016 by founders with a combined 80 years of experience, the company is changing the grocery shopping experience by integrating ground-breaking AI and sensor fusion technology inside a smart AIoT shopping cart architected by legendary luxury auto designers. (Tracxpoint 10.12)

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9.13 Finscend Wins Multiple Accolades at MoneyLIVE

Finscend received top marks from industry colleagues at the MoneyLIVE Summit 2018, Europe’s leading retail banking conference, which recently concluded in London. Finscend’s presentation was voted by peers as the “best overall pitch.” In addition, Finscend was selected by participants as the start-up they were most likely to invest in and the start-up with the greatest chance of reaching scalability. By deploying BDP, banks can reduce their operating costs while increasing customer satisfaction.

Headquartered in Israel, Finscend has developing a unique solution incorporating both an algorithm and software that works with the Visa®/MasterCard® scheme. When a bank dispute or chargeback request is opened, the solution ensures that a succinct and specific dispute file is generated, which increases the likelihood of positive outcome for the client while reducing processing time and costs for banks. The solution includes management reporting tools and an enterprise user account area, where clients can manage their entire operation. The core technology is implemented with proprietary tools. (Finscend 10.12)

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9.14 Guardian’s Advanced Sensor Technology Now Helps Keep Driver’s Attention on the Road

Driver fatigue and distraction are significant factors in highway accidents and fatalities. To combat both conditions, Guardian Optical Technologies has announced it has added the position of a driver’s head to the many safety elements the company’s advanced “All in One” sensor can detect inside the cabin of an automobile. Guardian’s stand-alone automatic sensor system is built from the ground up to work with automotive hardware and software, including all built-in safety systems, such as seatbelts and airbags. Drivers are constantly kept aware of conditions and people in their cars, allowing them to sidestep dangerous human error, including unintentionally leaving infants behind in the car.

Guardian combines video image recognition (2D), depth mapping (3D), and optical micro- to macro-motion analysis to constantly scan and track occupants and objects anywhere in the vehicle, using low-cost, automotive-grade components. The sensor identifies the location and physical dimensions of everyone in the car, distinguishing people from objects. By detecting micro vibrations, the system can register, in some cases, a presence even without a direct line of sight.

Tel Aviv’s Guardian Optical Technologies is dedicated to enabling “passenger-aware” cars, with cutting-edge sensor technology that makes cars safer and more convenient. Just one sensor combined with advanced 2D, 3D, and motion analysis protects drivers and passengers by constantly scanning and tracking occupants and objects anywhere in the vehicle. These technologies work with a car’s seatbelts and airbags to sound immediate alerts. (Guardian Optical Technologies 11.12)

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10: ISRAEL ECONOMIC STATISTICS

10.1 UN Finds Wages in Israel Rising Faster than World Average

The latest Global Wage Report from the United Nations’ International Labor Organization shows that wages in Israel went against international trends to rise in 2017. According to the report, wage growth worldwide slowed by 2.4% in 2016 and 1.8% in 2017. Leaving out China, whose immense population and growth rate have a major influence on the global average, the rate of wage growth slowed by 1.8% in 2016 and 1.1% in 2017.

Despite the slowdown in wage growth – which is the lowest since 2008 – Israel has seen its average national wage rise consistently for the past five years: by 1.4% in 2013; 2.7% in 2014; 2.6% in 2015; 2.9% in 2016; and 3% in 2017. The rate of wage growth in Israel also performed well when compared to some of the strongest economies in the world. The average rate of wage growth in G-20 nations dropped to only 0.4% for 2017 (compared to Israel’s 3% increase for the same year). Some developed countries, such as Spain and Italy, saw negative growth in their annual wages. The U.S. saw its average wage grow by only 0.7% in 2017, the same rate the U.S. recorded in 2016. (Various 02.12)

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10.2 Israeli Startups Raised $600 Million in November

Israeli startups raised nearly $600 million in November, according to press releases issued by companies that completed financing rounds. The figure may be more as some companies prefer not to publicize the investments they have received. This sum can be added to the $4.5 billion that Israeli startups raised in the first nine months of 2018, according to IVC-ZAG as well as the estimated $600 million raised in October. This means that the country’s startups have raised a record $5.7 billion since the start of 2018, easily surpassing last year’s record of $5.24 billion.

Most of the sum in October was raised in large financing rounds led by Habana.ai, which has developed the world’s fastest AI chip, and raised $75 million. Another chipmaker, Valens Semiconductor raised $63 million and app developer Lightricks raised $60 million. Velox raised $32 million, OpenLegacy raised $30 million and SysAid raised $30 million. (IVC 02.12)

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10.3 Israeli Home Sales Continue to Fall in Third Quarter

On 2 December, Israel’s Ministry of Finance chief economist reported that 21,700 homes were sold in Q3/18, including purchases under the framework of the Buyer Fixed Price Plan, the fewest number of deals since Q4/11. The number was 8% less than in the corresponding quarter last year and 5% fewer than in the preceding quarter. The Ministry of Finance announcement stated that if Buyer Fixed Price Plan sales are excluded, the number of deals was 13% fewer than in Q3/17.

The number of deals at market prices (excluding Buyer Fixed Price Plan sales) in the first nine months of 2018 totaled 65,000, the lowest figure for this period of the year since 2006. Since the fourth quarter of 2016, the number of deals has dropped continuously in comparison with the corresponding quarter in the preceding year. This is the longest continuous decrease since the beginning of the preceding decade.

According to the announcement, purchases by move-up buyers totaled 7,700 housing units in the third quarter, down 12%, compared with the third quarter of last year. This is one of the lowest quarterly number for purchases by move-up buyers in recent years. Over the first nine months of 2018, move-up buyers bought only 26,200 homes, 9% fewer than in the corresponding period last year and the lowest number since 2012.

The figures confirm many recent reports that housing investors were keeping a low profile. The third quarter features a new low in purchases by investors for the first time since at least the beginning of the preceding decade, these purchases fell below 3,000 deals. The proportion of investments in total deals continued to fall, reaching a low of 13%. In comparison with the corresponding quarter last year, purchases by investors were down 35%, following the drastic fall in these proportions since the fourth quarter of 2016.

The figures for sales under the Buyer Fixed Price Plan show a rise in the number of deals. The review found that housing units purchased under the Buyer Fixed Price Plan and the Target Price Plan totaled 2,200 in Q3/18, 60% more than in Q3/17 and 28% more than in the preceding quarter. Sales since the beginning of the year in the subsidized programs totaled 6,400, 85% more than in the corresponding period in the preceding year. (MoF 02.12)

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11: IN DEPTH

11.1 ISRAEL: A New Phase in Israel-Gulf Relations

Seth Frantzman posted on 26 November in the ME Forum that Intelligence and Transportation Minister Israel Katz pushed for cooperation between Israel and the Gulf states in a speech in Oman on 7 November. “In my view, cooperation between Israel and the Gulf states can and should be expanded,” he said. “Israel also has a lot to offer when it comes to water desalination and irrigation, agriculture and medicine.”

The trip bookended several high profile visits to the Gulf by Israeli officials. Prime Minister Benjamin Netanyahu visited Oman in late October. Culture and Sport Minister Miri Regev and Communications Minister Ayoub Kara also traveled to the United Arab Emirates, one to attend a sporting event and another for a conference.

The visits represent a significant breakthrough in connections between Israel the Gulf states. Since the 1990s, when Israel signed the Oslo Accords and made peace with Jordan, there were increasing ties to several Gulf countries. This included the opening of trade offices. However, relations became frozen during the Second Intifada (2000 – 2005).

In the last decade, a thaw has taken place. Katz said during his visit that his trip and others were “part of a wider trend of strengthening ties between Israel and the Gulf countries based on common interests and a mutual recognition of the potential benefits for both sides, both in terms of contending with common challenges and threats, as well as opportunities.”

The transportation minister’s visit to Oman coincided with his discussions about a rail link or “tracks of regional peace” that could one day foresee linking Israel with the rest of the Arab region. He discussed the plan at the IRU Congress that met in Muscat from 6 to 8 November.

Currently, Israel has relations with Jordan and Egypt. Jordan has been seeking to expand its very limited rail network; the Gulf states and Saudi Arabia are all laying plans for major infrastructure projects involving rail and transportation. In the United Arab Emirates, Etihad Rail is planning a 1,200 km. line that will eventually reach the Saudi Arabian border and Oman. A 2,400 km. line would link Riyadh to Al-Haditha on the Jordanian border. It would give Saudi Arabia around 3,900 km. of track.

Oman, where Katz traveled, has been increasing its rail network in recent years. In 2015, Sultan Qaboos bin Said al Said signed off on two more phases of a multi-phase rail network. The first phase links Al Buraimi on the UAE border with the port of Sohar. A second phase would stretch down to Ibri and another phase would go down to the port of Al Duqm. Eventually, it could be 2,135 km. long. With Jordan as a regional transportation hub, Israel could be hooked up to a powerful network of regional states. This would also aid the Palestinian economy. “It will create an additional trade route in the region, which is shorter, faster and cheaper,” Katz said.

With Saudi Arabia pioneering major economic reforms, called Vision 2030, the region is on the verge of an economic revolution after years of stagnation. Saudi Arabia is one of the largest economies in the region, but it wants to diversify and is laying plans for nuclear energy, investments in desalination and other projects. Israel and the UAE are perfectly positioned, with roughly the same GDP, to benefit and contribute to this regional awakening.

Eight years since the Arab Spring began at the end of 2010, the Middle East is still recovering from the instability and terrorism that became the dark side of the spring. Out of the chaos and instability came the extremism of Islamic State. The defeat of ISIS has now led to a new struggle by Iran and its adversaries for regional hegemony. All of this has overshadowed Israel’s important role in regional security and relationships. Katz’s visit shows that attitudes are changing. “This is the first time an Israeli minister has been formally invited to participate in an international conference in Oman,” his office noted. He described Qaboos as an experienced and impressive leader. “I was moved to receive such a warm welcome in Oman as an Israeli minister and take part in Oman’s traditional sword dance.”

It is a sign of Israel’s growing strength.

Katz’s vision of a network of rail links may take decades to come to fruition, but it is an important symbol of the way the region may trend towards stability. A stable Middle East, as has been illustrated by the last decades of conflict, is essential for global stability.

Seth J. Frantzman spent three years in Iraq and other countries in the region researching the war on terror and Islamic State. He is executive director of the Middle East Center for Reporting and Analysis. A former assistant professor of American Studies at Al-Quds University, he covers the Middle East for The Jerusalem Post and is a writing fellow at the Middle East Forum. He is writing a book on the state of the region after ISIS. (MEF 26.11)

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11.2 JORDAN: Anger Simmers Again In Jordan Over Controversial Legislation

Osama Al Sharif posted on 29 November in Al-Monitor that public unrest is looming, given the Jordanian parliament’s passage of an income tax bill after the previous version sparked nationwide protests over the summer and discussing another law that would restrict freedom of speech.

Jordan’s upper house, the Senate, passed an income tax bill on 26 November, a day after the House of Representatives rejected amendments it proposed. Instead of holding a joint session of both chambers, the senators opted to approve the draft law as it was passed by the lower house, which had lowered tax rates on a number of commercial and industrial sectors. On 21 November, the Senate voted to revert to tax rates originally suggested, stirring negative reactions from some legislators, the media and various business sectors in the kingdom.

The government of Prime Minister Omar Razzaz has crossed a major hurdle by passing new income tax legislation, the issue that brought down its predecessor last June. In contrast to the popular protests that forced the resignation of Hani al-Mulki’s government, the Jordanian street has been eerily quiet this time. But the general mood remains both critical of the proposed law and skeptical of the government’s promises that it will not target the middle and low-income classes.

While the kingdom’s influential Professional Unions Association that led this summer’s strikes and protests remained silent as the House debated the income tax bill earlier this month, the Jordan Times reported on 25 November that the syndicates once again opposed the controversial bill, saying that “escalatory yet democratic measures” may be taken to push for its cancelation. On the same day, a small number of union members held a protest in front of the Professional Unions compound.

Passing the law, which is intended to prevent tax evasion and widen the tax base, is part of an economic reform plan that the government is undertaking in an agreement with the International Monetary Fund. The adoption of the law will allow the government to receive additional loans from the IMF and other creditors to deal with its budget deficit as it continues to restructure the economy.

But representatives of various commercial and industrial sectors say provisions in the bill will cripple the local economy further and raise prices of essential goods. President of the Amman Chamber of Industry Fathi al-Jaghbir told Al-Monitor that additional taxes will hurt Jordanian industries and weaken their competitiveness. He pointed to an amendment that canceled an exemption of income tax on exports while another raised the income tax rate on the industrial sector from 15% to 20%.

Jaghbir said that other sectors, such as agriculture, will also be adversely affected. He added that the chamber will take a number of escalatory steps against the law including holding peaceful protests and launching a social media campaign.

Economic columnist for Ad-Dustour Khaled al-Zubaidi also believes the new law will hurt the local economy and chase off foreign investors. He told Al-Monitor that an amendment proposed by the Senate to impose a 10% tax on capital gains and another 10% on profits earned from trading in securities will kill an already weak financial market. “The government is working against its own interest because as economic sectors become sluggish as a result of this law, its earnings from taxes will decrease accordingly,” Zubaidi said. He added that when annual economic growth is at a humble 2%, the government should introduce incentives such as lowering taxes.

But while the government has avoided mass protests over the income tax law, it may still face public wrath over another piece of controversial legislation it wants to pass. Last summer, the previous government had sent an amended cybercrime law to the House. The proposed draft was criticized by the Jordan Press Association, journalists, activists and political parties for imposing heavy penalties including jail on those found guilty of incitement under a vague hate speech article.

The controversial article loosely defines hate speech as a “statement or act that is prone to fuel religious, sectarian, ethnic or regional sedition; calls for violence or justifies it; or spreads rumors against people with the aim of causing them physical harm or damage to their assets or reputation.”

But even as Razzaz himself concurred that the definition is too broad, he has refused to withdraw the bill, leaving it to the legislature to make needed changes. He was quoted on 20 November as saying that Jordan needs such a law to fight blackmail, fraud, character assassination and hate speech as well as pornography.

Activists fear that legislators, who are constantly criticized for their poor performance on social media outlets, will cooperate with the government to pass the draconian law. A growing number of Jordanians have joined a social media campaign against the cybercrime bill.

An opponent of the law, House of Representatives member Khaled Ramadan, told Al-Monitor that the government is now attempting to restrict criticism and people’s right to free speech. “I believe the law will pass and that deputies will seek to impose harsher penalties,” he said. He added that current laws are more than enough to deal with hate speech. Head of Jordan’s Center for Defending Freedom of Journalists Nidal Mansour believes that if the cybercrime law is passed, Jordan’s ranking in various international freedom indices will decline significantly.

He told Al-Monitor that Article 11 of the bill allows for the imprisonment of journalists and social media activists and that the loose definition of hate speech will make any kind of criticism in any medium culpable, facing up to three years in prison. “It’s not an issue of more laws but one of culture and changing people’s behavior,” Mansour said. “It has to do with instilling free speech values and social responsibilities in schools so that future generations can exercise their right responsibly.”

Osama Al Sharif is a veteran journalist and political commentator based in Amman who specializes in Middle East issues. (Al-Monitor 29.11)

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11.3 BAHRAIN: Bahrain ‘B+/B’ Ratings Affirmed; Outlook Remains Stable

On 30 November, S&P Global Ratings affirmed its ‘B+/B’ long- and short-term foreign and local currency sovereign credit ratings on Bahrain. The outlook is stable. The transfer and convertibility assessment on Bahrain remains at ‘BB-‘.

Outlook

The stable outlook reflects our expectation that the Bahraini government will use the window of opportunity provided by the pledged financial support from other Gulf Cooperation Council (GCC) sovereigns to accelerate the pace of fiscal consolidation against remaining external risks, exacerbated by the very low central bank reserves.

We could raise the ratings if Bahrain’s budgetary position improves significantly beyond our current expectations. We would also consider raising the ratings if GDP per capita trend growth strengthens.

We could lower the ratings if external pressures intensify, for example, if the exchange rate peg were to come under pressure due to a sharp increase in demand for foreign currency.

Rationale

Our ratings on Bahrain are supported by the country’s net external asset position. The ratings are also supported by our expectation of financial assistance from countries in the GCC, $10 billion of which was announced in October 2018. We expect this recently announced support to partly meet the Bahraini government’s funding needs over the coming years, partly replacing other external funding. The ratings are constrained by our view of Bahrain’s continued budgetary dependence on oil revenues, its high stock of government debt, and its unresolved domestic political tensions, which in our view hamper the effectiveness of the sovereign’s policymaking. The ratings are also limited by the economy’s weak trend growth in real GDP per capita.

Flexibility and Performance Profile: Financial support from other GCC sovereigns will help Bahrain implement budgetary consolidation

Bahrain has received pledges of financial support of $10 billion over the next four years from GCC sovereigns. This money will partially cover the government’s funding needs and support Bahrain’s exchange rate arrangement.
The government has also enacted fiscal measures which aim for a balanced budget by 2022. We have lowered our estimate of Bahrain’s fiscal deficits as a result, but we do not expect a balanced budget within our forecast period.

In October 2018, Bahrain received pledges of $10 billion (26% of 2018 GDP) of support from Kuwait, Saudi Arabia and United Arab Emirates. We expect disbursements to take place over the length of the government’s 2019 – 2022 budgetary consolidation program and that initial disbursements will begin before the end of 2018. The exact nature of the support package, in terms of whether or not the funds will be conditional on Bahrain achieving specific fiscal targets and the type of funding to be provided, for example, grant or debt funding, has yet to be announced. We have assumed that support will come in the form of debt. In our view, the support package provides the government with time to enact further budgetary consolidation measures with a reduced need to fund its ongoing deficits externally, thus easing financial market pressures. Nevertheless, the replacement of one source of external debt financing with another means that our forecast for the level of central bank international reserves is largely unchanged.

The recently announced pledge is on top of the $10 billion announced in 2011 ($7.5 billion excluding Qatar). We estimate about $2.5 billion of the amount pledged in 2011 has been disbursed so far. This slow pace of disbursement relates to the package being targeted at infrastructure projects, and the related administrative delays in fund absorption. We expect the new support will cover budgetary expenditure and will be disbursed more quickly within the next four years.

At the same time, the government has announced an ambitious plan to balance its budget by 2022. The plan includes revenue-increasing measures focusing on increasing revenue capture from the non-oil sector of the economy. Currently, fiscal revenues are heavily oil-dependent, despite the oil sector contributing less than 20% to GDP. On the expenditure side, the government is planning on reducing the government workforce by about 15% through a voluntary retirement scheme, which will require an initial outlay we estimate at around 2% of 2018 GDP. We expect that the cost of the scheme will not be funded from the state budget, and assume it will be paid for with government assets. The government also plans to reduce expenditure through a centralized procurement structure, and to balance the revenues and expenditures of the Electricity and Water Authority (EWA), which would reduce government transfers.

Taking into account the government’s new plan, we now expect Bahrain’s fiscal imbalance to narrow at a faster pace, reaching 5% of GDP by 2021 from close to 10% of GDP in 2017. We expect increases in non-oil revenues, especially from the introduction of the value-added tax (VAT) in 2019. Though implementation will be gradual, we assume on average that the VAT introduction could have a revenue-raising impact equal to 3% of nominal consumption a year. In our view, government revenues will remain dependent on oil over the forecast period. For our forecasts, we assume an oil price of $65 per barrel in 2019, $60 in 2020, and $55 in 2021. We expect expenditures to continue to decline over our forecast period, driven by the government’s new expenditure reduction measures. Government interest payments are a growing item of expenditure, and now comprise almost 17% of total expenditures, up from around 6.5% in 2014. Though the financial support package, if concessional in nature, could help reduce interest costs, we believe it will remain a large component of expenditure.

We consider the $10 billion fiscal support from GCC sovereigns as government debt in our projections. We estimate that the government’s gross debt stock will increase toward 87% of GDP by 2021, down from our earlier projections of 100% of GDP by 2021. In our view, the high level of debt remains a constraint on the government’s fiscal flexibility. Our forecasts include an additional 1% of GDP in addition to the budget deficit in annual government debt accumulation, in relation to the government’s historical off-budget spending on defense and the Royal Court. We do not expect government debt to reach the legislated debt ceiling, currently at 102% of GDP, within the forecast period. We estimate debt on a net basis at about 60% of GDP in 2018 and forecast net debt at 69% of GDP by 2021. To derive net government debt, we net off cash and available-for-sale securities at the social security system and the Future Generations Fund from gross debt.

Bahrain’s gross international reserves are low, covering less than one month’s current account payments and about 40% of the monetary base, according to our estimates. Gross international reserves were just under $2 billion as of September 2018. We expect reserve levels at $2.6 billion at the end of 2018. They have also been volatile, in the absence of a substantial and sustained net inflow of foreign currency. Nevertheless, we note that the Central Bank of Bahrain (CBB) receives daily foreign currency inflows from the sale of oil (through the national oil companies). Previously, the main support for the CBB’s gross international reserve position was government external bond (and sukuk) issuance. We expect that financial assistance from other GCC sovereigns will, to some extent, replace these sources of funding. We forecast year-end reserves to be broadly flat over the next few years.

Deducting Bahrain’s monetary base from reserves – because we view currency convertibility into foreign currency as a requisite for pegged arrangements – results in negative usable reserves. In our view, monetary policy flexibility is limited because the Bahraini dinar is pegged to the U.S. dollar. In addition, we consider the CBB has limited credibility regarding its ability to maintain its exchange rate arrangements, given its low and volatile level of gross international reserves.

We expect a modest narrowing in Bahrain’s current account deficit this year based on higher oil prices than 2017. However, we assume a decline in oil prices over the forecast period, which should lead to increasing current account deficits. Increased exports of aluminum from the expansion of Aluminium Bahrain should support exports. Although we expect Bahrain to remain in a net external creditor position over the forecast period, we expect that the coverage of external liabilities by liquid external assets (narrow net external debt) will fall slightly. Gross external financing needs remain high due to Bahrain’s large banking sector.

For our banking sector contingent liability assessment, we refer only to the resident retail banks because, in our view, the cost of the wholesale banks’ potential financial distress would not be fully borne by the government, given the high share of foreign ownership. This is not the case, however, in our external risk analysis, where the international investment position contains both resident retail and resident wholesale banks. Despite Bahrain’s large financial sector (domestic retail banks) with gross assets estimated at 236% of GDP and a large number of companies majority-owned by the government, we consider the government’s contingent liabilities to be limited. On average, banks display high regulatory capital positions. Our Banking Industry Country Risk Assessment for Bahrain is ‘7’ (on a scale of 1-10, with ‘1’ being the lowest risk and ’10’ the highest).

Domestic liquidity remains healthy, as shown by the increase in domestic deposits during 2017, coupled with a stable amount of funds from the government and related entities. Most of the asset price correction has worked its way through the banking system, as shown by the decreasing cost-of-risk of most banks operating in the country. We do not expect a significant negative impact on the asset quality of the local banking system. We also note that the exposure to the construction and real estate segment has stabilized at about 19% of gross loans, though it still stands at a high 35% of commercial loans. We consider that the overbanked status of the Bahraini banking system – with a small bankable population and economy – fosters intense competition and squeezes interest margins. High shares of customer deposits, including from local and foreign owners, and limited reliance on external debt, feature prominently in retail banks’ funding profiles. Excluding the external assets and liabilities of the wholesale sector, Bahrain’s narrow net external asset position would likely turn to a liability position in the region of 30% of current account receipts, rather than the creditor position we currently present.

Institutional and Economic Profile: We expect the economy to expand, but fiscal consolidation could act as a constraint

* We expect real economic growth to average 2.5% over 2018-2021, supported by GCC-funded infrastructure investment, but fiscal consolidation could weigh on growth.

* We estimate trend growth in real per capita GDP at -0.6% over 2012-2021, below that of peers at similar levels of development.

* There were no reported incidences of political violence or protests in the run-up to the November elections. However, we expect political decision-making to remain centralized.

Bahrain’s economy and financial system have performed well, despite the government’s weak fiscal position and low level of gross international reserves at the CBB. However, the sharp increase in fiscal consolidation could weigh on growth over the forecast period. Our forecast for average real GDP growth over 2018 – 2021 is 2.5%. In addition to the boost provided by GCC-funded infrastructure investment, a number of large ongoing projects should support growth. About $2.5 billion (6% of 2018 GDP) of the GCC infrastructure support fund has been disbursed since 2013, with a sharp increase in disbursements taking place in 2016 ($675 million) and 2017 ($530 million). We expect about $870 million to be disbursed over 2018 and further annual disbursements of about the same over the next five years.

Bahrain’s relatively diversified economy benefits from its proximity to the large market of Saudi Arabia, strong regulatory oversight of the financial sector, relatively well-educated work force, and low-cost environment. We expect population growth to average around 3% a year over the forecast period. When GDP performance during 2012-2021 is adjusted for population levels, real growth is negative, suggesting that labor supply is a key driver of growth.

We anticipate that Bahrain’s political tensions will continue. In our opinion, there are still risks from the entrenched polarization between the Shia and Sunni communities, and internal communal divisions. We consider that the implementation of sensitive fiscal austerity measures has the potential to stoke unrest, thereby constraining the government’s policy choices. We note, however, that fiscal consolidation measures already introduced have not had any security-related repercussions. There were also no reported incidences of political violence or protests surrounding the November 2018 election. In our view, the overall transparency of policymaking is constrained and accompanied by variable disclosure of information.

Bahrain is a member of the coalition of Arab states, which has imposed a boycott on Qatar, cutting diplomatic ties as well as trade and transport links with the country on 5 June 2017. The boycott has had a minimal impact on Bahrain’s economy (except for the forgone $2.5 billion formerly pledged to Bahrain from Qatar), though political tensions within the GCC could persist, in our view. (S&P 30.11)

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11.4 EGYPT: Egypt Grapples With Economic Decisions Amid High Inflation Rates

Muhammed Magdy posted on 30 November in Al-Monitor that the Monetary Policy Committee of the Central Bank of Egypt decided to hold key interest rates for the fifth consecutive quarter, which raised questions about the government’s ability to lower the high inflation rate.

The Monetary Policy Committee of the Central Bank of Egypt (CBE) decided on 15 November to leave key interest rates steady, keeping the deposit rate at 16.75% and the lending rate at 17.75% for the fifth consecutive quarter amid a rising inflation rate that stood at 17.7% in October, compared to 16% in September. This raised questions about the bank’s ability to reach the target inflation rate of 13% (± 3%) during the fourth quarter of 2018.

The CBE acknowledged the increasing risks resulting from a higher-than-forecast increase in the prices of some fresh commodities such as potatoes and tomatoes. However, it said that its restrictive monetary policy has managed to contain core inflationary pressures, allowing the annual core inflation rate to continue to fall to an average of 8.7% between July and October 2018. The CBE said that “current policy rates remain in line with achieving single-digit inflation as soon as the effects of fiscal consolidation measures dissipate.”

Mohamed Abu Basha, a macroeconomic analyst at Cairo-based investment bank EFG Hermes, told Al-Monitor that the CBE’s decision to hold interest rates until the end of this year was “expected.” He added, “There was no need to raise interest rates this year, but there is a need to contain inflationary pressures and monitor the global deflationary trend.”

Global markets have recently witnessed confusion due to the trade war between the United States and China, the performance of Eurozone countries, Japan and the United Kingdom, and the increasing interest rates, which have been putting emerging markets under further stress. This has been evident after the International Monetary Fund (IMF) cut its global growth forecasts for 2018 and 2019 to 3.7%, down from its July estimate of 3.9%.

Abu Basha noted that the increasing inflation rate witnessed in recent months was the result of an increase in the prices of some agricultural commodities, such as potatoes and tomatoes, by more than 90%. However, the CBE Monetary Policy Committee, according to him, saw that the rise in the prices of those goods is a seasonal trend that would eventually come to an end, thus placing downward pressure on inflation.

Tomatoes in Egypt caught a virus that destroyed most crops. Also, there was a shortage in the supply of potatoes because they were out of season and because some traders decided to monopolize the stored harvest, which led to an increase in the prices. Potato and tomato prices rose by 146.7% and 43.9%, respectively, in October year over year, thus spiraling out of government control.

According to Abu Basha, there is another reason behind the CBE’s decision not to cut interest rates, namely preserving foreign investments in debt instruments. Egypt lost about $8.4 billion in foreign investments between April and September in the wake of the crisis that hit emerging markets such as Turkey and Argentina and the unprecedentedly high US interest rates.

The US Federal Reserve raised interest rates on 26 September for the third time this year, thus attracting investors to the US market and leading to capital outflow from emerging markets such as Argentina, Brazil and Turkey. On 30 August, the Central Bank of Argentina raised interest rates to 60% to save the currency, while Turkey raised interest rates to 24% on 14 September. Ahmed Badra, a member of the board of the Egyptian Arab Land Bank, concurred with Abu Basha, telling Al-Monitor that the CBE is trying to preserve Egypt’s attractiveness amid the fluctuations plaguing emerging markets.

Inflation is one of the main challenges facing the government amid its attempt to implement the economic reform program it launched after it signed an agreement on 3 November 2016, with the IMF in return for a $12 billion loan. Inflation reached 34.2% in July 2017, a level unseen in the past three decades.

Yaman al-Hamaki, an economics professor at Ain Shams University, told Al-Monitor that the government’s economic policy has cast a shadow over the Central Bank’s decision and forced it to hold interest rates. “It had no other option,” she said. Hamaki noted that the increase in the prices of vegetables — which placed upward pressure on inflation — was the result of the monopoly and corruption plaguing Egyptian markets amid the absence of government control.

She pointed out that the Egyptian government is carrying out its economic reform program in the absence of serious plans. This is evidenced by the stagnant markets, the high inflation rates and low productivity. Hamaki added that the government is implementing austerity measures without undertaking concrete reforms within the industrial and agricultural sectors, which undermines the economic reform process adopted by the state.

On 31 October, the IMF agreed to release the fourth tranche of the $12 billion loan following a fourth review of the loan program. The IMF called on Egypt to continue to implement reforms, encourage private sector investments, improve transparency in state-owned enterprises and fight corruption. Egypt is awaiting the approval of the IMF Executive Board to get $2 billion in December, the fifth tranche of the loan. It has thus far received $8 billion, and is expecting one final payment in June or July 2019.

The Egyptian Initiative for Personal Rights, a civil society organization, said in a report commenting on the third review of the IMF (November 2017 – May 2018) that the Egyptian government has only implemented four out of the 14 procedures stipulated by the IMF to receive the third batch of the loan. Salma Hussein, who drafted the report, told Al-Monitor that the IMF still agreed to proceed with the loan because Egypt implemented the basic measures it had required, such as raising interest rates and lifting fuel subsidies.

Asked about the effect of holding interest rates, she said that the current interest rates are still high and the government is widely required to decrease them because high interest rates deepen the public budget deficit and lead to higher inflation rates. Hussein warned that keeping interest rates at this level poses a threat to the Egyptian economy as it could lead to a further decline in the value of the pound during the remainder of the 2019 fiscal year, thus sending inflation above 20%.

Abu Basha expects the CBE to reach the target rate by the end of the year. He said that during its meeting scheduled for December, the CBE will once again hold interest rates.

Muhammed Magdy is an Egyptian journalist currently working as an editor for judiciary affairs at the Al-Shorouk daily newspaper and as an editor for political affairs for Masrawy. (Al-Monitor 30.11)

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11.5 TURKEY: Turks Cannot Pay Back Lavish Consumer Debts

Mustafa Sonmez observed in Al-Monitor of 28 November that while interest rates increase in Turkey, the country’s laborers, white collar workers and retirees struggle to pay back debts or obtain new loans.

The stable economic growth that Turkey has experienced since 2001 has come to an end. The growth began after the financial crisis in 2001, when an International Monetary Fund program was implemented to address that crisis. Then, in 2002, the Justice and Development Party (AKP) came to power, kicking off a period of long-term growth. From 2003 – 2008, Turkey registered an annual growth of 5.9%. From 2009 – 2017, the rate of growth was 4.9% a year.

This period of economic growth created more disposable income and jobs. It also led to an increase in taxes and therefore public services, giving the AKP a steady base of voters. As a result of this economic performance, the AKP was able to build the political Islamic regime it had aspired to.

The most important feature of the “good life” in Turkey was the country’s access to an unprecedented amount of foreign resources. A stable internal environment combined with easily accessible global liquidity provided Turkey with abundant foreign resources. The expansionist monetary policies of the United States and the EU to manage the global financial crisis enabled countries like Turkey to obtain foreign resources and endowed Turkey with a rate of about 5% stable growth.

But after 2014, there were signs that the good life was coming to an end. External expansionist policies were nearing an end and interest rates were set to increase. Turkey was able to prolong its period of growth until the end of 2017, but it couldn’t fend off the 2018 crisis. According to the Central Bank of Turkey’s balance of payments figures, in the first nine months of 2018 there were no resources available from abroad, while $4.2 billion of foreign resources departed Turkey.

In the growth period, about one-fourth of foreign resources were used as household credits. After 2003, the Turkish public grew used to living off credit like never before. Consumer credit in the form of housing and car loans rapidly spread. The use of credit cards also became routine. Consumer loans helped keep domestic demand alive, but it also caused massive debts for low-income families who had mortgaged their financial futures.

In 2004, easily available consumer credit and borrowing on credit cards constituted 4.6% of the annual national income, which was 24% of total bank credits. Households were encouraged to seek attractive long-term housing loans and to fill their wallets with easy installment offers of lucrative bank and credit card deals that promised easy paybacks. Household debts that were 4.6% of the annual national income in 2004 climbed to 18% of the national income by 2013, making up 31% of total bank credits.

After 2014, household debts began to broadcast serious warning signs, as banks were not able to collect on the loans. The AKP regime realized it had to impose some restrictions and insurance rates went up. Until 2017, growth based on domestic demand was the most prominent leverage of the system. It enabled about 19 million unorganized, non-unionized workers to live on loans. According to the Confederation of Revolutionary Labor Unions, or DISK, 66% of workers were earning below $365 a month. Since it would be practically impossible to survive on that income, it was obvious that households were adding to their incomes with easily available credit.

This way of balancing the family budget became more difficult in mid-2018. Consumer inflation was amplified by a rapid increase in foreign currency parity and abnormal tensions with the United States. It became imperative to increase Turkish currency interests, thus further increasing consumer credit and credit card borrowing. The interest rate for housing loans went from 13% in the first quarter of 2018 to 29% in November. More importantly, more households were taking out bank loans to pay credit card debts, with interest rates reaching 37%. According to the Financial Stability Report issued by the central bank in May 2018, bank debts and credit card borrowing had reached about $153 billion, making up 56% of household debts.

Turkey’s low and middle income laborers, white collar workers and retirees were severely pressed in paying back their debts. Facing serious delinquencies in paying back the household credits, many debtors began facing legal actions because of their arrears. According to data issued by the Union of Banks of Turkey, 1.1 million people faced legal action in 2017. In the first nine months of 2018, this figure reached over 3.2 million debtors. Banks could not collect about $3.5 billion, or 21% of the debts.

Banks are still concerned they won’t be able to collect on the loans. Some of the debtors may lose their jobs. Those who keep their jobs may not make enough money to cope with the 25% inflation.

In a nutshell, this could mean millions of families will struggle to pay back loans. Banks, meanwhile, will face growing risk in collecting loans all the while reducing domestic demand for them and thus prolonging the current crisis.

Mustafa Sonmez is a Turkish economist and writer. He has worked as an economic commentator and editor for more than 30 years and authored some 30 books on the Turkish economy, media and the Kurdish question. (Al-Monitor 28.11)

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11.6 TURKEY: Will China buy Turkey on the Cheap?

Posting in Al-Monitor of 8 December, Kadri Gursel observed that some argue China may “swallow” Turkey through acquisitions, given China’s growing interest in the region and Turkey’s economic crisis, which has cheapened its assets and left it in dire need of external funds. But the realities on the ground speak otherwise.

Is China going to buy up crisis-hit Turkey? The question sounds startling at first, but when a journalist begins hearing discussions revolving around this theme at almost every roundtable, panel or seminar on international relations he attends, looking for an answer to the question becomes a professional duty.

Indeed, the question is not unfounded. Turkey is going through a deepening economic crisis marked by rising unemployment and inflation, a growing external debt burden and a highly volatile Turkish lira. On top of it, Turkey’s problems with the United States and the European Union are worsening, and the country is drifting away from the West. China, on the other hand, is the world’s second-biggest economic power and seeks to revive the ancient Silk Road through its ambitious Belt and Road Initiative; in this context, it takes interest in the region where Turkey sits while boasting an extraordinary increase in capital exports and a foreign trade surplus — which means an abundance of money.

Ties between Turkey and China have remained on a positive track and continue to improve. This has become possible in part because Turkey has come to ignore the Uighur problem in the name of its economic and political interests.

In the most recent high-level contact, Chinese President Xi Jinping and his Turkish counterpart, Recep Tayyip Erdogan, held a bilateral meeting on the sidelines of the G20 summit in Buenos Aires on 30 November, expressing a willingness to take further “the strategic cooperation” and economic ties between their countries.

The Global Times, an English-language daily affiliated with the Communist Party of China, wrote that Xi spoke highly of Erdogan and said that “he and the Turkish president have kept close communication in recent years and jointly led the strategic cooperation between their countries to a higher level.” According to the report, attributed to China’s official news agency, Xinhua, Xi said that “China supports the efforts by Turkey to maintain its steady development.” This was a polite reference to Turkey’s economic crisis, and Xi urged the two countries to “share development opportunities.”

Erdogan, for his part, reportedly praised the Belt and Road Initiative and expressed readiness “to deepen cooperation with China in areas such as trade and economy, investment, aviation, and tourism within the Belt and Road framework.” To put the two presidents’ words into perspective, let’s take a look at figures pertaining to economic and commercial ties, starting with a comparison of foreign direct investments (FDI).

China’s direct investments overseas increased 44% to hit $183 billion in 2016, making it the world’s second-biggest investor in this category. When it comes to Turkey, however, Turkish central bank figures point to a downturn. Chinese FDI in Turkey was worth $115 million last year, down from $300 million in 2016 and $451 million in 2015. In the first eight months of 2018, Turkey attracted a mere $5 million in FDI from China. According to figures compiled by the Economic Policy Research Foundation of Turkey, the Chinese share in the total FDI that flowed to Turkey in 2017 was 2.2%.

The trade balance between the two countries is overwhelmingly in China’s favor. China was the largest exporter to Turkey last year, selling products worth $23.3 billion. Turkish exports to China amounted to $2.9 billion, with Turkey ranking as the 54th largest exporter to the world’s most populous nation. In other words, the state of trade with China is among the major sources of Turkey’s current account deficit, along with energy imports.

The giant asymmetry between the two countries has clearly emboldened those who, after the dramatic depreciation of the Turkish lira in August, have argued that “China will buy Turkey on the cheap,” and Turkey will end up as “an economic satrapy of China” and even face “Sinification.”

Some in Erdogan’s inner circle, meanwhile, attribute ideological significance to Turkey’s ties with China, viewing them in an “East versus West” context. Take, for instance, Yigit Bulut, a senior adviser to Erdogan and a member of the Presidential Economic Policies Board. In a 9 September column in the pro-government daily Star titled “The East-West equation is being rewritten,” Bulut argues that a new, East-centered world order is emerging around Turkey and its periphery, and this new “imperial” power will include a “Turkish-Chinese synthesis” as well.

China’s Belt and Road Initiative and Turkey’s ties with China receive coverage also in the context of widespread anti-Americanism in Turkey’s pro-government media. Yeni Safak columnist Ibrahim Karagul proclaimed in the headline of his 1 October article that “the idea of a West-centered world has collapsed” and describes the Belt and Road project as “a new trade road that keeps the United States out.” According to him, the project is “an overt front” in “a political power struggle under the cover of economic war.”

Amid such comments in pro-government quarters, a summit of the Belt & Road Industrial and Commercial Alliance (BRICA) convened in Istanbul on 18 – 19 October. What was the purpose of the summit? Was it meant to help overthrow the West-centered world order and establish trade roads that sideline the United States? The summit was hosted by the Turkish Industry and Business Association (TUSIAD), which brings together the bosses of the country’s business community and upholds “the competitive market economy” and “participatory democracy.” To give an idea of TUSIAD’s representative clout, its membership of 4,500 companies pays 80% of the corporate tax in Turkey and accounts for 85% of the country’s foreign trade, excluding energy imports. The organization is known also for its substantial if soft-spoken criticism of government policies — especially those in the economic field.

The Chinese partner of the BRICA summit was the China Federation of Industrial Economics, one of the country’s leading business groups. The aim of the BRICA Istanbul summit — the second after the group’s creation in Beijing in 2015 and the first summit in Egypt last year — was “to contribute to Turkish-Chinese economic relations.”

Asked about Chinese expectations from Turkey, a Turkish participant who closely followed the backstage of the summit offered an overview in stark contrast to the overly ideological meanings that some in government quarters attribute to relations with China. “There is nothing like an East-West axis in this affair. East and West are intertwined. The largest investments to China come from the West and the largest investments to the West come from China,” said the participant, who asked not to be named. “There is one thing the Chinese are telling Turkey: ‘Turkey’s EU [accession] process should remain on track. We want to see assurances to that effect.’”

The participant stressed that China sees Turkey as a Eurasian crossroad opening to Europe and aims for a stronger presence in Turkey not only for its domestic market but also to open up to the region and the world. “They are telling us to update our customs union with the EU and not drift away from the EU,” the participant said. “They want their companies to operate under the guarantee of the law in Turkey and wish to see the EU common market standards, the market economy’s operational standards and a stable macroeconomic management in Turkey.”

According to Professor Selcuk Esenbel, a leading Turkish expert on the Far East and founder of the Asian Studies Center at Istanbul’s Bogazici University, Turkey’s trade with China is not an alternative to its economic ties with Europe but rather backs and complements them. Esenbel’s view of the Belt and Road Initiative does not support the ideologically loaded argument of a “Chinese-Turkish synthesis” either. “The Chinese are not of the mind that they are entitled to dominate,” she told Al-Monitor. “Because they rule in global trade, they want to build networks for their economic interests and security. Most of it is about trade, and secondly, they have a lot of money at hand.”

Clearly, Turkey sits in an extraordinary geographic location as to the logistical network that China is building for its global trade. Chinese interest in Turkey’s port and railroad potential is thus natural. The current economic crisis will no doubt leave Turkey poorer, and foreign buyers will in the meantime acquire some of its companies, resources and mines. Yet despite its abundance of money, China could neither buy Turkey on the cheap nor become a remedy for its crisis with that money.

Kadri Gursel is a columnist for Al-Monitor’s Turkey Pulse. His main focuses are Turkish foreign policy, international affairs, press freedom, Turkey’s Kurdish question, as well as Turkey’s evolving political Islam and its national and regional impacts. He wrote a column for the Turkish daily Cumhuriyet between September 2018 and May 2016 and for daily Milliyet between 2007 and July 2015. (Al-Monitor 08.12)

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11.7 CYPRUS: IMF Executive Board Concludes 2018 Article IV Consultation with Cyprus

On 28 November 2018, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Cyprus.

Cyprus is recovering strongly following the 2012–13 crisis. GDP grew by 4% (yoy) in the first half of 2018, driven by tourism, professional services and foreign investment in construction as well as continued strength in private consumption. The unemployment rate continued to decline to 7.4% in September from 10.2% a year earlier. Inflationary pressures remain low. Supported by subdued unit labor costs, Cyprus has maintained its export competitiveness, although the current account deficit widened last year as strong domestic demand pushed up imports. Fiscal performance has strengthened on the economic recovery with the primary surplus widening to 4.3% of GDP in 2017. Banks are making progress in cleaning up their balance sheets. Nevertheless, the banking sector still faces one of the highest non-performing loan ratios in Europe, while both private and public sectors have a large debt overhang.

The near-term outlook for the economy is favorable, with growth expected to remain at around 4.2% in 2018–19, supported by the services sector and largely foreign-financed investments. Over the medium term, economic growth is projected to slow to its long-run potential rate of around 2½%, as the transitory effects of the investment boom gradually dissipate. Fiscal performance is expected to improve with a primary surplus of around 5% in 2018–19. Public debt is thus expected to be on a firm declining path, falling below 70% of GDP by 2023, despite a sharp increase earlier this year following the resolution of the Cyprus Cooperative Bank. The economic outlook could weaken if implementation of NPL resolution is delayed, while public debt sustainability could be undermined by realization of contingent liabilities or erosion of fiscal discipline.

Executive Board Assessment

Executive Directors welcomed the strong post-crisis economic recovery, which has supported large fiscal surpluses and lowered the unemployment rate. Directors also welcomed the recent reforms undertaken to address key vulnerabilities in the banking sector, including the resolution of a large systemic state-owned bank. Directors observed, however, that private and public debt remain large while NPL ratios are still among the highest in Europe. They encouraged the authorities to make further efforts to address these legacy problems and strengthen economic growth over the medium term.

Directors emphasized the importance of further measures to facilitate a steady decline in NPLs on a durable basis. They called for steadfast implementation of the amended legislative framework on foreclosure, insolvency, sale of loans and securitization, supplemented by a strengthening of the court system and removal of uncertainties related to title deeds. Directors also stressed the need to enhance the governance and supervisory framework for the recently-established asset management company. They recommended that to limit moral hazard, the proposed Estia scheme aimed at encouraging distressed borrowers to begin servicing their loans be better targeted and based on appropriate assessment of borrowers’ capacity to repay.

Directors highlighted the need for banks to continue efforts to strengthen their balance sheets. They urged banks to diversify income sources and consolidate operations to improve cost-income ratios and better position themselves against increased competition. Directors recommended strengthening regulatory guidance on loan restructuring and exercising vigilance over bank lending policies, the adequacy of provisioning, and debt-to-asset swap policies.

Directors welcomed Cyprus’s robust fiscal performance and emphasized that strict spending discipline should be maintained. They cautioned against relying on transitory revenues from cyclical gains and one-off measures to finance permanent spending initiatives, and took positive note of the authorities’ commitment to cap expenditure increases, including the public wage bill, in line with the medium-term GDP growth rate, in order to create room for growth-enhancing spending. Directors noted that the transition to public insurance in the health sector should be carefully managed. They agreed that fiscal structural reforms are needed, and recommended strengthening public financial management, monitoring risks from local governments and the state-owned sector, and improving the corporate governance of commercial state-owned enterprises.

Directors stressed the need to undertake institutional reforms and further enhance the investment climate and raise medium-term growth potential. They agreed that reforms to increase the efficiency of the courts, speed up the enforcement of commercial claims, and clear the backlog of cases should continue. They also recommended expediting legislation to strengthen the governance and autonomy of the Central Bank of Cyprus and encouraged further efforts to mitigate AML/CFT risks. Directors noted that active labor market policies and investment in higher value-added sectors can help reduce high youth unemployment and skills mismatch, thereby promoting more inclusive growth. (IMF 03.12)

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IBG Newsletter Q4 2018

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IBG Newsletter Q4 2018

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EDI Fortnightly, 26 December 2018

December 26, 2018, 7:45 am

≫ Next: CREATING & SEIZING WORLDWIDE BUSINESS OPPORTUNITIES

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26 December 2018
18 Tevet 5779
19 Rabi Al Akhar 1440

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Israel Approves NIS 700 Million Grant for Intel
1.2  Israel to Fully Tax IPO or Exit-Dependent Employee Options (in Some Cases)
1.3  Prime Minister Netanyahu Hosts Cypriot, Greek Leaders for Annual Tripartite Summit
1.4  Israeli Government Adopts OECD Regulation Policy

2: ISRAEL MARKET & BUSINESS NEWS

2.1  Optibus Accelerates Growth of its AI-Based Mass Transportation Platform
2.2  Cannbit Signs Collaboration Agreement with Namaste
2.3  SafeRide and Ixia Deliver Advanced Testing for Next Generation Connected Vehicles
2.4  KPN Ventures Provides Growth Capital To Cloud & Edge Orchestration Company Cloudify
2.5  NoTraffic Accelerates Vision to Make All Roads Smart, Raising $3.2 Million in Seed Funding
2.6  Avanan Raises $25 Million to Revolutionize Secure SaaS Email and Collaboration
2.7  Singapore’s VisVires Backs Israeli Shrimp-Health Startup ViAqua
2.8  Temi Raises $21 Million
2.9  MinerEye Awarded $2.5 Million EU Grant for Its Data Classification and Security Solution
2.10  Israel Innovation Authority and PlanetM Collaborate for Autonomous Technologies Testing in Michigan
2.11  Ottopia Raises $3 Million to Develop Remote Assistance Platform for Autonomous Cars
2.12  Valerann Raises $5 Million to Upgrade Existing Road Information Technology for Present & Future Mobility Challenges
2.13  PepsiCo Completes Acquisition of SodaStream International

3: REGIONAL PRIVATE SECTOR NEWS

3.1  Lebanon’s First Content Curation Platform Kicks off From Beirut
3.2  Investment in MENA Fintech Startups on the Rise
3.3  ArabiaWeather and Raymetrics SA to Revolutionize Dust Forecasting in MENA
3.4  Abu Dhabi Agribusiness Seeks $10 Million for UAE and Saudi Expansion
3.5  Intel Funds NYU Abu Dhabi Cyber Security Research
3.6  Dubai’s dnata Buys New York-Based 121 Inflight Catering
3.7  BP & Mubadala Purchase 45% Stake in Eni’s Noor Concession
3.8  CIB Establishes CVentures, Egypt’s First Corporate VC Firm Focused Primarily on FinTech

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1  Israel to End Use of Coal for Electricity Production by 2030
4.2  Morocco Improves in World Bank’s Sustainable Energy Indicators
4.3  Morocco Makes ‘Impressive Progress’ in Limiting Global Warming

5: ARAB STATE DEVELOPMENTS

5.1  Lebanon’s Fiscal Deficit Up to $4.50 Billion by Third Quarter
5.2  Total Number of New Lebanese Registered Cars Down by 9.74% in November 2018
5.3  Jordan & Iraq Review Economic Relations, Explore Further Cooperation
5.4  Jordan’s Public Debt Rises to JOD28.5 Billion, Some 94% of Estimated GDP

Arabian Gulf

5.5  The Size of the GCC Retail Market in 2023
5.6  Gulf Forecast to See 81% Rise in Chinese Tourists by 2022
5.7  Kuwait Pharmaceuticals Market Expected to Exceed Revenues of $1.5 Billion by 2022
5.8  What a Difference $10 Billion Aid Makes to Gulf’s Weakest Link
5.9  Ajman (UAE) Government Sets $1.13 Billion Budget for 2019 – 21
5.10  Dubai’s RTA Partners with Careem on E-hail Taxi JV
5.11  Saudi Arabia Projects $35 Billion Budget Shortfall in 2019
5.12  Saudi Arabia Sticking With Expat Fees for Now
5.13  Red Sea Project Set to Add $5.8 Billion to Saudi Arabia’s GDP
5.14  Pakistan Receives $1 Billion from Saudi Arabia to Ease Economic Crunch
5.15  UAE Rated Most Advanced MENA Country for Online Shopping
5.16  UAE Eyes More Workers from Nepal, Rwanda and Cambodia

North Africa

5.17  Egypt’s Trade Deficit Falls 10.1% in Annual Terms
5.18  CAPMAS Reports 16.8 % Increase in Value of Egypt’s Exports in 2017
5.19  Egypt’s Constitutional Committee Authorizes Egypt-Cyprus Pipeline Agreement
5.20  Morocco’s Trade Deficit Increased by 7.7% by November
5.21  Morocco’s FDI Reaches MAD 31.82 Billion
5.22  Morocco Attracted 200,000 Chinese Tourists in 2018

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Retail Trade Volume in Turkey Shrunk in October
6.2  Cypriot Social Welfare Expenditure Fell to 19.1% of GDP in 2016
6.3  Value of Cypriot Construction Activity Spiked 22% in 2016 to €2.14 Billion
6.4  Greek Jobless Rate Drops to 18.3% in the Third Quarter

7: GENERAL NEWS AND INTEREST

ISRAEL

7.1 Israel Calls Early Elections on 9 April 2019‎

REGIONAL

7.2  Jordan’s Gender Gap Widens to Rank Near Bottom of Index
7.3  GCC Student Numbers Forecast to Grow Despite Fee Concerns
7.4  Turkey Spent Over $48 Billion on Education in 2017

8: ISRAEL LIFE SCIENCE NEWS

8.1  BrainsWay Selected by USA FDA Innovation Challenge to tackle Opioid Addiction
8.2  BiomX and J&J Innovation Collaborate for Microbiome-based Biomarkers for IBD
8.3  Check-Cap Receives FDA Conditional Approval of IDE Application to Initiate U.S. Pilot Study of C-Scan®
8.4  Aleph Farms Jump-starts First Cell-Grown Steak
8.5  Evogene & TMG Develop Nematode Resistant Soybean through Genome Editing
8.6  Biop Receives FDA Approval for its Medical Digital Colposcope
8.7  FDA Approves INSIGHTEC’s Exablate for Treatment of Parkinson’s Disease
8.8  OWC Reports Successful Cannabinoid-Enriched Sublingual Disintegrating Tablet
8.9  Kalytera Phase 2 Clinical Study Evaluating CBD in Prevention of Acute GVHD Reports Interim Data
8.10  CathWorks FFRangio System Receives US FDA Clearance

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Habana Labs’ Goya AI Processor Receives PCI-SIG Certification
9.2  My Size’s Mobile Smart Tape Measure App Reaches One Million Downloads
9.3  Fieldbit Releases Next Generation of Augmented Reality for Technical Services
9.4  ECI Debuts 1.2T Dual Channel Blade for New Age of Adaptive Optical Networking
9.5  CyberInt Launches Managed Cloud Security Services
9.6  SafeDK Revealed Thousands of Malicious In-App Mobile Ads Auto-Redirecting Users to Porn Sites
9.7  Foresight and RH Electronics to Join Forces in a Strategic Alliance
9.8  Dish Mexico Selects Gilat & Hispasat for Delivery of Broadband Services to Mexico
9.9  Essence Group Paves the Way With State-of-the-Art Functionality for Monitored Security

10: ISRAEL ECONOMIC STATISTICS

10.1  Israel’s November CPI Falls by 0.3%
10.2  Israel Poverty Report Finds Less Poverty but More Poor People
10.3  Israel Ranks as World’s Third Most Educated Country

11: IN DEPTH

11.1  ISRAEL: IVC Finds Israeli Startup Closures Diminishing
11.2  ISRAEL: Analysis – Initiated Marketing of Consumer Credit
11.3  LEBANON: Moody’s Changes Outlook on Lebanon’s Rating to Negative, Affirms B3 Rating
11.4  BAHRAIN: Moody’s Changes Outlook on Bahrain’s Rating to Stable, Affirms B2 Rating
11.5  OMAN: Oman’s Economic Ambitions
11.6  EGYPT: How Russia Challenges the United States’ Investment in Egypt
11.7  LIBYA: After Palermo: Achievements and Future Challenges For Libya
11.8  TUNISIA: Fitch Affirms Tunisia at ‘B+’; Outlook Negative
11.9  MOROCCO: IMF Approves $2.97 Billion for Morocco Under their Precautionary & Liquidity Line
11.10  TURKEY: Fitch Affirms Turkey at ‘BB’; Outlook Negative
11.11  TURKEY: Turkey’s Recession Becomes Official
11.12  TURKEY: Turkey Economic Report – 2018

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel Approves NIS 700 Million Grant for Intel

On 25 December, the Knesset Finance Committee approved a NIS 700 million grant for Intel Corp in return for a planned $5 billion expansion of its production operations at the Kiryat Gat fab. Intel submitted its plans for the Kiryat Gat expansion in May. Intel is Israel’s largest private employer and biggest exporter. In 2017, Intel Israel exported $3.6 billion worth of goods, 8% of all Israel’s high-tech exports. In exchange for the NIS 700 million grant, the Israeli government expects Intel to hire 250 new employees and make NIS 2.1 billion in Israeli procurement. (Globes 25.12)

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1.2 Israel to Fully Tax IPO or Exit-Dependent Employee Options (in Some Cases)

A new memo published by the Israel Tax authority could see local employees pay as much as 50% tax on any option they exercise as a result of their company being sold or listed on an exchange. Companies, especially in the tech sector, often grant their employees the right to buy a certain amount of company stock at a predetermined price, typically requiring them to wait a certain vesting period before the options can be exercised. According to the new memo, if the options granted to employees are dependent on employee or company stock performance, and thus the employees are acting as shareholders who bear the risk of stock price fluctuations, the options will be taxed as capital gains, at a 25% rate. If employees are granted options following an initial public offering but those options are locked for a period of two years or more, those options will also be taxed as capital gains when exercised.

If, however, employees can only exercise their options in the event of the company performing an IPO or being sold, and the monetary gain is immediate and predetermined – like any other bonus granted to employees – then the options will be taxed as income, which bears a tax rate of up to 50% in Israel.

The memo is not a change of existing policy but simply a clarification, which came about following a pre-ruling the authority made in response to a specific taxation inquiry earlier this year. Perceived as a tax increase on the already high tax load on Israel’s highest paid industry, the memo evoked criticism from Israel’s tech sector. The authority has allowed companies 180 days to change the terms of stock options already granted to employees. (Various 18.12)

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1.3 Prime Minister Netanyahu Hosts Cypriot, Greek Leaders for Annual Tripartite Summit

The Cyprus issue, energy and regional developments are among the issues to be discussed during the Cyprus-Greece-Israel trilateral summit, held on 20 December in the Israeli city of Beer Sheva. Cypriot President Nicos Anastasiades attended the Summit together with the Prime Minister of Israel Benjamin Netanyahu and Greek Premier Alexis Tsipras. President Anastasiades was accompanied by Foreign Minister Nikos Christodoulides, Energy Minister Yiorgos Lakkotrypis, Transport Minister Vassiliki Anastasiadou, government spokesman Prodromos Prodromou and Undersecretary to the President Vasilis Palmas.

It is noted that issues discussed during the summit included, among others, the Cyprus issue, energy, regional developments, the Middle East peace process, research and innovation, education, tourism, communications, agriculture, cyber security. A series of bilateral and trilateral Memoranda of Understanding were signed, followed by statements of the three leaders to the press. PM Netanyahu also hosted a working lunch for the leaders and their delegations. (CNA 19.12)

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1.4 Israeli Government Adopts OECD Regulation Policy

The Israeli government has approved the proposal of Prime Minister Benjamin Netanyahu to adopt and implement the OECD’s regulation policy. This means that new orders and rules that government ministries seek to initiate will undergo broader examination and will be reviewed by the regulation department in the Prime Minister’s Office to ensure uniformity and efficiency of government regulations.

Under the prime minister’s proposal, before any regulatory change, government ministries will have to carry out an international comparison, a cost-benefit analysis, public consultation, and an assessment of the effectiveness of the proposed legislation. The Prime Minister’s Office will review the work of the various ministries to ensure that comprehensive and thorough staff work is done before any new regulation is added. (Globes 24.12)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Optibus Accelerates Growth of its AI-Based Mass Transportation Platform

Optibus announced the closing of a $ 40 M Series B financing round, led by Insight Venture Partners with a strategic investment by Alibaba Group. The Series B funding will drive future product innovation and support expansion into new and existing markets. Existing investors, including Verizon Ventures, Pitango Venture Capital, New Era Capital and Sir Ronald Cohen, also participated in the round.

The Optibus platform is an end-to-end, SaaS offering that powers mass transportation. Optibus creates an operational plan and schedule that orchestrates the movements of every vehicle and driver in a city-wide transportation ecosystem, choosing the best options available to transit operators and agencies, and creating better service for passengers with lower operating costs. Since its Series A funding round in 2017, Optibus has expanded its presence in North America and Europe. The company has also seen its sales grow by 400% and its product chosen for more than 300 cities worldwide.

Tel Aviv’s Optibus helps the world’s leading transportation providers better run mass transportation through advanced artificial intelligence and optimization algorithms. Optibus provides a SaaS platform that plans and schedules the movements of every vehicle and driver in a transportation network, with detailed insight into how this affects operations, on-time performance and costs. Optibus has been chosen for more than 300 cities and drives some of the most complex and large-scale transportation operations worldwide, helping improve quality of service and efficiency, reduce costs, streamline operations and reduce congestion and emissions. (Optibus 12.12)

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2.2 Cannbit Signs Collaboration Agreement with Namaste

Cannbit, which was merged into A.L. Capital Holdings, announced the signing of a memorandum of understanding (MOU) with Namaste Technologies of British Columbia. The two companies have already cooperated in the past.

Namaste sells cannabis products and products related to cannabis consumption in Canada and 20 other countries. Most of its sales are online. Cannbit has licenses to grow cannabis in Israel and is in the process of organizing activity in this area. The company estimates that it will begin producing cannabis in early 2019.

Under the MOU, Namaste will help Cannbit establish cannabis ventures outside Israel and in raising capital from private investors outside Israel and on foreign stock exchanges. Cannbit will help Namaste consider the option of dual listing on the TASE. Cannbit will introduce Namaste to Israeli cannabis research and development companies for investment purposes. The parties also plan to found a chain of coffee, leisure and explanatory centers in Israel. Patients with licenses for using medical cannabis will be able to obtain guidance and explanations at these centers about how to use medical cannabis in combination with proper nutrition, subject to the security and medical licenses necessary for activity of this type.

As part of Namaste and Cannbit’s previous cooperation, Namaste invested NIS 2.5 million in Cannbit for 4.4% of the latter’s shares. The two companies signed an agreement whereby Namaste will buy cannabis from Cannbit for inclusion in its products, and for sale through its marketing channels. (Globes 12.12)

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2.3 SafeRide and Ixia Deliver Advanced Testing for Next Generation Connected Vehicles

SafeRide Technologies has collaborated with Ixia, a Keysight Business, to test SafeRide’s vSentry vehicle cybersecurity solution using the BreakingPoint applications and network security test platform. The BreakingPoint test platform simulates unauthorized data activity within the vehicle, while SafeRide’s technology detects these attempts, contains the activity, and prevents any interference or data loss.

SafeRide’s vSentry multilayer cybersecurity solution monitors all external communication to the vehicle, in-vehicle network traffic, and ECU software in real-time, and provides a zero false-positive firewall, Intrusion Detection and Prevention System (IDPS), and access control to all ECU resources. SafeRide’s vXRay advanced AI Machine Learning and Deep Learning technology uncovers zero-day vulnerabilities and allows for remediation by updating real-time access control policies over-the-air.

It can be challenging to test the level of efficiency and operation of leading cybersecurity solutions, such as SafeRide’s vSentry. To address this challenge, the BreakingPoint test solution simulates real-world traffic, distributed denial of service (DDoS), exploits, malware and fuzzing attacks. BreakingPoint simulates both good and bad traffic to validate and optimize the network under the most realistic conditions. BreakingPoint is used to trigger unauthorized data exfiltration activity, while SafeRide’s vSentry solution detects the exfiltration attempt with vehicle profiling and anomaly detection algorithms, and applies automatic bandwidth control policies to contain the incident and prevent interference and data loss.

Tel Aviv’s SafeRide Technologies is the provider of vSentry, the industry-leading multi-layer cybersecurity solution for connected and autonomous vehicles that combines state-of-the-art deterministic security solution with a groundbreaking AI profiling and anomaly detection technology to provide future-proof security. SafeRide provides OEMs, fleet operators and automotive suppliers early detection and prevention of cyberattacks, and helps to avoid financial damage, prevent reputation loss, and save lives. (SafeRide 12.12)

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2.4 KPN Ventures Provides Growth Capital To Cloud & Edge Orchestration Company Cloudify

Rotterdam’s KPN Ventures, the venture capital investment arm of KPN, has participated in the $7M financing round of Cloudify. Cloudify enables service providers and enterprises to automate, manage and virtually transform their network and application services from their core location to branches and multi-access edge devices. In addition to KPN Ventures, CreditEase Israel Innovation Fund and existing investors including Claridge Israel, BRM Group and VMware participated in the $7 million financing round. The growth capital will be used to further accelerate the international expansion and to build the partner ecosystem in order to support customer success.

The company assists many large organizations in their digital transformation by offering a solution that enables them to be flexible and to have a multi-cloud environment combined with faster adoption of new technologies. For KPN, Cloudify offers an open source solution to manage the complexity of network virtualization. The Cloudify orchestration solution is vendor agnostic and flexible to adapt to interfaces in networks and IT landscapes, and enables infrastructure management and any virtual network functions.

Herzliya’s Cloudify was established in 2014 by its parent company, GigaSpaces Technologies. In July 2017, Cloudify became independent in order to focus on the fast-growing market for management and orchestration of cloud applications, network functions virtualization (NFV) and edge devices. (Cloudify 13.12)

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2.5 NoTraffic Accelerates Vision to Make All Roads Smart, Raising $3.2 Million in Seed Funding

Founded in 2017, Tel Aviv’s NoTraffic has developed a management platform that offers cities a ground-breaking solution to reduce traffic congestion and improve road safety in real time. The company announced the completion of a $3.2M seed funding round, led by lool ventures with participation from Next Gear Ventures, North First Ventures and private investors Tal Recanati and Uri Rubin. The funds will be used to further invest in R&D, accelerate the company’s commercial roll out in the US, as well as to recruit additional employees both in Israel and the US.

NoTraffic is the most cost effective and seamless way for cities to optimize traffic flow in real time today whilst simultaneously upgrading and preparing road infrastructure for tomorrow’s world of connected and autonomous vehicles. The company has developed an advanced IoT platform for traffic management in urban environments, based on the integration of information collected through communication between vehicles and infrastructure (V2I) and information from smart sensors (using computer vision) deployed at traffic light-controlled intersections and conflict points on the road. The system is based on advanced artificial intelligence (AI) algorithms that identify, categorize and track all road users, from cars, buses, cyclists, electric scooters and pedestrians, accurately predicting their time of arrival at an intersection.

In June 2018, the company successfully completed a ground-breaking experiment, in cooperation with Foresight Autonomous Holdings Ltd. The experiment successfully demonstrated accident prevention through real- time communication between vehicles and road infrastructures, inter alia in order to prevent accidents similar to the accidents involving Google and Uber autonomous vehicles in the US. Specifically, the trial demonstrated the benefits of vehicle to infrastructure communications, whereby vehicles were able to access data on both vehicles and pedestrians outside of the vehicle’s own line of sight, preventing collisions with both vehicles and pedestrians. (NoTraffic 14.12)

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2.6 Avanan Raises $25 Million to Revolutionize Secure SaaS Email and Collaboration

Avanan has raised $25 million in Series B funding from existing investors StageOne Ventures, Magma Venture Partners and Greenfield Partners (a TPG Growth investment platform). Avanan’s customer base has increased 10-fold in the last 12 months, protecting over 1M end-user accounts in organizations across all industries, from startups to Fortune 100. Avanan plans to use the new funding to further accelerate its growth.

Avanan helps companies secure the full Office 365 suite, G Suite, Box, ShareFile, Slack and other collaboration SaaS applications from phishing attacks, malicious content, data leakage, account takeover and more. What sets Avanan apart is its multi-vendor platform, which allows customers to pick and choose security technologies from the leading vendors in the industry. Each of these vendor’s security technologies is preconfigured and activated from inside the Avanan platform with one click. Within the Avanan platform, customers can purchase predefined bundles containing security technologies from Avanan and Avanan’s partners, or a-la-carte, selecting the exact technologies and vendors they want to use in each category. Avanan sells its solution under the Avanan label as well as through several white-label OEMs with some of the leading IT security vendors.

Tel Aviv’s Avanan is the premier security solution for cloud-based email, messaging, and collaboration. Deploying in minutes, Avanan’s unique, multi-vendor security solution leverages the industry’s best technologies to protect organizations from advanced threats such as phishing, malware, data leakage, account takeover and shadow IT. (Avanan 14.12)

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2.7 Singapore’s VisVires Backs Israeli Shrimp-Health Startup ViAqua

Singapore-based VisVires New Protein Master Fund (VVNP), the food and feed investments division of VisVires Capital Asia, has invested in Israel-based medical aquafarming startup ViAqua Therapeutics. The financial terms of the investment were not disclosed.

Founded in 2014, Misgav’s ViAqua develops a particle-based method for orally administering antiviral medication to shrimp. ViAqua’s first product, expected to go on the market in the next few months, prevents and treats several ailments including white spot syndrome virus, a highly contagious and deadly virus. Previous investors in ViAqua include Dutch animal feed company Nutreco NV, Trendlines Group and the Technion Israel Institute of Technology. (NoCamels 18.12)

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2.8 Temi Raises $21 Million

Temi Global announced the closing of a $21 million investment round led by former Alibaba CTO John Wu, an existing investor. Other investors in this financing round include Generali Investments S.p.A of Italy and Hong Kong- based IoT company Ogawa. Temi has raised $82 million to date, including this latest round. The company says it will use the investment for marketing and sales initiatives of ‘Temi,’ which it calls the world’s first truly intelligent, mobile, personal robot. On top of this investment round, Ogawa and Temi have established a strategic partnership for Temi’s marketing and distribution at 180,000 points of sale worldwide. Temi is currently sold at 15 locations throughout the US as well as online. In January, the company will officially launch sales at CES.

Tel Aviv’s temi is the world’s first, truly intelligent, mobile, personal robot for your home, which places you at the center of your technology, including smart home devices, online content and video communications – harnessed by the power of your voice. Featuring state of the art AI, and a system of sensors and cameras, temi will seamlessly enter your life, perfectly navigating the most dynamic environment you can imagine. temi offers you an effortless way to connect with online content and friends. This is the personal robot experience we have always imagined, and using it is as easy as turning on a light. (temi 19.12)

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2.9 MinerEye Awarded $2.5 Million EU Grant for Its Data Classification and Security Solution

MinerEye, an innovator in AI-powered data governance, has been awarded a highly competitive SME Instrument Grant from the European Commission worth €2.2 million ($2.5 million). The Grant organization selected MinerEye’s Data Tracker to provide EU companies with innovative and effective solutions to ensure secure and compliant cloud adoption which is currently lacking in the market today. SME Instrument is part Horizon 2020, the EU Research and Innovation arm that identifies, rigorously evaluates and selects solutions that foster innovation and economic growth in the EU. Only 6.8% of companies that apply have received the Grant since its inception.

MinerEye has developed a proprietary technology based on computer vision and machine learning that automatically categorizes, classifies and tracks very large amounts of data in an extremely fast and precise fashion. Working at the byte level, MinerEye’s DataTracker can identify and tag all types of enterprise data, from PII to contracts, patents, designs photos and video.

Powered by Interpretive AI, Hod HaSharon’s MinerEye technology sees and continually tracks data by its essence, regardless of its form and information content type, wherever it resides. With MinerEye’s unique approach, companies can now discover, organize and track vast information assets by scanning enterprise data repositories at the byte and pixel level. Sensitive data is mapped, tagged and secured according to data protection and compliance regulations including GDPR, HIPPA, PCI-DSS, SOC2, and EU-U.S. Privacy Shield. Employing machine learning and computer vision, MinerEye’s flagship product DataTracker is helping companies significantly reduce data storage, monitor and fast-track cloud migration activities, protect previously undetected, unclassified and undermanaged data against security breaches, and continuously audit their information to maintain regulatory compliance. (MinerEye 19.12)

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2.10 IIA and PlanetM Collaborate for Autonomous Technologies Testing in Michigan

An agreement was announced between The Israel Innovation Authority and PlanetM to co-finance testing and piloting of future autonomous technologies in Michigan. The Michigan Israel Business Accelerator (MIBA) was instrumental in initiating and crafting the agreement that was announced on 16 December. The goal of the program is to expand the cooperation between the ecosystem in Michigan, which enables manufacturing and testing in the field, and innovative Israeli companies in a variety of industries and in the smart transportation sector in particular.

As part of the program, Israeli companies will receive support for conducting field tests and piloting of the technologies developed by pilot sites in Michigan, such as the American Center for Mobility (ACM), MCity and/or the Michigan Highways, as well as access to the best technological incubators, Israeli companies will also have the opportunity to test their technologies in the snowy conditions of Michigan. Selected candidates will be able to receive up to 50% of the approved funding budget by PlanetM, in addition to a grant of up to 50% of the remaining funding budget to be approved by the Innovation Authority. (MIBA 23.12)

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2.11 Ottopia Raises $3 Million to Develop Remote Assistance Platform for Autonomous Cars

Tel Aviv’s Ottopia announced the closing of a $3 million seed funding round led by MizMaa Ventures with participation from Glory Ventures, Plug and Play, and NextGear. The startup, founded earlier this year, emerged from stealth mode to make the announcement.

Ottopia developed an advanced teleoperation platform for autonomous vehicles, which allows the human operator and the car’s artificial intelligence to work together during a remote intervention, through a combination of both human and artificial intelligence. The human assists the Autonomous Vehicle (AV) with decision-making in a complex scenario; the AV then executes that decision and navigates with a full suite of sensors and safety measures engaged. The funds will be used to expand the company’s R&D team and collaborate with autonomous vehicles companies to prove the versatility and enhanced safety of the platform. (Ottopia 21.12)

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2.12 Valerann Raises $5 Million to Upgrade Existing Road Information Technology for Present & Future Mobility Challenges

Valerann has raised $5 million in seed funding in a round led by Rio Ventures Holdings and 2B Angels, in addition to Spain’s Telefonica and unnamed angel investors. The company, which will make its official debut at CES next month, is also announcing a partnership with both Bosch and Jaguar Land Rover to create a “holistic data marketplace” to support connected and self-driving vehicles.

Valerann essentially provides a wireless, sensory, IoT system that spits out information about everything that takes place on the road in real-time. This data can then be used to detect risks, prevent accidents, optimize intersections, automate traffic control centers, and support connected and autonomous vehicles. The interesting thing is that it can theoretically be used for any road today.

Founded in 2016, Tel Aviv’s Valerann has created the Smart Road Solution. It has already deployed its solution with some of the largest private and public highway operators in the UK, the US and Israel and is expected to integrate its system with two additional private toll road operators in Europe in the next year. (Valerann 21.12)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 Lebanon’s First Content Curation Platform Kicks off From Beirut

Limelines, Lebanon’s first content curation platform, was officially launched to the public on 27 November 27, 2018. The Beirut-based digital startup is fully developed by local talents, and caters to every reader, writer, and publisher in the region. The high-tech platform exposes the MENA region’s publishers and content creators all in one place.

Limelines allows readers to customize the content they would like to read about and pick the topics that interests them to benefit from an elevated and enhanced reading journey. With its integrated advanced machine learning, it spares the reader the time and effort of skimming through stories they less relate to: Limelines curates and offers its readers topic-driven stories. This enables them to move to a new era of news consumption that satisfies their information needs. Limelines also allows its users to collect and share the stories they read with their community. This AI-driven content channel is not only expected to disrupt online reading but will also introduce ‘social’ interactivity to the classic news reading behavior.

Limelines research revealed that in addition to news, sports, business, economy, culture, finance, entertainment, as well as tech, art, and health, represent the MENA region’s top interests. Thus, the platform strives to highlight these topics among over 40 additional ones and present them in a new mold through its partnership with publishers. The digital platform has kicked off in English first and is expected to release Arabic and French versions in early 2019. These two releases will constitute major milestones the startup aspires to achieve, to service the growing online audience.

Readers can simply log in to http://www.limelines.com or the app on iOS or Android, create a customized profile and kick-off their new reading journey. Publishers and writers who would like to start submitting their content, can create their personalized profile page through Limelines’ web edition. Brands seeking to know more about potential business opportunities can visit our brands page. (Limelines 16.12)

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3.2 Investment in MENA Fintech Startups is the Rise

With the increasing number of Fintech startups being set up in the MENA region to solve the existent financial problems, the sector has been witnessing considerable investments raised by the startups to support them in expanding. For example, Bahrain’s Paytabs, a payment gateway provider, raised a total of $20M in investment – the highest amount of investment raised by Fintech startups in the region.

Today, the sector is estimated at $2B and is expected to witness an annual growth of $125M until 2022, according to MENA Research Partners (MRP). Investments in Fintech startups in the region have amounted to over $200M (over the period covered by our in-depth research from 2001 till 2017) to date considering the high increase in the number of startups founded each year. These investments provide startups with the necessary funding to develop and grow their startups leading to the development of the whole industry as well.

Not only is the UAE home to the highest number of Fintech startups in the region, but it is also home to the highest total amount of investment received by Fintech startups with $80M raised for 34 startups contributing to 40% of the total investment amount. With half the total amount raised by UAE startups, the market with the second highest total amount of investment is Jordan with around $39M raised for 9 startups, contributing to 19.5% of the total amount. The remaining countries contribute to 59.5% of the total amount of investment received by Fintech startups. (ArabNet 05.12)

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3.3 ArabiaWeather and Raymetrics SA to Revolutionize Dust Forecasting in MENA

Amman, Jordan’s ArabiaWeather – the largest private weather company in the Arab World and a pioneer in weather technology – has signed a Memorandum of Understanding (MoU) with Raymetrics SA, a global leader and manufacturer of atmospheric Light Detection and Ranging (LIDAR) systems. Anchored in Athens and boasting global reach and ambition, Raymetrics SA – founded by scientists and engineers – has developed innovative remote sensing techniques for atmospheric monitoring. Inked in October 2018, the MoU aims at revolutionizing dust forecasting in the Middle East and North Africa (MENA) region, thus enhancing the quality and accuracy of ArabiaWeather forecasts.

By virtue of the partnership, Raymetrics SA will complement ArabiaWeather’s decision support solutions and weather forecasts with advanced hardware – including a state-of-the-art regional LIDAR network – consequently elevating the latter’s personalized, relevant and precise weather coverage, in turn, benefitting ArabiaWeather’s end-users including consumers, enterprises and governments. As a company operating in a geography where sand and dust storms are frequent, ArabiaWeather will further bolster its specialized dust forecasting capabilities, hence improving readiness and emergency response.

The MoU will also enable ArabiaWeather and Raymetrics SA to promote collaborative projects that leverage each company’s unique strengths, resources and cutting-edge technologies in order to deliver timely, accurate and localized weather information and services to private and public sector entities across the MENA. Furthermore, the partnership will allow Raymetrics SA to benefit from ArabiaWeather’s regional experience and standing in order to expand its reach within the MENA. (ArabiaWeather 16.12)

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3.4 Abu Dhabi Agribusiness Seeks $10 Million for UAE and Saudi Expansion

Abu Dhabi-based Pure Harvest Smart Farms is planning to expand in the UAE and into Saudi Arabia after announcing the successful first harvest of products grown in its inaugural high-tech greenhouse. The company, a technology-enabled arid climate agribusiness, said it plans to raise funds of at least $10 million for the expansion after showcasing its first premium quality tomatoes from the greenhouse in Nahel. Pure Harvest said the product launch was part of its aim to be part of the solution to the region’s growing food security, water conservation, and sustainability challenges.

The greenhouse was developed in partnership with Certhon Greenhouse Solutions, a Dutch designer and builder of modern greenhouses. Indoor temperature, humidity, and carbon dioxide levels are carefully balanced and automated using a climate management computer system developed by Priva, a leader in horticulture and building automation. The company achieved first harvest of its initial products including candy tomatoes, tomatoes-on-the-vine, and cherry tomatoes – approximately two months after commissioning the facility in early August. It said early results have been “overwhelmingly positive”, with the greenhouse beating targeted yields by 20% for its first season.

The performance of the greenhouse climate control system has enabled Pure Harvest to be the first agribusiness company in the UAE to produce commercial quantities of fresh tomatoes during extreme summer climate conditions. Pure Harvest is currently selling its products to major retail customers across the UAE including Spinney’s, Carrefour, Waitrose, Zoom, and Choithram’s as well as selected hotels and restaurants, including the Four Seasons. (AB 14.12)

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3.5 Intel Funds NYU Abu Dhabi Cyber Security Research

Intel has awarded NYU Abu Dhabi a three-year, $300,000 grant to help with research into new ways of securely testing and configuring computer chips by third-party companies. The research, being conducted by NYU Abu Dhabi Associate Dean of Engineering Ozgur Sinanoglu, allows tech companies to obfuscate security critical data – such as the chips serial ID – by using a secret key pre-loaded onto the chip. Once hidden, a third-party company can test and configure each chip before being sold, but without access to the chip’s security critical data.

With the results of this research, hardware designers will be able to ensure that chips they produce cannot be reverse-engineered by attackers. The research will also demonstrate the commercial viability of process by assessing low-cost obfuscation techniques and their integration across the electronic chip supply chain. (AB 23.12)

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3.6 Dubai’s dnata Buys New York-Based 121 Inflight Catering

dnata, the Dubai-based air services provider, has announced that it has completed the acquisition of New York headquartered inflight and VIP caterer, 121 Inflight Catering. The company said the acquisition allows it to significantly expand its operations in the United States, further strengthening its global network of catering businesses. Founded in 2007, 121 Inflight Catering offers premium catering services to commercial airlines and private jets from its facilities at New York JFK and Nashville International Airport. It employs more than 350 culinary professionals and serves 21 international airlines and hundreds of private aviation customers.

Over the past year dnata has invested significantly in growing its global catering network. The company’s most recent milestones include the opening of a new catering facility in Dublin, Ireland, and the acquisition of Qantas Airways’ catering division in Australia. dnata is also in the final stages of completing its new Vancouver facility – its first catering facility in Canada – which will formally open in 2019.

Besides the flight catering facilities at New York-JFK and Nashville International Airport, the acquisition also includes two separate restaurants. 121’s flight catering operations will be rebranded to dnata and continue to operate under the guidance of the existing 121 management team. (AB 11.12)

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3.7 BP & Mubadala Purchase 45% Stake in Eni’s Noor Concession

Egypt has approved the sale of a 25% stake in Eni’s offshore exploratory Noor concession to BP. The agreement, signed by Minister of Petroleum Tarek El Molla, also approved the entry of Emirati investment company Mubadala to the concession, which reached an agreement with Eni in November to purchase a 20% stake. The sale leaves Eni holding a 40% stake in the concession, while its Egyptian partner company Tharwa Petroleum holds the remaining 15%. Eni and Tharwa have invested $105 million to drill two exploratory wells. The first well is currently being drilled 50-km away from the shore at a depth ranging between 50 and 400 meters, and covers a total 735 km2 area. El Molla said following the signing that the strong interest shown by international oil companies demonstrates a strong investment climate in Egypt’s oil and gas industry. (EOG 10.12)

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3.8 CIB Establishes CVentures, Egypt’s First Corporate VC Firm Focused Primarily on FinTech

Commercial International Bank (CIB), Egypt’s leading financial institution, announced the establishment of CVentures, the first Corporate Venture Capital firm in Egypt primarily focused on investing in transformational FinTech startup companies, and next generation financial services platform’s. CVentures establishment reflects CIB’s deep and continued commitment towards Egypt’s largely untapped financial services industry, and the importance of FinTech as one of the key drivers of Financial Inclusion, and the country’s future economic growth prospects, at large.

CVentures will pre-dominantly participate in Series A and Series B investment rounds in Egypt, the Middle East, Africa and other highly regarded cross-border market economies, in addition to considering Seed investment rounds across similar markets. To achieve this, CVentures will combine the speed and agility of an independent investor with the breadth of CIB’s businesses, whilst continuously developing meaningful relationships with dynamic and insightful stakeholders involved in high-growth, disruptive technologies and differentiated business models that compliment and intersect with CIB’s core businesses.

Established in 1975, today Commercial International Bank (CIB) is Egypt’s leading private-sector bank. With its well-established network of over 190 branches, CIB provides its customers with exceptional service, whether they are individuals, households, high-net-worth individuals, large corporations, or small businesses. For several years, CIB has also enjoyed the titles of most profitable bank operating in Egypt and the bank of choice for over 500 of Egypt’s largest corporations. CIB was also named the World’s Best Bank in the Emerging Markets at the Global Finance 2018 special awards ceremony, one year after it was awarded same title from Euromoney. (CIB 18.12)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Israel to End Use of Coal for Electricity Production by 2030

Israel said on 17 December that it would stop the use of coal by 2030, joining a host of other countries in an alliance that aims to transition to cleaner sources of energy. The Powering Past Coal Alliance, launched by Canada and Britain, seeks to gradually reduce the production of electricity from coal and to support clean energy in government and corporate policies. It supports phasing out the use of coal in OECD countries by 2030 and in the world by 2050. Twenty-eight countries have already joined the alliance.

Energy Minister Steinitz said his ministry was working to accelerate the entry of clean and renewable energies into Israel and would continue to act to reduce air pollution. Israel has been reducing coal use and shifting to natural gas. The energy and environment ministries issued a joint statement saying that steps in recent years have led to a 25% drop in electricity production from coal since 2015, while the emission of pollutants has fallen significantly. (IH 18.12)

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4.2 Morocco Improves in World Bank’s Sustainable Energy Indicators

The World Bank has published its report of the 2018 Regulatory Indicators for Sustainable Energy (RISE) that listed 133 countries’ renewable energies improvements, giving Morocco a score of 74. RISE informs investors of the sustainable energy policies and regulations of a given country. The World Bank surveyed 133 countries based on data provided by governments from 2010 to 2017.

Alongside China, Brazil, Mexico, Russia, and South Africa, Morocco emerged as a prominent example of a country that has put in place advanced policy frameworks in support of sustainable energy. The report gave Morocco a score of 74 points for sustainable energy indicators, including access to electricity (100 points), energy efficiency (56 points), and renewable energy (67 points). In terms of energy efficiency, Morocco scored high with 80 points in the national energy efficiency planning indicator, 100 points in energy efficiency indicator, and 96 points in energy efficiency incentives from electricity rate structures.

However, Morocco scored low in other indicators, including incentives and mandates put in place for the public sector (13 points), for industrial and commercial end users (13 points), transport (0 points), and minimum energy efficiency performance standards (32 points).

Regarding renewable energies, Morocco did well in the legal framework for renewable energy (100 points), planning for renewable energy expansion (83), and attributes of financial and regulatory incentives (83 points). The report gave a medium score to incentive and regulatory support for renewable energy (62 points), counterparty risk (65), carbon pricing and monitoring (50), and use (23 points). Morocco produces 28,000 GW hours of electricity, while the rest is imported from Spain. It seeks to boost its production capacity by 6,500 MW by 2020, with solar and wind energies each representing 2,000 MW, according to a US International Trade Administration 2017 report. (MWN 12.12)

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4.3 Morocco Makes ‘Impressive Progress’ in Limiting Global Warming

Morocco is among the countries that have made significant progress in limiting the effects of global warming, according to the Climate Action Tracker (CAT). CAT listed Morocco among the countries that have invested “impressive” efforts to curb the damaging effects of climate change. The institute of Climate Analysis, Ecofys Consultancy and NewClimate Institute issued the CAT’s Warming Projections Global Update for December 2018, on the sidelines of the 24th World Climate Conference (COP24) held in Katowice, Poland. For this year’s update the CAT has examined how emissions projections have shifted since the Paris agreement in 2015.

The CAT analysis identified “real movement on the ground, with Argentina, Canada, Chile, Costa Rica, Ethiopia, the EU, India and Morocco taking significant steps in the right direction, and with other countries also taking action.” The analysis, which assessed 32 countries, gave Morocco a ‘clear progress’ indicator, thanks to the country’s “impressive progress in recent years.” Clear progress means, according to the analysis, a “clear decrease in projected 2030 emissions level due to actual policy development.”

Morocco also made a great achievement in climate change performance and become the second-best performing country in the Climate Change Performance Index (CCPI) for the year 2019, behind Sweden. Morocco ranks high in all CCPI categories, including greenhouse gas (GHG) emission, renewable energy, energy use, and climate policy. The index, which evaluates and compares the climate protection performance of 56 countries and the EU, also looked at Morocco’s progress in reducing greenhouse gas emissions, energy use, and climate policies. The index stated that Morocco’s renewable energy projects and goals, including the world’s largest “Noor Solar Project,” resulted in a high rating in the climate change ranking. (CAT 15.12)

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Fiscal Deficit Up to $4.50 Billion by Third Quarter

According to the Ministry of Finance, Lebanon’s fiscal deficit expanded from $2B by September 2017 to $4.50B by September 2018. In fact, fiscal revenues witnessed an annual increase of 3.16% to reach $8.67B while the government spending rose by a yearly 26.16% to stand at $13.18B. Lebanon’s overall primary balance which excludes Lebanon’s debt service posted a deficit of $590.89M, compared to a surplus of $1.63B by September 2017. Tax revenues (constituting 81.6% of total revenues) increased by an annual 1.97% to $6.55B. Revenues from the VAT (28.9% of total tax receipts) climbed by 11.37% year-on-year (y-o-y) to $1.89B, and this can be largely attributed to the new VAT rate of 11%, increased from 10% starting January 2018. Meanwhile, customs’ revenues (15.5% of tax receipts) dropped by 4.20% (y-o-y) to $1 billion. As for Non-tax revenues (18.40% of total revenues), they grew by 4.51% to stand at $1.48B by September 2018. This can be linked to the yearly increase of 22.73% in telecom revenues (constituting 44.13% of total non-tax revenues) to reach $651.28M by June September. On the expenditures’ side, total government spending increased by a yearly 24.25% to hit $11.98B by September 2018. In details, transfers to Electricity du Liban (EDL) alone rose by 37.87% to reach $1.24B which followed the 38.52% annual rise in average oil prices to $72.73/barrel over the period. Moreover, total debt service increased by an annual 7.83% to reach $3.92B by September 2018. In details, interest payments rose by a yearly 8.09% to stand at $3.79B by September 2018 while the foreign debt principal repayment recorded an uptick of an annual 1.01% to reach $130.44M by September 2018. (MoF 19.12)

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5.2 Total Number of New Lebanese Registered Cars Down by 9.74% in November 2018

According to the Association of Lebanese Car Importers (AIA), the total number of newly registered commercial and passenger cars continues to shrink by an annual rate of 9.74% to stand at 32,907 by November 2018. This was triggered by the 9.45% yearly drop in the number of newly registered passenger cars to 30,785 and the 13.81% drop in the newly registered commercial vehicles to 2,122 by November 2018. In terms of car brands, Kia held the largest share of 15.47% of newly registered passenger cars, followed by Hyundai and Toyota with shares of 13.03% and 12.73% respectively and Nissan with and 12.04 % of the total. In terms of sales per importer, RYMCO acquired the biggest share of the total newly registered cars with 15.44%, followed by NATCO (14.52%), BUMC (13.04%) and Century Motor Co (12.47%). In November, the total number of newly registered commercial and passenger cars decreased by 17.47% comparing to the same period last year. (AIA 14.12)

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5.3 Jordan & Iraq Review Economic Relations, Explore Further Cooperation

Jordan and Iraq on 19 December stressed their keenness to enhance economic relations, and discussed the import of Iraqi oil to Jordan at special prices during a meeting at the Prime Ministry. Prime Minister Razzaz and the Iraqi Deputy Prime Minister for Economic Affairs and Minister of Finance and Planning Hussein discussed means to enhance bilateral cooperation between the two countries. During the meeting, the premier stressed the deep-rooted ties between the two nations, underscoring the importance of enhancing them on all levels to serve both countries’ best interests.

Razzaz and Fuad discussed cooperation in a number of fields, especially a crude oil pipeline project between the two countries and activating bilateral agreements to achieve full integration between Jordan and Iraq. During extensive talks, involving senior officials from Jordan and Iraq, both sides highlighted the need to have cooperative ties rather than competitive ones to best serve their interests, according to Petra.

The project to transport Iraqi crude oil through the oil pipeline between Basra and Aqaba was the highlight of the meeting, as Baghdad aspires to find new ways of exporting oil. Talks also touched on the possibility for Jordan importing Iraqi oil at preferential prices, and installing power grids as part of reconstruction efforts in Iraq. In the transport field, the two sides agreed to increase focus on the Karameh-Tureibil Border Crossing and improve air and maritime transport by providing facilities for importers in the Iraqi private sector. They also discussed the possibility of exempting Jordanian exports to Iraq from customs fees, establishing joint industrial zones, launching integrated industries and starting joint investment projects between both countries’ private sectors to encourage Iraqi investments in the Kingdom. (JT 20.12)

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5.4 Jordan’s Public Debt Rises to JOD28.5 Billion, Some 94% of Estimated GDP

Jordan’s total public debt amounted to JD28.5 billion, comprising 94.9% of the estimated gross domestic product (GDP) at the end of October 2018, compared with JOD27.269 billion or 94.3% of the GDP in 2017. The Ministry of Finance said that the most prominent financial debts are of the National Electricity Power Company (NEPCO) and the Water Authority, guaranteed by the central government, which amounted to about JOD 7.4 billion. The net public debt at the end of October of this year indicated a rise of JOD1.661 billion, compared to the end of 2017. The ministry explained that the funds were borrowed to offset the general budget deficit and cover guaranteed loans for NEPCO and the water authority, so the public debt reached JOD27.096 billion, constituting 90.4% of the estimated GDP at the end of October 2018, compared with JOD25.435 billion, and constituting 88% of GDP, for 2017.

The existing balance of external debt (budget and guaranteed) at the end of October 2018 edged up by JOD175 million to reach JOD12.042 billion, constituting 40.2% of the estimated GDP for the end of October 2018, compared to JOD11.867 billion, constituting 41.1% of GDP at the end of 2017. (Petra 23.12)

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►►Arabian Gulf

5.5 The Size of the GCC Retail Market in 2023

Retail sales across four Arabian Gulf countries are projected to increase by more than $24 billion over the next five years, with the UAE expected to lead this trend with an estimated growth rate of 16%, according to Euromonitor International. Euromonitor’s research reveals that Kuwait, Oman, Saudi Arabia and the UAE are all set to capitalize on the rise of consumerism thanks to favorable demographics, a rise in population and a strong growth trajectory in tourism and per capita income.

The research indicates that the retail industry in the UAE is currently worth $55 billion and is forecast to steadily rise to $63.8 billion by 2023. Store-based retailing will continue to dominate, accounting for $52.7 billion of the overall market in the UAE, however, non-store retailing, which includes online shopping, direct selling, mobile internet, social media and home shopping, will grow by 78%from 2018 to 2023. The value of non-store retailing is also forecast to increase across all four Gulf markets between 2018 and 2023, with Saudi Arabia expected to account for the biggest growth of 93.5%, followed by Oman (68%) and Kuwait (48%). (AB 22.12)

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5.6 Gulf Forecast to See 81% Rise in Chinese Tourists by 2022

The number of Chinese tourists travelling to the GCC is expected to increase 81% from 1.6 million in 2018 to 2.9 million in 2022, according to new research. Data from Colliers International published ahead of Arabian Travel Market (ATM) 2019, reveals that the GCC countries currently attract just 1% of China’s total outbound market. However, it said positive trends are expected over the coming years as 400 million Chinese tourists are expected to go abroad in 2030 – up from 154 million in 2018.

China’s links with the GCC have strengthened in recent years due to the introduction of additional and direct airline routes; the strong growth of the Chinese economy and Chinese tourists’ increasing disposable income, it noted. The Colliers data shows Saudi Arabia will experience the highest proportionate increase in arrivals from China, with a projected compound annual growth rate (CAGR) of 33% between 2018 and 2022. Both the kingdom and China’s cultural and educational exchanges have been cited as one of the key elements driving this influx.

Looking at the remainder of the GCC, the UAE will follow with a forecasted CAGR of 13%, Oman at 12% and both Bahrain and Kuwait will steadily increase their Chinese visitor arrivals with a growth of 7%. In the UAE, China is the fifth largest source market behind India, Saudi Arabia, the UK and Oman. Over the last 12 months, the UAE has stepped up its efforts to attract more Chinese visitors with Dubai’s Department of Tourism and Commerce Marketing (DTCM) recently signing an agreement with Chinese internet giant Tencent to promote the emirate as a preferred destination for Chinese travelers. Meanwhile, in Oman, Bahrain and Kuwait passport holders from the People’s Republic of China can now receive a 30-day visa on arrival. (AB 19.12)

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5.7 Kuwait Pharmaceuticals Market Expected to Exceed Revenues of $1.5 Billion by 2022

Kuwait Pharmaceutical Market poses compelling future potential with growth led by the widespread prevalence of chronic diseases, growing population and the high per capita income of the people in the country. The limited indigenous manufacturing capabilities also present a number of growth opportunities for multinational and regional pharmaceutical companies to enter the Kuwait pharmaceuticals industry. The large investments which have been undertaken for development of the healthcare sector through the public-private partnership (PPP) route is expected to grow the pharmaceuticals market in the coming years. Mandatory health insurance, which is currently applicable only to the expatriates, is likely to be extended to the indigenous population in the future. This expansion of the healthcare sector in the country will be accompanied by growth in demand for medicines. The availability of generic products is anticipated to increase as private health insurance schemes are encouraging prescribers to adopt more rational prescription patterns. Price harmonization across GCC can further lead to substantial reduction in the prices of majority of pharmaceutical products across therapy areas in the country.

As Kuwait accelerates its healthcare development strategy as part of the Kuwait Vision 2035, the MoH is also working on expansion projects for eight existing hospitals adding 4,600 beds, 150 operating rooms and 500 outpatient clinics. Both Kuwait’s pharmaceutical and healthcare markets have been noted as high-priority sectors, with many projects set to be carried out under public-private partnerships (PPPs). Furthermore, chronic diseases such as cardiovascular, diabetes, obesity, cancer and respiratory conditions are rising dramatically in Kuwait primarily due to less physical activity and dietary habits such as increased fast food consumption linked to high-income generation. Thus, the market shares of anti-infectives, gastrointestinal, cardiovascular and musculoskeletal are expected to increase in the Kuwait pharmaceuticals market by 2022. (Ken 11.12)

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5.8 What a Difference $10 Billion Aid Makes to Gulf’s Weakest Link

Bahrain and Oman are the most vulnerable economies in the Gulf, but one has a $10 billion bailout package and the other is on its own. That’s why the bonds of Bahrain, whose dwindling foreign-currency reserves fueled concern this year that its currency’s peg to the dollar may be at risk, became 2018’s best performers in the six-nation Gulf Cooperation Council after Saudi Arabia and other rich allies came to the rescue in October. The aid helped shrink the risk premium that investors demand to hold the island-state’s debt due 2028 over Oman’s to about 40 basis points from an all-time high of 346 basis points in June. That gap will probably narrow further as JPMorgan Chase & Co starts to include Bahrain’s securities in its emerging-market bond indexes from the end of January. Bahraini bonds have returned 4.2% this year, while Oman’s have lost 2.8%.

Bahrain has benefited from a close relationship with Saudi Arabia for decades. The downside of that is it has adopted the kingdom’s foreign policies, which has caused some concern among investors of late, but the upside is the financial aid it gets from its richer neighbor. Oman, on the other hand, has resisted pressure to take sides in regional spats, so there’s no guarantee Arab nations will come to its rescue. (AB 12.12)

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5.9 Ajman (UAE) Government Sets $1.13 Billion Budget for 2019 – 21

Sheikh Humaid bin Rashid Al Nuaimi, Ruler of Ajman, has approved the general budget of the Ajman Government for 2019-2021. The budget amounts to AED4.14 billion ($1.13 billion), a growth of 17%, with the budget for the 2019 fiscal year set at AED1.38 billion ($380 million) and without a deficit. Sheikh Ammar bin Humaid Al Nuaimi, Crown Prince of Ajman and chairman of the Ajman Executive Council, said that the Ajman Government’s budget reflects the directives to achieve the well-being and happiness of the emirate’s citizens and residents, as well as to provide the best services.

Sheikh Ahmed bin Humaid Al Nuaimi, Ajman Ruler’s Representative for Administrative and Financial Affairs and chairman of the Department of Finance, said that the budget’s largest allocation is divided between infrastructure, community facilities and the environment, which account for 37% of total expenditure. Economic affairs account for 25% to improve the business environment while 21% is allocated to public services, and 17% to public order and safety. (AB 17.12)

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5.10 Dubai’s RTA Partners with Careem on E-hail Taxi JV

Dubai’s Roads and Transport Authority (RTA) has partnered with ride-hailing app Careem Networks Company (Careem) on an E-Hail Taxi Joint Venture in order to boost the taxi sector. The new company’s name and logo will be announced in the next few months, while it will cater to customers as of April 2019. The e-hail taxi market for limousines, however, will remain open without any changes.

The announcement comes in line with the Smart Dubai initiative by Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, to transform the emirate into the world’s smartest city. He added that the JV supports Dubai’s Integrated Mobility Platform (S’Hail), which enables customers access to all transit means through a single window (smart app) by integrating RTA’s transit means including the metro, tram, buses, marine transport, and taxis, with the transit means provided by other parties in Dubai, such as limousine companies.

It is also expected to raise the efficiency of taxis through enhanced vehicle accessibility and online booking as well as reduced vehicle waiting time, while customer advantages include the ability to make direct online payments via the app, chart the most suitable journey route, share rides with others and access vehicle and driver details and addition. In addition, it will have an option for a chauffeur service. Moreover, it will enable the launch of future transit services such as shared journeys, supporting RTA’s efforts in achieving multi-modal integration.

Careem was selected from five e-hail taxi companies operating in the global market following the submission of technical and financial proposals. Careem will cater to the provision of the e-hail technology, and the management of bookings and drivers through its existing app. The new company will see 10,843 taxis exclusively run for a limited period. (Various 24.12)

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5.11 Saudi Arabia Projects $35 Billion Budget Shortfall in 2019

On 18 December, Saudi Arabia announced an expansionary budget for 2019 but projected a shortfall for the sixth year in a row due to low oil prices. The budget projects a deficit of $35 billion, still about 32% lower than the estimated deficit for the current calendar year. Spending is estimated at $295 billion, the largest in the oil-rich kingdom’s history, while revenues, mostly from oil, are estimated at $260 billion.

Saudi Arabia, which has introduced economic reforms aimed at reducing its dependence on oil, has posted budget shortfalls since 2014 when crude prices crashed. The finance ministry said the kingdom, which is pumping about 10.5 million barrels of oil per day, succeeded in reducing the estimated budget deficit in 2018 by 31% to $36 billion due to the partial rebound in crude prices. The ministry also said the country’s economy, which contracted by 0.9% last year, grew by 2.3%. It expects growth to hit 2.6% in 2019. The ministry said Saudi would resort to drawing on state reserves and borrowing to plug the deficit. (AB 18.12)

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5.12 Saudi Arabia Sticking With Expat Fees for Now

Saudi Arabia will keep its policy of imposing fees on foreign workers despite complaints from businesses but is open to reconsidering them if there’s an economic need, Economy and Planning Minister Mohammed Al Tuwaijri said. The expatriate levies were introduced last year as part of an effort to generate non-oil revenue and encourage companies to hire Saudi nationals, both key goals of Crown Prince Mohammed bin Salman’s plan to overhaul the largest Arab economy and prepare it for a time after oil. But the charges proved painful for a private sector already struggling to adapt to rapid policy changes and have yet to make a dent in Saudi unemployment, which is at its highest level in more than a decade.

The world’s largest crude exporter is trying to strike a balance between boosting a lackluster economy and implementing fiscal and economic reforms. After contracting 0.9% in 2017, the economy is expected to grow 2.3% this year and 2.6% next, according to the government, which announced an expansionary budget on 18 December. The kingdom is planning a stimulus package next year that is both “financial and regulatory.” It’s also pushing ahead with a privatization drive after plans to sell stakes in state assets got off to a slow start. The kingdom expects to privatize seven companies in the first quarter of 2019 and 19 in total next year. (AB 19.12)

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5.13 Red Sea Project Set to Add $5.8 Billion to Saudi Arabia’s GDP

A project to develop 22 islands in the Red Sea off the coast of Saudi Arabia will add SR22 billion ($5.86 billion) to the Gulf kingdom’s GDP, it has been announced. Saudi Arabia’s King Salman was briefed on the project by a delegation from the Red Sea Development Company, led by chief executive John Pagano at Araqa Palace in Riyadh. Pagano delivered a visual presentation on the master plan of the Red Sea Project, underlining its economic and development goals and its objective to become a global destination for luxury tourism.

The first phase of the project, scheduled to be completed in 2022, will include an airport, marinas, residential properties, recreational facilities and up to 3,000 hotel rooms. A total of 22 islands will be developed as part of the project that is expected to create an estimated 70,000 jobs and attract approximately one million tourists per year.

The Red Sea Development Company was registered by the Saudi Ministry of Commerce and Investment in May as a closed joint-stock company wholly owned by the Public Investment Fund (PIF). The Red Sea project is a luxury and sustainable international tourist destination on the west coast of Saudi Arabia and one of the three major projects of PIF. The project is located along the western coast of Saudi Arabia, between the cities of al-Wajh and Umluj, 500km north of Jeddah. (AB 14.12)

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5.14 Pakistan Receives $1 Billion from Saudi Arabia to Ease Economic Crunch

In another boost to the nation’s dwindling dollar reserves, Pakistan on 14 December received $1 billion from Saudi Arabia. South Asia’s second-largest economy is expecting its third and final $1 billion tranche from Riyadh next month to help ease Pakistan’s financial crunch. Islamabad is looking to bridge a gap of at least $12 billion caused by its latest balance-of-payments crisis and is currently negotiating its 13th bailout since the late 1980s with the IMF.

Prime Minister Imran Khan has been loath to undertake reforms proposed by the IMF and since his election victory in July the former cricket star has shuttled between China, Saudi Arabia and the UAE in an effort to secure bilateral funding from those allied nations. Pakistan said in October that Saudi Arabia would deposit $3 billion directly and provide another one-year deferred payment facility of up to $3 billion for oil imports. The announcement came after Khan attended the Future Investment Initiative in Riyadh. (AB 14.12)

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5.15 UAE Rated Most Advanced MENA Country for Online Shopping

As the e-commerce market gains momentum regionally and globally, the UAE is making strides and the Emirates is rated the most advanced country for online shopping in the MENA and is ranked fourth among the top 10 developing economies, according to the United Nations Conference on Trade and Development’s (UNCTAD) B2C E-Commerce Index 2018.

The UAE does well in internet usage and accounts, with room to improve for secure servers and postal reliability in order to emerge as a top-ranked nation in B2C e-commerce readiness, the Unctad’s latest report on e-commerce said. The UAE is positioned first in the Arabian Gulf and is leveraging this to become a regional hub. One sign is the purchase of the UAE’s online retailer Souq.com by Amazon in May 2017 for $583 million. Another is the $735 million Dubai CommerCity, the first dedicated e-commerce park in Mena.

According to Euromonitor International figures, the UAE’s e-commerce landscape is worth Dh44.2 billion during 2018, with bill payments, transport and retailing being the key segments for online commerce in the country. Internet retailing in the UAE is valued at Dh7.4 billion – exclusive of VAT – in 2018, growing by 18.8% over the previous year. The channel is expected to grow by a CAGR 13% over the forecast period to reach Dh15.5billion in value during 2023, experiencing the largest value growth across all business segments, Euromonitor said. (Various 13.12)

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5.16 UAE Eyes More Workers from Nepal, Rwanda and Cambodia

The UAE is keen to strengthen ties with Rwanda, Nepal and Cambodia, with a view to encourage more workers to the Gulf state, a senior official has said. Nasser bin Thani Al Hamli, Minister of Human Resources and Emiratisation, has held talks with the Foreign Minister of Rwanda, the Minister of Labour of Nepal and the Minister for Immigration Affairs of Cambodia. The meeting discussed ways of developing the cooperation between the UAE and their countries, especially in the areas of labor and workers’ issues. The meetings took place separately on the sidelines of the United Nations’ Intergovernmental Conference in Marrakech, Morocco. During the meetings, Al Hamli highlighted the UAE’s keenness to enhance its bilateral partnerships with countries that provide it with workers and participate in related international events. (AB 12.12)

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►►North Africa

5.17 Egypt’s Trade Deficit Falls 10.1% in Annual Terms

Egypt’s trade deficit decreased by 10.1% year-on-year (YOY) in September 2018 to reach $3 billion, compared to $3.35 billion in September 2017. Official figures published by CAPMAS show that the country’s trade deficit declined by almost a quarter (24.1%) over a month from the $3.95 billion recorded in August 2018. CAPMAS cited rising crude exports as a key driver for the improving figures, having increased 36% YOY. The agency also said that strong exports of clothes (39.5% YOY) and fertilizers (55.6% YOY) also made a significant contribution. (CAPMAS 19.12)

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5.18 CAPMAS Reports 16.8 % Increase in Value of Egypt’s Exports in 2017

CAPMAS announced that the total value of Egypt’s exports reached $26.29b in 2017, compared to $22.49b in 2016, an increase of 16.8%. CAPMAS added in its annual bulletin on foreign trade that the total value of non-petroleum exports reached $22.49b in 2017, compared to $19.64b in 2016, an increase of 14.5 %. On the other hand, the total value of petroleum exports reached $3.80b in 2017, up from $2.86b in 2016, an increase of 32.9%. In terms of the exports’ manufacturing degree, CAPMAS revealed that Egyptian exports during 2017 were concentrated in finished goods, which reached 46.1% of the total Egyptian exports.

Meanwhile, the CAPMAS declared that the value of semi-manufactured goods exports was $6.55b in 2017, up from $5.97 b in 2016, an increase of 9.6%. Concerning the most important goods whose export values witnessed an increase in 2017, the report stated that crude oil reached $2.0b in 2017, compared to $1.77b in 2016, an increase of 18.1%. Meanwhile, the value of ready-made clothing and related accessories reached $1.45b in 2017, against $1.26b in 2016, an increase of 15.1%.

The CAPMAS also revealed that the value of plastics and their products reached $860m in 2017, compared to $620m in the previous year, a hike of 38.7%. The value of iron and its products reached $761m in 2017, up from $548m in 2016, a jump of 38.9%. In the context of the major countries which receive the Egyptian exports, the CAPMAS stated that Italy came in the first place with 8.3% of total exports, noting that exports to Italy increased by about 50% in 2017, recording $2.198b, up from $1.46b in 2016.

The report announced that Turkey ranked second in representing 7.3% of total exports, as exports increased by 39.1%, reaching $1.92b in 2017, versus $1.38b in 2016. Saudi Arabia came in the third place with 5.9% of the total exports, as the value of exports decreased by 12.8% to reach $1.56b in 2017, down from $1.79b in 2016. The USA ranked fourth, representing 5.2% of total exports, noting that the value of exports increased by 23.4%, amounting to $1.37b in 2017, up from $1.11b in 2016. In terms of the economic blocs, the CAPMAS stated that the Arab countries ranked first with 37.3% of the total exports, followed by western European countries with 26.3%, then east European countries with 13.7%. Notably, the CAPMAS is the official statistical agency of Egypt that collects, processes, analyses, and disseminates statistical data and conducts census. (CAPMAS 20.12)

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5.19 Egypt’s Constitutional Committee Authorizes Egypt-Cyprus Pipeline Agreement

Egypt’s Constitutional Committee authorized the Egypt-Cyprus agreement to establish a natural gas subsea pipeline on 9 December. The committee decided that the agreement complies with Egyptian law and the country’s constitution, and gave the go-ahead for the project to start. The original agreement was signed between Minister of Petroleum Tarek El Molla and Cypriot Minister of Energy Yiorgos Lakkotrypis on 19 September. It will see the construction of subsea natural gas pipeline between the Cypriot Aphrodite natural gas field and Egyptian liquefaction facilities, with a capacity of 700 million standard cubic feet per year (mscf/y). An official source told Al Mal in September that work will begin in Q1/19, with a view to starting operations in 2022. (EOG 10.12)

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5.20 Morocco’s Trade Deficit Increased by 7.7% by November

Morocco’s Foreign Exchange Office (FEO) reported the figures in its monthly foreign trade indicators for November 2018. Morocco’s increase in imports was mainly driven by the purchases of energy products, up 18.4% to MAD 18.4 billion; purchases of processing goods, up 7.8% to MAD 7.8 billion; and finished consumer products, up 7.1% to MAD 6.5 billion. The three import categories represent 73.3% of the total increase in imports.

Exports also increased by 9.7% to MAD 249.04 billion in the first 11 months of 2018. The rise can be attributed to increased exports in all sectors, but particularly that of automotive, up by MAD 5.73 billion, phosphates and derivatives, up MAD 5.3 billion; and agriculture and food, up MAD 3.06 billion. The FEO pointed out that the three export categories represent 63.8% of the total increase in exports, noting that the aviation, textile and leather sectors, recorded an increase of 1.46% and 1.36%, respectively. (MWN 18.12)

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5.21 Morocco’s FDI Reaches MAD 31.82 Billion

Morocco’s Foreign Direct Investments reached MAD 31.82 billion in 2018, up 36.7% compared to the same period a year earlier. This performance is attributed to an increase of revenues to reach MAD 11.48 billion, and expenditures increasing by 2.93%, said the Foreign Exchange Office. Remittances from Moroccans living abroad decreased by 1.7%, reaching MAD 59.65 billion at the end of November 2018. The travel balance recorded a decrease of 1.8%, reaching MAD 49.7 billion between January and November 2018, compared to MAD 50.62 billion during the same period of 2017. (MWN 18.12)

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5.22 Morocco Attracted 200,000 Chinese Tourists in 2018

The number of Chinese tourists in Morocco rose from 10,000 in 2015 to nearly 200,000 people this year, according to the minister of tourism Mohammed Sajid. He met with the Chinese deputy minister of culture and tourism recently in Marrakech. Sajid said the two countries signed an agreement to organize a cultural and tourism year of Morocco in China and another event in honor of China in Morocco in 2020. The Chinese deputy minister made an official four-day visit to Morocco. He said that relations between the two countries are undergoing sustained development and announced a Chinese cultural center in Rabat is due to open soon. In September, Sajid met the Civil Aviation Administration of China administrator to discuss a new deal to open a direct flight between the countries and remove airspace restrictions. (MWN 18.12)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Retail Trade Volume in Turkey Shrunk in October

Calendar-adjusted retail sales volume with constant prices slipped 7.5% on a yearly basis in October, the Turkish Statistical Institute (TUIK) announced on 18 December. Non-food – except automotive fuel – sales showed the biggest annual drop among main economic activities with 12.1%. Automotive fuel sales fell 7.6%, while food, drinks and tobacco sales rose 1.6%. The volume of medical goods and cosmetic sales among non-food went up 5% on an annual basis in October. Sales by mail orders and over the internet climbed 4.5% while textile, clothing and footwear sales rose 2.8%, during the same period.

However, the sales volume of electronic goods and furniture shrank by 23.3% in the month, while computers, books, and telecommunications equipment’s sales volume decreased 20.3%. TUIK also revealed that the calendar-adjusted retail turnover with current prices surged 18.2% year-on-year in October. (TUIK 18.12)

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6.2 Cypriot Social Welfare Expenditure Fell to 19.1% of GDP in 2016

Spending on social protection in Cyprus, as a percentage of GDP fell to 19.1% in 2016 from 19.9% the year before, which translates to €3.530 billion compared to €3.532 billion in 2015. The majority of the social welfare benefits that were provided to beneficiaries in 2016 (85%), were non-means tested – this accounted for €2.936 billion in 2016.

In most cases, the beneficiaries, having made cash contributions to various insurance funds (e.g. the Social Insurance Fund), gained the right to benefits, without their income being a criterion. In other words, the majority of social protection benefits are not explicitly or implicitly conditional on the beneficiary’s income and/or wealth falling below a specified level.

Furthermore, the majority of the benefits were cash benefits (€2.769 billion), whereas benefits in kind constituted only 19.9% of the total of social protection benefits (€686 million). As regards cash benefits, 90.1% (€2.494 billion) were provided periodically, for example pensions and other benefits, whereas lump sum benefits constituted 9.9% of the cash pay-out. The most significant Social Protection Expenditure functions was for the elderly for illness/healthcare, which combined, constituted 67.3% of welfare benefits (compared to 67.4% in 2015). The largest share of old age benefits were pensions which amounted to €1.569 billion, constituting 93.2% of the total old age benefits. The Social Insurance Scheme is the largest provider of social payments in Cyprus with benefits reaching €1.423 billion, representing a 40.3% share of the total benefits. (FM 19.12)

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6.3 Value of Cypriot Construction Activity Spiked 22% in 2016 to €2.14 Billion

According to the ‘Construction and Housing Statistics 2016’ survey, the production value of Cyprus’ building sector increased 22.2% to €2.146 billion from €1.756 billion the year before. The value added at current prices shows an increase of 23.5%. More new and bigger homes were built – with Limassol leading the way – while the number of jobless in the sector also fell – many observers would attribute the upturn to the passport for investment scheme kicking in. The scheme encourages foreign investors to buy new properties as a pathway to citizenship.

Cyprus construction activity registered a rise of 20.7% compared to a marginal 0.2% upturn in 2015, based on the production index of the sector. The share of new construction of residential buildings is 50.8% of the total, non-residential buildings is 27.7%, while civil engineering projects accounted for 21.5%. For 2015 the figures were 48.9% residential, 27.3% non-residential and 23.7% civil engineering projects. The number of full-time employees in the sector increased from 19,242 to 21,130 persons in 2016. The housing stock at the end of 2016 amounted to 449,000 dwelling units, of which 60.9% were in urban areas. (FM 20.12)

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6.4 Greek Jobless Rate Drops to 18.3% in the Third Quarter

Greece’s jobless rate fell to 18.3% in July-to-September from 19% in the second quarter, data from the country’s statistics service ELSTAT announced on 13 December. About 71.8% of Greece’s 871,756 jobless are long-term unemployed, meaning they have been out of work for at least 12 months, the figures showed. Greece’s highest unemployment rate was recorded in the first quarter of 2014, when joblessness hit 27.8%.

The data showed that women and young people in the 15-19 age group were most affected among the unemployed. The jobless rate for women was 23.3 versus 14.3 for men in the third quarter, while for people aged 15-19 it stood at 44.3%.

Athens has already published monthly unemployment figures through September, which differ from quarterly data because they are based on different samples and are seasonally adjusted. September unemployment fell to 18.6%. Quarterly figures are not seasonally adjusted.

Greece’s economy expanded for a ninth straight quarter in the July-to-September period and at a faster pace than the quarter before, mainly driven by stronger consumer spending. (ELSTAT 13.12)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 Israel Calls Early Elections on 9 April 2019

On 24 December, Prime Minister Netanyahu called ‎early elections for 9 April, setting the stage for a ‎three-month campaign. The general elections were not due until November. The latest coalition crisis came about over lack of support for the ultra-Orthodox army recruitment bill. Likud MK David Bitan said that the situation had been forced on his party and that Netanyahu had wanted to remain in office the full term until November 2019.

Announcing the elections, PM Netanyahu ‎listed his government’s accomplishments and said he hoped his current religious, ‎nationalistic coalition would be the core of ‎Israel’s next government as well.‎ Coalition insiders tried to downplay the ‎role the conscription bill – controversial ‎legislation that has threatened the government’s ‎stability multiple times – played in the decision. ‎

Moments after the coalition faction heads’ meeting ‎ended on 24 December, an official statement was released ‎saying, “Exercising national and budgetary ‎responsibility, the heads of the coalition parties ‎have unanimously decided to dissolve the Knesset and ‎call for early elections at the beginning of April. ‎The partnership in the Knesset and the government ‎will continue during election time.” ‎ The government will officially introduce a bill ‎calling for the dissolution of the Knesset on ‎26 December.‎

PM Netanyahu, who also served a term in the late 1990s, ‎has been prime minister for the past decade.‎ His supporters point to a humming, high-tech ‎economy, his handling of security issues, ‎particularly countering the threat of Iranian ‎influence in the region, and his gains on the ‎diplomatic stage, including a close alliance with ‎President Trump that has paid important ‎dividends. President Trump’s recognition of Jerusalem as Israel’s capital ‎and his withdrawal from the international nuclear ‎deal were both welcomed by Netanyahu. The Israeli ‎leader also has quietly forged ties with Sunni Arab ‎states, further sidelining the Palestinians, who ‎have severed ties with the U.S. because they believe ‎Trump is biased against them.‎ The first public opinion poll after the announcement ‎of early elections predicted another solid victory ‎for Netanyahu and Likud.‎ (Various 25.12)

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*REGIONAL:

7.2 Jordan’s Gender Gap Widens to Rank Near Bottom of Index

Jordan dropped three spots to rank 138th out of 149 countries in the 2018 Global Gender Gap Index report announced by the World Economic Forum (WEF). When the report was first introduced in 2006, Jordan was 93rd globally, but its rank has gradually gone down the scale over the years, with the report stating that the country’s overall performance this year “remains largely unchanged”. Weighing Jordan against other countries in the region, the country was placed 10th, 19 spots behind Tunisia, which recorded the narrowest gender gap regionally at 119th, followed by the UAE at the 121st spot. Also ahead of Jordan in the region were Kuwait, Qatar, Algeria, Bahrain and Mauritania, in addition to Egypt and Morocco.

Despite the progress in countries like Tunisia, complete financial equality between the genders in the Middle East and North Africa, which is the region with the widest gender gap in the world, would take some 153 years to attain, according to the report.

Even though Jordan dropped three ranks since last year, its ranking has improved in two of the four categories, climbing up six spots in the “Educational Attainment” index to achieve a rank among the top 50 countries worldwide at 42nd. The second area in which the Kingdom witnessed significant improvement was the “Health and Survival” index, going up 11 ranks to reach the 102nd placement. Nonetheless, the country’s score was weighed down by a near-the-bottom ranking in “Economic Participation and Opportunity”, where its position stood at 144th, as well as “Political Involvement” where it ranked 129th. The data also showed another significant finding, which is that the proportion of women married by the age of 25 is 30%, while it is 7% for men. (WEF 18.12)

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7.3 GCC Student Numbers Forecast to Grow Despite Fee Concerns

The total number of students in the GCC education sector is projected to reach 14.5 million in 2022 despite growing concern over rising fees, according to new research. According to Alpen Capital, the region will see a compound annual growth rate (CAGR) of 2.3% from an estimated 12.9 million in 2017. A growing school age population, high per capita income, continued government spending and long term strategic government initiatives are expected to drive the future growth of the GCC education sector, the report said. Between 2017 and 2022, the pre-primary and tertiary segments is expected to grow at a faster rate than the other segments, it added. The report noted that the number of students in private schools is projected to grow at a CAGR of 4.1% while enrolments at public schools is likely to increase at a slower pace, recording a CAGR of 1.3% between 2017 and 2022.

Saudi Arabia is expected to remain the largest education market in the GCC in 2022. In terms of annualized growth, the number of students in Oman and Qatar is projected to grow at a faster rate than the other member nations. Saudi Arabia is also anticipated to account for the highest number of schools in GCC by 2022. Alpen said the demand for public and private schools in the GCC region is likely to increase at a CAGR of 1.9% to 36,747 by 2022, reflecting a requirement of more than 3,200 schools over the next five years. It added that the growing preference for private education continues to drive the demand for international schools and universities across the GCC region.

The report said the influx of international institutions and oversupply of education providers in the GCC region is likely to challenge the sustainability of institutions without a long-term plan. This has led to increasing competition among private operators, resulting in pricing pressures and margin erosion for private operators. (AB 15.12)

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7.4 Turkey Spent Over $48 Billion on Education in 2017

Turkey’s total expenditure on education soared 9.8% to $48.3 billion in 2017, compared to the previous year, the Turkish Statistical Institute (TUIK) said on 19 December. The expenditure on education as a percentage of gross domestic product (GDP) dropped to 5.7% in 2017 from 6.2% in 2016, according to the data. In 2017, 74.5% of expenditure was public while households accounted for the remaining 19%.

Tertiary education accounted for 31% ($10.3 billion) of the total education expenditure of public institutions, while 26% ($8.7 billion) was for upper secondary education. Meanwhile, private institutions allocated 45.3% ($4.4 billion) of total spending for upper secondary education, and 27.1% ($2.66 billion) for tertiary education. Upper secondary education showed the highest increase in education expenditures with 20.6%.

The education expenditure per student in the country reached $2,220, rising 8.2% versus the previous year. The highest level of expenditure per student in 2017 was for tertiary education with $3,736. Around 140 million schoolbooks were delivered free of charge in September 2018 alone in Turkey, where children receive 12 years of elementary education for free. Public universities also serve with no tuition fees in the country. (TUIK 19.12)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 BrainsWay Selected by USA FDA Innovation Challenge to tackle Opioid Addiction

BrainsWay‘s deep transcranial magnetic stimulation (Deep TMS) system was one of only eight medical devices selected by the U.S. Food and Drug Administration (FDA) from over 250 applications to participate in the “FDA Innovation Challenge: Devices to Prevent and Treat Opioid Use Disorder,” a new program launched by the FDA to help combat the opioid crisis. BrainsWay will work directly with the FDA to accelerate the conduct of a clinical study and expedite potential marketing application review of its Deep TMS system for the treatment of Opioid Use Disorder (OUD).

BrainsWay’s Deep TMS system has been FDA cleared for the treatment of Major Depressive Disorder (MDD) since 2013 and was FDA cleared (De Novo) for the treatment of Obsessive Compulsive Disorder (OCD) in August 2018. BrainsWay also announced completion of the first shipment of its Deep TMS system for the treatment of OCD in adults to 20 sites in the USA.

Jerusalem’s BrainsWay is engaged in the research, development and sales and marketing of a medical system for non-invasive treatment of common brain disorders. The medical system developed and manufactured by the company is based on a unique breakthrough technology called Deep TMS, which can reach significant depth and breadth of the brain and produce broad stimulation and functional modulation of targeted brain areas. In the U.S., the Company’s device has been FDA cleared for the treatment of major depressive disorder (MDD) since 2013, and is now FDA cleared (De-Novo) for the treatment of Obsessive Compulsive Disorder (OCD). The Company’s systems have also received CE clearance and are sold worldwide for the treatment of various brain disorders. (BrainsWay 11.12)

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8.2 BiomX and J&J Innovation Collaborate for Microbiome-based Biomarkers for IBD

BiomX has entered into a collaboration with Janssen Research & Development to utilize BiomX’s XMarker microbiome-based biomarker discovery platform. The XMarker platform will be used to stratify responders and non-responders to inflammatory bowel disease (IBD) therapeutics. The collaboration was facilitated by Johnson & Johnson Innovation Limited.

There is growing evidence that the composition of the microbiome is a promising predictive tool for disease and for patient response to therapy in conditions such as IBD, cancer and liver disease. BiomX’s novel XMarker platform applies a unique metagenomics-based approach to decipher full microbial genomic signatures that can be further developed into predictive biomarkers. The platform combines ultra-high-resolution DNA analysis, machine-learning techniques and high-scale cloud computing resources to build classifiers of high sensitivity and specificity.

Ness Ziona’s BiomX is a microbiome drug discovery company developing customized phage therapies that target and destroy harmful bacteria in chronic diseases such as inflammatory bowel disease (IBD) and cancer. They discover and validate proprietary bacterial targets and customize our natural and engineered phage compositions against these targets. (BiomX 12.12)

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8.3 Check-Cap Receives FDA Conditional Approval of IDE Application to Initiate U.S. Pilot Study of C-Scan®

Check-Cap announced that the U.S. FDA has conditionally approved the Company’s Investigational Device Exemption (IDE) application to initiate a U.S. pilot study of the C-Scan® system. The FDA’s conditional approval of the IDE requires Check-Cap to provide additional information to the FDA and Check-Cap may begin enrolling patients immediately upon approval by the study site’s Institutional Review Board (IRB). The U.S. pilot study (NCT03735407) will be a single-arm study enrolling subjects considered to be of average risk for polyps and colon cancer. The study will evaluate the safety, usability, and subject compliance of the C-Scan® system.

Usafiya’s Check-Cap is a clinical-stage medical diagnostics company developing C-Scan®, the first and only preparation-free capsule-based screening method for the prevention of colorectal cancer (CRC) through the detection of precancerous polyps. The patient-friendly test has the potential to increase screening adherence and reduce the overall incidence of CRC. The C-Scan® system utilizes an ultra-low dose X-ray capsule, an integrated positioning, control, and recording system, as well as proprietary software to generate a 3D map of the inner lining of the colon. C-Scan® is non-invasive and requires no preparation or sedation, allowing the patient to continue their daily routine with no interruption as the capsule is propelled through the gastrointestinal tract by natural motility. (Check-Cap 13.12)

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8.4 Aleph Farms Jump-starts First Cell-Grown Steak

Aleph Farms has kicked off the first cell-grown minute steak, delivering the full experience of meat with the appearance, shape, and texture of beef cuts. The food tech start-up’s new product demonstrates its capabilities for growing different types of natural beef cells isolated from the cow into a fully 3-D structure similar to conventional meat. The breakthrough not only obtains the true texture and structure of beef muscle tissue steak, but also the flavor and shape, establishing a new benchmark in cell-cultured meat technology.

Aleph Farms successfully grown slaughter-free steak, without the need for devoting vast tracts of land, water, feed, and other resources to raise cattle for meat and uses no antibiotics. Cell-grown meat is typically grown from a few cells of a living animal, extracted painlessly. These cells are nourished and grow to produce a complex matrix that replicates muscle tissue. One of the barriers to grown meat production has been getting the various cell types to interact with each other to build a complete tissue structure as they would in the natural environment inside the animal. The challenge is to find the right nutrients and their combination that would allow the multicellular matrix to grow together efficiently, creating a complete structure. The company overcame this obstacle thanks to a bio-engineering platform developed in collaboration with the Technion – Israel Institute of Technology, Haifa.

Ashdod’s Aleph Farms was co-founded in 2017 by Israeli food-tech incubator The Kitchen, a part of the Strauss Group and the Technion. The company is supported by US and European venture capital firms. Aleph Farms joined The RisingFoodStars—the European Institute of Technology (EIT) Food’s club of outstanding agrifood start-ups in July 2018. (AlephFarms 12.12)

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8.5 Evogene & TMG Develop Nematode Resistant Soybean through Genome Editing

Evogene and Brazil’s TMG – Tropical Melhoramento & Genetica, a leading plant breeding company aiming to develop genetic solutions to delivery yield and profit to growers and collaborate to meet the world demand for grains and fibers; announced a collaboration for the development of non-GMO nematode resistant soybean utilizing genome editing technologies on TMG’s commercial soybean lines.

Pursuant to the collaboration, Evogene will utilize its CPB (Computational Predictive Biology) platform to identify the required genome edits to attribute nematode resistance in soybean and will perform such edits on TMG’s proprietary commercial soybean germplasm. TMG will validate the efficacy of the edited soybeans in greenhouse assays and in field trials in Brazil and will incorporate the edited genes in TMG breeding pipeline. TMG is one of the largest soybean breeding companies in Brazil, with its proprietary germplasm planted across four million hectares throughout South America.

The agreement provides commercialization rights for the resulting products by both parties, subject to royalty payments made by each to the other party on its product sales. In addition, Evogene will receive an undisclosed down-payment and will be entitled to a development milestone payment.

Rehovot’s Evogene is a leading biotechnology company developing novel products for major life science markets through the use of a unique computational predictive biology (CPB) platform incorporating deep scientific understandings and cutting-edge computational technologies. Today, this platform is utilized by the Company and its subsidiaries to discover and develop innovative products in the following areas: ag-chemicals, ag-biologicals, seed traits, integrated castor oil ag-solutions and human microbiome-based therapeutics. (Evogene 18.12)

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8.6 Biop Receives FDA Approval for its Medical Digital Colposcope

Ramat Gan’s Biop Medical announced it received approval from the U.S. FDA for its first product, the Biop Medical Digital Colposcope. The filing of the Biop Digital Colposcope is the first stage of the device filing to the FDA. The FDA approval is an important step in the company’s regulatory and marketing strategies towards product launching in the US. Currently, Biop Medical is preparing the second stage of the FDA application due to be filed early 2019.

Founded in 2013 and based in Ramat Gan, Biop developed a device that maps the cervix and identifies cancerous and precancerous cells in epithelial tissues. The company has raised $4.45 million to date, from investors including South Africa-based medical equipment company Avacare Health Group and the Israel Innovation Authority, a government tech investment arm. (Biop 17.12)

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8.7 FDA Approves INSIGHTEC’s Exablate for Treatment of Parkinson’s Disease

INSIGHTEC announced that The Center for Devices and Radiological Health (CDRH) of the FDA has approved an expansion of the indication of Exablate Neuro to include the treatment of patients with tremor-dominant Parkinson’s disease (PD). The Exablate Neuro is a focused ultrasound device for performing incisionless thalamotomy guided by MR imaging. This expansion adds medication-refractory tremor from PD to the current Exablate Neuro indication for incisionless, focused ultrasound thalamotomy for medication-refractory essential tremor.

During the focused ultrasound treatment, sound energy passes safely through a patient’s skull with no surgical incisions to heat and precisely ablate the target in the thalamus. The treatment allows the neurosurgeon to create a personalized treatment plan and to evaluate feedback of the patient’s symptom relief or potential side effects in real-time. Patients must be at least 30 years of age. This approval was based on data from a study led at the University of Virginia School of Medicine and was also conducted at Swedish Neuroscience Institute in Seattle.

Haifa’s INSIGHTEC is a global medical technology innovator transforming patient lives through incisionless brain surgery using MR-guided focused ultrasound. The company’s award-winning Exablate Neuro is used by neurosurgeons to perform the Neuravive treatment to deliver immediate and durable tremor relief for essential tremor and tremor-dominant Parkinson’s disease patients. Research for future applications in the neuroscience space is underway in partnership with leading academic and medical institutions. (INSIGHTEC 18.12)

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8.8 OWC Reports Successful Cannabinoid-Enriched Sublingual Disintegrating Tablet

OWC Pharmaceutical Research Corp. reported the successful production of its cannabinoid-enriched sublingual disintegrating tablet, specifically developed as smoking substitute.

Smoking and inhalation are currently the most common using methods of administering medical cannabis. However, the precise concentration of active cannabinoids in inflorescences is inconsistent and difficult to determine. In addition, smoking may have deleterious side effects and social acceptance issues, which may reduce compliance of drug administration. OWCP’s sublingual disintegrating tablet will offer an alternative to smoking and inhalation, allowing for controlled, consistent dosing and diligent compliance to medical regimens and offer quick pain and other symptoms relief as Sublingual absorption provides a direct route for cannabis to enter much quicker to the blood system.

OWCP now reports that it has completed the successful production of its sublingual tablet, which will allow the company to begin its clinical testing program for this dosing form. OWCP has received an IRB approval to conduct a pharmaco-kinetic (PK) safety study of its sublingual tablet. In addition, OWCP has applied for an amendment to its study protocols to enable the comparison of its tablet with a known cannabis-based pharmaceutical, which is registered for treatment of spasticity in Multiple Sclerosis patients. The company has also received a permit from the IMCA (Israel Medical Cannabis Agency) to conduct an efficacy study of the tablet on chronic pain syndrome.

Ramat Gan’s OWC Pharmaceutical Research Corp., through its wholly-owned Israeli subsidiary, One World Cannabis, (collectively OWC) conducts medical research and clinical trials to develop cannabis-based pharmaceuticals and treatments for conditions including multiple myeloma, psoriasis, fibromyalgia, PTSD and migraines. OWCP is also developing unique and effective delivery systems and dosage forms of medical cannabis. All OWC research is conducted at leading Israeli hospitals and scientific institutions and led by internationally renowned investigators. (OWC 18.12)

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8.9 Kalytera Phase 2 Clinical Study Evaluating CBD in Prevention of Acute GVHD Reports Interim Data

Kalytera Therapeutics announced positive interim data from its ongoing Phase 2 clinical study evaluating cannabidiol (CBD) for the prevention of acute graft versus host disease (GVHD) following bone marrow transplant. Kalytera’s ongoing Phase 2 clinical study is an open label, multicenter study to evaluate multiple doses of CBD for the prevention of acute GVHD following allogeneic hematopoietic cell transplantation, commonly referred to as bone marrow transplantation. The study will evaluate the PK profile, safety, and efficacy of CBD at doses of 75, 150 and 300 mg BID. All patients in the study receive CBD treatment for 7 days prior to their bone marrow transplant procedure and for 98 days following the procedure.

CBD is a non-psychotropic ingredient of cannabis that does not cause euphoria or cognitive effects. The formulation of CBD that Kalytera is evaluating for the prevention of acute GVHD is a proprietary formulation that is designed to improve product stability and absorption after oral dosing.

Kazrin’s Kalytera Therapeutics is pioneering the development of CBD therapeutics. Through its proven leadership, drug development expertise, and intellectual property portfolio, Kalytera seeks to establish a leading position in the development of CBD medicines for a range of important unmet medical needs, with an initial focus on GVHD and treatment of acute and chronic pain. (Kalytera 20.12)

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8.10 CathWorks FFRangio System Receives US FDA Clearance

CathWorks announced that its FFRangio System received US FDA 510(k) clearance. The FFRangio system demonstrated accuracy versus the invasive FFR wire in a blinded comparative study, FAST-FFR. The results of the FAST-FFR pivotal study were used to establish substantial equivalence of the FFRangio system.

The CathWorks FFRangio System quickly and precisely delivers the objective FFR guidance needed to optimize PCI therapy decisions. FFRangio is derived from routine X-rays acquired during a diagnostic angiogram procedure, is non-invasive and performed intra-procedurally during coronary angiography, eliminating additional clinical risk, time and cost associated with invasive FFR. FFRangio provides a 3D reconstruction of the entire coronary tree with FFR values along each vessel.

Kfar Saba’s CathWorks is a medical technology company focused on applying its advanced computational science platform to optimize PCI therapy decisions and elevate coronary angiography from visual assessment to an objective FFR-based decision-making tool for physicians. FFR-guided PCI decision-making is proven to provide significant clinical benefits for patients with coronary artery disease and economic benefits for patients and payers. The company’s focus is specifically on bringing the CathWorks FFRangio System to market to provide quick, precise, and objective intraprocedural FFR guidance that is practical for every case. (CathWorks 21.12)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 Habana Labs’ Goya AI Processor Receives PCI-SIG Certification

Habana Labs announced that its Goya AI inference processor, successfully passed the PCI-SIG compliance testing at the Taipei, Taiwan workshop. As a result, the Goya AI processor card and the HL-1000 chip, have been added to the PCI-SIG integrators list for PCI Express (PCIe) 3.0 x16, operating at 8 Giga-transfers per second (GT/s), as Add-in cards and Components lists respectively. The PCI-SIG workshop promotes compliance with real products to eliminate interoperability issues and ensure proper implementation of the PCIe specification.

Habana Labs has already started production of its first Goya inference processor PCIe card and delivered it to customers in multiple geographies and market segments. The Goya processor silicon has been tested since June of 2018 and is now in production.

Goya has set two industry records, by delivering 15,012 images/second throughput with 1.3msec latency on the ResNet-50 benchmark, while simultaneously attaining an unmatched power efficiency record of 150 images/second/watt.

Caesarea’s Habana Labs was founded in 2016 to unlock the true potential of AI by providing an order of magnitude improvements in processing performance, cost and power consumption. The company set out to develop AI processors from the ground up, optimized for the specific needs of training deep neural networks and for inference deployment in production environments. (Habana Labs 12.12)

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9.2 My Size’s Mobile Smart Tape Measure App Reaches One Million Downloads

My Size announced that its mobile smart tape measure app, SizeUp, has reached one million downloads worldwide. Launched to the global iOS and Android markets in 2016, SizeUp reached this significant milestone as the easy-to-use mobile measurement application became a favorite for DIYers and project lovers around the world.

The global adoption of SizeUp has been critical to My Size, as it puts its technology in the hands of as many users as possible. Additionally, it serves as a market validation of My Size’s patented technology, which also serves as the foundation for its fashion apparel measurement app MySizeID. SizeUp joins an impressive list of applications to reach one million downloads early on in its existence.

SizeUp is a mobile smart tape measure which allows users to instantly and accurately measure objects by placing their smartphone at one end of the object, lifting it slightly, and moving it to the other end either vertically or horizontally. SizeUp is easy to calibrate in order to ensure accuracy, can measure intervals between surfaces, and automatically stores the last measurement taken. It is available to all users for free for 30 days, with a full featured version available for purchase following the trial period.

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9.3 Fieldbit Releases Next Generation of Augmented Reality for Technical Services

Fieldbit announced the launch of Fieldbit 5.0, the latest version of the company’s proprietary field service application that enables enterprises to create, capture and efficiently share knowledge across entire organizations using smart glasses and smart phones. The innovative redesign enhances technician productivity and performance via a user-friendly and intuitive interface capable of being deployed across the web and on Android and Apple iOS devices.

Fieldbit 5.0 offers unique implications for different operating systems. For Android, first-time users can expect an easy-to-use layout requiring no previous training to utilize. Additionally, the new software boasts integrated knowledge and ticketing systems to optimize the process of requesting real-time, interactive support. Apple iOS users can expect a new AR experience as well. Fieldbit 5.0’s new engine optimizes image recognition and simultaneous localization and mapping (SLAM) algorithms to create a new experience with AR annotations, which can now be viewed from various angles.

Founded in 2014, Ra’anana’s Fieldbit is a leading developer of real-time augmented reality collaboration solutions. Its enterprise class, cloud-based technology enables on-site service engineers to collaborate seamlessly with experts in the service center, and to receive all the know-how and guidance they need to solve issues quickly. Fieldbit increases remote resolution and first time fix rates, minimizing costly downtime and enhancing customer satisfaction. (Fieldbit 12.12)

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9.4 ECI Debuts 1.2T Dual Channel Blade for New Age of Adaptive Optical Networking

ECI announced the debut of the TM1200, a 1.2T blade (dual 600G channel) which allows for a truly programmable, adaptive optical network. The TM1200 delivers unmatched spectral efficiency and elasticity through software-controllable continuous modulation. Moreover, it maximizes capacity in a granular manner to best match client needs and variable channel conditions.

Traditionally, line-side modulation was only programmable in large increments – such as 100G, 200G or 400G – often relying on different line cards. The TM1200 uniquely delivers software-controlled continuous modulation in 50 Gbps increments up to 600 Gbps line rate, rather than supporting specific modulation schemes. Therefore, the optimal modulation scheme and transmission rate can be adjusted, and the sweet spot for maximizing line rates discovered, for any given optical route or set of channel conditions.

Petah Tikva’s ECI is a global provider of ELASTIC network solutions to CSPs, critical infrastructures as well as data center operators. Along with its long-standing, industry-proven packet-optical transport, ECI offers a variety of SDN/NFV applications, end-to-end network management, a comprehensive cyber security solution, and a range of professional services. ECI’s ELASTIC solutions ensure open, future-proof, and secure communications. (ECI Telecom 12.12)

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9.5 CyberInt Launches Managed Cloud Security Services

CyberInt is launching a new cloud security offering. With CyberInt Managed Cloud Security Services, organizations gain complete visibility and control of their cloud environments; compliance with global security and privacy legislation; and access to the highest levels of cyber security experts. Current cloud security tools and guidelines are not sufficient, leaving companies’ cloud environments, applications, and data vulnerable to threats. With CyberInt, organizations get complete visibility, ongoing audit and compliance, and stronger security around cloud-hosted data. The robust security offering delivers a comprehensive public cloud strategy and established security management services, directly addressing the challenge of managing complex, multi-cloud environments.

Recently recognized as one of the 20 most promising enterprise security solution providers for 2018 by CIOReview, Petah Tikva’s CyberInt eliminates potential threats before they become crises by looking at all online activities and digital assets from an attacker’s perspective and provides managed detection and response services to customers worldwide. Leveraging Argos real-time digital risk protection platform with a global cyber expert analyst team, as well as managed SOC, threat hunting, deep dive investigations, real-time incident response and risk assessment services, CyberInt provides holistic end-to-end protection to digital businesses in retail, ecommerce, gaming and financial industries. (CyberInt 12.12)

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9.6 SafeDK Revealed Thousands of Malicious In-App Mobile Ads Auto-Redirecting Users to Porn Sites

SafeDK announced the official release of the world’s first mobile user level ad journey, as part of its patent pending ad-visibility technology. The solution helps publishers track ads behind specific user complaints, identify and resolve malicious ad’s sources, cut time spent by customer support and eliminate the need to reproduce the issue. SafeDK used user-level analysis technology and utilized its wide coverage of 400M Monthly Active Users to track a specific user ad-journey, which led the company to uncover thousands of ads that auto-redirect users to porn sites. The company instantly alerted the ad networks that served the malicious ads and provided them with the information needed to manage the crisis as quickly as possible.

In-app malicious and fraudulent code that ‘piggybacks’ on innocent ads and auto redirect users to inappropriate sites has turned into an epidemic in the industry. Ad network SDKs are leaning on 3rd party programmatic solutions that are vulnerable to breaches and are exposed to manipulations. SafeDK’s user-level ad creative and performance data is the only solution which lets publishers identify ad-related issues which occur to specific users. Furthermore, the technology does not require any collection of private user information, which is essential for publishers in the GDPR era.

Herzliya’s SafeDK is a leading end-to-end mobile SDKs management platform which enables top app publishers to analyze, monitor and optimize the behavior of SDKs and ad-networks in their apps. Mobile apps commonly incorporate 3rd party SDKs, which are seen as black boxes by the app owners integrating them. With SafeDK, app owners can analyze, control and optimize SDK related impact on performance, stability, ad quality, blacklist violations and campaigns performance. Also, SafeDK lets publishers switch off problematic SDKs in real time and control specific permissions. (SafeDK 14.12)

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9.7 Foresight and RH Electronics to Join Forces in a Strategic Alliance

Foresight Autonomous Holdings announced the signing of a non-binding Development and Investment Agreement with RH Electronics, a primary contractor in the manufacturing and assembly of electronic systems. The agreement covers the terms of RH’s engagement, directly and/or through its approved contractor, Tonson Labs, for a multi-phase project to develop chip-based FPGA and ASIC solutions for QuadSight, Foresight’s four-camera vision system. Initially, RH will lay the infrastructure for an FPGA-board platform. Following completion of phase 1 and successful pass of acceptance tests, RH is planned to proceed towards development and manufacturing of an ASIC chip for the QuadSight system.

The parties are targeting to enter, within two months, into a binding agreement based on the principles of the initial non-binding agreement, pursuant to which the parties will determine the minimal quantities of QuadSight production units, and the commercial terms of production. In addition, under such binding agreement RH will receive a “right of first refusal” for the manufacturing of QuadSight systems and will prepare the infrastructure for such manufacturing facilities.

Ness Ziona’s Foresight Autonomous Holdings, founded in 2015, is a technology company engaged in the design, development and commercialization of stereo/quad-camera vision systems and V2X cellular-based solutions for the automotive industry. Foresight’s vision systems are based on 3D video analysis, advanced algorithms for image processing and sensor fusion. The company’s systems are targeting the Advanced Driver Assistance Systems (ADAS), semi-autonomous and autonomous vehicle markets.

Established in 1984, RH Electronics is a leading EMS (Electronics Manufacturing Services) and CM (Contract Manufacturing) provider based in Nazareth Elite, Israel, with factories around the world. RH has advanced production technologies in the fields of electronics PCBA, mechanics, cables and machining at one stop shop. RH is active in the field of top turnkey solution of design, engineering, testing, manufacturing and subcontracting services. (Foresight 17.12)

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9.8 Dish Mexico Selects Gilat & Hispasat for Delivery of Broadband Services to Mexico

Gilat Satellite Networks announced that Dish Mexico has chosen Gilat’s SkyEdge II-c multi-service platform, operating over Hispasat’s HTS satellite, Amazonas-5, to deliver high-quality broadband services in Mexico. Mexico will be connected with ON, a new high-quality satellite Internet access service, to benefit the unserved and underserved people of Mexico. This service will include high speed broadband connectivity over satellite as a solution for remote regions where terrestrial service is not available. The broadband service will utilize Gilat’s highly efficient X-Architecture and DVB-S2X VSATs operating over Ka-band capacity from Hispasat’s recently launched Amazonas-5 satellite.

Petah Tikva’s Gilat Satellite Networks is a leading global provider of satellite-based broadband communications. With 30 years of experience, we design and manufacture cutting-edge ground segment equipment, and provide comprehensive solutions and end-to-end services, powered by their innovative technology. Delivering high value competitive solutions, our portfolio comprises of a cloud based VSAT network platform, high-speed modems, high performance on-the-move antennas and high efficiency, high power Solid State Amplifiers (SSPA) and Block Upconverters (BUC). (Gilat 17.12)

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9.9 Essence Group Paves the Way With State-of-the-Art Functionality for Monitored Security

Essence Group is developing next generation security solutions to reinvent the way security monitoring stations protect their customers. Essence Group solutions currently protect three million homes and businesses worldwide. Their approach to secure living is what perfectly places Essence Group to understand the issues related to 21st century security.

The company is due to release its next generation professional security platform that leverages this know-how, and utilizes state-of-the-art technologies such as IoT infrastructure, artificial intelligence and big data to provide customers with the highest level of protection in these challenging times. Highlighting this point is that Essence is now able to prevent the hacking of Mifaire tags. Mifaire tag hacking has created security breaches for multiple monitoring and access control companies worldwide. Any company that uses Mifaire tags can use this new solution to stop intruders from imitating the signal that disarms an alarm system or allows access to a building or office.

Initial tests have shown a system with superb customer experience for the end user and for the monitoring station, including: near real time alerting for the monitoring station; automated decision making; streaming HD video over long range wireless channels; anti-jamming of RF channels to ensure continual service.

Herzliya’s Essence Group is a global provider of IoT connected-living solutions for communication, security and healthcare service providers, serving households and small-medium businesses. Leveraging experience and innovation with a global presence and 20 million devices deployed worldwide, Essence is committed to developing and supporting solutions that enhance partners’ businesses and enable people to live fuller, better lives. The multiple award-winning Care@Home Multi-Service Platform is an Aging-in-Place product suite offering seamless home care monitoring indoors and outdoors, allowing independence for seniors and peace of mind to their loved ones. (Essence Group 21.12)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israel’s November CPI Falls by 0.3%

Israel’s Consumer Price Index (CPI) fell 0.3% in November, the Central Bureau of Statistics reported on 13 December. The drop was bigger than expected by the pundits. The fall of 0.3% comes after the unexpected rise of 0.3% in October, on the basis of which the Bank of Israel increased the interest rate for December from its historic low of 0.1% to 0.25%. Inflation over the past 12 months remains at 1.2%, at the lower end of the Bank of Israel’s 1%-3% target range. The CPI has risen 1.1% since the start of 2018.

Notable price falls in November included fresh fruit (6.2%), culture and entertainment (0.9%), furniture (0.8%) and public transport (0.8%). Notable price increases were in clothing (2.9%) and fresh vegetables (1.4%).

The Central Bureau of Statistics also published the Housing Price Index today for September October. The Index showed the price of the average deal falling 0.2% in September-October compared with August-September. Housing prices have fallen 1.8% over the past 12 months. The average price of a new home remained unchanged between August-September and September-October. (CBS 14.12)

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10.2 Israel Poverty Report Finds Less Poverty but More Poor People

The Latet (To Give) organization published a report on 13 December, claiming 77.4% of the families receiving state support have at least one breadwinner, and 19.7% have two or more breadwinners. The report indicates that like last year, one of every three children and one of every four Israelis is poor. At the same time, it is important to note that in contrast to the definition of poverty in the official poverty report by the National Insurance Institute, Latet’s definitions of poverty are multi-dimensional.

Latet’s index estimates the degree of want in a family in five aspects reflecting needs essential for dignified living in Israel: housing, education, health, nutritional security and ability to meet the cost of living. A family reporting a shortage in at least three of the five indices is classified as poor. Latet’s unique model counts 500,000 more poor people in Israel than the National Insurance Institute, bringing the total to 2.5 million. Latet’s model puts the number of poor families in Israel at 533,000. According to in-depth surveys conducted by Latet, 34.1% of the public regards poverty and social gaps as the most urgent problem requiring attention from the government, while state security was in second place with 33.3%. Asked what two issues are most urgent, 66% included poverty and social gaps as either most urgent or second most urgent, compared with 54.1% for state security.

A positive aspect of the report was a rise in the average monthly income of those receiving state assistance from NIS 3,348 in 2017 to NIS 4,176 in 2018, an increase of nearly 25%. Latet attributes a large part of this increase to the increase in the minimum monthly wage, which currently stands at NIS 5,300. The report also states that the feeling of employment security improved this year, with 19.9% of those receiving state assistance reporting that they were likely or very likely to lose their current jobs, far less than the 33.1% who reported the same thing last year.

It appears, however, that the public is not giving the government credit for these results; 75.6% of the public believes that the government bears more responsibility, a larger proportion than for any other party, but only 24.4% believes that the government is actually dealing with the problem. 36.9% of the public believes that the government is refraining from setting targets for reducing poverty because the long-term results are of no interest to politicians. 72% of the public believes that dealing with poverty is either a low priority on or totally absent from the national agenda.

The alternative poverty report also reported other findings: 94% of the senior citizens receiving state support said that their old-age allowances either did not enable them to fulfill their basic living needs in dignity, or did so only partially, about the same proportion as last year (92.2%). 66.7% of the senior citizens receiving state support said that they were unable to properly maintain their health because of their economic situation, and 89.8% were unable to make payments for nursing, compared with 85.7% in 2017. 70.9% of those receiving state assistance reported being swamped with debt, compared with 77.4% last and 34.1% of the general population in 2017. 48.9% of those receiving assistance reported having a bank account blocked or attached for debt, a bailiff’s action, or lawsuits, compared with 8.4% of the general population. 50.7% of those receiving state aid reported lacking a properly working air-conditioner or heating at home, or being unable to afford to operate it. 11.5% of those receiving assistance had attempted to commit suicide, or had planned to do so in the past year, because of economic distress, down from 18% in 2015. (Globes 13.12)

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10.3 Israel Ranks as World’s Third Most Educated Country

Israel is the third most educated country, according to 2017 data compiled by the Organization for Economic Cooperation and Development (OECD). The OECD calculated the percentage of each country’s population between the ages of 25 and 64 who have completed a two- or four-year degree beyond high school – including both academic and vocational programs.

The data shows that 50.9% of Israelis in the target age bracket have a higher-education degree. The report noted that Jewish Israelis enter college at a later age than most Western counterparts because most serve in the military for at least two years after high school.

The United States came in at No. 5, with only 46.4% of its population in the target age group having completed a higher-education program – even though half of the world’s top-ranking universities are American. South Korea came in at No. 4, with 47.7% having completed a higher-education program, but it tops the list of most educated people aged 25-34 (66.6%). Japan is No. 2 (51.4%) and the most educated country in the world is Canada (56.7%) – although Canada faces an over education, underemployment problem. (OECD 20.12)

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11: IN DEPTH

11.1 ISRAEL: IVC Finds Israeli Startup Closures Diminishing

Fewer and fewer startups are closing down each year in Israel according to a new report published by the IVC Research Center. The report analyzes the number of startups closing down and the amount of money they raised. According to the report, 3,307 high-tech startups terminated their activity in 2012-2017 after raising a cumulative $3.8 billion. The study did not examine the reasons why the startups closed down.

Some 634 startups closed down in 2013 after raising $1.4 billion, 710 in 2014 ($665 million), 590 in 2015 ($327 million), 540 in 2016 ($350 million) and 352 in 2017 ($406 million). The report did not include 2018, but IVC believes that 550 startups will close down in 2018 by the end of the year.

IVC figures show that 1,147 startups were founded in 2013, meaning that the ratio between startups that closed down and startups that were founded that year was 55%. In addition, 1,353 startups were founded in 2014 (52%), 1,290 in 2015 (45%), 1,102 in 2016 (49%), and 823 in 2017 (42%).

There are 8,360 high-tech startups currently active in Israel, two and a half times the number that closed down starting in 2013. IVC says that the active companies raise an average of $4.43 million per year. The startups that closed down operated for an average of 5.5 years before closing down, during which they raised an average of $623 million a year. The report also shows that the companies that closed down survived an average of four years between their last financing round and the date on which they closed down.

The report states that 2,400 startups, 75% of those that closed down, did not disclose the amount they raised, assuming that they raised any money. Another 400 startups raised less than $1 million each and raised an aggregate total of $120 million. Startups that raised $30 million or more before closing down raised an aggregate $2.7 billion, including $850 million by Better Place, $134 million by Quixey, $92 million by BIO Control Medocal, and $89 million by Mobli.

2,590 startups, 78% of all those that closed down, did so in the early stages, while 686 startups closed down in the initial revenue stages and only 33 closed down in the growth stages. At the same time, two thirds of all the capital raised by startups that closed down during was raised by startups in the initial revenue stages, including $850 million by Better Place. Even excluding this amount, companies in this category still accounted for half of all the capital raised by startups that closed down.

1,228 startups, 37% of all those that closed down, were Internet companies. Due to the low development costs in this sector, IVC says, they raised only an aggregate of $468 million in capital before closing down. 432 life science startups raised an aggregate $808 million before closing down, and 828 communications startups raised an aggregate $800 million before closing down. (Globes 24.12)

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11.2 ISRAEL: Analysis – Initiated Marketing of Consumer Credit

In recent years, the Bank of Israel’s Banking Supervision Department has given greater attention ‎to the consumer and prudential aspects of the increase in credit to households.‎

From the prudential aspect, the Department has taken a variety of measures to ‎assess and limit the risk in the consumer credit portfolio. In January 2015, it ‎required making a conservative loan loss provision in order to illustrate in ‎advance the developing risk in this area. Additional examinations and checks ‎were made at the banks, as part of which the underwriting, monitoring and ‎control processes were examined. The Department showed the risks in the ‎consumer area to the banks’ management and boards of directors to make sure ‎that they would act as necessary. The Department also analyzed the distribution ‎of credit in the economy by income level, and published the analysis to the banks ‎and the public.‎

The Banking Supervision Department’s measures led to a slowdown in the ‎growth rate of credit provided to households by the banks in the past year.‎

From the consumer aspect, the Banking Supervision Department required that ‎credit marketing be aimed at customers with the ability to repay, in order to ‎prevent financial entanglements among economically weaker population groups. ‎In addition, the banks were required strictly uphold proper marketing practices ‎toward their customers. The central credit register that is expected to go online ‎in 2019, which is one of the important projects being led by the Bank of Israel, ‎will make it easier for all lenders, banks and nonbank entities, to properly assess ‎the customers’ repayment capacity based on full information, in order to prevent ‎the provision of credit to customers who do not have the ability to repay.‎

The Banking Supervision Department has placed a special emphasis on the ‎initiated marketing of credit to households by the banking system – a ‎process by which the bank approached a specific customer with an offer to ‎provide credit – at branches, through digital channels, by phone, and even during ‎the handling of another request from the customer. While this practice exists in ‎Israel and abroad, initiated marketing also carries risks for customers. For ‎instance, during an initiated contact, the customer generally does not have ‎sufficient opportunity to assess all of the conditions or to compare prices with ‎other credit alternatives in the market, or to assess the overall burden of liability ‎so that he can properly plan how to repay the credit.‎

As such, the Banking Supervision Department provided written instructions to the ‎banks and the credit card companies in 2015 on how to make an initiated ‎approach to customers with a credit offer. The banks are required to set out in ‎their policy the target groups for their initiated marketing, and to exclude from it ‎groups of customers that do not have the ability to repay, as well as other ‎groups of customers (such as the very elderly or very young). We emphasize ‎that these groups were excluded from initiated marketing only, but they can ‎obviously still approach the banks to request credit at their own initiative, and ‎each request will be judged on its own merits. In addition, the Department ‎required the banks to make sure that the credit solutions are consistent with the ‎needs of the customers.‎

In the past year, the Banking Supervision Department has examined the ‎initiated marketing of consumer credit in the banking system through ‎examinations and other checks.‎

These examinations showed that in general, credit is marketed to ‎customers with a reasonable repayment capacity, and there was no ‎phenomenon of “pushing” credit to customers who could not repay it or to ‎financially weaker customers.‎

However, the Banking Supervision Department did identify other problems ‎in the marketing processes in some cases, and it is monitoring their ‎rectification in accordance with its requirements:

-Banking corporations are required to make sure that their employees, at ‎branches and call centers, do not apply any pressure on customers to ‎obtain credit services. Examinations conducted by the Banking Supervision ‎Department found certain cases where call center employees acted to ‎convince customers to take a loan even though the customers had said they ‎were not interested. It was found that the improper convincing in those ‎cases included repeated offers, applying pressure on customers to decide ‎‎“today”, and the use of inappropriate verbal coercion.‎

-The Banking Supervision Department is requiring the banking corporations to ‎prepare for a mechanism that will prevent the harassment of customers ‎with repeated offers of credit after they have said they are not interested in ‎the service, and is even instructing the banking corporations to prepare for ‎the implementation of a mechanism that will allow customers to give prior ‎notice that they are not interested in initiated contact from the bank. This is ‎due to cases that were found where call center employees contacted ‎customers with repeated offers to obtain loans, even after the customers ‎said they were not interested or refused the offers.‎

-The Banking Supervision Department is requiring the banking corporations to ‎increase the disclosure they provide to customers by improving ‎guidelines for conducting a conversation with a customer and increasing ‎controls over the conversations in practice: ‎

-The banks must bring to the customer’s attention, at the beginning of the ‎conversation, the customer’s financial state in the account, both on ‎the debit side and on the credit side. In particular, the banks must ‎bring to the customers attention details about deposits that are available ‎to them, including their date of repayment and their interest rate. The ‎objective is to enable the customers to make an informed decision on ‎whether to take out a loan or to withdraw a deposit, in view of the ‎interest rate differentials between the two. In financial terms, the use of ‎a deposit is generally more worthwhile for the customer than taking out a ‎loan, since the interest that the customer receives on a deposit is much ‎lower than the interest he would pay on a loan.‎

-Another example is the requirement to advance disclosure of the ‎interest rate on the loan offered at the beginning of the marketing ‎conversation, and before the customer has formed his opinion on the ‎offer. This requirement is due to the work process in some cases where ‎the sale is comprised of two stages: In the first conversation, the ‎customer gives his agreement in principle to submit a request for credit ‎before the bank tells him what the interest rate is, and the bank updates ‎him regarding the approved interest rate only in the second ‎conversation. The Banking Supervision Department wants to make sure ‎that the customer understands what the interest rate is and considers it ‎at an early stage of the sales process, before giving his agreement in ‎principle to submit a request for credit.‎

-The disclosure of the interest rate is especially important in cases where ‎the customer is offered a loan to fully or partially pay back previous ‎loans. From a financial standpoint, it is generally not worthwhile for a ‎customer to recycle existing loans with a more expensive loan. The ‎exception to this is a customer that is having difficulties repaying the ‎loans, and the recycling is required in order to spread out the payments.‎

-The banks must make sure to bring interest rate benefits to the ‎customer’s attention, insofar as an existing customer is entitled to such a ‎benefit based on a general arrangement (belonging to a certain segment ‎of the population, such as soldiers, students, and so forth), or based on ‎special agreements (for instance agreements that apply to certain ‎groups of workers).‎

The Banking Supervision Department is requiring that the banks make sure ‎that loans offered through direct channels are not more expensive than ‎loans offered to customers at branches. The Department’s position is that ‎technological improvements enable the banking corporations to streamline ‎and to offer their customers services at lower prices. This position also ‎applies to the price of consumer loans.‎

The Banking Supervision Department is requiring the banking corporations to ‎make sure that the variable pay mechanisms for employees who market ‎credit are not based on personal credit sales targets or on other targets ‎that may encourage aggressive marketing and increase risk. The ‎Department found that variable pay based on personal targets may increase ‎the risk of marketing that does not meet the appropriate disclosure and ‎fairness standards.‎

Another material requirement of the Banking Supervision Department is ‎intended to ensure an organizational culture of the customer’s best ‎interest in the bank’s operations. As such, a requirement was presented to ‎increase control and examination of the consumer credit provision ‎processes, and particularly the initiated marketing conversations, by ‎gatekeepers at the banking corporations—controllers, legal counsel, ‎compliance, risk management, and internal audit—in order to ensure that all ‎of the banking corporations’ obligations toward their customers are met.‎

The Banking Supervision Department is continuing its work on consumer credit, ‎and in the coming year, it will monitor the rectifications of the deficiencies that ‎were found. It is also preparing for the publication of a specific directive on the ‎marketing of consumer credit by the banking system.‎ (BoI 12.12)

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11.3 LEBANON: Moody’s Changes Outlook on Lebanon’s Rating to Negative, Affirms B3 Rating

On 13 December 2018, Moody’s Investors Service changed the outlook to negative from stable on the Government of Lebanon’s issuer ratings and affirmed the ratings at B3.

The negative outlook reflects an increase in risks to the government’s liquidity position and the country’s financial stability, in large part as a consequence of domestic and geopolitical risks that have become more intractable. In particular, in the absence of fiscal consolidation measures that would allow the release of some international loans and partly reverse the widening in risk premia observed in recent months, Lebanon’s fiscal metrics that have already been among the weakest of all the sovereigns rated by Moody’s would weaken further, contributing to yet higher liquidity and financial stability risks.

The affirmation of the B3 rating reflects Moody’s assumption that a government will be formed in the near term and will implement some fiscal consolidation that would unlock the CEDRE (“Conférence Economique pour le développement, par les réformes et avec les entreprises”) public investment package, which in turn would support GDP growth and ease liquidity risks. The rating affirmation also takes into account the central bank’s demonstrated capacity to maintain a degree of financial stability despite very large macroeconomic imbalances and through times of political tensions, although the effectiveness of its financial operations may be diminishing.

Moody’s has also affirmed Lebanon’s (P)B3 senior unsecured Medium Term Note Program rating and its (P)Not Prime other short-term rating.

The foreign and local-currency bond and bank deposit ceilings remain unchanged. Specifically, the foreign-currency bond ceiling is unchanged at B1, the foreign-currency bank deposit ceiling is unchanged at B3, and the local-currency bond and deposit ceilings are unchanged at Ba2. The short-term foreign-currency bond and deposit ceilings are also unchanged at Not Prime.

Ratings Rationale

Rationale for the Change in the Outlook to Negative from Stable: Heightened Political Tensions and Delay in Fiscal Consolidation Jeopardize Donor Disbursements, Weigh on Investor Sentiment

The negative outlook on Lebanon’s rating reflects an increase in domestic and geopolitical tensions that is hindering the authorities’ capacity to halt the widening of fiscal and external imbalances. This situation has a negative impact on Lebanon’s access to financing from international donors. More generally, heightened political risk contributes to wider risk premia and higher funding costs.

One main risk is that political tensions and the policy standstill continue to further jeopardize capital inflows and committed donor disbursements, with significant repercussions on Lebanon’s ability to maintain financial stability and service its debt at sustainable costs.

On the domestic side, a resolution of the political deadlock that prevents a government formation since the 6 May 2018 parliamentary elections is a prerequisite in order to unlock the $11 billion public investment support package committed by the international donor community during the CEDRE conference held in April 2018 in return for fiscal consolidation measures worth 1% of GDP per year over the next five years.

As regards geopolitical risks, Moody’s assessment is that they have increased in light of the withdrawal of the United States (Aaa stable) from the Joint Comprehensive Plan of Action (JCPOA) agreement signed between Iran (unrated) and the permanent members of the UN Security Council plus Germany (Aaa stable), followed by the imposition of sanctions on Hezbollah in late October which target not only the organization’s political and militant arm, but also “foreign persons and government agencies that knowingly assist or support Hezbollah”. These secondary sanctions further increase uncertainty among investors and in the international donor community in light of the group’s anticipated participation in Lebanon’s cabinet.

Largely as a result of the domestic and geopolitical risks, Moody’s estimates that the risk premia on Lebanon’s government’s international debt have widened by 300 basis points since April to around 800 basis points, marking a significant increase in the cost of international debt.

Slowing Deposit Growth as Budget Deficits Remain Wider for Longer Exacerbates Government Liquidity Risk

Moody’s expects the budget deficits to remain wider for longer than it previously expected, raising the government’s debt burden, at a time when banks’ deposits, that have been channeled by the central bank to finance the government’s needs, are slowing.

Without any government to implement some fiscal consolidation, the budget deficit is likely to stand at 10.5% of GDP in 2018, compared with 8.9% previously expected by Moody’s. Higher interest payments, larger transfers to the loss-making Electricité du Liban due to higher oil prices through most of the year, and lower revenue all contribute to a wider deficit compared to 2017.

For 2019 and 2020, Moody’s anticipates a limited narrowing of the fiscal deficit, to 9.5% and to 9.0% of GDP, respectively. Taking into account subdued real GDP growth, around 1-2% in the next three years, Moody’s estimates that the government’s debt burden – excluding domestic debt holdings of public entities accounting for about 11% of GDP – will continue to increase to over 150% of GDP by 2021 from an anticipated 141% in 2018.

Reflecting the government’s intention to issue domestic debt closer to market rates starting 2019, debt affordability, as measured by interest/revenue, will exceed 50% next year and stay around these levels, the weakest amongst all Moody’s-rated sovereigns. Such weak debt affordability makes Lebanon’s fiscal and credit profile particularly vulnerable to a prolonged increase in the cost of debt.

Persistently wide deficits and large debt refinancing needs will keep the government’s borrowing needs above 30% of GDP. Beside larger than earlier expected financing needs, government liquidity risks are exacerbated by a slowdown in commercial banks’ private sector deposit growth and the above-mentioned wider risk premia on international debt.

Private sector deposits have been a main source of indirect financing for the government. Through a series of financial operations starting in May 2016, the Banque du Liban (BdL), the central bank, incentivized commercial banks to attract new deposits and park their liquid foreign assets at the BdL. The objective has been to stabilize the economy’s net foreign asset position in the context of the reduced pace of cross-border inflows that started in 2011 in the wake of the regional Arab Spring upheavals. This centralization of liquidity at the BdL has allowed it to maintain interest rates low and stable by purchasing the government debt which is not absorbed by the banking system. The BdL’s domestic debt holdings have thus expanded to 50% of the government’s total local currency debt as of September 2018 from about 27% at the end of 2010.

After a strong acceleration between mid-2016 and late 2017, deposits have slowed down, despite ongoing incentives provided by the BdL. Based on banks’ balance sheet data up to October 2018, Moody’s estimates that annual private sector deposit growth will be around 3% in 2018, equivalent to about $5 billion instead of the $6.5 billion anticipated before, and lower than the fiscal deficit at $6 billion.

Heightened political risk, higher interest rates by the US Federal Reserve, and lower confidence in sustained financial stability as highlighted by the increased trend toward deposit dollarization, are likely to have accounted for the slowdown in deposit growth and are indicative of the diminishing effectiveness of the BdL’s policies.

Unless depositors’ confidence in political and financial stability is restored, the government’s access to funding will remain constrained, with prospects of further liquidity and fiscal pressure reflected in the negative outlook.

Widening External Imbalances Weigh on Foreign Exchange Reserve Buffer Required to Ensure Exchange Rate and Financial Stability

Tightening financing conditions in international debt markets and declining net foreign assets at the BdL point to higher external vulnerability risks and financial stability risks for Lebanon.

Lebanon’s very wide current account deficit, which Moody’s expects to remain above 20% of GDP in the next few years, has long highlighted the country’s external vulnerability. This has been mitigated by a large stock of foreign exchange reserves, which, at $34.6 billion as of October 2018, provides ample coverage of goods and services imports (at over 13 months). At an average of about 65% of M2 over the past three years, the stock of foreign exchange reserves also provides coverage for significant local currency deposit conversions to US dollars in a stress scenario.

However, foreign exchange reserves are less ample when assessing financial stability risks related to potential deposit outflows or lower inflows. In particular, the ratio of net foreign assets to the M3 broad money measure (including foreign currency deposits) is declining toward the 20% upper threshold deemed prudent under IMF reserve adequacy metrics for countries with large banking systems, from almost 50% in 2011. Another measure of reserve adequacy relates short-term external debt to foreign exchange reserves. BdL’s practice in recent years to maintain a floor for foreign exchange reserves at $30-32 billion and intervene when that level looked like it may be breached, is consistent with maintaining adequate coverage of short-term external debt.

The deteriorating balance of payments dynamics observed in 2018 which reflect commercial banks’ worsening net foreign asset position partially in response to their participation in BdL’s operations, highlights the economy’s gradually diminishing external shock absorption capacity captured in the negative outlook.

Rationale for Rating Affirmation at B3

The affirmation of the B3 rating is based on Moody’s baseline assumption that a government is formed and able to implement some fiscal consolidation that diminishes the fiscal, liquidity and external stress explained above. The B3 rating also takes into account BdL’s demonstrated capacity to ensure financial stability and channel financing to the government, albeit now at increasing costs.

More generally, Lebanon’s institutions have a track record of supporting the government’s willingness and capacity to meet their debt payments, even through highly challenging economic, social and political periods including a civil war in 1975 – 90.

With some fiscal consolidation back on track, Lebanon’s economy would be supported by the disbursement of significant donor commitments of over $11 billion over the next five years (equivalent to about 3-4% of GDP per year) that would boost investment. Donor disbursement would happen conditional on a reduction in the fiscal deficit by 1% of GDP per year over the next five years. Evidence that fiscal consolidation is underway would also likely shore up investors’ and depositors’ confidence.

What Could Change the Rating Up

The negative outlook indicates that an upgrade is unlikely.

Moody’s would likely change the outlook to stable if significant reforms unlocked the CEDRE public investment package, raised GDP growth prospects and durably restored investors’ and depositors’ confidence and deposit growth. This would support the effectiveness of the central bank’s measures aimed at channeling financing for the government at sustainable costs while maintaining financial stability.

What Could Change the Rating Down

Moody’s would likely downgrade Lebanon’s ratings if in the absence of credible and effective fiscal consolidation prospects, possibly as a result of continued domestic political deadlock and/or intensified geopolitical pressures, the government’s access to financing at affordable costs became further impaired. In particular, a further significant slowdown in deposits would denote lower policy effectiveness and point to increasing risks to financial stability, putting downward pressure on the rating. (Moody’s 13.12)

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11.4 BAHRAIN: Moody’s Changes Outlook on Bahrain’s Rating to Stable, Affirms B2 Rating

On 17 December 2018, Moody’s Investors Service changed the outlook to stable from negative on the Government of Bahrain’s issuer ratings and affirmed the ratings at B2.

The key driver of the outlook change to stable is Moody’s assessment that Bahrain’s government and external liquidity risks, while remaining elevated, have materially reduced following the announcement of a $10 billion financial support package from Bahrain’s Gulf Cooperation Council (GCC) neighbors. Financial support and the fiscal consolidation measures (the Fiscal Balance Program, FBP) that are set to accompany it will support investors’ confidence and help to reduce the government’s financing needs. In turn, this will slow a further weakening in Bahrain’s public finances in a way that is consistent with a B2 rating.

The affirmation of Bahrain’s B2 rating reflects Moody’s view that, despite the recent reduction, the sovereign’s external vulnerability will remain very high with persistently low foreign exchange reserves. Moreover, Moody’s expects that, despite some fiscal consolidation, Bahrain’s government debt burden will continue to rise, as political and social considerations will prevent a full implementation of the FBP. These credit challenges are set against Bahrain’s key credit strength – its relatively diversified and dynamic economy.

Bahrain’s long-term foreign-currency bond ceiling is unchanged at Ba3. Its long-term foreign-currency bank deposit ceiling is unchanged at B3. The short-term foreign-currency bond and bank deposits ceiling remain unchanged at Not Prime, while the long-term local currency country risk ceilings are unchanged at Ba2.

In addition, the long-term foreign-currency bond and bank deposit ceilings for Bahrain – Off Shore Banking Center remain unchanged at Baa2, while the short-term foreign-currency bond and bank deposit ceilings remain unchanged at Prime-2.

Ratings Rationale

Rationale for the Change in the Outlook to Stable from Negative

GCC Financial Backstop Reduces Government and External Liquidity Risk

On 4 October 2018, Bahrain announced a $10 billion (26% of 2018 estimated GDP) financial support agreement signed with Saudi Arabia (A1 stable), UAE (Aa2 stable) and Kuwait (Aa2 stable). The package aims to support a set of fiscal reforms – summarized in the Fiscal Balance Program – which Bahrain has committed to implement under the agreement.

Moody’s anticipates that funds from the financial support package will be disbursed during 2018-22 in the form of long-term concessionary loans, more than covering the scheduled external debt payments (principal and interest) of the government (approximately $9.4 billion, including the $750 million sukuk that was repaid in late November 2018). The disbursements will directly support Bahrain’s government liquidity position and reduce the risk that the central bank foreign exchange reserves could be rapidly depleted.

Importantly, Moody’s estimates that Bahrain will be able to draw on additional extraordinary support from the GCC neighbors to support the stability of its exchange rate peg during the course of the FBP implementation. Moody’s also expects that the presence of the GCC backstop will allow the government and government-related entities to regain access to international capital markets, which had become compromised during much of 2018, further supporting liquidity.

FBP Implementation, Albeit Likely Partial, Will Slow Further Weakening of Public Finances

The fiscal reforms announced by the government as part of the FBP would represent very significant fiscal consolidation. While Moody’s expects some implementation hurdles and, as a result, a more gradual fiscal consolidation, some of the measures outlined becoming effective will slow the weakening of Bahrain’s fiscal metrics.

The FBP targets a reduction in government spending relative to GDP to 19.5% in four years from an estimated 26.6% in 2018, with an increase in revenue to 19.3% from 17.5%, which would restore budget balance by 2022. The measures include spending cuts from a voluntary retirement scheme for eligible civil servants, more targeted social transfers and increases in water and electricity tariffs and savings from better spending efficiency and rationalization; on the revenue side, the FBP plans the introduction of a 5% value added tax, a review of existing government fees and services and the repricing of tariffs charged to domestic industrial consumers of natural gas.

Given the challenge of achieving such large and broad fiscal consolidation, and in light of Bahrain’s limited track record of implementing significant fiscal tightening, Moody’s assumes only a partial implementation of the FBP. While VAT looks likely to be implemented, maintaining some of the planned expenditure cuts over several years will likely be challenging.

Even with a partial implementation, however, Bahrain’s fiscal deficit is likely to narrow sufficiently to lower the government’s gross borrowing requirements to around 25% of GDP by 2022 from an estimated 35% of GDP in 2017. Government debt is also likely to increase at a much more moderate pace than earlier envisaged. At this stage, Moody’s expects government debt to rise to around 95% of GDP in 2022 (including debt owed to the central bank), from 89.4% in 2018, compared to more than 110% of GDP previously projected.

Rationale for the Rating Affirmation at B2: External Vulnerability Will Remain Very High

Moody’s expects that Bahrain’s external vulnerability will remain very high. While the disbursements from the GCC package will cover all government external debt payments over the next four years, they will not be sufficient to materially increase Bahrain’s foreign exchange reserves at the same time.

Moody’s expects that reserves will remain in a range that covers only about 1-2 months of imports of goods and services. Although up from the latest levels ($1.4 billion or 6 months of import coverage at the end of October 2018), reserves will continue to provide only a very thin buffer to protect the sovereign against potential external shocks, including potential declines in oil prices below Moody’s medium-term assumptions.

Government Debt Metrics Will Continue to Deteriorate, Albeit More Slowly Than Previously Envisaged

Bahrain’s fiscal strength will remain very low, although the further weakening in debt metrics will be materially slower than previously anticipated. Under the assumption of a partial implementation of the FBP, Moody’s expects that government debt relative revenues will rise above 430% in 2022 from estimated 408% at the end of 2018. Meanwhile, debt affordability will remain low, with interest payments to revenue rising slightly, to 21% in 2022 from 19% in 2018, and vulnerable to increases in global interest rates, although the concessionary nature of the funding from the GCC support package will mitigate some of this impact.

Relatively Diversified Economy Supports B2 Rating

Bahrain’s B2 rating remains supported by the country’s relatively diversified and dynamic economy. Hydrocarbon production accounts for about 15% of nominal GDP in 2018, implying a smaller sensitivity of nominal GDP to fluctuations in oil prices compared to the rest of GCC. Moody’s expects that Bahrain’s non-oil growth will be around 3% in the next few years, with fiscal consolidation weighing on growth momentum somewhat. Overall GDP growth is likely to average around 2%.

Over the longer term, Bahrain’s economic strength will benefit from the new hydrocarbon discovery announced in April 2018, although the boost to growth, as well as export and fiscal revenues starting in 2023, is as yet unknown.

The B2 rating also takes into account the proven commitment of the GCC countries to support Bahrain’s financial, economic and social stability, which includes ongoing disbursements from the GCC Development Fund that was set up to fund Bahrain’s infrastructure and housing projects. We estimate that at the end of 2018, approximately $5 billion of the available funds (equivalent to 13% of GDP) remain available and the expected disbursements of 2 – 2.5% of GDP per year will continue support Bahrain’s non-oil growth in the next five years.

What Could Change the Rating Up

Over time, a more rapid and significant fiscal consolidation than currently expected, that would set the government’s debt burden on a stable and eventually declining path, would likely would likely prompt Moody’s to upgrade the rating. Effective fiscal consolidation would be reflected in a durable and material reduction of Bahrain’s fiscal vulnerability to declines in oil prices as measured by falling fiscal breakeven oil prices.

A sustained rebuilding of the central bank’s foreign exchange buffers that would materially decrease external vulnerability risks would also likely lead to an upgrade.

What Could Change the Rating Down

Moody’s would likely downgrade the rating if it became apparent that fiscal consolidation will be materially slower than currently envisaged, potentially threatening the disbursements of GCC support and/or undermining investors’ confidence. In this scenario, fiscal metrics would weaken and liquidity and external vulnerability risks would rise again, possibly rapidly.

More generally, protracted delays in disbursements from the GCC that would lead to a further significant erosion of foreign exchange reserves and undermine market confidence in the GCC backstop would also put negative pressure on the rating. (Moody’s 17.12)

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11.5 OMAN: Oman’s Economic Ambitions

Nima Khorrami Assl posted in Sada on 14 December that Oman’s drive for economic diversification is contributing to its rapprochement with Israel, which can offer its expertise and technology for agriculture, entrepreneurship, and defense.

Israeli Prime Minister Benjamin Netanyahu’s 25 October visit to Oman spawned speculation about Muscat’s position on the stalled Israeli – Palestinian peace process and myriad regional security challenges. However, it is Oman’s economic concerns that drive its interest in renewing relations with Israel, after having cut ties in 2008. Oman has struggled to shift to a post-oil economy in recent years. Worries over the health of Sultan Qaboos bin Said and an uncertain succession have given the sultan and his government added urgency to start such an economic transition. Crude exports currently account for up to 71% of government revenues, which Muscat, rather predictably, has been relying on to ease the economic burdens of rising youth unemployment, increasing Yemeni refugee flows and subsidizing the basic living costs of around 84,000 low-income households, or roughly one-third of its citizens.

Oman’s already dwindling oil and gas reserves, which are set to deplete in 14 and 27 years respectively, are becoming costly to extract at a time when suppressed global oil prices have diminished their returns. Muscat has been forced to seek alternative ways to increase its revenue and address its growing budget deficit, which stood at 3.5 billion Omani rials ($9.1 billion) in 2017, or around 10% of GDP. The government has contemplated fuel and energy subsidy cuts and additional taxes, but it is wary of public pushback against such austerity measures. The Omani government removed fuel subsidies in 2016, which drove oil prices up so much that public protests broke out in Muscat on 2 February 2017 – the first major demonstrations since 2011 – forcing the government to reinstitute a smaller subsidy the following week.

Instead of austerity measures, Muscat sees economic diversification as a solution, making it the top priority in its Vision 2040 development plan, issued in 2017. The plan, a repackaging of Oman’s Vision 2020 launched in 1995, focuses on modernizing agriculture, creating technology and startup ecosystems, boosting tourism and establishing free industrial zones near the port cities of Salalah and Duqm.

Israel can be of immense assistance to Muscat, especially in the agriculture and the high-tech sectors. While Oman can source these technologies from other countries, it also recognizes that Israeli leadership increasingly values having relations with Arab states as part of its wider strategy of countering Iran. Following the lead of Saudi Arabia and the UAE in slowly warming up to Jerusalem, the public meeting between Netanyahu and Sultan Qaboos, during which he officially called for the recognition of Israel, puts Muscat ahead of the curve in pursuing normalization and all its economic and strategic benefits.

As part of Vision 2040, Oman’s Council of Ministers mandated the Ministry of Agriculture and the Oman Food Investment Holding Company (OFIC) to develop, invest in, and implement programs aimed at boosting farm production. This includes increasing exports of dates, honey, and fruits. To achieve this, Oman aims to introduce precision irrigation and non-thermal processing to increase crop yield and quality while using less water. Given Israel’s own arid climate and water scarcity – in addition to a strategic desire for agricultural independence and food security – Israeli companies are among the leading players in the global market for such agricultural technology. Israeli firms such as Metzer, Amiram and Hazera have particularly distinguished themselves in carrying out effective projects in Africa and China to improve irrigation, seeding technology, pest control, desalination, renewable energy and waste management. The technology Oman needs to achieve its agricultural targets, Israel has in abundance.

Israel has also been successful in the establishing and managing highly functional startup ecosystems despite its relatively small population. This includes experience regulating and coordinating university programs with those of the incubators, accelerators, and seed and venture capital funds – as well as relevant ministries and public bodies, such as the Ministry of Industry, Trade and Labor and the Israel Innovation Authority – within a single framework to promote innovation. Oman has made some progress on its own to become a regional startup hub. Various incubators and funds have set up in Muscat in recent years, among them Riyada, Zubair SEC, Al Raffd Fund and Iskan Oman Investment. However, there seems to be a mismatch between the startups these funds support and the research and policy agendas of the Ministry of Commerce and Industry, the Public Authority for Crafts Industries, and leading academic institutions such as Sultan Qaboos University. For example, while the government seeks to nurture tech startups, Sultan Qaboos University has yet to set up an independent information technology (IT) or computer science college. National universities also do not synchronize their research programs with the Ministry of Labor’s projected demands within the job market. Therefore, officials at the Supreme Council for Planning can learn a great deal from Israel’s experience.

Moreover, as part of its wider diversification move, Oman has been relentless in pursuing diversified sources of defense equipment. This is evident in recent deals with India, including the signing of a memorandum of understanding in February 2018 to let the Indian navy berth at the port of Duqm. Increased illegal border crossings from Yemen are feeding Oman’s fears that terrorist cells could emerge inside its refugee camps. Tensions with Saudi Arabia and the UAE over its neutrality in Yemen and Qatar are also stoking worries that Oman may become a target of these countries’ increasingly hawkish foreign policy. Vision 2040’s aim of developing Salalah and Duqm as major maritime hubs further pits Oman against the UAE economically. Although the United States has also increased its military sales to Oman, the current U.S. administration appears to be siding with the UAE and Saudi Arabia over unresolved border disputes between Abu Dhabi and Muscat, making access to Israeli surveillance and monitoring technologies an attractive backup.

Most importantly, Oman hopes to enlist the services of Israeli cybersecurity firms given its private and governmental sectors’ vulnerabilities to large scale, sophisticated cyberattacks from either its immediate neighbors or more distant states. Having seen how Qatar and the UAE have targeted each other’s networks in recent years, increasing and strengthening its cyber resilience is among Muscat’s top priorities. Israeli private firms already play a critical role in enhancing the cyber capabilities of the UAE and Saudi governments, seemingly attaching no strings such services save a tacit recognition of it as a legitimate state. It should not come as a surprise that Muscat too wants to get its hands on their software.

For Jerusalem, resetting relations with Muscat gives it access to a new and relatively lucrative market in a strategic location. Israeli firms would also gain easier access to the nearby Indian market by operation through Oman, which has fewer logistical hurdles. NaanDanJain, an Israeli-Indian firm that specializes in water irrigation systems for rice production, can potentially set up a storage and processing facility in Oman without having to obtain as many permits as it would in India. Similarly, Israeli companies can seek to establish working relations with the Oman India Fertilizer Company (OMIFCO) to develop and sell products for export to India for a lower cost of labor. Israeli IT firms could potentially also tap into the large pool of Indian IT talent already residing in Oman – thereby avoiding the bureaucratic red tape of establishing a presence in India.

Israel (as an innovation hub) and Oman (as a logistical hub) are both important to China’s and India’s wider global strategies, as seen by their investments in Israeli tech firms and in developing Oman’s port of Duqm. Oman and Israel could use this to forge a reciprocal relationship for trade with these economic giants, building on their geographical and technological attributes. For instance, Israel is already a major supplier of weapons and technology to India – which buys 49% of all Israeli arms exports, making Israel its largest military supplier after Russia and the United States – and China – to which Israel sold $3.5 billion worth of goods and services in the first eight months of 2018, primarily surveillance and cybersecurity technology. Partnering with well-funded Omani entities, such as the Oman India Joint Investment Fund and the Duqm-based China-Arab Wanfang Investment Management (Ningxia) Company, would further enable Israel to set up factories or research and development centers for export to these major hubs.

Yet for that to happen, Oman’s pragmatic, principled and independent foreign policy will be indispensable in the post-Qaboos era. Given the highly personalized nature of decision making under his rule, there is a danger his efforts might get interrupted even though he has already prepared the ground for his inevitable departure. The more stubborn obstacle is whether Israel is truly committed to the establishment of a Palestinian state, as this has been of paramount importance to Muscat for decades.

Nima Khorrami Assl is a freelance political risk consultant focusing on geopolitics. (Sada 14.12)

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11.6 EGYPT: How Russia Challenges the United States’ Investment in Egypt

Mohamed Maher posted in Fikra Forum on 11 December that to outside observers, it sometimes appears that decision makers in Washington take the close relationship between Egypt and the United States for granted. On the one hand, this makes sense: The United States has invested a great deal of money and political capital in its relationship with Cairo. Egypt is the second largest recipient of American aid behind Israel, receiving over $80 billion over the last 40 years.

Yet America’s interests in Egypt have never been more threatened. In fact, the United States could lose the benefits of its long-term investment in Egypt due to the continuing rapprochement between Cairo and Moscow, which seems to have hit a new peak after four years in development. Evidence from the past year indicates that this trend towards cooperation between the two states is significantly more than just a fleeting trend or an attempt by the Egyptians to improve their negotiating position with the United States.

Today, bilateral relations between Egypt and Russia evoke the memories of the Cairo-Moscow relationship during the Soviet era before Anwar Sadat, when Egypt was firmly within the Soviet Union’s political orbit. Despite President Sadat’s reorientation of Egypt’s foreign policy to fit more in line with the policies of the United States and Western nations, this earlier history appears to have provided an appealing precedent for both Cairo and Moscow.

For one thing, Russia is clearly eager to expand its relationships in the Middle East when it senses opportunity. After Russia managed to save its historical ally Assad in Syria and solidify its political, military and economic presence there, it appears to be seeking benefits of relationships not limited to the Levant. In order to restore the former glories of the Soviet Union in the broader Middle East – one of Putin’s grand aspirations – and threaten Western interests in the region, Syria is not enough. Instead, Egypt’s historical leadership role in the Arab world makes it a particularly appealing partner for the Russian president.

Recent developments in Egyptian-Russian relations also challenge the notion that these close ties are temporary or short-term. To the contrary, evidence shows that relations between Cairo and Moscow are heading towards a strategic partnership that will consequently erode the formers’ decades-long partnership with Washington.

Signs of this development are multifaceted, including military, political, and economic cooperation. In the military sphere, Russian President Vladimir Putin and his Egyptian counterpart President Abdel Fattah el-Sisi most recently signed a comprehensive strategic partnership agreement at the Russian presidential palace in the Black Sea resort town of Sochi in October. Sisi has described the agreement as opening “a new chapter in the history of cooperation between Cairo and Moscow.” Just days after signing the agreement, the two countries performed their annual joint military exercises in Egypt, “Defenders of Friendship 2018,” part of a larger deal reached several years earlier. The deal and exercises coincided with the previously suspended “Bright Star” joint military exercises between Egypt and the United States, previously halted during the turmoil of the Arab Spring and only recently resumed.

President Sisi and President Putin also see nuclear power as a venue for cooperation, signing a final agreement in December 2017 to establish a nuclear power plant in northwestern Egypt. Putin characterizes the plant as leading to further cooperation with Egypt and described the Arab state as an old and reliable partner in the MENA region. State-owned Russian firm Rosatom is set to build the plant with a Russian loan worth some $25 billion, marking the largest non-raw material export deal in Russia’s history.

Rapprochement between Egypt and Russia has also included significant movements towards greater economic cooperation. Negotiations are still ongoing between Moscow and Cairo for Egypt to join the Eurasian Economic Union – comprised of Russia, Kazakhstan, Kyrgyzstan, Armenia and Belarus – which would make Egypt its first Arab member. During the same meeting in Sochi, Putin voiced his support for this close economic cooperation. Joining would allow Egypt greater freedom of movement for goods and services with other countries in the Union. Officials from both countries are also negotiating to establish a new Russian industrial area in the Suez Canal Zone with investments of nearly $7 billion.

Politically, Egypt and Russia have adopted nearly identical positions on the conflicts in Syria and Libya. The Egyptian-Russian understanding is best exemplified in their position in the Syrian conflict, which for Egypt is in marked opposition to the position of its American, Western and Gulf allies. Cairo has fully aligned with Russia’s position in Syria and in return Russia has helped Egypt become a key player in the conflict. Russia helped coax the warring factions to participate in negotiations in Cairo this past June, including insurgent militias from Eastern Ghouta, Northern Homs and the Assad regime.

Egypt’s stance on Syria is all the more remarkable for its political repercussions – Egypt’s position has threatened its ties with Gulf allies, which aim to undermine the Syrian regime because of its close relationship with Iran. Egypt first decisively damaged its strategic interests with Gulf nations and the United States when it defiantly voted with Russia (against Saudi Arabia) in a 2016 UN Security Council Resolution. Following the most recent military operation carried out by the United States and its allies against the Assad regime, Egypt’s foreign ministry issued a statement saying that such operations threatened the safety of the Syrian people, failing to mention that the American military operation came in response to the Assad regime’s use of chemical weapons against Syrian civilians.

As for the Libyan crisis, Moscow and Cairo have once again converged through their support of the Libyan National Army led by General Khalifa Haftar. Russia has supported Haftar and provided him with spare military parts and technical advice, contravening the ban on armament imposed on Libya. There have been several, mostly indirect, arms agreements between the two sides, with weapons from Belarus or other countries close to Moscow coming into Libya through Egypt.

These strategic developments in Egyptian-Russian relations have had a significant impact on Egypt’s relationship with the United States, and they should be understood as a direct response to earlier U.S. policies that Cairo found threatening. Ultimately, the policies of the Obama administration bear the bulk of responsibility for harming Egyptian-American relations: Cairo refuses to forget the position of the United States against its historical ally, Hosni Mubarak, when it pressured him to step down during the January 2011 Revolution. Washington’s constant discussion of democracy and human rights with Egyptians, including linking delivery of aid to Cairo’s progress in these areas, has also made the Egyptian administration more skeptical of its friendship with Washington.

However, the most important matter is Washington’s delay of some arms shipments to Egypt in the midst of the Egyptian army’s battle with the Islamic State in the Sinai Peninsula. While the United States stated that these measures were taken to pressure the new Egyptian government to abide by human rights norms during its security crackdown against opposition elements, most notably the Muslim Brotherhood, Cairo received an entirely different message.

American pressure on Cairo regarding human rights has certainly proven a futile effort at diplomacy: Egypt has been excessively sensitive to any signs of pressure, even in the areas of democracy and human rights. Although any measures to put pressure on the regime could hurt Egyptians in their pocketbooks, this quickly rouses their “national pride.” The regime takes advantage of this by evoking the legacy of colonialism and attempts by the great powers to intervene in Egyptian affairs. In this way, the regime stokes Egyptians’ nationalistic fervor, inflames public opinion, and mobilizes them to keep resisting these attempts at foreign pressure, even in the case of human rights. This strategy has had remarkable success, and has consistently been implemented from the 1952 Revolution until the present day.

Internally, the Egyptian regime interpreted an American shift in support as an indication that they could no longer depend on the United States as a reliable ally, leaving an opening for Russia to secure the needs of the Egyptian army. Thus, 2014 marked the first shift towards Russia through Russia and Egypt’s major arms agreement worth more than $3 billion – a deal funded by the Saudis and Emiratis.

Though U.S. pressures on Cairo began years earlier, the full extent of these repercussions on the US-Egyptian relationship will continue to unfold in 2019. If the United States hopes to redirect the course of this relationship, it cannot rely on its old investments. Rather, if the United States intends to push back Russia, it should use lessons from the recent past to create more stable ties with the largest country in the Middle East, adopting an approach that incentivizes Egypt to change positively instead of pressuring the regime in ways that only pushes it further away. Egypt’s rapprochement with Russia is a result of this very pressure, so a new approach that can incentivize Egyptians to change is essential.

Mohamed Maher is an Egyptian journalist and researcher based in the United States. (Fikra 11.12)

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11.7 LIBYA: After Palermo: Achievements and Future Challenges For Libya

Anna Borshchevskaya, Ben Fishman, and Barbara A. Leaf wrote in The Washington Institute for Near East Policy PolicyWatch 3052 on 17 December that the Italian-sponsored stabilization conference produced some positive outcomes, but a genuine breakthrough requires U.S. involvement.

Despite significant skepticism, last month’s international conference on Libya provided a welcome boost to the UN-led political transition plan. Held 12-13 November in Palermo, Italy, the gathering produced consensus on an adjusted timeline for elections and provided a stage for important working groups on security and economic priorities, with most actors playing nice under the Mediterranean sun.

Still, the UN effort will require much more than positive rhetoric going forward. The United States can best support the UN Support Mission in Libya (UNSMIL) and its envoy Ghassan Salame through high-level engagement with European and regional partners – not only to ensure their genuine support for the revised political roadmap, but also to fend off their reflex efforts to aid certain local allies at the expense of Libyan unity, a practice that has stymied progress in the past. Achieving stability there is key to securing U.S. regional interests against resurgent terrorist activity, retaining Libyan oil production, and minimizing the Mediterranean influence of rivals such as Russia – the latter a goal that was highlighted just last week by National Security Advisor John Bolton in the administration’s new Africa strategy. A political transition and a legitimate, cooperative government are required to achieve these goals, not just periodic airstrikes on Libyan territory.

What Palermo Achieved

Whereas past international conferences often highlighted differences among the actors, Palermo brought most of the relevant Libyan and international players together at a sufficiently high level to convey an emerging consensus on the required steps for transition. Even Libyan National Army commander Gen. Khalifa Haftar attended after declaring he would boycott the event, though he arrived at the last minute and restricted his participation to a separate meeting with Salame, Italian prime minister Giuseppe Conte, Libyan Government of National Accord prime minister Fayez al-Sarraj, the presidents of Egypt, Tunisia and the European Council, the prime ministers of Russia and Algeria and France’s foreign minister. Notably absent at this sideline event: David Satterfield, the acting assistant secretary of state for Near Eastern affairs who served as the top U.S. official at the main conference.

Palermo also revitalized progress on security and economic reform, where the UN is now closely involved. On security, UNSMIL and its international partners will continue to monitor the UN-negotiated ceasefire in Tripoli and look for opportunities to expand it beyond the capital. In the meantime, Libya’s new interior minister Fathi Bashagha, who attended Palermo, has redeployed police in Tripoli and secured international commitments for long-needed training programs. The conference also endorsed the Cairo-led dialogue to restructure Libya’s armed forces. Eventually, though, the UNSMIL and Egyptian security tracks should be linked to avoid legitimizing rival power structures.

On the economic front, Palermo pushed forward a set of temporary reforms that Libya’s Central Bank began implementing in September to address the currency crisis and reduce the black market economy, which has enriched criminal networks and militias. More aggressive reforms are required, from devaluing the Libyan dinar to significantly reducing fuel subsidies. Nevertheless, the country is finally on a positive economic trajectory, with the National Oil Corporation reporting its highest earnings of the year in October.

The Elections Dilemma

Participants at Palermo generally supported Salame’s plan to postpone elections until spring 2019 and convene a broad National Conference sometime before then. Yet even this delayed timeline will be difficult to meet. Libyan actors are almost certain to spar over the location, participants, agenda, and length of the National Conference. Most important, the conference will need to be tied to the draft constitution in some fashion if it is to produce clear principles that are broadly shared across Libya. At the moment, the constitution is on a separate, convoluted track requiring “a legal basis” in order to hold a referendum on its contents.

More dauntingly, elections need to be held according to an electoral law, which will require decisions on type (presidential vs. parliamentary system), sequencing, districts and regional representation – issues that depend on achieving some measure of conclusiveness in the National Conference deliberations and, possibly, the constitutional drafting process. Papering over differences on these matters would be a recipe for another round of contested elections, much like the 2014 polls that broke Libya into two rival governments. In contrast, holding broadly acceptable elections would give the population the best opportunity for ending the protracted post-Gadhafi transition period.

Minimizing Disruptions

Even in the most optimistic scenario, progress on the political, security, and economic tracks may face blowback from internal and external players who benefit from the chaotic status quo. Accordingly, UNSMIL and Salame should continue their deliberate efforts to involve all of Libya’s major factions while maintaining support from the main international actors. Senior Italian officials expended enormous effort to get representative groups to attend the Palermo conference, but in the end, most Libyan factions met with international delegations separately rather than engaging with each other. If the fundamental questions about Libya’s future national identity are to be answered, the international community will need to pressure these parties to meet face to face at the National Conference.

Other major hurdles include implementing an audit of the Central Bank, which the Government of National Accord and Haftar agreed to in July after he committed to return oil facilities and revenue to the National Oil Corporation. The parties must also prepare for the fact that the fragile security situation could break down at any time, especially as the political stakes grow higher and militia or terrorist spoilers target key Libyan or international institutions.

The Outlier: Russia

Libya has quietly emerged as yet another potential arena for Russian interference in the absence of U.S. leadership. President Vladimir Putin has leaned toward Haftar for years, but lately he has worked to build ties with the Sarraj government and other actors as well, positioning himself as a potential arbiter.

Likewise, Haftar has ostentatiously sought Russia’s backing, flying to Moscow whenever he feels pressure from the United States or his episodic backers in Egypt and the United Arab Emirates. He flew there again just days before Palermo, meeting with Defense Minister Sergei Shoigu, senior army official Valery Gerasimov and Yevgeny Prigozhin, owner of the shadowy Wagner mercenary group that many describe as an unofficial arm of the Defense Ministry. Gerasimov’s attendance is telling given that Russian “contractors” have reportedly been operating in east Libya – Haftar’s stronghold – on and off over the past few years, most recently in the run-up to Haftar’s visit.

Acquiring a larger role in a strategically vital North African country would give Moscow a springboard for greater influence in the rest of the region while advancing a number of other strategic goals. Libya’s ports would fit with Moscow’s effort to secure naval access throughout the Mediterranean Sea. The Kremlin is also eager to access Libyan energy resources, revitalize old arms sales, and resume economic contracts. Moreover, an outsize Russian role would demonstrate another victory in the face of Western “failure,” in line with Putin’s larger goal of projecting power at America’s expense and thereby bolstering his domestic legitimacy – all without bringing genuine resolution to Libya.

Where is the United States?

Given the absence of high-level U.S. involvement in the Palermo talks and other recent transitional efforts, the first order of business for Washington is to name a new ambassador to Libya – albeit dispatched to Tunis rather than Libya given the security concerns raised by the 2012 Benghazi attack. There is simply no substitute for a seasoned, full-time U.S. diplomat who can lead outreach to local actors and oversee the requisite regional coordination.

Second, Washington should engage visibly, and in a sustained fashion, at the political level. Secretary of State Mike Pompeo’s recent Brussels meeting with Sarraj is a welcome move, though such outreach would have been far more valuable had it occurred at Palermo, with multiple Libyan players. Other regional actors and potential spoilers demonstrated the priority they place on Libya by sending presidents and prime ministers.

Third, the United States should do what it does best: convince close regional partners (Egypt, the UAE) and European allies (Britain, France, Italy) to align their efforts with the UN’s program. This includes separate bilateral activities (e.g., counterterrorism) that have knock-on political effects such as empowering certain militias. In so doing, they could block Russian efforts to continue building Haftar up as a dominant independent force.

Finally, Washington should bank on the U.S. quality that most other outside powers lack: a reputation as an honest broker. Ironically, that reputation may have been heightened precisely because the United States drifted away from engaging in Libya over the past two years. Now is the time for Washington to reengage – UNSMIL’s efforts are gaining momentum, and only the United States can give the mission the political space required to advance the next stages of Libya’s long-overdue transition.

Anna Borshchevskaya is a senior fellow at The Washington Institute. Ben Fishman served as director for North Africa at the National Security Council before rejoining the Institute as senior fellow. Barbara Leaf was U.S. ambassador to the UAE before joining the Institute as a senior fellow. (TWI 17.12)

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11.8 TUNISIA: Fitch Affirms Tunisia at ‘B+’; Outlook Negative

On 11 December 2018, Fitch Ratings affirmed Tunisia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B+’ with a Negative Outlook.

Key Rating Drivers

Tunisia’s rating is constrained by high and growing public and external debt reflecting wide twin deficits, subdued economic growth and a challenging political and social environment. This is balanced against strong structural features relative to ‘B’ peers, low GDP growth volatility and a clean debt service record.

The Negative Outlook reflects persistent pressures on external liquidity arising from large financing needs that will average 13.2% of GDP per year in 2018-2020 under Fitch’s forecasts, deterioration in the terms of trade, low foreign-currency (FX) reserves and a high inflation differential with trading partners. Despite some progress towards budget consolidation, the implementation of unpopular fiscal reforms remains slow and there are pressures for wage increases amid high social discontent and deepening political divisions. The lack of budgetary headroom and low external buffers amplify the economy’s high susceptibility to exogenous shocks, for example from a rise in oil prices, tighter international funding conditions, weaker European demand or security risks.

High accumulated current account deficits (CAD) have caused a rapid rise in Tunisia’s gross external debt to 87.5% of GDP in 2017 from 60.1% in 2014 and Fitch forecasts it will rise to 102.8% in 2020. The CAD will widen to 10.6% of GDP in 2018 from 10.3% in 2017 on the back of the depreciation of the dinar and the rise in oil prices. A tighter policy mix and rise in the domestic hydrocarbon production with the coming online of the Nawwara gas field will contribute to an improvement in the CAD to a still high level of 8.5% of GDP in 2020, under the agency’s forecasts. The central bank’s newly introduced competitive FX auctions will increase the flexibility of the dinar and reduce pressures on Tunisia’s dwindling FX reserves.

Strong support from the official creditor community in the context of Tunisia’s democratic transition is a key support for the rating and helps mitigate external liquidity risks. Official loan disbursements will cover nearly half the sovereign’s financing needs in 2018 and 2019. Following weak results in 2016 and 2017, Tunisia’s performance under its 2016-2020 arrangement with the IMF has materially improved with a successful completion of three program reviews in 2018, but implementation risks are high.

Some multilateral donors have come close to their internal prudential limits in terms of financial support to Tunisia. The authorities expect these creditors to continue channeling their support under alternative arrangements, but this aggravates medium-term external liquidity risks, particularly in the event of a significant fiscal slippage.

The central government (CG) deficit will narrow for the first time in four years in 2018, shrinking to 4.8% of GDP (including grants), in line with the budget target, from 6% in 2017. The improvement accrued from significant permanent direct and indirect tax increases but future consolidation efforts will fall on the spending side of the budget. The government aims to reduce the wage bill from 15.6% of GDP (including tax credits to civil servants) in 2018 to 12.4% in 2020 by restraining hiring and containing wage increases. It also expects to cut the energy subsidy bill by continuing to adjust hydrocarbon prices on a quarterly basis. A pension reform aiming at addressing the short-term liquidity shortfall of the public provident fund was submitted to Parliament in June.

Fitch projects the CG deficit to narrow to 4% of GDP in 2019 and 3.5% in 2020 against official targets of 3.7% and 2.5% respectively, as the agency expects only slow progress on reducing the payroll amid continued demands for wage increases by labor unions. The general government (GG) deficit (which includes social security and local governments’ balances) will consequently narrow to 3.6% of GDP in 2020 from 5.9% in 2017. A rise in oil prices, further delays to the approval of the pension reform or continued pressures on the wage bill would pose material downside risks to the deficit trajectory.

GG debt will rise from 70.7% of GDP in 2017 to 73.7% in 2018 and remain broadly stable over the next two years, under Fitch’s baseline. Nearly 70% of GG debt is foreign-currency denominated, rendering the debt trajectory vulnerable to a depreciation of the exchange rate. The authorities plan to tap international markets again in 2019 and repeated Eurobond issuances have increased the sovereign’s exposure to market risks.

Tunisia’s moderate economic recovery is broadening, supported by strong crop production and robust growth in tourism, which is underpinning activity in services. GDP growth will accelerate from 1.9% in 2017 to 2.6% in 2018 and further to 2.8% in 2019 under Fitch’s forecasts. A tighter policy mix, pressures on purchasing power and rising costs of inputs will gradually restrain domestic demand while exports will be lifted by strong agricultural harvests, recovery in phosphates mining and the depreciation of the dinar.

Inflation has stabilized in recent months close to its 26-year peak of 7.8% in June. Fitch expects inflation will slowly decelerate over H1/19 due to the slow transmission of monetary tightening, improved food supply and base effects but the agency projects it will remain well above the long-term average of 4% over the next two years.

The financial health of several major state-owned enterprises (SOEs) is undermined by governance shortcomings, low autonomy and their quasi-fiscal roles resulting in underpricing of services and ballooning payroll. Transfers to ailing SOEs are a burden for the budget and the restructuring of several loss-making public companies, including the national carrier Tunisair, are a source of contingent liabilities for the sovereign. The scope for privatization of large companies is limited by strong opposition from labor unions. Government guarantees on SOE debt were 13.8% of GDP at end-2017. Additional contingent liabilities for the sovereign arise from the protracted litigation over Banque Franco-Tunisienne (BFT).

The banking sector faces tight market funding conditions and is highly dependent on central bank financing, which amounted to 15.2% of GDP at end-October. Credit growth has consistently outpaced deposit inflows and a new central bank circular requires commercial banks to gradually reduce their high loan/deposit ratio towards 120%, against a current sector average of 150%. The sector’s profitability is weak and could be eroded by further increases to Banque Centrale de Tunisie’s policy rate that will raise funding costs while lending interest rates are capped. Non-performing loans (NPL) are high and represented 14.1% of total loans at end-September, with a much higher ratio of 19.7% in public banks. A new law has reduced legal obstacles to write-offs of NPLs in public banks and should facilitate their gradual restructuring.

Disagreements over a possible dismissal of the current Prime Minister have led to the dissolution of the alliance between the president’s Nidaa Tounes and Ennahda, the two largest parties in Parliament. The government appears to be still supported by a majority of parliamentarians but political volatility will remain significant and constrain policy-making in the run-up to the 2019 parliamentary and presidential elections. Tunisia’s proportional electoral system and fragmented political landscape mean that the legislative elections are likely to result in a hung parliament and the direction of policy after the elections is uncertain.

Rating Sensitivities

The main factors that may individually, or collectively, lead to a downgrade:

-Continued weakening in external finances, such as widening of the current account deficit and further drawdown in international reserves, leading to pressures on external liquidity.

-Political developments or social unrest hindering further progress on macroeconomic adjustment policies and reforms or resulting in the IMF program going off track.

-Failure to narrow the fiscal deficit or materialization of contingent liabilities, for example from the weak state-owned enterprises, leading to a faster rise in government debt/GDP than our current projections.

The current Outlook is Negative. Consequently, Fitch does not currently anticipate developments with a material likelihood of leading to an upgrade. However, the main factors that may individually, or collectively, result in the Outlook being revised to Stable include:

– Implementation of adjustment policies and reforms supporting macroeconomic stability and reducing downside risks for the economy.

-Reduction in budget deficits consistent with stabilizing the public debt/GDP ratio over the medium term.

-A sustainable improvement in Tunisia’s current account deficit, leading to lower external financing needs and stronger international liquidity buffers.

Key Assumptions: We expect global economic trends to develop as outlined in Fitch’s Global Economic Outlook. (Fitch 11.12)

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11.9 MOROCCO: IMF Approves $2.97 Billion for Morocco Under their Precautionary & Liquidity Line

On 17 December, the Executive Board of the International Monetary Fund (IMF) approved a two-year arrangement for Morocco under the Precautionary and Liquidity Line (PLL) for SDR 2.1508 billion (about $ 2.97 billion, or 240% of Morocco’s quota). The access under the arrangement in the first year will be equivalent to SDR 1.25066 billion (about $ 1.73 billion or 140% of quota).

Despite a sharp pick up in global oil prices, the authorities have reduced fiscal and external vulnerabilities and implemented important reforms with the support of three consecutive 24-month PLL arrangements. The new PLL arrangement will provide insurance against external shocks and support the authorities’ efforts to further strengthen the economy’s resilience and promote higher and more inclusive growth.

The authorities intend to treat the new arrangement as precautionary, as they have done under the previous three arrangements. Morocco’s first PLL arrangement for SDR 4.1 billion (about $ 6.2 billion at the time of approval) was approved on 3 August 2012. The second PLL arrangement for SDR 3.2 billion (about $5 billion at the time of approval) was approved on 28 July 2014 and Morocco’s third arrangement for SDR 2.5 billion (about $3.5 billion at the time of approval) was approved on 22 July 2016.

The PLL was introduced in 2011 to meet more flexibly the liquidity needs of member countries with sound economic fundamentals and strong records of policy implementation but with some remaining vulnerabilities.

Following the Executive Board on Morocco, Mr. Mitsuhiro Furusawa, IMF Deputy Managing Director and Acting Chair of the Board, made the following statement:

“Morocco has made significant strides in reducing domestic vulnerabilities in recent years. Growth remained robust in 2018 and is expected to accelerate gradually over the medium term, subject to improved external conditions and steadfast reform implementation. External imbalances have declined substantially, fiscal consolidation has progressed, and the policy and institutional frameworks have been strengthened, including through the implementation of the recent Organic Budget Law, stronger financial sector oversight, a more flexible exchange rate regime, and an improved business environment.

Nevertheless, the outlook remains subject external downside risks, including heightened geopolitical risks, slow growth in Morocco’s main trading partners, and global financial market volatility. In this context, a successor Precautionary and Liquidity Line (PLL) arrangement with the Fund will provide valuable insurance against external risks, and support the authorities’ policies aimed at further reducing fiscal and external vulnerabilities and promoting higher and more inclusive growth.

“Building on progress made under past PLL arrangements, further fiscal consolidation will help lower the public debt to GDP ratio over the medium term while securing priority investment and social spending. These efforts should be based on tax and civil service reforms, sound fiscal decentralization, strengthened oversight of state owned enterprises, and better targeting of social spending. Greater exchange rate flexibility will further enhance the economy’s capacity to absorb shocks and preserve competitiveness. Adopting the central bank law and continuing to implement the 2015 Financial Sector Assessment Program recommendations will help further strengthen the financial sector policy framework. Finally, reforms of education, governance, the labor market, and continued improvement in the business environment will be essential to raise potential growth and reduce high unemployment levels, especially among the youth, and to increase female labor participation.” (IMF 17.12)

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11.10 TURKEY: Fitch Affirms Turkey at ‘BB’; Outlook Negative

On 14 December 2018: Fitch Ratings affirmed Turkey’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BB’ with a Negative Outlook.

Key Rating Drivers

Turkey is navigating the fallout from a sharp depreciation of the lira earlier in the year. Currency weakness stemmed from the materialization of external financing vulnerabilities, aggravated by political and geopolitical developments, all areas of weakness for the sovereign credit profile. The slowdown will challenge a long-standing commitment to fiscal discipline that underpins strong public finances relative to rating peers. Growth is volatile compared with peers, and inflation is higher and set to remain so. Structural indicators are generally better than rating peers.

The Negative Outlook reflects the significant and multifaceted risks to the adjustment path posed by economic policy settings, domestic political and geopolitical risks and global financing conditions.

Maintaining a balanced policy stance that is consistent with the current rating in the face of lower growth and rising unemployment will test economic policy, an area where Fitch considers credibility has deteriorated. Fiscal and monetary policies were tightened in H2/18 and the authorities’ economic targets suggest they are prepared to tolerate a sustained period of below trend growth. With Fitch assuming that external financing conditions will tighten in 2019, a premature loosening of domestic policy settings could lead to renewed pressure on the currency.

The completion of a prolonged electoral cycle in March 2019 and the ongoing transformation to an executive presidency (likely to closer align formal administrative structures and the presidential administration) could provide an environment more conducive for economic reform that would begin to tackle long-standing structural weaknesses, although Fitch is cautious about prospects for implementation.

Fiscal policy has been tightened in H2/18 as the government strived to hit its central government deficit target of 1.9% of GDP. New revenue measures are expected to more than offset foregone revenues from targeted tax cuts introduced in October. A deficit of 1.8% of GDP is budgeted for 2019, which implies a sharp adjustment given the expected slowdown in growth. Consolidation measures worth 2% of GDP have been identified, primarily on the expenditure side. Fitch projects that the 2018 and 2019 targets will be missed due to the impact of the weak economy on revenues. The fiscal targets are at the central government level and spending by other entities within the general government perimeter has risen recently. The general government deficit is forecast to widen to 2.8% of GDP in 2018 and 2019 from 2% in 2017.

The moderate level of general government debt is forecast to remain a rating strength. Fitch expects general government debt/GDP to rise to 31.9% at end-2018 from 28.3% at end-2017 owing to the widening of the fiscal deficit and the fall in the lira (46% of central government debt was FX-denominated at end-October). This is well below the forecast median for current ‘BB’ peers of 48.3%. Debt/revenue is projected to be close to half the current peer median, despite the weakness of the domestic economy, reflecting the large revenue base. Contingent liabilities, which are rising from a low base (driven primarily by PPPs), are unlikely to have a material impact on public finances over the forecast period, but pose a risk over the medium term. Sovereign support for the banks over the current period of economic weakness is possible.

Monetary policy has long proved unable to anchor inflation in single digits. Inflation spiked to 25.2% in October after the currency depreciation and is set to remain well in excess of rating peers. Inflation will decline owing to the collapse in domestic demand, although base effects are likely to keep it over 20% until H2/19. At an average of 20.7%, inflation in 2019 is expected to be the highest of all bar two of the sovereigns rated by Fitch. We expect inflation to remain in double digits by end-2020. Uncertainties around the monetary policy response pose a substantial risk to the inflation outlook.

External vulnerabilities evident in a large external financing requirement and low international liquidity ratio were exposed by the tightening of external financial conditions around mid-year. Some corporates with FX mismatches have restructured their FX debt, but banks have rolled over syndicated loans and the sovereign tapped the Eurobond market (in euros and US dollars) in the final quarter. Although a rebalancing is underway, the external sector will remain a key credit weakness. Foreign-exchange reserves have fallen this year (less so net of bank placements) and gross external financing needs (including short-term debt) for 2019 are projected at 274% of end-2018 FX reserves.

The flexible exchange rate and a slump in domestic demand have played a key role in the external adjustment. The current account was in surplus in August, September and October, a swing of $13.4 billion (1.8% of GDP) y-o-y. Import compression and rising exports are projected to narrow the current account deficit to 3.7% of GDP in 2018 and 1.9% in 2019 from 5.6% in 2017, although the import component of exports and the structure of supply contracts will neutralize some of the benefits of a cheaper currency for exporters. Fitch expects a renewed widening of the current account deficit once the economy regains momentum in 2020.

Banks are being pressured by the weaker operating environment. Fitch downgraded 20 Turkish banks on 1 October and 26 of the 28 Fitch-rated banks currently have a Negative Outlook. There are significant risks to banks’ credit profiles as a result of the weaker GDP growth, lira depreciation and high interest rates, which put pressure on asset quality, margins and capitalization. The Negative Outlooks also reflect refinancing and liquidity pressures, given sector reliance on foreign funding markets, as well as the risk of a reduction in market access given the volatile Turkish operating environment and tighter global financing conditions.

Asset quality has deteriorated. NPLs (loans overdue by 90+ days on an unconsolidated basis) were 3.5% at end-October, up from 3% at end-June. Various forbearance measures introduced by the regulator and a new debt restructuring mechanism put in place in August could delay the recognition of asset quality problems. Capital adequacy is above the regulatory requirement, at 18.1% at end-September. However, Fitch estimates that regulatory forbearance on exchange rates and securities valuations provided a 250bp-300bp uplift to this number. Fitch estimates banks total external debt due within the next 12 months net of more stable sources of funding to be $50 billion-$55 billion, compared with available foreign currency liquidity of $75 billion-$80 billion.

Turkey is set for a prolonged period of below trend growth against a backdrop of tight domestic policy settings and tough external conditions. Credit availability has dropped sharply, firms are reporting delays in collecting receivables, domestic demand has slumped and the unemployment rate is rising. The economy contracted by 1.1% q-o-q in Q3 and Fitch assumes a sharper fall in Q4, lowering full year growth to 3.5%. A slow pick-up in growth in sequential terms is expected in 2019, although base effects mean the headline rate is forecast at just 0.6%, the lowest since 2009. Net trade and services will provide the main support for growth. Average growth for 2018-2020 of 2.5% compares with a forecast median for current ‘BB’ peers of 3.4% and an average for 2010-2017 of 6.8%.

Political and geopolitical risks weigh on Turkey’s ratings and World Bank governance indicators are below the ‘BB’ median. Tolerance of dissenting political views is reducing in the opinion of independent observers. A presidential system is being formalized, which is causing some administrative disruption. Local elections, due in March 2019, will complete a prolonged electoral cycle and are expected to be keenly contested. The weakening economy does not yet appear to have had a major impact on support for the ruling AKP. Domestic security conditions have improved recently.

Relations with the US have improved from their recent low point, with sanctions against two ministers removed, and Turkey was awarded a significant reduction exemption enabling it to continue to import some oil from Iran. However, there are a number of active pressure points in relations with both the US and the EU.

Rating Sensitivities

The main factors that, individually, or collectively, could lead to a downgrade are:

-Failure to rebalance the economy and implement reforms that provide a path to addressing structural deficiencies and reducing inflation and external vulnerabilities.

-A sudden stop to capital inflows or hard landing of the economy, particularly if it heightens stresses in the corporate or banking sectors.

-A marked increase in the government debt/GDP ratio to a level closer to the peer median.

-A serious deterioration in the political or security situation.

The main factors that, individually, or collectively, could lead to a stabilization of the Outlook are:

-A sustainable rebalancing of the economy evidenced by a reduction in the current account deficit and inflation that reduces external vulnerabilities.

-A political and security environment that supports a pronounced improvement in key macroeconomic data.

Key Assumptions: Fitch forecasts Brent Crude to average $72.5/b in 2018, $65/b in 2019 and $62.5/b in 2020. (Fitch 14.12)

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11.11 TURKEY: Turkey’s Recession Becomes Official

Mustafa Sonmez observed on 14 December in Al-Monitor that the shrinking Turkish economy needs external funds to start growing again, but luring foreign investors back is a tall task that Turkey is unlikely to accomplish in the short run.

The Turkish economy entered turbulence in the second half of the year amid a sharp increase in foreign exchange prices, which, in turn, fueled inflation. Though the president maintained there was no crisis, successive indicators spoke of a rapid downturn. Finally, the growth data for the third quarter — released Dec. 10 by the Turkish Statistical Institute (TUIK) — offered a telling picture of what is going on.

According to TUIK, Turkey’s gross domestic product (GDP) grew only 1.6% in the third quarter, down from 5.3% in the second quarter and 7.2% in the first one — a sharp decline that matches the definition of recession. For Turkey’s economy, a growth rate of 5% to 6% is considered “the normal.” Thus, the 1.6% rate in the third quarter indicates that the economy is now “officially” in recession.

A sectoral analysis of this state of recession, combined with available indicators for the fourth quarter, show that the turmoil is devolving into a contraction and depression. Given the high inflation marking the turmoil, one could speak even of slumpflation, which is a very difficult type of a crisis.

The sectoral analysis offers little optimism for the coming period. The agricultural and industrial sectors grew only 1% and 0.3%, respectively, in the third quarter, while the construction sector — the star of the economy in the past 15 years — shrank 5.3%, becoming the first to plunge into crisis.

Looking at the spending rubric, one could also observe that the growth rate fell to 1.6% despite some improvement in exports due to the depreciation of the Turkish lira and an increase in government spending. Final consumption expenditure of resident households grew only 1%, while durable goods consumption shrank by a frightening 24%. While public spending grew 7.5%, this rate is hardly sustainable, given also the government’s stated commitment to budget discipline. The increase in exports did contribute to growth, but remained modest despite the big slump of the lira.

Investments, meanwhile, did not grow at all, but rather declined 3.6%, which is another indication of depression in the next quarter.

In terms of dollars, the year-on-year GDP decreased by $48.8 billion to about $833 billion. Accordingly, GDP per capita in the third quarter decreased by $284 from last year, falling to $10,272. The figure falls further to some $9,700 if more than 4 million immigrants, most of them Syrians, are added to the country’s population. The labor force, meanwhile, has seen its share from the GDP decline. Payments to labor stood at about 31%, down from about 38% in the first quarter.

The outlook of the third quarter makes the fourth one rather obvious. With inflation running at more than 20%, the Turkish economy is contracting. Despite a 1.4% drop in inflation in November — a direct result of Ankara’s tax reductions to rejuvenate the market — year-on-year consumer inflation stands at 21.5% and is likely to hit 22% by the end of the year. Among emerging economies, the only inflation comparable to that of Turkey’s is seen in crisis-hit Argentina, running at about 45%.

Along with this sticky inflation, a rapid decline is observed in imports, which reflects the industry’s shrinking demand for imported raw materials and machinery. This constitutes the most important sign that the economy has stopped growing and even began to contract. As a result, Turkey posted a current account surplus of $1.4 billion in the third quarter, in the wake of deficits of $16 billion and $15 billion in the first and second quarters, respectively.

The key factors that drove the recession are the drastic flight of foreign investors and the sharp increase in foreign exchange prices. According to Central Bank data, $18.5 billion in foreign capital moved out of Turkey in the July-September period, when the recession began. This was in stark contrast to the first half of the year, when Turkey attracted an inflow of $13.5 billion in foreign funds.

The abrupt reversal in the summer was marked by severe political tensions between Ankara and Washington, which bore heavily on investor sentiment. As foreign exchange prices shot up amid the foreign exodus in the third quarter, imports almost ground to a halt and the current account deficit turned to a surplus. To compensate for the fleeing funds, Turkey appears to have used $9 billion from its reserves, while another $8 billion came from unknown sources that appear in the “net error and deficit” section of the country’s balance of payments.

In sum, the figures show that foreign funds are no longer coming to Turkey and that money has become more expensive abroad. Indeed, the foreign exchange movements in October offer another sign of Turkey’s transition from recession to depression. The flight of foreign money continued in October, reaching $1.5 billion in that month alone and $20 billion since July. This means that the Turkish economy, which is unable to grow without foreign funds, will continue to ail until the confidence of foreign investors is restored.

The official growth rate in the fourth quarter will be released in March, but pundits are already forecasting a contraction of at least 3%, which would put the overall growth rate for the year at less than 2.5%. The international credit rating agency Moody’s is even more pessimistic, predicting a 1.5% growth for 2018 and a 2% contraction in 2019.

To start growing again, the Turkish economy needs a meaningful inflow of foreign capital. The return of foreign investors depends on the improvement of domestic indicators, primarily inflation, and a significant easing in Turkey’s risk factors, meaning that the country’s risk premium should decrease at least by half to some 200 basis points. This, however, is not likely to happen soon.

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11.12 TURKEY: Turkey Economic Report – 2018

Bank Audi’s Turkey Economic Report 2018, released on 12 December, observed that macro concerns are shifting from currency woes to the real economy in Turkey today.

Turkish Economy Amid Macro/Monetary Crisis In 2018

Seventeen years after the previous crisis of the beginning of the past decade, Turkey has experienced a significant economic/monetary shock in 2018. Long-standing external finance vulnerabilities have been exposed by tighter external financing conditions and exacerbated by deteriorating economic data, economic uncertainty and US sanctions, feeding into self-reinforcing concerns about the private sector’s vulnerability to currency weakness. This has been manifested most clearly through a plunge in the Turkish lira and ensuing market pressures, leading to a prelude of a monetary crisis. The result was that the Turkish lira has declined by close to 60% relative to the US dollar, from 3.79 at the beginning of the year to reach a peak of 7.22 on 12 August to then appreciate to reach 5.25 by the closing of this report.

Strong Monetary Tightening Amid Soaring Inflation Rates

Monetary conditions were marked by spiking Turkish lira volatility, dwindling international reserves and elevated levels of inflation (exceeding 25%), which prompted the Central Bank of Turkey to implement a strong monetary tightening to support price stability, while shifting to a simplified monetary policy that has involved abandoning a multi-rate framework and ensuring funding via a single rate. In parallel, Turkish securities registered noticeable price falls during the first eleven months of 2018. The BIST 100, which represents the 100 largest companies by market capitalization, registered a 17.3% drop during the first eleven months of 2018. Concurrently, the country’s five-year CDS spreads expanded by 220 bps over the period, moving from 165 bps at end-2017 to 385 bps at end-November 2018, in a sign of a deterioration in market perception of sovereign risks at large.

Adequate banks’ capitalization and sound primary liquidity in the face of asset quality concerns and wholesale funding issues

The Turkish banking sector has had to face volatile and tough operating conditions domestically, with political pressures and tensions contributing to a currency crisis and taking a toll on investor sentiment and activity growth throughout part of the year. While the currency depreciation and domestic tensions have raised concerns over asset quality and funding metrics of banks operating in the country, it is to Turkish banks’ luck that this is happening at a time when their financial buffers in terms of liquidity and capital adequacy, which have proven relatively resilient so far, are at their best (primary liquidity ratio of 29.3% and capital adequacy ratio of 18.2% at end-October 2018).

Some differences and some similarities between the 2000-2001 crisis and the 2018 crisis

Regarding similarities, both crises revolved around exchange rate depreciation of almost similar magnitudes. Both the 2000-2001 crisis and the current crisis were partly triggered by growing external vulnerabilities amid a surging current account deficit to GDP ratio (from -0.4% in 1999 to -3.6% in 2000 and from -3.8% in 2016 to almost -5.6% in 2017). In addition, Central Bank reserves reported low reserve adequacy ratios during both crises (around 4 months of imports back then and today). As to differences, Turkey faced a banking crisis in 2000-2001 following risk accumulation in banks’ balance sheets prior to the crisis, erupting into acute losses in the banking system (ROE of -74.2% and -21.4%), with NPLs/Total loans reaching 18.6% at the time. Today, the sector is so far generating ROE of 15.1% and a NPL ratio of 3.5%. Overnight rates reached 80% during the previous crisis while they are still at 24% in this year’s turmoil.

Macro fears shifting from external imbalances and currency qualms to real sector concerns

Looking forward, the outlook doesn’t look that dim, especially that external imbalances are starting to improve. The IMF forecasts the current account deficit to improve from 5.7% of GDP today to 1.4% of GDP in 2019. One of the main reasons of the improvement in the CAD is the slowdown in the real economy, which means less imports of goods and services. Real GDP growth is actually set to slow down to 3.5% in 2018 and 0.4% in 2019 before bouncing back in 2020. So the economy is rebalancing, with less output growth but better external imbalances amid sound public finances, which supports the outlook of the currency looking forward. In sum, macro fears have now shifted from the external imbalances and currency concerns to the real economy and sluggishness concerns at large. (Bank Audi 12.12)

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CREATING & SEIZING WORLDWIDE BUSINESS OPPORTUNITIES

December 27, 2018, 7:42 am

≫ Next: What’s New at EDI – January 2019

≪ Previous: EDI Fortnightly, 26 December 2018

International trade and investment drives economic growth, increases profits and expands corporate horizons. From the mid-1980s through the end of 2015, international trade grew by over 7% a year – twice the rate of growth of GDP. That growth was based not only on a wider acceptance of free market attitudes and falling trade barriers but also on reduced transport costs, geopolitical changes and advances in technology and communications. While the landscape has changed dramatically since 2015 with challenges to the World Trade Organization, implementation of new tariffs in some quarters and the renewed emergence of nationalism in many countries, the opportunities attendant to export promotion remain significant.

Stef Wertheimer, the founder of Israel’s Iscar Industries which was bought a few years ago by Warren Buffet’s Berkshire Hathaway Group for $6 billion (in two tranches), once commented: “Achievements in successful export industries, which need highly skilled people, can create an area as flourishing as South Korea and Singapore.”

Foreign sales are a sine qua non for major business growth but trade issues for businesses can be every bit as complex as those of sovereign governments. Exporters need to identify, assess and enter export markets, find reliable partners and ensure that their overseas investments face minimal risks.

But how does an average small to medium sized enterprise (SME) enter the arena of international trade with minimal risk? In our 27 years of business experience, we have found that the ideal way to do this is to rely on local “guides” who can help accompany SME’s through the intricacies of doing business and conducting trade in foreign markets. These “guides” can take the form of consulting firms, industry associations, government agencies and others who can provide SMEs with market information, familiarize SMEs with the market’s business practices, design market entry strategies, identify potential business partners, arrange meetings/visits, organize trade exhibition support and more.

One network of “guides” is the International Business Group (www.ibgglobal.com), an association of 22 business development and consulting companies strategically located around the world, covering over 150 country markets. [Full disclosure: Our firm is a founding member of the group.] During the 15 years since the group was founded, IBG members have successfully handled a total of over 47,000 export promotion projects while simultaneously generating over $5 billion in inward capital investment for governmental economic development organizations.

Networks such as IBG can provide a whole host of services that minimize risk while maximizing the potential for success. Typical services include:

• Company/product assessment and marketability reviews
• Target market identification, market and competition analysis
• Market entry strategy and goal setting
• Agent / distributor & partner searches
• Market development
• Investor Searches and Matching
• Trade Missions
• Trade and Investment Exhibitions and Events.

So what is the major barrier to SME’s making the decision to pursue further export promotion activities? Clearly, it is fear of the unknown whose catalyst is not having a level of confidence and trust in people whom one has never met. Why should an SME trust a consultant or other “guide” from another country?

This is why it is critical for SMEs to identify appropriate supporting players whom they can trust in each of the target markets. An established business development consultant network with worldwide coverage and a solid reputation like that of IBG is a terrific solution for providing trustworthy partners in a range of markets.

Apple’s founder Steve Jobs said: “Great things in business are never done by one person. They’re done by a team of people.” In the same way, wise SMEs can seek out appropriate “guides” abroad in order to identify and seize the countless business opportunities in world markets. The future is waiting to be grasped.

Sherwin Pomerantz

President

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What’s New at EDI – January 2019

January 2, 2019, 2:10 am

≫ Next: Fortnightly, 9 January 2019

≪ Previous: CREATING & SEIZING WORLDWIDE BUSINESS OPPORTUNITIES

10 Illinois Companies to Exhibit at Arab Health 2019 in Dubai

Illinois will, once again, have a booth at the annual Arab Health exhibition and conference in Dubai at the end of January. 10 Illinois companies will display there at what has become the second largest life science exhibition in the world after Germany’s Medica. EDI’s Trade Director, Seth Vogelman, will be in Dubai to administer the State of Illinois booth, assist the Illinois companies and ensure that their visit there will be as productive as possible. EDI represents the trade an investment promotion interests of Illinois in the Middle East.

Ontario Exhibiting at Cybertech Israel 2019

Cybertech Israel 2019 at the end of January in Tel Aviv will see a number of Ontario cyber companies exhibiting, the third time the province will be bringing companies to this event. They will be joined by other Canadian delegations as well from both Vancouver and the Atlantic Provinces. EDI represents the trade promotion and innovation interests of Ontario in Israel.

Ukraine Food Mission to Israel

In late November, the Ukraine Export Promotion Office organized a mission to Israel of food producers seeking business opportunities in Israel. EDI was selected to fully plan and execute the mission including the arrangement of individual B2B meetings with prospective Israeli business partners, site visits to local industry, networking opportunities and informational seminars. 11 Ukrainian food exporters participated in the three-day visit to Israel and attended the IsraFood Exhibition as well.

EDI Participates in Invest Hong Kong Annual Meeting

EDI’s VP Business Development Michael Platt was in Hong Kong and China in mid-December to participate in the annual meeting of Invest Hong Kong overseas representatives. The weeklong event provides an opportunity for the representatives to become further familiar with what Hong Kong has to offer foreign entities seeking to develop business activities and opening offices in Hong Kong. This year’s visit was different in that the group also spent two days in mainland China becoming familiar first-hand with the Greater Bay Area. The “Greater Bay Area” refers to the Chinese government’s scheme to link the cities of Hong Kong, Macau, Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Huizhou, Jiangmen and Zhaoqing into an integrated economic and business hub. EDI represents the foreign direct attraction interests of Hong Kong in Israel.

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Fortnightly, 9 January 2019

January 9, 2019, 1:35 pm

≫ Next: Fortnightly, 23 January 2019

≪ Previous: What’s New at EDI – January 2019

9 January 2019
3 Shvat 5779
3 Jumada Al-Awal 1440

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1  Knesset Approves Medical Cannabis Export Law
1.2  Knesset Passes Law Aimed at Fighting Solicitation of Prostitution
1.3  Transportation Ministry to Roll Out Interactive Air-Conditioned Bus Stops
1.4  Over Half Israel’s 2019 Drug Basket Budget Goes to Cancer Treatment

2: ISRAEL MARKET & BUSINESS NEWS

2.1  Elbit to Deliver Two-Color Laser System to Raytheon
2.2  Elbit Systems Provides Security Solution for Karish-Tanin Gas Fields Platform
2.3  Innovid Receives $30 Million in Funding from Goldman Sachs
2.4  mPrest Partners With Southern Company for Smart Energy Applications
2.5  Amazon to Buy CloudEndure for $250 Million
2.6  SolarEdge to Enter E-Mobility Market with Acquisition of S.M.R.E.
2.7  BIRD Foundation to Invest $7.3 Million in 8 New Projects
2.8  Eyesight Teams Up With Samsung on Driver Monitoring System
2.9  Innoviz and HARMAN Partner to Deliver Industry-Leading LiDAR to Automakers

3: REGIONAL PRIVATE SECTOR NEWS

3.1  yallacompare Raises $8 Million in Latest Round
3.2  South Korea to Provide 28 Subway Cars to Egypt by 2021
3.3  American Concrete Institute Opens New Middle East Regional Office in Dubai, UAE

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Construction Progresses on Final Phase of Giant Dubai Solar Park
4.2 The Use of Plastic Bags in Greek Supermarkets Drops by 80%

5: ARAB STATE DEVELOPMENTS

5.1  Lebanon’s Average Prices Rose by an Annual 6.26% in November 2018
5.2  Lebanon’s Trade Deficit Widened to $14.4 Billion in October 2018
5.3  Foreign Currency Reserves Cover Jordan’s Imports For 7 Months
5.4  Tourism Revenues for Jordan Reach $5 Billion
5.5  Aid Received by Jordan in 2018 Reaches $3.3 Billion

Arabian Gulf

5.6  UAE Aviation Sector Contributes 15% to the Country’s GDP
5.7  Dubai Approves 2019 Budget with Higher Expo 2020 Infrastructure Expenditures
5.8  Oman Approves Increased Budget Based on $58 Per Barrel of Oil
5.9  Oman Bans Expats in Specific Private Sector Education Jobs
5.10  King Salman Announces Plans to Establish Saudi Space Agency
5.11  Saudi Arabia Reports an 18% Drop in Expat Remittances

North Africa

5.12  Libya Falls in Ease of Doing Business Index
5.13  Forbes Says Morocco Ranks 62nd Best Country for Business for 2019
5.14  Morocco Received Over MAD 30 Billion in Foreign Funds in 2017

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Turkey’s Exports Hit All-Time High With $168 Billion in 2018
6.2  Turkey Was Russian Tourists’ Leading Destination in 2018
6.3  Cyprus’ Registered Unemployed Falls by 16.7% to Under 30,000
6.4  Cyprus’ Tourism Revenue Jumps 6% in October

7: GENERAL NEWS AND INTEREST

ISRAEL

7.1 As 2019 Begins, Israel’s Population Stands at 9 Million‎
7.2 Immigration to Israel Increases by 5% in 2018

8: ISRAEL LIFE SCIENCE NEWS

8.1  Teva Announces FDA Approval of Only Digital Inhaler with Built-In Sensors – ProAir Digihaler
8.2  RenalSense Pilot Study on ICU Patient Monitoring at Pittsburgh’s UPMC
8.3  Venus Medtech Completes Merger with Keystone Heart
8.4  Syqe Medical Raises $50 Million
8.5  Israeli Researchers Raise $1 Million for Eye Drops That Could Replace Glasses
8.6  CytoReason Signs Collaboration Agreement with Pfizer for Drug Discovery
8.7  Greater Cannabis Company Distribution Agreement With iCAN
8.8  EarlySense Completes $39 Million Financing Round to Accelerate Global Expansion
8.9  Biond Biologics Announces $17 Million Series B Financing
8.10  Orri Jaffa Mandarins Heading to North America
8.11  Cann2Go Software Optimizes Last Mile Delivery of Medical Cannabis
8.12  Anchiano Therapeutics Files F-1 Registration Statement for U.S. IPO

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 SafeRide Technologies Launches vXRay Advanced AI Technology Vehicles Security
9.2  Upstream Security & Arilou Partner to Build ‘End to End’ Security for Smart Mobility
9.3  Arbe to Launch the World’s First Ultra-High Resolution Automotive Radar System
9.4  Mellanox 200 Gigabit HDR InfiniBand to Accelerate a World-Leading Supercomputer at Stuttgart
9.5  VAYAVISION VAYADrive 2.0 – Software-Based AV Environmental Perception Engine
9.6  Cortica to Collaborate with Renesas to Deliver AI Capability in System-on-Chip Platform

10: ISRAEL ECONOMIC STATISTICS

10.1  Israeli Startups Raised Over $400 Million in December
10.2  Poverty and Inequality Decline in Israel
10.3  Arab Israeli Women’s Employment Up Sharply to 40%
10.4  New Car Deliveries in Israel Decline by 5% in 2018
10.5  Record 4.1 Million Tourists Visited Israel in 2018

11: IN DEPTH

11.1  ISRAEL: PwC Finds 2018 a Record Year for M&As in Israel
11.2  ISRAEL: Bank of Israel Research Department Staff Forecast for January 2019
11.3  LEBANON: US Doubles Down on Military Aid to Lebanon
11.4  EGYPT: Cairo – The World’s Test Platform for Transportation
11.5  TURKEY: Istanbul, the Flashpoint of Turkey’s Crisis and Looming Elections

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Knesset Approves Medical Cannabis Export Law

On 25 December, the Knesset approved the medical cannabis export law in second and third readings, paving the way for Israel to become a leading medical cannabis exporter and participant in a thriving sector. Knesset members voted 21 – 0 in favor of the bill, part of a set of reforms first okayed in 2016, albeit cabinet approval is still needed for its implementation.

According to Israeli government research, medical cannabis exports is set to bring in an estimated $1 billion in revenue per year. Since the government announced the reforms two years ago, some 400 Israeli farmers applied for permits to grow cannabis, with another 242 receiving preliminary approval. The ministry also said it received some 200 applications for cannabis nurseries seeking to distribute cannabis plants, 95 requests to set up cannabis pharmacies, 60 applications for processing facilities, and 44 requests to set up stores selling cannabis products. The revised law provides a budget for police to monitor, track and control the production and delivery of cannabis for export, and prevent spill over.

Recreational use of cannabis in Israel is still not legal but licensed medical cannabis consumption for vetted physical and mental health issues has been allowed for a decade.

The new law specifies that any foreign investment of more than 5% in an Israeli cannabis company will require regulatory approval. The law now awaits final approval from PM Netanyahu and his cabinet. (NoCamels 26.12)

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1.2 Knesset Passes Law Aimed at Fighting Solicitation of Prostitution

On 31 December, the Knesset voted unanimously to ban the solicitation of sexual services in Israel. According to the law, individuals who solicit or attempt to solicit sexual acts will face an NIS 2,000 ($535) fine. A second offense will be punishable by a NIS 4,000 ($1,070) fine and the prosecution will have the authority to file an indictment against the solicitor. In addition, the court will have the authority to issue a maximum fine of NIS 75,300 ($20,000) for repeat offenders. The law is set to take effect in mid-2020, to allow the state time to set up government mechanisms for the rehabilitation of sex workers on the basis of recommendations issued by the inter-ministerial committee on fighting prostitution, which suggested the state allocate a multi-million dollar budget to this end. (IH 01.01)

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1.3 Transportation Ministry to Roll Out Interactive Air-Conditioned Bus Stops

Israel’s Transportation Ministry is preparing to road-test a new “smart” air-conditioned bus stop in an effort to make public transportation users more comfortable in the oppressive summer heat. Transportation Minister Katz announced on 26 December that the pilot program will be launched in Eilat, Israel’s southernmost city, where high temperatures in the summer often exceed 40° C. The first new stops will likely be located at sites throughout the city that see the heaviest public transportation use. The new bus stops are enclosed modules that feature automatic doors, interactive controls, and touch screens that provide transportation users with real-time schedules and routes for the bus lines that stop there. The controls make the stops accessible to passengers with disabilities. (IH 30.12)

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1.4 Over Half Israel’s 2019 Drug Basket Budget Goes to Cancer Treatment

The members of the committee for expanding the National List of Reimbursed Drugs have published the list of drugs and medical technologies to be added to the National List of Reimbursed Drugs for 2019, at a cost of NIS 460 million. The drugs will be used by some 70,000 patients, while the approved tests will be used for a very large number of people. The use of the drugs, costing an additional NIS 40 million, will be gradually introduced and charged to the 2020 budget. Cancer treatments costing NIS 255 million, more than half of projected additional cost, will be added to the list in 2019, in line with the trend in recent years, with the exception of 2018.

In recent months, the committee members initially selected a list of 770 drugs and technologies at a cost of over NIS 3 billion, of which only 107 drugs were selected. Some 220 drugs costing over NIS 2 billion reached the final selection stage. New drugs for treatment of leukemia, multiple myeloma lymphoma (of the plasma cells found in bone marrow), liver cancer, melanoma, breast cancer, prostate cancer, kidney and bladder cancer, lung cancer, and cervical cancer (including advanced biological and bio-immunotherapy drugs activating the immune system to attack cancer cells) were also added to the National List of Reimbursed Drugs. (Globes 03.01)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Elbit to Deliver Two-Color Laser System to Raytheon

Elbit Systems announced that its subsidiary, Elbit Systems of America was awarded a contract by Raytheon Company to provide the Two Color Laser System (TCLS) for the Multi-Spectral Targeting System. The initial contract is in an amount not material to Elbit Systems and will be performed during 2019. TCLS is a production component within the electro-optical surveillance system for multiple military airborne platforms, including the next-generation targeting systems onboard unmanned aerial vehicles.

Haifa’s Elbit Systems is an international high technology company engaged in a wide range of defense, homeland security and commercial programs throughout the world. The Company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance (C4ISR), unmanned aircraft systems, advanced electro-optics, electro-optic space systems, EW suites, signal intelligence systems, data links and communications systems, radios and cyber-based systems. (Elbit Systems 03.01)

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2.2 Elbit Systems Provides Security Solution for Karish-Tanin Gas Fields Platform

Elbit Systems announced that it was awarded a $15 million contract from Energean Israel, a subsidiary of Energean Oil and Gas, to supply a comprehensive solution for the Floating Production Storage and Offloading (FPSO) platform of the offshore Karish-Tanin gas fields. The contract will be performed over an approximately two-year period, with warranty and logistic support continuing for an additional 10 years.

The technological suite, to be supplied by the Company’s subsidiary, Elbit Security Systems (ELSEC), includes a wide range of sensors, among them electro-optic systems, radars, sonars, a command and control center as well as equipping rapid interception boats with a dedicated suite of sensors. The security solution will enable to detect and identify both surface and underwater threats and will assist security teams to respond efficiently.

Haifa’s Elbit Systems is an international high technology company engaged in a wide range of defense, homeland security and commercial programs throughout the world. The Company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance, unmanned aircraft systems, advanced electro-optics, electro-optic space systems, EW suites, signal intelligence systems, data links and communications systems, radios and cyber-based systems. (Elbit Systems 07.01)

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2.3 Innovid Receives $30 Million in Funding from Goldman Sachs

Innovid has secured $30 million in pre-IPO funding from Goldman Sachs’ Private Capital Investing group. Innovid will use the additional capital to further its innovation and leadership in the connected TV (CTV) advertising technology market, as well as to expand its global footprint.

Innovid currently creates, delivers and measures video ads for the world’s largest brands, such as L’Oreal, Toyota, Bank of America, GlaxoSmithKline, Campbell’s and more. With the rapid consumer adoption of CTV, Innovid works hand-in-hand with key publisher clients, including Hulu, Roku and Fox, among others, to re-imagine the advertising experience for the consumer. In partnership with its publishing clients, Innovid led the creation of two industry firsts: consumer choice-based engagement ads and live Internet TV campaigns.

Ramat Gan’s Innovid is a leading provider of In-Video Advertising solutions for online advertisers, publishers and content producers. The company’s In-Video platform combines the marketing value of product placement, which is enjoying a 30% growth rate this decade in all electronic media, with the interactivity only possible on the internet. Through the use of Frame-based Meta-Data, Innovid’s proprietary technology provides a seamless integration between the video and the embedded images. Beyond ad integration and serving, the company solution includes a back-end analytics dashboard to measure and track engagement. (Innovid 07.01)

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2.4 mPrest Partners With Southern Company for Smart Energy Applications

mPrest and Atlanta’s Southern Company, America’s premier energy company, announced a collaboration to develop and implement a solution to further enhance the resiliency, efficiency and flexibility of Southern Company’s robust distribution system. mPrest’s intelligent grid “System of Systems” applications directly address the challenges of the evolving energy industry, which include rapidly decentralizing networks, sharp changes in energy demand, extreme weather events and cyber security threats.

As the first step in the partnership, Southern Company and mPrest were awarded a grant from BIRD Energy, a program sponsored by the U.S. Department of Energy, the Israeli Ministry of Energy, jointly with the Israel Innovation Authority and managed by the Israel-U.S. Binational Industrial Research and Development (BIRD) Foundation, to develop a distribution product that turns grid-edge devices into fully integrated tools for enhanced management at the edges of the electric grid. Distribution technologies like this allow for optimal distribution energy management, resulting in energy and cost savings and reliable integration of distributed energy resources.

Petah Tikva’s mPrest is a global provider of mission-critical monitoring, control and big data analytics software. Leveraging the power of the Industrial IoT, mPrest’s integrative “System of Systems” is a proven catalyst for digital business transformation. Their innovative management solutions have been deployed in next-gen applications for carrier service providers, system integrators, smart cities as well as IoE (Internet of Energy) applications for energy utilities, defense and HLS. (mPrest 07.01)

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2.5 Amazon to Buy CloudEndure for $250 Million

Amazon is acquiring Israeli cloud computing company CloudEndure for an estimated $250 million. The deal is expected to close shortly. Amazon, through its subsidiary AWS, is the world’s biggest supplier of clouds services, and wants to maintain its advantage over other major cloud computing suppliers and among other things, strives for smoother transfer of data. The acquisition of CloudEndure can help in this task.

Based in Ramat Gan, CloudEndure was founded six years ago and has raised $20 million. CloudEndure is a cloud computing company that develops business continuity software solutions for disaster recovery, continuous backup, and live migration. The company enables the smooth transfer of data from cloud to cloud. For example, organizations operating in a multi-cloud environment can save their data and recover it if the cloud collapses. Companies often work with many clouds for financial reasons (lack of dependence on one cloud), and dispersing risk (for example if there is a security breach in the cloud), or for operational reasons (working in many countries or if there is a better data center). CloudEndure’s product also enables smoother transfer of data from servers to the cloud. (Globes 07.01)

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2.6 SolarEdge to Enter E-Mobility Market with Acquisition of S.M.R.E.

SolarEdge Technologies announced the entry into a definitive agreement to acquire S.M.R.E. Headquartered in Italy, SMRE provides innovative integrated powertrain technology and electronics for electric vehicles. Founded in 1999 and traded on the Italian AIM (SMR.MI), SMRE has three business units: e-mobility, automated production machines and telematics software. The company has more than fifteen years of experience developing end-to-end e-mobility solutions for electric and hybrid vehicles used in motorcycles, commercial vehicles and trucks. These solutions include innovative high-performing powertrains with e-motor, motor drive, gearbox, battery, BMS, chargers, Vehicle Control Unit (VCU) and software for electric vehicles.

The initial acquisition entails a purchase from the founder and an additional two stockholders of approximately 51% of the outstanding shares of SMRE pursuant to a standard share purchase agreement, for an aggregate investment of approximately $77 million, with 50% to be paid in cash and the remaining 50% to be paid in shares of SolarEdge common stock. The transaction is expected to close in the coming weeks and will be followed by a mandatory tender offer in which SolarEdge intends to offer to purchase in an all cash transaction, subject to regulatory reviews and approvals, the remaining outstanding ordinary shares of SMRE, that are currently listed on the Italian AIM stock exchange, with the goal of SMRE becoming a wholly-owned subsidiary of SolarEdge.

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2.7 BIRD Foundation to Invest $7.3 Million in 8 New Projects

During its meeting last month, held in Tel Aviv, Israel, the Board of Governors of the Israel-U.S. Binational Industrial Research and Development (BIRD) Foundation approved $7.3 million in funding for eight new projects between U.S. and Israeli companies. In addition to the grants from BIRD, the projects will access private sector funding, boosting the total value of all projects to approximately $20.4 million.

The BIRD Foundation promotes collaborations between U.S. and Israeli companies in various technological fields for the purpose of joint product development. In addition to providing conditional grants of up to $1 million for approved projects, the Foundation assists by working with companies to identify potential strategic partners and facilitate introductions.

The eight projects, approved by the Board of Governors, are in addition to the 974 projects, which the BIRD Foundation has approved for funding during its 41-year history. To date, BIRD’s total investment in joint projects has been nearly $350 million, helping to generate direct and indirect sales of more than $10 billion. The projects approved include:

-4Cast Systems (Petah Tikva, Israel) and Adelos (Polson, MT) will develop an Upstream – Advanced Pipeline Disaster Prevention System.

-Compedia Software & Hardware Development (Ramat Gan, Israel) and Samaritan’s Purse (Boone, NC) will develop VolunteerVR – Virtual Reality Skills and Empowerment Tools for Disaster Relief Volunteers.

-HackerU (Ramat Gan, Israel) and JustCode. (NY, NY) will develop Cyber Security and Coding Assessment Platform for Measuring and Enhancing Cyber Readiness and Tech Talent Competency.

-Juganu (Rosh HaAyin, Israel) and Just Greens (Newark, NJ) will develop a Tunable White Spectrum SMART LED Based Fixture for Automated Horticulture Processes.

-Leviticus-Cardio (Petah Tikva, Israel) and Jarvik Heart (NY, NY) will develop the Wireless Jarvik 2000® LVAD.

-Mitos Medical (Netanya, Israel) and FiberTech Medical (Baltimore, Maryland) will design and manufacture a Surround Vision Scope.

-MS Tech (Herzliya Pituah, Israel) and Tekwave Solutions (Alpharetta, GA) will develop a Rapid Field Analysis of Chlorates, Perchlorates, Fentanyl and Synthetic Opioids using HF-QCM Nanotechnology Detection Sensors.

-Somatix Technologies (Ra’anana, Israel) and Catholic Senior Housing and Health Care Services (PA) will develop a Digital Health System, SafeBeing – ‘Aging in Place’ Lifestyle with Exceptional Peace of Mind.

The deadline for submission of Executive Summaries for the next BIRD cycle is 6 March 2019. Approval of projects will take place in June 2019. (BIRD 08.01)

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2.8 Eyesight Teams Up With Samsung on Driver Monitoring System

Eyesight announced it was teaming up with Samsung Electronics. The deal will integrate Eyesight’s advanced AI computer-vision Driver Monitoring software into Samsung’s software for its in-cabin camera solution, creating the most advanced fully-integrated Driver Monitoring System for installation by car manufacturers. Eyesight and Samsung’s Driver Monitoring System monitors a driver’s gaze direction, pupil dilation, eye openness, blink rate and head position using Eyesight’s proprietary Computer Vision algorithms to detect levels of drowsiness and distraction. A car manufacturer can decide what to do next: it can sound an alarm to alert the driver, suggest a rest, or activate more self-driving features. The new Driver Monitoring bundled hardware and software solution will offer advanced capabilities and quick time to market for the carmakers and Tier-1 manufacturers.

Tel Aviv’s eyeSight Mobile Technologies is a leader in touch free Interfaces for consumer electronics. Its technology allows users to control mobile and portable devices with simple hand gestures by using the built-in camera, advanced real-time image processing and machine vision algorithms. (Eyesight 07.01)

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2.9 Innoviz and HARMAN Partner to Deliver Industry-Leading LiDAR to Automakers

Innoviz Technologies and Connecticut’s HARMAN International, a wholly-owned subsidiary of Samsung Electronics Co., focused on connected technologies for automotive, consumer and enterprise markets, announced a newfound strategic partnership to make Innoviz’s high-performing, solid-state and mass-producible LiDAR solutions available to OEMs globally. HARMAN will leverage Innoviz’s LiDAR offerings to further reinforce its position as a leading provider of products and technologies to automakers that help improve vehicle safety, perception, connectivity and experience. Specifically, Innoviz’s LiDAR will enhance HARMAN’s existing ADAS and Automated Driving initiatives, helping deliver superior driver assist features today and Levels 3-5 automation tomorrow.

InnovizOne, which HARMAN will make available to OEMs through this partnership, is a solid-state LiDAR sensor that is designed specifically for automotive deployments and automakers’ mass-production needs. Innoviz LiDAR sensors create dense 3D point clouds. Innoviz’s perception software enables outstanding object detection, classification and tracking at long distances. The solution delivers on all of the automotive industry’s needs for performance, reliability, cost, compact size and product maturity, and is a sensor for next generation autonomous vehicles.

Rosh HaAyin’s Innoviz is a leading manufacturer of high-performance, solid-state LiDAR sensors and perception software that enable the mass -production of autonomous vehicles. InnovizPro is a solid-state LiDAR that offers outstanding performance and value for automotive and other applications. InnovizOne is a cutting-edge, automotive-grade LiDAR sensor that provides superior 3D sensing for Level 3-Level 5 autonomous driving. Innoviz is backed by top-tier strategic partners and investors, including Aptiv, Magna International, Samsung, Magma Venture Partners, Vertex Ventures, SoftBank Ventures Korea, 360 Capital Partners, Glory Ventures, Naver and others. (Innoviz 08.01)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 yallacompare Raises $8 Million in Latest Round

Dubai-based yallacompare has raised $8 million in its latest round of funding. Lead by existing investors STC Ventures and Wamda Capital, the financial comparison website also attracted new investor Argo Ventures, the investment arm of international insurance company Argo Group. The investment will be used to expand to Egypt by the end of the first quarter of this year while also increasing market share in the UAE and Kuwait.

While consumers in the region feel comfortable comparing prices online, many still prefer to conclude the purchase offline, usually on the phone. yallacompare is working with insurance companies to automate more of the processes and interactions with customers. The company’s last round of funding was in May 2017 when it raised $3.5 million. (Wamda 06.01)

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3.2 South Korea to Provide 28 Subway Cars to Egypt by 2021

Egypt is set to receive 48 subway cars by 2o21 from South Korean railway system Hyundai Rotem Co worth $135 million. The order, which was based on a competing bid, will be custom made as Hyundai Rotem Co will be building the subway cars for Egypt’s National Authority for Tunnels. The cars, which will be air-conditioned, will travel at the speed of 80 kilometers per hour and will service Cairo’s metro line 2. The order will also guarantee a maintenance and repair service until 2031. Hyundai Rotem is an affiliate of Hyundai Motor Group. The 41-year-old company produces defense and plant equipment; it has already supplied Cairo metro Line 1 with 180 subway cars.

Egypt’s metro system is one of the oldest in the Middle East and Africa. It stands as one of Egypt’s most used and affordable means of public transportation as official taxi fares start at EGP 5 while Uber and Careem are considered pricier options. (ES 02.01)

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3.3 American Concrete Institute Opens New Middle East Regional Office in Dubai, UAE

The American Concrete Institute (ACI) announced the opening of its regional office in Dubai, United Arab Emirates. The opening marked the Institute’s first physical presence outside of the United States since its inception in 1904. The Middle East Regional Office will focus on advancing the development, dissemination, and adoption of ACI consensus-based knowledge on concrete and its uses in the region. The new office is located on level 7 of the Dubai World Trade Center.

Founded in 1904 with a headquarters in Farmington Hills, MI, USA, and a regional office in Dubai, UAE, the American Concrete Institute is a leading authority and resource worldwide for the development, dissemination, and adoption of its consensus-based standards, technical resources, educational & training programs, certification programs, and proven expertise for individuals and organizations involved in concrete design, construction, and materials, who share a commitment to pursuing the best use of concrete. (American Concrete Institute 07.01)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Construction Progresses on Final Phase of Giant Dubai Solar Park

On 29 December, the Dubai Electricity and Water Authority (DEWA) said that construction work on the fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park has advanced further with the completion of 128 pillars of the project’s solar tower. The fourth phase of the park is the largest single-site investment project in concentrated solar power (CSP) in the world based on the independent power producer (IPP) model. Featuring a total investment of AED50 billion, the park will reach a total capacity of 5,000 megawatts (MW) by 2030.

The fourth phase of the solar Park will use three technologies to produce 950MW of clean energy, 600MW from a parabolic basin complex, 100MW from a solar tower and 250MW will be generated from photovoltaic panels. It will have the world’s tallest solar tower, at 260 meters and the largest thermal energy storage capacity in the world of 15 hours, which allows for energy generation round the clock.

The 13MW photovoltaic first phase of the solar park became operational in 2013. The 200MW photovoltaic second phase of the solar park was launched in March 2017 while the 200MW first stage of the 800MW photovoltaic third phase became operational in May 2018. The third phase will be completed in 2020. (AB 30.12)

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4.2 The Use of Plastic Bags in Greek Supermarkets Drops by 80%

The use of plastic bags in supermarkets in Greece dropped 80% in 2018 since stores no longer give them away for free, according to a recent survey by the Research Institute of Retail Consumer Goods (IELKA). The environmental protection measure that came into force on 1 January 2018 has resulted in an enormous reduction in the use of plastic bags. Based on 2017 figures, 1.5 billion fewer plastic bags were used this year in Greece. While plastic bags had historically been given away for free in supermarket and retail stores, this year businesses began charging for plastic, beginning at 4 cents for thin bags and going up to 40 cents for larger, thicker ones. The charge for the plastic bags is considered an environmental fee. The reduction in use is expected to be even higher in 2019, as the charge for the bags will be begin at 9 cents for the thinner ones from 1 January onward.

The objective set by the E.U. in their “Community Directive 2015” for the reduction of plastic waste is that member states should take measures to ensure that the annual consumption level does not exceed 90 thin plastic bags per capita by 31 December 2019. In an attempt to inform consumers about the increase in the environmental fee, IELKA is cooperating with nine supermarket chains in a new campaign. The drive started in the second half of December and will continue through January, 2019. It will include a special brochure sent to over 1,500 supermarkets, informational posters and promoting the use of reusable bags on electronic and social media. (IELKA 25.12).

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5: ARAB STATE DEVELOPMENTS

5.1 Lebanon’s Average Prices Rose by An Annual 6.26% in November 2018

According to the Central Administration of Statistics (CAS), the average inflation rate of Lebanon rose by 6.26% by November 2018, as the Consumer Price Index (CPI) reached 106.53 by November 2018. In reality, consumer prices went up across all sub-categories. The average price of Housing and utilities (Housing water, electricity, gas and other fuels) constituting a combined 28.4% of the CPI, witnessed a yearly rise of 7.05%, on the back of increases in its components. Owner-occupied rental costs (grasping 13.6% of this category) and water, electricity, gas and other fuels (grasping 11.8% of this category) rose by 3.94% y-o-y and 11.22% y-o-y, respectively.

Also, the average costs of food and non-alcoholic beverages (20% of CPI) rose by a yearly 5.07% by November 2018. As for the average prices for Transportation (13.6 % of CPI), they increased by 8.57% y-o-y, and this can be mainly due to the significant rise in average oil prices by a yearly 35.45% to reach $72.87/barrel by November 2018. In addition, the average price for Health (7.7% of CPI), Education (4.33% of CPI), and Clothing and footwear recorded a yearly upticks of 5.24%, 4.33% and 15.84%, respectively. (CAS 27.12)

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5.2 Lebanon’s Trade Deficit Widened to $14.4 Billion in October 2018

Lebanon’s trade deficit in the first 10 months of the year 2018 stood at $14.41B, up by 3.98% from last year’s deficit. In details, the total value of imports gained an annual 4.02% to stand at $16.87B. Also, the value of exports rose by 4.25% to stand at $2.46B by October 2018. As for the month of October alone, total deficit amounted to $1.45B which is 4.20 % lower when compared to the same month last year. 2018’s most imported product was Mineral products (grasping 21% of the total value of imports), followed by 11.65% for machinery and electrical instruments and 10.9% for products of the chemical and allied industries.

By the month of October 2018, the value of imported mineral products dropped by 1.2% to $3.55B. In addition, the value of machinery and electrical instruments surged from $1.61B by October 2017 to $1.97B by October 2018. The value of the chemical and allied industries rose by 5.05% to $1.84B when compared to the same period last year.

In the tenth month of 2018, Lebanon had mainly imported goods from Greece which grasped 11.04% of total imports, followed by China, Italy, Germany and USA with respective shares of 10.30%, 8.28%, 6.23% and 4.76% of the total value of imported goods.

As for exports, the top exported products from Lebanon were pearls precious stones and metals with a share of 22.42% of the total followed by shares of 13.28% for base metals and articles of base metal and 12.23% for products of the chemical or allied industries. In details, the value of pearls, precious stones and metals surged by 12.86% by October 2018 to stand at $550 million, compared to $0.5 billion by October 2017. In turn, the value of base metals and articles of base metal rose by 13.28% to $0.33B, and the value of products of the chemical or allied industries also registered a yearly increase of 12.23% to $0.30B.

As for the top destinations in terms of exports, UAE grasped the first place with 21.32%, followed by Syria, KSA, Iraq, and Hong Kong with 8.03%, 6.25%, 5.30%, and 4.42% respectively. (Blom 27.12)

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5.3 Foreign Currency Reserves Cover Jordan’s Imports For 7 Months

The foreign currency reserves at the Central Bank of Jordan (CBJ) exceed $13.4 billion, which is enough to cover the cost of the Kingdom’s imports of goods and services for seven months, CBJ Governor Fariz said on 7 January. Fariz added that the international standard for foreign reserves rate is the coverage of three months. The governor said that monetary stability is the bank’s top priority, noting that the CBJ is aware of the national economy’s low growth rates and is, consequently, keen on reaching a balance between the requirements of achieving monetary stability and providing funding tools. He pointed out that the banking system in the Kingdom is “solid and well-structured”, and is able to absorb major shocks and risks due to the fact that banks in Jordan possess high capitalization ratios, in addition to adequate levels of liquidity.

The governor said that the national program for economic reform has been adopted in cooperation with the IMF and includes a set of important reform procedures that mainly target the general monetary status, the energy sector and reducing shortcomings in the general budget. He expressed hope that these measures would achieve further success in the medium term, especially in light of the stabilization of political conditions witnessed in the region, calling for enhancing the investment environment in the Kingdom and guaranteeing so that it benefits from the upcoming reconstruction process in the region.

The governor expected the inflation rate in 2018 to stand at 4.5%, noting that the impacts of inflation resulting from administrative decisions of temporary nature vanish after a short term, and central banks usually do not take any action to counter such inflations, which are normally not accompanied by changes on the medium and long terms. (CBJ 07.01)

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5.4 Tourism Revenues for Jordan Reach $5 Billion

Tourism revenues reached $5 billion, and are expected to exceed this figure at the end of this year, the Central Bank of Jordan (CBJ) announced on 31 December. Tourism sector’s performance indicators showed a rise in the number of overnight tourists, which amounted to about 3.860 million tourists until the end of November, an increase of 8% compared to the same period of 2017, while the number of one-day visitors reached 721,325, a rise of 8.7% to the same period of 2017.

The number of visitors to Petra rose by the end of November to reach 800,000 visitors, an increase of 33%, the number of visitors to Jerash increased by 30% to 308,000 visitors, Wadi Rum 36% to 225,000 visitors, Mount Nebo 155% to 444,000 visitors, Ajloun 24.5% 243,000 visitors, the Baptism Site 395% to 131,000 visitors, the Madaba Map church 42% to 291,000 visitors and Karak 71% to 26,000 visitors, the Ministry added. Revenues of archaeological sites increased to JD21 million by the end of November, an increase of 36% compared to the same period of 2017. (CBJ 31.12)

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5.5 Aid Received by Jordan in 2018 Reaches $3.3 Billion

The financial assistance received by the Hashemite Kingdom in 2018 until 20 December amounted to $3.3 billion, the Ministry of Planning and International Cooperation announced. The figure represents the total of both grants and soft loans contracted and pledged to support Jordan, of which regular grants amounted to $1.1 billion, while soft loans comprised $1.3 billion and an additional $894.7 million was granted to the Kingdom within the Jordan Response Plan to the Syrian Crisis (JRP). The Planning Ministry said that some $526 million of regular grants were directed to support the Treasury, whereas the remaining amount was allocated for financing development projects across the Kingdom in various fields, including education, water, health, waste management and women’s empowerment.

The ministry added that 66% of the received loans, worth around $873 million, was also directed to support the Treasury and the remaining was split 14-20% between development programs and power and energy projects. Additional grants within the JRP went to fund the plan’s three main pillars; Treasury support ($5.3 million), developmental projects for host communities at ($218.6 million) and meeting refugee needs ($228.69 million). (JT 26.12)

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►►Arabian Gulf

5.6 UAE Aviation Sector Contributes 15% to the Country’s GDP

The aviation sector contributed 15% to the UAE’s GDP in 2018, according to Saif Mohammed Al Suwaidi, director-general of the General Civil Aviation Authority (GCAA). Al Suwaidi said the UAE has invested an estimated $270 billion in the aviation sector, which includes improvements to airport infrastructure and a fleet of 884 commercial aircraft. Al Suwaidi said GCAA is also re-planning routes to neighboring countries that will increase airspace capacity and generate annual financial savings of $14 million for airline companies. The GCAA chief said passenger traffic across all UAE airports is expected to increase at a rate of 5.2% (142m passengers).

UAE accounts for 45% of the Arab aviation sector, which takes into consideration the number of passengers and aircraft capacity, and the addition of up to five aircraft each month to the UAE’s four carriers. He said the UAE registered a total of 6,438 drones this year, with each recorded on the GCAA’s unified e-platform. (AB 31.12)

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5.7 Dubai Approves 2019 Budget with Higher Expo 2020 Infrastructure Expenditures

Dubai Government has approved a budget for 2019 foreseeing expenditure of $15.5 billion (AED56.8b), a marginal increase on last year, with infrastructure investment for the upcoming Expo 2020 again a focus for the emirate. Last year’s budget was the largest in the history of the emirate – a 19% increase from 2017 – as it increased spending on Expo 2020 Dubai infrastructure. This is expected to be scaled up even further this year with AED9.2b allocated from this year’s budget, which is almost double last year’s amount. Dubai expects to generate $13.8b (AED 51b) in public revenues, an increase of 1.2% over the fiscal year 2018.

Non-tax revenues (fees and other) account for 64% of total expected revenue. Tax revenues account for 25%, while revenues from government investment represent 3%. The budget was approved by Sheikh Mohammed, Ruler of Dubai. (AB 01.01)

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5.8 Oman Approves Increased Budget Based on $58 Per Barrel of Oil

Oman’s budget deficit for the coming year is estimated to be $7.2b (OMR2.8b) with 86% of the shortfall to be financed through external and domestic borrowing. Oman’s government approved a 2019 budget of $33.5 billion (OMR12.9b), $1b (OMR400m) more than its 2018 projected figure. The sultanate’s budget was based on an oil price assumption of $58 per barrel, with estimated total revenues of $26b (OMR10.1b).

The budget deficit for the coming year is estimated to be $7.2b (OMR2.8b) with 86% of the shortfall to be financed through external and domestic borrowing. The remainder of the deficit will be financed through the withdrawal of reserves. (AB 01.01)

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5.9 Oman Bans Expats in Specific Private Sector Education Jobs

Oman’s National Centre for Statistics and Information said of the 2,041,190 workers in the private sector, 250,717 are Omanis. As a result, Oman has issued a ban on expats holding certain positions in private higher education institutions and private training institutions. The new decree, issued by the Minister of Manpower Al Bakri, has banned the appointment of non-Omanis as director of admissions and registration department, director of student affairs, director of quality assurance and director of the career guidance department. While those expats currently employed in these positions will continue until the end of their contracts, the ministry said those contracts will not be renewed. The ministry’s data said that the Omanisation rate in technical colleges at the dean’s position is 100%, administrative staff is at 98%, technicians is 57% and academic cadres stood at 20%, which the ministry seeks to increase by hiring more lecturers. (AB 31.12)

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5.10 King Salman Announces Plans to Establish Saudi Space Agency

As part of a series of royal decrees to reshape the government, Saudi Arabian King Salman announced Prince Sultan bin Salman bin Abdulaziz Al Saud as chairman of the board of directors of the Saudi Space Agency at the rank of minister. Prince Salman was the first Arab and Muslim to travel into space in 1985, helping to deploy a satellite for the Arab Satellite Communications Organisation with NASA. The announcement comes just weeks after two Saudi-designed satellites were launched into space from China.

The satellites, which were developed by the King Abdulaziz City for Science and Technology, will be used to provide high-resolution images of the planet’s surface from low earth orbits, help with urban planning, monitor movements and changes on the earth’s surface, and provide government agencies with high-resolution images. Known as Sat 5a and Saudi Sat 5b, the satellites were launched from Jiuquan Satellite Launch Centre. The launch of the two new satellites comes as part of the Kingdom Vision 2030 aiming to localize strategic technologies, maximize local content and empower the Saudi youths gain knowledge of advanced technologies in the development and manufacture of satellites. (AB 28.12)

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5.11 Saudi Arabia Reports an 18% Drop in Expat Remittances

Expat remittances fell by 18% in November, according to Saudi Arabian Monetary Authority (SAMA). The banking authority said $2.6 billion was transferred by expats in November, compared to $3.2b in the same month last year. SAMA said remittances by Saudis also dropped by 39.5% – $1.2b in November, compared to $2.1b in 2017. The value of retail (point of sale) transactions in the kingdom reached a record $56b (SAR210b) for the first 11 months of this year, up from $48b (SAR180b) in 2017. (AB 31.12)

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►►North Africa

5.12 Libya Falls in Ease of Doing Business Index

Libya has been ranked 186th out of 190 countries in the World Bank‘s recent Doing Business 2019 report, down from 185th place the previous year. Top of the list were New Zealand, Singapore and Denmark, with last place going to Somalia, just behind Eritrea and Venezuela. Iran ranked 128th, with Iraq 171st.

Doing Business measures regulations affecting 11 areas of the life of a business. Ten of these areas are included in this year’s ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures labor market regulation, which is not included in this year’s ranking. (WB 06.01)

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5.13 Forbes Says Morocco Ranks 62nd Best Country for Business for 2019

Forbes has ranked Morocco as the 62nd “Best Country for Business” for 2019. The magazine said that Morocco earned this place due to its “proximity to Europe and relatively low labor costs” and that it is working “towards building a diverse, open market-oriented economy.” The country’s key business sectors include agriculture, tourism, aerospace, automotive, and phosphates. Forbes said Morocco has increased investment in its port, transportation, and industrial infrastructure to position itself as a center and broker for business throughout Africa.

Forbes also noted King Mohammed VI’s leadership in business, saying that since taking the throne in 1999, “King Mohammed VI has presided over a stable economy marked by steady growth, low inflation, and gradually falling unemployment.” The magazine, however, acknowledged that “poor harvests and economic difficulties in Europe contributed to an economic slowdown.” Morocco’s ranking dropped from 55th in 2017 out of 153 countries, ranking in the top 36%.

The magazine also noted Morocco’s Free Trade Agreement with the US and its Advanced Status agreement with the EU as boosting Moroccan exports. Morocco also seeks to expand its renewable energy capacity with a goal of making renewable more than 50% of installed electricity generation capacity by 2030. The UK topped Forbes list for 2019 before Sweden, Hong Kong, the Netherlands, New Zealand, Canada, and Denmark. Regionally, Tunisia ranked 82nd and Algeria 114th. (MWN 04.01)

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5.14 Morocco Received Over MAD 30 Billion in Foreign Funds in 2017

Morocco received MAD 30.4 billion in foreign funds in 2017, up 35.7% compared to 2016, according to the Treasury and External Finance Department (DTFE). The rise in foreign loans is explained by the budget increase allocated for reform programs, amounting to MAD 20.7 billion in 2017 compared to only MAD 6.6 billion in the previous year. The external funding that Morocco received included loans of MAD 20.89 billion, concessional loans of MAD 7.07 billion, and grants of MAD 2.44 billion.

The government allocated 22% of the funds for the financial sector, 19% for budget support, 15% for agriculture, 14% for social services and 13% for transport. Morocco’s public external debt rose to nearly MAD 332.35 billion in 2017, compared to MAD 312.46 billion in 2016, according to DTFE. At the end of 2017, Morocco had MAD 900 billion in public debt and MAD 149 billion in debt service.

The French Development Agency (AFD) announced last month that Morocco receives the bulk of the agency’s funding in Africa, with €2.9 billion in loans as of October 2018. In 2017, AFD provided Morocco with €431 million in loans for project funding. The most recent AFD loan to Morocco amounted to €50 million to extend and improve potable water in the country’s northern provinces. Morocco plans to issue a new bond in 2019 of around €1 billion. (MWN 04.01)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Turkey’s Exports Hit All-Time High With $168 Billion in 2018

Turkey’s exports hit an all-time high with $168.1 billion last year, the country’s trade minister said on 4 January. Minister Pekcan stated that exports in 2018 climbed 7.1% year-on-year, compared with nearly $157 billion in the previous year. In 2018, imports fell 4.6% on a yearly basis to $223.1 billion. Turkey’s exports-to-imports coverage ratio reached 75.3% last year, up 8.2%age points from 2017. According to the preliminary data, Turkey’s foreign trade balance posted a deficit of $55 billion last year, marking a significant improvement compared with $76.8 billion in 2017. The final figures will be announced by the country’s statistical authority on 31 January. (HDN 04.01)

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6.2 Turkey Was Russian Tourists’ Leading Destination in 2018

Turkey was the most popular foreign destination for Russian tourists in 2018, with visitor numbers rising 25%, said the Russian Association of Tour Operators on 26 December. The overall Russian tourist flow grew 8% in 2018 compared to the previous year. This growth was ensured thanks to high demand for tours to several countries, including Turkey. Other popular destinations for Russian tourists include Germany, Italy, Spain, Greece, the UAE, Tunisia and France. Visa-free travel and short-terms flights are among the most important factors when Russia tourists choose their destination. (AA 27.12)

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6.3 Cyprus’ Registered Unemployed Falls by 16.7% to Under 30,000

The number of registered unemployed dropped by 5,971 in December 2018 compared to a year ago, official data indicates. In December, the jobless number fell 16.7% and was reduced to 29,800 from 35,771 the year before. Based on the seasonally adjusted data that show the trend of unemployment, the number of registered unemployed for December 2018 decreased to 23,929 from 24,589 in the previous month. Compared to a year ago, the biggest drops in unemployment were observed in the sectors of trade (a decrease of 1,193 unemployed), public administration (-1,137), accommodation and food service activities (-794), manufacturing (-607), construction (-529), education (-189) and for newcomers to the job market (-1,521). (CyStat -4.01)

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6.4 Cyprus’ Tourism Revenue Jumps 6% in October

Revenue from Cyprus tourism surged 6% in October reaching €293.8 million from €277.1 million in the same month of 2017, it is the highest percentage increase since March. For the 10 months to October 2018 revenue from tourism is estimated at €2.56 billion compared to €2.49 billion in the same period of 2017, recording an increase of 2.7%. The expenditure per person for October 2018 during their stay reached €677.60 compared to €681.05 in the corresponding month of the previous year, recording a decrease of 0.5%. Expenditure per person/per day for October 2018 recorded an increase of 4% (from €73.23 to €76.13).

A decrease of 4.3% was recorded in the average length of stay, from 9.3 days in October 2017 to 8.9 days in October 2018. Spending per person for the 10-month period January – October 2018 reached €697.54 from €731.63 in the same period of 2017, recording a decrease of 4.7%. Expenditure per person/per day for January – October 2018 also fell 1.5% from €77.01 to €75.82. The most frugal visitors in October were the Greeks spending an average of €43.80 a day while the most extravagant were the Belgians spending a whopping €136.34 per-day. A record number of 3.65 million tourists enjoyed a Cyprus holiday in 2017, spending an unprecedented €2.6 billion. (Cystat 07.01)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 As 2019 Begins, Israel’s Population Stands at 9 Million

The population of Israel stood at nearly 9 million people as the country began 2019. According to the Central Bureau of Statistics, 74.3% of the population is Jewish, 20.9% is Arab and another 4.5% are residents who immigrated to Israel under the Law of Return despite not being recognized as Jews. In 2018 the population grew by 2% and in 2025, it is expected to hit the 11 million mark. A record-breaking 185,000 babies were born in 2018 – 74.4% were Jewish, 22.8% were Arab and 2.8% were others. Also contributing the growth of the population was Jewish immigration, with some 28,000 people making their new homes in Israel. Their main countries of origin: Russia (31.5%), Ukraine (19.6%), France (8%) and the United States (7.9%). (CBS 01.01)

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7.2 Immigration to Israel Increases by 5% in 2018

Jewish immigration to Israel rose by 5% in 2018, compared with 2017, the Jewish Agency reported. Some 29,600 immigrants arrived in Israel in 2018, up from 28,220 in 2017. The main contributors to the rise was a 45% increase in immigration from Russia with 10,500 immigrants coming to Israel in 2018. Some 6,500 immigrants arrived from Ukraine this year, down 9% from 2017. There were 3,550 immigrants to Israel from North America, a similar number to last year. Another 2,600 immigrants arrived from France, down 25% from 2017, 660 immigrants from Brazil, down 4% and just over 500 immigrants from the UK, down 4%. There were 330 immigrants from Argentina, up 17% and 320 immigrants from South Africa, down 2%. (Various 30.12)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Teva Announces FDA Approval of Only Digital Inhaler with Built-In Sensors – ProAir Digihaler

Teva Pharmaceutical Industries announced that the U.S. FDA has approved ProAir Digihaler (albuterol sulfate 117 mcg) inhalation powder, the first and only digital inhaler with built-in sensors which connects to a companion mobile application and provides inhaler use information to people with asthma and COPD. ProAir Digihaler is indicated for the treatment or prevention of bronchospasm in patients aged four years and older with reversible obstructive airway disease, and for prevention of exercise-induced bronchospasm (EIB) in patients aged four years and older.

ProAir Digihaler contains built-in sensors that detect when the inhaler is used and measure inspiratory flow. This inhaler-use data is then sent to the companion mobile app using Bluetooth Wireless Technology so patients can review their data over time, and if desired, share it with their healthcare professionals. The approval of ProAir Digihaler is based on the review of a supplemental new drug application (sNDA) submitted by Teva to the FDA. ProAir Digihaler combines a breath-activated, multi-dose dry powder inhaler with albuterol, the most widely used asthma rescue medication, with a built-in electronic module and a companion mobile app.

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8.2 RenalSense Pilot Study on ICU Patient Monitoring at Pittsburgh’s UPMC

RenalSense is conducting a pilot study with its Clarity RMS critical care monitoring system at the University of Pittsburgh Medical Center (UPMC). The objective of the study is to assess the contribution of the Clarity RMS system towards improving the nursing workflow in the intensive care unit (ICU). The first part of the two-stage study launched in July was completed in 200 patients. In the second stage, data will be collected and analyzed from an additional 2000 patients.

Jerusalem’s RenalSense is a privately owned medical device company dedicated to real-time renal diagnostics. The company’s first product, Clarity RMS, provides continuous, automatic monitoring of urine flow, enabling better patient care and ICU economics. RenalSense’s next generation products will provide additional real-time parameters and expanded diagnostic capabilities, to further improve the practice of ICU and critical care management. (RenalSense 25.12)

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8.3 Venus Medtech Completes Merger with Keystone Heart

Venus Medtech (Hangzhou), the preeminent Chinese transcatheter heart valve company, announced it has closed its Merger with Keystone Heart, a privately-held medical device company and makers of TriGUARD 3. The Merger provides Venus Medtech with TriGUARD 3, the first Cerebral Embolic Protection Device designed to provide complete coverage to all brain regions for patients undergoing cardiac procedures, as well as an established clinical and commercial organization in both the US and Europe.

Keystone Heart is focused on protecting the brain from embolic debris to reduce the risk of brain infarcts during TAVR, surgical valve replacement, atrial fibrillation ablation and other structural heart procedures. The company is currently enrolling patients in the REFLECT trial in the US to evaluate TriGUARD 3, anticipating enrollment completion in the early part of Q1/19 and FDA approval in Q3/19. CE mark approval for Europe is anticipated by the end of Q1/19.

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8.4 Syqe Medical Raises $50 Million

Syqe Medical has raised $50 million, the largest financing round ever by an Israeli cannabis company. The Shavit Capital fund, which usually invests in companies planning an offering on a foreign stock exchange, led the round, indicating where Syqe is probably headed in the coming years. Also participating in the round were a pharma industry investor and the PRM Holdings fund, the investment arm of therapeutic plants company Martin Bauer Group. PRM’s investment is consistent with Syqe’s strategy of developing its product for additional drugs based on plants and administered by inhaler, in addition to cannabis.

Syqe has raised $83 million to date, including the current round. Previous funding was mainly through the OurCrowd crowdfunding platform and from private investors Barry Shaked and Brian Cooper.

Syqe’s product is an inhaler designed to vaporize specific dosages of medical cannabis and make it possible to inhale them with very accurate control of a fixed dosage. The product includes the option of changing the dosage according to the patient and changing the dosage remotely by the attendant physician. Teva Israel markets the product at hospitals in Israel, as of now in a pilot program. Teva is interested in smart inhalers for conventional drugs.

Tel Aviv’s Syqe Medical aspires to transform cannabis and other botanicals into mainstream medical drugs. Their vision is to decentralize drug development and streamline its clinical testing in a 21st century fashion. To achieve these goals Syqe has been implementing cutting-edge technologies for over 6 years and employs a multi-disciplinary team of electronic engineers, mechanical engineers, industrial designers, chemists, biologists, physicians and pharmacologists. (Globes 31.12)

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8.5 Israeli Researchers Raise $1 Million for Eye Drops That Could Replace Glasses

Researchers from Shaare Zedek Medical Center and Bar Ilan University recently raised a $1 million investment to fund research and development for eye drops they say can correct cornea-related vision problems, thereby potentially making eyeglasses obsolete. The development of the eye drops, dubbed “nanodrops,” was first announced in March 2018.

Made up of a synthetic nanoparticle solution, the eye drops have shown great potential to solve cornea-related vision issues. In the team’s first round of animal trials in March, the nanodrops were applied to pigs’ corneas and successfully corrected two kinds of refractive errors: myopia (near-sightedness) and presbyopia (far-sightedness typically caused by aging). The team plans to further test the drops on live rabbits this year, before moving on to human trials in 2020. During these trials, the researchers will test the drops on subjects with “any type of refractive error that enter into the scope of the nanodrops.” They will also address remaining issues regarding the functionality of the drops.

The researchers are currently working with their team of investors to build a biotech startup around the nanodrops. They plan to promote their invention through this company with the expectation of placing the product on the market by the summer of 2020. In addition to the nanodrops themselves, the researchers are developing a small, smartphone-compatible laser device that will allow patients to easily apply the drops at home using a mobile application. (NoCamels 01.01)

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8.6 CytoReason Signs Collaboration Agreement with Pfizer for Drug Discovery

CytoReason has entered into a collaboration agreement with Pfizer that will leverage CytoReason’s cell-centered models of the immune system. CytoReason will receive from Pfizer payments potentially equaling up to low double digit millions of US$ for technology access fees, research support and certain success-based payments. CytoReason’s proprietary platform helps rebuild lost cellular information from gene expression data and associates genes to specific cells. This information is then integrated with additional omics and literature data to create a cell-based model of the trial-specific immune response. Integration with the CytoReason disease model empowers the study analytics and allows the model to learn and improve, leading to robust target discovery, drug response biomarkers and indication selection.

Based on more than 10 years of research, Tel Aviv’s CytoReason’s technology uses a proprietary data and machine learning model to reconstruct cellular information from bulk tissue, to train an immune-specific NLP engine, and to integrate multi-omics data. The company’s platform organizes and standardizes collaborators’ data (gene, protein, cell, and microbiome) and integrates it into CytoReason’s proprietary disease model to generate mechanistic understanding of the immune system, leading to novel insights. (CytoReason 07.01)

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8.7 Greater Cannabis Company Distribution Agreement With iCAN

Baltimore’s the Greater Cannabis Company, a biopharmaceutical company focused on development and commercialization of innovative delivery systems for the Cannabis market, entered into a letter of intent with iCAN Cannabis to expand distribution of its eluting patch platform into key global markets. The eluting patch platform is an innovative delivery system, which uses a patented muco-adhesive and multilayered orally dissolving thin film to deliver a precise dose of cannabinoids into the body through the buccal mucosa. Clinical studies funded in part by the National Institutes of Health (NIH) have shown the delivery system’s capability in achieving higher bioavailability and desired results in the body using lower, and controlled, dosing when compared to other routes of administration.

The agreement with iCAN will include commercial ready formulations to meet medical and recreational market demands. Distribution and marketing rights for iCAN will include Israel, Australia, South Africa, Netherlands, South Africa, Mexico, Colombia, Panama, Germany, Austria, Switzerland, Malta, Macedonia and Portuguese territories.

iCAN: Israel-Cannabis is a leading Israeli developer of cannabis-based formulations, clinical trials and cannabis testing. iCAN is committed to accelerate Israel’s Canna-Technology industry, capitalizing on Israeli innovation and a leading cannabis regulatory environment to bring premier products to market. iCAN is powered by CannaTech, the premier international cannabis summit held annually in Tel Aviv, and around the world including London, Sydney, Hong Kong and now Panama in 2019. (iCAN 07.01)

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8.8 EarlySense Completes $39 Million Financing Round to Accelerate Global Expansion

EarlySense has completed a $39 million financing round, with the majority of the funding coming from Hill-Rom, a global provider of medical technologies and the world’s leading hospital bed manufacturer, and Wells Fargo Strategic Capital, the venture capital and growth equity investment arm of Wells Fargo & Company. Other new investors include BlueRed Capital, Israel Innovation Fund, Argos Capital and Hotung Capital. Existing investors, including Pitango Venture Capital and JK&B Venture Capital, participated as well.

Hill-Rom’s investment comes on the heels of the hospital bed manufacturer’s launch of the Centrella Smart+ Bed, the world’s first hospital bed with integrated continuous contact-free heart rate and respiratory rate sensing and analytics technology.

EarlySense’s FDA-cleared and CE-approved solutions are used by healthcare facilities around the world. EarlySense technology leverages Big Data and advanced machine learning algorithms to generate highly accurate health information, empowering clinicians to achieve early detection of adverse events and improved patient outcomes. The combination of accurate identification and prediction enables proactive intervention by health teams and enhanced patient safety. The company’s contact-free, under-the-mattress sensing platform improves the patient experience, and provides 24/7 (100 times per minute) monitoring for patients who were previously monitored manually only every few hours.

Ramat Gan’s EarlySense is the global leader in contact-free, continuous monitoring solutions for the healthcare continuum. Used worldwide in hospitals, post-acute care facilities and homes, EarlySense assists clinicians in early detection of patient deterioration. The solution has been proven to help prevent adverse events, including code blue events which are a result of cardiac or respiratory arrest, preventable ICU transfers, patient falls, pressure ulcers, and hospital readmissions. EarlySense’s FDA-cleared solutions leverage Artificial Intelligence (AI) and big data analytics to provide actionable health insights and improve clinical outcomes. (EarlySense 07.01)

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8.9 Biond Biologics Announces $17 Million Series B Financing

Biond Biologics announced the closing of a $17 million Series B financing. Biond was founded in 2016 by the former scientific team of cCam Biotherapeutics, an immuno-oncology company which was fully acquired by Merck in July 2015. The former cCAM Biotherapeutics team was joined by additional veterans of the Israeli biotech industry, with the aim to build a strong, sustainable and innovative science-driven biotechnology company. The company’s vision and strategy are to bring innovative drugs to patients based on synergistic long-term collaborations with leading global companies in the immunotherapy field.

Biond intends to use the proceeds to move its lead drug candidate, BION-202, into clinical trials and to advance the preclinical development of BION-206 and its proprietary antibody cell-internalization technology. The financing and due diligence were led by Israel Biotech Fund and Harel Insurance & Finance Group, with participation of Celgene Corporation, the Japanese-Israeli fund, SBI JI Innovation Fund and existing investors.

Misgav’s Biond Biologics is a drug discovery and development company focused on the field of immunotherapy, combining excellent science and out-of-the-box innovative thinking. Biond aims to translate high quality science into therapies for diseases with unmet medical needs by developing innovative drugs and establishing collaborations with leading pharma companies. Biond’s in-house pipeline is based on internal research of newly discovered immune-checkpoints and immune-evasion mechanisms. Biond’s leading pre-clinical development programs include BION-202, a novel macrophage activator, and BION-206, a novel agent developed for overcoming a natural immune suppression mechanism, recently discovered by Biond’s scientists. (Biond Biologics 08.01)

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8.10 Orri Jaffa Mandarins Heading to North America

The Plant Production and Marketing Board of Israel predicts that 2019 will see significant increase in exports of the Orri Jaffa mandarin to the US and Canada. The organization set goals for expanding export of its leading, easy-to-peel mandarin in response to the increased demand for high-quality, easy-peelers. The Jaffa Orri is a mandarin developed by scientists at the Israeli Volcani Research Center. This easy-to-peel mandarin retains an excellent, fresh, sweet flavor with a fleshy texture, and mouthful juiciness, while bearing virtually no seeds. It also carries a particularly long shelf life and appears later in the season compared to other easy peelers – from January into May.

Over the past five seasons, citrus exports from Israel to North America have increased from 3,000 tons to 9,000 tons last season, of which about 5,300 tons are easy-to-peel mandarins. This season, export of Orri Jaffa mandarin alone is expected to reach 9,000 tons, constituting a potential 70% growth.

Orri Jaffa mandarin currently is exported to 45 countries worldwide. Most of the yield is exported to Europe (78%). The most prominent outlets in Europe of the popular fruit are: France (39%), the Netherlands, Scandinavia and Russia (7% each). About 18% of the fruit is shipped to North America, and 4% to Asia Pacific.

The Plant Production and Marketing Board of Israel was established in 2004 to assist farmers in advancing their agricultural missions. The board promotes the Jaffa brand and other registered citrus industry brands. It helps kick-start pioneering R&D projects, executes centralized crop protection initiatives, assists organizations in meeting phytosanitary standards and insures growers against weather-related losses. (The Plant Production and Marketing Board 08.01)

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8.11 Cann2Go Software Optimizes Last Mile Delivery of Medical Cannabis

As the number of medicinal cannabis users in Israel surge and demand for at-home delivery grows, Cann2Go has developed a SaaS platform, utilizing a sophisticated set of algorithms that enables the cost-effective and secure transport of medicine to the patient. Cann2Go allows cannabis companies to easily plan and manage all their Cannabis distribution and last-mile deliveries in an efficient and cost-effective manner with full visibility to the end customer. Cann2Go’s powerful distribution & delivery technology provides orders management, optimized routing, real-time secured tracking and end-customer experience. Instead of focusing on routing and prioritization algorithms, Cann2Go clients can focus on bringing their clients the best service with the best user experience.

Cann2Go is a SaaS solution that allows its users to create dynamic workflows and automate the management of the whole Cannabis retailers’ distribution process. Their set of elastic algorithms and smart tools allows its user to adjust the platform to his organization’s unique workflows and its end-consumers’ high expectations.

iCAN is building the global cannabis ecosystem. iCAN identifies and accelerates innovative medical cannabis technologies and creates synergies and cooperation across the industry. iCAN uses its global network and reach to position Israel as the world’s leading medical cannabis tech hub. (iCAN: Israel Cannabis 08.01)

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8.12 Anchiano Therapeutics Files F-1 Registration Statement for U.S. IPO

Anchiano Therapeutics has filed a registration statement on Form F-1 with the Securities and Exchange Commission for the proposed initial public offering in the United States of American Depositary Shares (ADS) representing ordinary shares of Anchiano Therapeutics. The number and value of ADSs to be offered have not yet been determined. The proposed U.S. IPO is expected to commence as market conditions permit and is subject to the SEC’s review and declaration of effectiveness of the filing.

Anchiano Therapeutics, located in Cambridge, MA, and in Jerusalem, is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel therapies to treat cancer in areas of unmet need. Their initial program is the genetic therapy for early stage bladder cancer. Inodiftagene vixteplasmid (formerly BC-819), their most advanced investigational agent, is under development as a treatment for non-muscle-invasive bladder cancer (NMIBC). Inodiftagene vixteplasmid has been tested in three clinical trials to date, and two registrational trials are set to be initiated in 2017 and will begin enrolling patients in the first half of 2018. (Anchiano Therapeutics 07.01)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 SafeRide Technologies Launches vXRay Advanced AI Technology Vehicles Security

SafeRide Technologies announced the launch of vXRay, a behavioral profiling and anomaly detection technology for connected vehicles’ Security Operation Centers (SOC). vXRay can be seamlessly integrated into customers’ connected vehicles’ SOC independently of vehicle architecture or ECU sourcing. It can help customers uncover zero-day vulnerabilities, provide early detection of vehicle malfunctions and flag misuse and abuse problems.

vXRay uses advanced, unsupervised machine learning paradigms in a fully autonomous process to establish the normal behavior of the vehicle without dependencies or previous knowledge of ECU properties and protocols. Once the behavioral baseline is established, the machine learning models can accurately detect, categorize and flag any abnormal behavior and report it to the connected vehicles’ SOC for further analysis. SafeRide’s vXRay technology was proven to effectively detect all cyberattacks and vehicle malfunctions in multiple vehicle models in customer testing, and is being implemented by several major automotive vendors as part of their 2019 security strategies.

Tel Aviv’s SafeRide Technologies is the provider of vSentry, the industry-leading multi-layer cybersecurity solution for connected and autonomous vehicles that combines state-of-the-art deterministic security solution with a groundbreaking AI profiling and anomaly detection technology to provide future-proof security. SafeRide provides OEMs, fleet operators and automotive suppliers early detection and prevention of cyberattacks, and helps to avoid financial damage, prevent reputation loss, and save lives. (SafeRide Technologies 03.01)

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9.2 Upstream Security & Arilou Partner to Build ‘End to End’ Security for Smart Mobility

Upstream Security announced a technology and go-to-market partnership with Arilou. Combined, Upstream Centralized Connected Car Cybersecurity (C4) technology and Arilou Intrusion Detection and Prevention (IDPS) technology will create a fully integrated cybersecurity offering for vehicle OEMs. Upstream Security and Arilou are engaged in joint go-to-market initiatives including joint marketing and demonstration of their integrated solution.

Today’s smart mobility providers face two unique challenges: first, they must secure the internal components and communication within the vehicle and, secondly, they must ensure the security of multiple vehicles, their connectivity and suite of mobility services using them. Now, through this pioneering partnership, Upstream Security and Arilou simultaneously resolve these two critical challenges – establishing a true “defense in depth” architecture for connected vehicles.

Arilou’s in-vehicle network cyber protection expertise and Upstream’s expertise in cloud-based security creates a best-in-class, next generation security framework for automotive manufacturers scrambling to introduce connectivity-based functions to consumer vehicles. Arilou brings much needed innovation to agent based vehicle security market through its IDPS security approach. Upstream Security, in turn, offers OEMs and mobility providers cloud-based agent-less access to connected car cybersecurity that can be implemented immediately, even for vehicles already on the road. In combination, the solution establishes an end-to-end security framework combining insights from both inside and outside the vehicles, resulting in unmatched resiliency and anomaly detection capabilities.

Herzliya’s Upstream improves the safety and security of connected vehicles and services built around them by monitoring business critical events and identifying cyber threats in real-time via a centralized cloud-based analysis of multiple automotive data feeds, including telematics and mobile applications. The solution is 100% agent-less and does not require any hardware or software inside the vehicles. Founded in 2017, Upstream Security is backed by Charles River Ventures, Glilot Capital Partners and Maniv Mobility.

Arilou Technologies, part of NNG Group, is a pioneer in the field of automotive cyber security. Established in 2012 in Tel Aviv, Israel, Arilou researches and develops end-to-end, multi-layered security solutions dedicated to the automotive environment. Independently tested by leading research institutes, the US Department of Transportation and major OEMs, Arilou’s ground-breaking technology, provides 100% accuracy in cyber-attack detection and prevention, with zero false positives and zero latency, placing Arilou’s solutions at the vanguard of real-time prevention. In 2016 Arilou was acquired by NNG, a leading automotive software supplier, specializing in hybrid navigation and vehicle user experience. (Upstream Security 03.01)

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9.3 Arbe to Launch the World’s First Ultra-High Resolution Automotive Radar System

Arbe is excited to announce the launch of Phoenix, its automotive 4D imaging radar beta product. This new front-end system, powered by Arbe’s proprietary chipset technology, enables evaluation and development towards production and full commercialization of 4D imaging radar for all levels of vehicle autonomy. Phoenix provides an image 100 times more detailed than other top industry radars, offering superior separation of stationary and moving objects in real time – an industry first. Phoenix proprietary chipset is the first system in the industry to leverage the advanced 22nm RF CMOS process. Additionally, by leveraging the 22nm RF CMOS process, Phoenix dramatically reduces costs while consuming the lowest power per channel in the industry.

Arbe is a recipient of the 2018 Global Technology Innovation Award from Frost & Sullivan. Recognized for its breakthrough full-stack 4D imaging radar system for the automotive environment, along with its future business value in terms of scalability, application diversity, technology licensing and human capital.

Tel Aviv’s Arbe is the world’s first company to demonstrate ultra-high-resolution 4D imaging radar with post processing and SLAM (Simultaneous Localization and Mapping). It is disrupting autonomous driving sensor development by bridging the gap between radar and optics with its proprietary imaging radar solution that provides optic sensor resolution with the reliability and maturity of radar technology for all levels of vehicle autonomy. The company was founded in 2015 and raised $23 million in funding to date. (Arbe Robotics 03.01)

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9.4 Mellanox 200 Gigabit HDR InfiniBand to Accelerate a World-Leading Supercomputer at Stuttgart

Mellanox Technologies announced that its 200 Gigabit HDR InfiniBand solutions were selected to accelerate a world-leading supercomputer at the High-Performance Computer Center of the University of Stuttgart (HLRS). The 5000-node supercomputer named “Hawk” will be built in 2019 and provide 24 petaFLOPs of compute performance. By utilizing the InfiniBand fast data throughput and the smart In-Network Computing acceleration engines, HLRS users will be able to achieve the highest HPC and AI application performance, scalability and efficiency. The mission of the HLRS Hawk supercomputer is to advance engineering development and research in the fields of energy, climate, health and more, and if built today, the new system would be the world’s fastest supercomputer for industrial production.

200 Gigabit HDR InfiniBand provides leading performance, scalability, and network robustness advantages. Among them, the Mellanox Scalable Hierarchical Aggregation and Reduction Protocol (SHARP) technology enables the execution of data algorithms on the data as it is being transferred within the network, providing the highest application performance and scalability. The Mellanox SHIELD technology enables self-healing interconnect capabilities to deliver highest network robustness and reliability. The higher HDR InfiniBand switch port count reduces total cost of ownership. These advantages, together with the high data throughput and the extremely low latency, make InfiniBand the preferred interconnect choice for both pre-Exascale and Exascale compute and storage platforms.

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9.5 VAYAVISION VAYADrive 2.0 – Software-Based AV Environmental Perception Engine

VAYAVISION announced the release of VAYADrive 2.0, an AV perception software engine that fuses raw sensor data together with AI tools to create an accurate 3D environmental model of the area around the self-driving vehicle. VAYADrive 2.0 breaks new ground in several categories of AV environmental perception – raw data fusion, object detection, classification, SLAM and movement tracking – providing crucial information about dynamic driving environments, enabling safer and reliable autonomous driving, and optimizing cost-effective sensor technologies.

The VAYADrive 2.0 software solution combines state-of-the-art AI, analytics, and computer vision technologies with computational efficiency to scale up the performance of AV sensors hardware. The software is compatible with a wide range of cameras, LiDARs, and radars. VAYADrive 2.0 solves a key challenge facing the industry: the detection of ‘unexpected’ objects. Roads are full of ‘unexpected’ objects that are absent from training data sets, even when those sets are captured while travelling millions of kilometers. Thus, systems that are mainly based on deep neural networks fail to detect the ‘unexpected’.

Or Yehuda’s VayaVision is a leading environmental perception based on raw data fusion software solution provider for autonomous vehicles. Compatible with all autonomous sensor systems, VAYAVISION’s patented autonomous driving technology fuses raw data from cameras, LiDARs, and radars to provide a full environmental model of the driving scenario, including high reliability object detection, classification, and tracking, traffic and road sign recognition, and free space analysis. Working with leading OEMs and Tier 1’s globally, VAYAVISION is paving the way for comprehensive autonomous vehicle environmental perception. (VAYAVISION 07.01)

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9.6 Cortica to Collaborate with Renesas to Deliver AI Capability in System-on-Chip Platform

Cortica announced a groundbreaking milestone: Cortica’s ‘Autonomous AI’ Solution for enabling smarter, safer, and better performing autonomous cars will be embedded onto the new R-Car V3H system-on chip solution, available from Renesas, the world’s leading manufacturer of processors for the automobile industry. Cortica is the developer of next generation ‘Autonomous AI’ that utilizes an ‘unsupervised learning’ methodology to mimic the way humans experience and incorporate the world around them.

Cortica will immediately begin deploying its advanced platform product in collaboration with Renesas, utilizing Cortica’s state-of-the-art computer vision system for front-facing cameras. Leveraging the low compute nature of the Cortica technology, Cortica offers the most accurate central perception engine for all current and future ADAS functions, available directly on the Renesas R-Car V3H SoC. For the first time, the collaborative effort will introduce a more robust and scalable open-platform perception solution featuring unmatched accuracy and performance rates, faster reaction time, and overall safety upgrades for ADAS. The solution demo by Cortica at CES will demonstrate a new generation of safer, smarter, and more ‘aware’ auto running directly on the Renesas chip with unparalleled execution times.

Founded in Israel in 2007, Tel Aviv’s Cortica has created next-generation Autonomous AI. Highly complex in its methodology yet stunningly simple in premise: the enablement of machines thatus1 think and learn on their own. Cortica’s ‘Autonomous AI’ model is based on an unsupervised learning methodology that recreates the way that humans experience and interact with the world around them so that cars (and all machines) can learn, predict and extrapolate information. Autonomous AI raises the bar on safety and efficiency of autonomous vehicles for the entire automotive industry. (Cortica 08.01)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israeli Startups Raised Over $400 Million in December

According to IVC-ZAG, Israeli startups raised over $400 million in December, according to press releases issued by companies that completed financing rounds. The figure may be more as some companies prefer not to publicize the investments they have received. This sum can be added to the $4.5 billion that Israeli startups raised over the first nine months of 2018, as well as the estimated $1.2 billion raised in October and November. This means that the country’s startups have raised a record $6.1 billion since the start of 2018, easily surpassing last year’s record of $5.24 billion.

Most of the sum in December was raised in large financing rounds led by medical cannabis smart inhaler company Syqe Medical, which raised $50 million and public transport optimization algorithm company Optibus, which raised $40 million. Conversation intelligence platform Chorus.ai raised $33 million, heart failure treatment company WhiteSwell raised $30 million and cyber security company Avanan and primary care app company K Health each raised $25 million. (Various 01.01)

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10.2 Poverty and Inequality Decline in Israel

The National Insurance Institute (NII) published its report on poverty in Israel in 2017, which stated that the number of children living in poverty declined during the year for the first time in many years, while the incidence of poverty among Haredim (ultra-Orthodox Jews) and Arabs fell. At the same time, poverty worsened among groups not in the labor market, especially senior citizens and the unemployed.

There were 1,780,500 poor people, including 814,800 children, in 466,400 families in 2017. The NII highlighted the fact that the absolute number of children living in poverty fell by 23,700, the first such decrease in many years, although the total number of children in Israel grew by 47,900 during the year. The proportion of middle class people in Israel rose from 47.9% to 53.4%.

The Gini Index of inequality in disposable income was down 1.6% in 2017 and the index of inequality in market income fell 1.3%. The Gini Index of inequality has thus fallen 11% since 2000. The decline in the index of inequality in disposable income was similar, but began only in 2007.

Israel still leads the developed countries in the per capita poverty rate, despite the reduction in the dimensions of poverty and income inequality. The report credits the Netanyahu government policy with a number of substantial achievements. The first is the decline in the number of poor children in Israel, although the poverty line was raised and the population grew. 17.9% of Israelis live below the poverty line (according to disposable income), a slightly higher proportion than in the US, Turkey and Mexico. Israel is in second place with a 23.8% proportion of poor children (Turkey is in first place). It is important to note, however, that the poverty line in Israel, which is linked to the standard of living, rose 4.6%, in tandem with a similar rise in per capita disposable income.

The incidence of poverty fell in 2017 as a result of higher employment rates and wage increases. For the first time since 2013, the incidence of poverty among working people fell, as did the proportion of working families in the poor population. The proportion of households with only one breadwinner dropped significantly in 2017. One possible explanation is the 6.1% increase in the minimum wage between 2016 and 2017, which probably had a positive impact on people with wages slightly higher than the minimum wage.

The incidence of poverty among Arab families fell from 49.2% in 2016 to 47.1% in 2017. The NII attributes this decrease to a 9% drop in the incidence of poverty among Arab families who neither live in East Jerusalem nor are part of the Bedouin population in southern Israel (two areas in which the incidence of poverty rose in 2017). Together with the fall in the incidence of poverty in the Arab sector, the depth of poverty rose 10% and the severity of poverty jumped 22% in this sector.

Among Haredim, the incidence of poverty fell from 45.1% in 2016 to 43.1% in 2017, and the incidence of poverty among children also dropped 3%. 15% of poor families are Haredi, far higher than the proportion of all families who are Haredi.

Unlike most NII allowances, the poverty line in Israel is linked to the standard of living and rises together with it. Gross monthly monetary income per family in Israel reached NIS 20,027 in 2017, 4.4% more than in 2016. Net monthly per capita income rose from NIS 5,223 in 2016 to NIS 5,477 in 2017, a 4.6% increase, and the poverty line rose accordingly. The poverty line is defined as income is at least 50% lower than the median per capita income, adjusted for size of family. (Globes 31.12)

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10.3 Arab Israeli Women’s Employment Up Sharply to 40%

The most prominent trend in the labor market in 2018 was a steep rise in employment among Arab Israeli women, according to a report by written by the Taub Center for Social Policy Studies. The employment rate of Arab Israeli women has risen by 3.8% since the beginning of 2018, following a 2.5% increase in 2017. The employment rate among Arab women is now nearing 40%, two years ahead of the target set for 2020 and getting closer to the employment rate among Haredi (Jewish ultra-Orthodox) men. The report attributes the increase to higher education levels among Arab women, a trend that has continued since the beginning of the decade.

Another point highlighted in the report is that the population group that has derived most of the benefit from the prosperity in the Israeli high-tech sector is non-Haredi Jewish men. Employment figures show that the proportion of people in this group employment in high tech rose from 8% to 15% in the course of a decade, compared with 7% among non-Haredi Jewish women, 3% among Haredi Jewish women and less than 2% among Haredi men and Arab women and men.

The general picture in the labor market is positive. Wages continue their upward path, with an 11% increase since 2014. Growth in productivity continues to lag behind the rise in wages, which will prevent further wage rises in the long term. The Taub Center found a surprising resemblance between wages of Haredim and Arabs, despite differences between the two groups in work hours and other variables.

Employment rates continued to improve in 2018; the downtrend in unemployment rates since 2003 continued into 2018. Employment rates among women have risen dramatically since 1995, greatly narrowing the gap between men and women in this aspect. The employment rate among women has risen from less than 60% in 1995 to 74%. The employment rate has risen slowly among men, regaining the 83% level it reached in the mid-1990s. The most impressive increase in employment rates was among Haredi women – 22% in 15 years. The employment rate among Arab women went up 11% since 2002, especially in the past few years, boosting the numbers of those employed by 50%, concurrently with a strong rise in education in this group. (Globes 31.12)

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10.4 New Car Deliveries in Israel Decline by 5% in 2018

Some 267,490 new vehicles were delivered in 2018, down 5% from 2017, according to the report of the Association of Car Importers based on Ministry of Transport figures. In December 2018, 5,100 new vehicles were delivered, down 12% from December 2017. The top-selling car brand in 2018 was again Korean company Hyundai with 38,423 deliveries, up 4% from 2017. In second place was Kia with 35,663 deliveries, virtually unchanged from 2017. Hyundai and Kio are both part of Hyundai Motors and together they have 27% of Israel’s market in new vehicle sales, and have been the top selling brands for the past four years. In third place in 2018 in terms of new vehicle deliveries in Israel was Toyota with 27,192, down 13% from 2017 and in fourth place was Skoda with 19,928 deliveries, down 8% from 2017. In fifth place was Nissan with 15,626 deliveries, up 9% from 2017, and in sixth place was Suzuki with 13,604 deliveries, down 20% from 2018. In seventh place was Mazda with 13,253 deliveries, up 2% and in eighth place was Mitsubishi with 12,952 deliveries, up 19% from 2018. (Globes 06.01)

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10.5 Record 4.1 Million Tourists Visited Israel in 2018

A record 4,120,800 tourists visited Israel in 2018, up 14% from last year, which was also a record year, and rising by 42% over 2016’s totals, the Ministry of Tourism announced. The Ministry of Tourism estimates that income from tourists last year totaled NIS 22 billion ($5.8 billion). December alone was a busy month for tourism with 325,600 visiting Israel, up 12% from December 2017. The Ministry of Tourism estimates that income from tourists in December totaled NIS 1.7 billion. In December, 288,100 tourists came to Israel by air, 37,400 by land and 26,200 by sea. (MoT 06.01)

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11: IN DEPTH

11.1 ISRAEL: PwC Finds 2018 a Record Year for M&As in Israel

Low-tech industries outperformed high-tech and life sciences industries in the Israeli mergers and acquisitions market in 2018, according to figures compiled by the PwC Israel. The company’s report reviewed mergers and acquisitions by Israeli companies in Israel and worldwide and by foreign companies in Israel in 2018.

PwC said that 2018 had seen a record year for the Israeli economy, with the volume of deals rising 77% to $21.6 billion (before completion of the Mazor Robotics deal), compared with $12.2 billion in 2017 and $16.8 billion in 2016. The report did not include exceptional deals of over $15 billion, and therefore excluded the huge acquisitions of Mobileye by Intel and of Actavis by Teva Pharmaceutical Industries.

The average deal price rose 88% to $267 million in 2018, but the number of deals dropped from 131 in 2017 to 124 in 2018. In addition to the increase in the conventional industries, the life sciences and pharma industry produced deals totaling $1.3 billion, down from $4.7 billion in 2017.

PwC Israel partner, head of advisory services, and transaction services leader Liat Enzel-Aviel says, “It appears that the decline in the number of high-tech deals is due to continued development by companies in the sector and growth possibilities that are postponing the sale of companies. The fall in the figures for pharma deals resulted from a decline in mergers and acquisitions activity by Teva, which was active as a buyer of companies in 2016 and a seller of companies in 2017.

“Large Israeli companies active in conventional markets with established business in global markets aroused great interest this year among large strategic players, who made major acquisitions in Israel. One of the main reasons is the effect of Israel’s image as a nation of innovation, which is spreading from the usual technology sectors into other areas. At the same time, companies sold this year had the potential to become flagship companies in the Israeli economy. The question arises of what this indicates about the economy, and whether there is a glass ceiling preventing these companies from developing into Israeli-owned global leaders.”

Acquisitions by US concerns rose from $3.7 billion to $12.9 billion this year, despite the US tax reform supporting the return home of US money. The number of deals from East Asia, remained unchanged, but the value of the deals declined.

Uncertainty About 2019

PwC believes that factors with conflicting effects are creating uncertainty for 2019. “Volatility in the financial markets and predictions of a slowdown in global growth are likely to have a negative impact on deal prices, if the predictions come true. Macroeconomic factors are liable to cause companies’ value to plummet, which could make acquisitions more attractive. On the other hand, price fluctuations will be so extreme that that market is likely to reach a standstill, due to investors’ desire to reduce their exposure,” Enzel-Aviel says.

At the same time, she detects a change in the mood among local entrepreneurs, who are not pushing for a quick exit. Another factor is the effect of the US tax reform, which is causing signs of a slowdown in activity outside the US. The regulatory aspect is also influential – if an extension for implementing the Promotion of Competition and Reduction of Concentration Law is not granted, it could potentially result in the sale of assets worth billions of dollars. (PwC 26.12)

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11.2 ISRAEL: Bank of Israel Research Department Staff Forecast for January 2019

This article presents the forecast of macroeconomic developments compiled by the Bank of Israel Research Department in January 2019 regarding the main macroeconomic variables – GDP, inflation and the interest rate. According to the staff forecast, Israel’s gross domestic product (GDP) is projected to increase by 3.4% in 2019, slightly lower than the previous forecast, and by 3.5% in 2020. The inflation rate over the next year is expected to be 1.3%, slightly lower than the previous forecast, and 1.8% in 2020. The Bank of Israel interest rate is expected to increase to 0.5% in the third quarter of 2019, and to continue increasing gradually to 1.25% by the end of 2020 (the end of the forecast range).

Forecast

The Global Environment

Our assessments of expected developments in the global economy are based mainly on projections by international institutions (the International Monetary Fund and the OECD) and by foreign investment houses. These institutions’ forecasts for growth and inflation in advanced economies remained virtually unchanged since the previous forecast, while their projections for imports to those economies declined slightly. We assume that growth in advanced economies will be about 2.0% in 2019 and 1.7% in 2020, and that the advanced economies’ imports will increase by 4.0% in 2019 and by 3.7% in 2020. Our assumption is that inflation in the advanced economies will total 2% in each of 2019 and 2020. According to the most recent assessments of investment houses that were published before the forecast was prepared, the US federal funds rate is expected to be about 3% at the end of 2019 and to remain at that level during 2020. The declared interest rate in the Eurozone is expected to be 0.1% at the end of 2019, and 0.5% at the end of 2020. The sharp decline in the price of oil was among the significant changes that took place in the global economic environment since the publication of the previous forecast. The average price of Brent crude oil was about $68 per barrel in the fourth quarter of 2018, compared with $76 in the third quarter.

Real Activity in Israel

GDP is expected to grow by 3.4% in 2019 and by 3.5% in 2020

National Accounts data indicate that the growth rate in 2018 was lower than the assessment in the previous forecast. Our assessment therefore is that it is more likely that the accelerated growth of recent years has been maximized, inter alia due to the supply constraints in the labor market. Accordingly, our assessment is that in 2019 and 2020, the economy will grow at a rate close to its long-term growth rate (about 3%), and that the expected activity of a number of large companies in those years will have an added significant effect. The forecast for 2019 is slightly lower than the previous forecast, due to the slowdown in activity reflected in the National Accounts data. Regarding the uses, private consumption is expected to increase in 2019 at a slower pace than our previous assessment. Fixed capital formation is expected to grow by 3% in 2019, but is expected to contract by 2% in 2020 as a result of the culmination of several large investments in the economy. The maturation of these investments is expected to contribute to exports, which are therefore expected to grow slightly more than world trade in 2019 and in 2020.

Inflation and interest rate estimates

According to the staff forecast, the inflation rate in the four quarters ending in the fourth quarter of 2019 will be 1.3%. Inflation at the end of 2020 will be 1.8%. The Consumer Price Index readings published since the publication of the previous forecast indicated a higher-than expected inflation rate, reinforcing the assessment that the moderation of inflation in the third quarter of 2018 was temporary. A number of factors are expected to support inflation in 2019: wage increases, the recent depreciation of the shekel in terms of the nominal effective exchange rate, and increases in the prices of electricity, water, and vehicle insurance. However, oil prices are expected to moderate inflation in the coming months, since they declined sharply during the fourth quarter of 2018. These combined considerations led us to lower the forecast for 2019 slightly. For 2020, our assessment is that the tight labor market will continue to support wage increases and consequently the convergence of inflation to the midpoint of the target range. However, the increase in inflation is expected to remain gradual, against the background of processes that have apparently not yet been fully maximized, including the continued growth of competition, government measures to lower the cost of living, and the development of e-commerce.

According to the Research Department’s assessment, the Bank of Israel interest rate is expected to increase to 0.5% in the third quarter of 2019, similar to the forecast from October, and to 0.75% in the first quarter of 2020. Overall, the interest rate is expected to rise gradually and to support the convergence of inflation to the midpoint of the target range as well as GDP growth in accordance with the long-term pace.

Main risks to the Forecast

Several factors may lead to economic developments that differ from those in the forecast. Regarding the global environment, the International Monetary Fund and the OECD noted in the recent publications that the downward risks to growth and world trade have increased. The main risks include the possibility that the trade war between the US and China may worsen, uncertainty regarding an agreement concerning the UK leaving the European Union, and questions regarding the abilities of the US and some European countries to carry deficits such as those upon which the forecast is based. Uncertainty in the global environment has been reflected in, among other things, the recent volatility in the financial markets, which in and of itself may lead, under certain circumstances, to a slowdown in the real economy globally and in Israel.

In the domestic environment, there is uncertainty regarding the extent to which the expected increase in wages and in the prices of some inputs (electricity and water) will be passed on to product prices, inter alia due to animated public discussion and the government’s declaration that it will act to reduce price increases.

There is also a downward risk to the forecast due to uncertainty regarding the causes of the decline in growth. The forecast is based on the assessment that the slowdown in the growth rate is mainly due to the economy having maximized its surplus production capacity and the increased effect of constraints on the supply side. However, the slowdown in growth may reflect some slowdown in the growth rate of domestic demand. In such a situation, the slowdown in growth may be more significant than just to the long-term rate, and domestic inflation may increase more moderately. (BoI 07.01)

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11.3 LEBANON: US Doubles Down on Military Aid to Lebanon

Jack Detsch posted on 3 January in Al-Monitor that the Trump administration is providing Lebanon’s army with more than $100 million in upgrades to tanks and attack helicopters.

The Donald Trump administration is providing the Lebanese army with more than $100 million in upgrades to tanks and attack helicopters in the latest US effort to stem the influence of Iran-backed Hezbollah.

The package includes training for pilots and maintenance crew on MD-530G light scout attack helicopters provided by the Pentagon last year as well as laser-guided rockets, according to Defense Department records obtained under the Freedom of Information Act by the Security Assistance Monitor. Lebanon will receive the equipment through the Defense Department’s Section 333 program, which helps US partners build their military inventories to fight terrorism and handle border security.

The Pentagon has indicated that the upgrades have long been in the works to help the Lebanese army stem the influence of Iran and Hezbollah as the organization’s activity has spread inside Syria. The package will also include sniper rifles, night-vision devices and mortars for infantry units.

“The Department of Defense (DoD) plans Section 333 security cooperation — including the assistance in question — well in advance according to our plans to strengthen the capabilities of key partners in the region,” Pentagon spokeswoman Rebecca Rebarich told Al-Monitor in a statement. “Strengthening the Lebanese Armed Forces (LAF) advances a range of US interests in the Middle East that includes not only countering the spread of violent extremisms but also stemming the influence of Iran and Hezbollah.”

With al-Qaeda and the Islamic State on the run, top Trump administration officials including national security adviser John Bolton and Secretary of State Mike Pompeo have called for the United States to take a harder line against Iran. But some experts aren’t sure aid to the Lebanese army fits the emerging American policy in the region.

Despite $1.5 billion in US assistance since 2005, including tanks and attack helicopters sent over last year, the LAF — while popular in Lebanon – has remained split along sectarian lines, a recent report from the Carnegie Endowment’s Middle East Center revealed.

Experts say the United States still holds a good record when it comes to keeping track of the equipment, despite the federal Government Accountability Office finding flaws in the State Department’s monitoring efforts in 2014. But it’s not clear that arming the LAF will help mitigate Hezbollah’s influence in the country.

Lawmakers in Lebanon have failed to agree on the formation of a government since elections in May, which saw Hezbollah make gains over Sunni Prime Minister Saad Hariri. Hariri has criticized Hezbollah for impeding the process of forming the Cabinet, which is split by law between the country’s religious blocs. Iran’s influence has been ascendant in Lebanon since the country faced a brutal 15 year civil war, which ended in 1990. Experts tell Al-Monitor that while US assistance is of limited military significance, only helping on a limited counterterror mission that has little relevance to the nation’s security, it gives the United States some influence at the bargaining table.

“These insurgencies are not an issue anymore,” Hanin Ghaddar, a visiting fellow at the Washington Institute, told Al-Monitor. “It’s more about leverage that the United States would like to keep. It’s the only leverage that the United States has over state institutions.”

While information on Section 333 had long been made widely available through Congress, the Defense Department recently began categorizing the records as “For Official Use Only,” making them more difficult for journalists and members of the public to obtain. During his tenure as secretary of defense, James Mattis sought to limit access to unclassified records and said DoD employees were obligated to report leaks.

Jack Detsch is Al-Monitor’s Pentagon correspondent. Based in Washington, Detsch examines US-Middle East relations through the lens of the Defense Department. Detsch previously covered cybersecurity for Passcode, the Christian Science Monitor’s project on security and privacy in the Digital Age. Detsch also served as editorial assistant at The Diplomat Magazine and worked for NPR-affiliated stations in San Francisco. (Al-Monitor 03.01)

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11.4 EGYPT: Cairo – The World’s Test Platform for Transportation

Yasmeen Nabil posted on Wamda on 7 January that recently Dubai-based ride-hailing app Careem launched an on-demand tuk tuk service in Cairo without any fanfare. The move marked the increasing competition in the city’s transport sector where ride-hailing applications continue to pilot new services that promise to ease the hassle of getting around the Middle East’s biggest city.

With a population of more than 25 million people and 2.3 million licensed vehicles in 2017, Greater Cairo (which includes the governorates of Giza and Qalyubia) is struggling with aggravated traffic, congestion, poor infrastructure and increasing fuel prices. And as one of the fastest growing cities in terms of population according to Euromonitor International, the problems are unlikely to disappear anytime soon.

This exacerbated transport issue has generated several ride-hailing applications looking to offer a solution. “Any mode of transportation, whether group transport or something like Uber and Careem, of course is very well received by the ministry because anything that helps in solving the transportation problem, or let’s say better eases the traffic flow and facilitates mobility is supported by the state, government and the ministry, especially group transport projects,” says Mohamed Ezz, spokesperson at the ministry of transport in Egypt.

This governmental backing has proven fruitful for the likes of US-based Uber and Careem and has spawned several local players including on-demand bus ride services Swvl and Buseet. “Cairo is our biggest city in Careem and the biggest city in the region as well. There are around 40% of Egyptians that don’t have any services that really cater for their needs. They are either forced to use public transportation or basically their own private cars,” says Hadeer Shalaby, general manager at Careem Bus.

The Need for Affordable Rides

On-demand private car hire services became widely popular when they were launched a few years ago, but the devaluation of the Egyptian currency in 2016 and the recurrent increase in fuel prices have proven an obstacle to this service as many Egyptians can no longer afford them.

In response, both Careem and Uber began introducing cheaper alternatives on their platform including their first ever bus service, using Cairo as a test-bed for their other markets. Around the same time, Buseet and Swvl also raised tens of millions of dollars in investment.

“In Egypt, rising inflation and costs for drivers have been a primary concern. For riders, Uber has launched a range of low-cost options including Uber Scooter, and most recently the Uber Bus, which is 70% cheaper than UberX and was designed in response to the Egyptian government’s request for low-cost transport options,” says Ahmed Khalil, head of operations at Uber Middle East and North Africa (Mena).

However, even with the cheaper bus services, there is still a significant share of the market that is unable to afford that. For this segment, tuk tuks and scooters are the main form of transportation.

Founded in 2017, Halan is an application that provides on-demand motorcycles and tuk tuks to the underserved communities and poorer areas where roads tend to be too narrow for cars. The company has already completed more than three million rides, expanded to Sudan and recently raised a multi-million series A funding round while securing founding Uber chief technology officer, Oscar Salazar as a board member. Back in March 2018 the company raised $2 million in a pre-series A round.

“When you live in these areas, there is a high need for these vehicles. Tuk tuks have resolved the problems of millions of people because a lot of people had to walk for kilometers to reach their destination,” says Mounir Nakhla, co-founder at Halan. “Also, motorcycles help a lot to overcome traffic jams in big cities. In Egypt, many citizens need to use more than one mode of transportation to get to their destination. What a motorcycle does is that it takes you to your destination directly.”

Dissatisfactory Options

Cairo’s public transport sector is currently fragmented. Almost half of the city’s daily transportation needs are met by the microbuses, an unregulated network of privately-owned vehicles running several routes across the city with prices ranging from EGP1.5-3 ($0.08-0.17).

Meanwhile the government is currently working on upgrading its metro system to serve the expected 2.1 billion rides expected this year. Ticket prices now start from EGP3 but are expected to rise for a third time following a 250% price hike last year which sparked protests at some stations. The traditional white taxis, while equipped with fare meters, are notorious for drivers who refuse to use them and are seen as an overpriced option.

With such decrepit options, transportation that appeals to young, working professionals is lacking in the public sector and with a mobile penetration rate of 105% according to research company, Budde, and low cost of connectivity, it is this highly connected youth segment that has led Cairo to become a market to test and scale transportation services. “In this part of the world, there is a very big population. We have very high internet penetration and smartphone penetration. We have very diverse methods of transportation and there is a lot of room for efficiencies in these methods of transportation,” says Nakhla. “Where efficiencies can be created, that is where entrepreneurs go.”

These entrepreneurs have included Mostafa Kandil, co-founder and chief executive officer of bus-booking app Swvl who is now looking to expand globally after closing a Series B round that valued the company at close to $100 million. Kandil is now in talks with Chinese investors to fund its planned expansion to South East Asia.

Smaller player Buseet recently raised an undisclosed seed amount for its bus-booking app, while other local startups have emerged in recent years to cater to the more niche segments. Raye7 is a carpooling application, Tawslni offers seats on journeys from one city to the next while Fyonka offers on-demand cars for women only.

Saturation Point

But some of these new ride-hailing apps have come with their own set of problems. Frequent reports and complaints about these companies often circulate on social media with consumers facing situations where they feel that their personal safety was threatened.

Conversely, Careem and Uber also had to deal with a different kind of problem when they faced a lawsuit in 2017 filed by taxi drivers who were severely affected by the rise of these services. They complained that the two companies use private cars for commercial purposes and do not pay the taxes for operating transport vehicles. The licenses of the two companies were suspended but soon after, the court lifted the ban once both companies agreed to pay the taxes. For both government and the companies it seems, transporting Cairenes was deemed more important than ongoing legal cases.

So competition has been sanctioned to thrive in Cairo’s transport sector. Both Uber and Careem’s bus service currently costs EGP5, their scooter service starts at EGP8 while Careem’s pilot tuk service starts from EGP3.5. Halan’s tuk tuk and motorbike service are priced just as competitively. With such an array of services, the market is becoming increasingly saturated, some of the local players are betting on their niche, others are focusing on providing a unique service and creating brand loyalty, but how they will eventually compete with the prowess and coffers of Uber and Careem, remains to be seen. (Wamda 07.01)

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11.5 TURKEY: Istanbul, the Flashpoint of Turkey’s Crisis and Looming Elections

Mustafa Sonmez posted in Al-Monitor on 7 January that Turkey’s commercial capital, Istanbul, is in the grips of economic turmoil, which raises the prospect of the city’s local administration changing hands after more than two decades of dominance by political Islam.

Turkey ushered in the new year under the mounting stress of economic crisis and local elections looming on 31 March. The stress is felt heavily in Istanbul, Turkey’s biggest city and commercial capital, which contributes 31% of the country’s gross domestic product and harbors 22% of the labor force and is now the epicenter of the economic tremors.

Under the 16-year rule of the Justice and Development Party, construction became the engine of economic growth and Istanbul drew the largest investments of the sector, ranging from sprawling housing complexes and business high-rises to countless urban infrastructures and “megaprojects” conducted as public-private partnerships. Istanbul’s economic rent and public wealth was appetite-whetting. Rent-seeking proliferated and businesspeople close to the AKP grabbed the biggest shares.

Turkey’s political Islam movement, whose hold on power has reached nearly 25 years at the municipal level and 16 years in the central government, made Istanbul the main worksite for its own growth and then increasingly for the building of a new regime. The construction-centered drive advanced problem-free for roughly a decade after the AKP’s coming to power, but began to stumble in 2014. Today, it is in turbulence amid a fully “homemade” crisis, with the strongest jolts felt in Istanbul.

Turkey’s economic growth under the AKP relied on foreign funds, mainly external borrowing of some $460 billion, with the funds used mostly for domestic consumption. When the inflow of funds decreased before grinding to a halt in 2018, the crisis became inevitable.

Not surprisingly, the earliest blows of the crisis hit the construction sector, where the first downticks in employment were seen. After an extraordinary profit bonanza until 2015, homes in Istanbul had begun to depreciate in real terms, with price increases trailing at least 10% behind overall inflation. The housing woes in the city particularly upset builders close to President Recep Tayyip Erdogan. In a bid to revitalize real estate sales, Ankara has opposed hiking interest rates and offered incentives to promote purchases, but none of those measures have yielded results.

Offices in Istanbul’s Levent and Maslak districts, the city’s main business centers, have seen a fast decline in occupancy rates, with rents also nosediving. In many of the once-mushrooming malls, shops are either empty or struggling to stay afloat with very low net sales. For many, the sales volume can no longer meet rents despite a presidential decree in September banning rental contracts in foreign currency.

The so-called megaprojects, built by both local and foreign contractors, are also in dire straits. The third bridge over the Bosporus and the new airport, erected — by flouting zoning laws — in Istanbul’s north, where the city’s scarce forests and water basins are, remain fraught with problems. The third bridge, inaugurated in 2016, remains largely idle, while the new airport is hit by delays, facing an uncertain future. One more megaproject — an undersea tunnel to the city’s south — is underperforming. The profit guarantees offered to the builders in the project contracts have already placed hefty burdens on the central government budget.

The turmoil in Istanbul’s construction sector has spilled over to other areas, affecting big and small companies alike. Even the metropolitan municipality is in a serious debt crisis.

Istanbul is also Turkey’s financial hub, and banks are similarly in a bottleneck, marked by a rapid decline in employment figures. While the contracting economy bears heavily on domestic trade, it is deeply shaking the advertising and media sectors, two indispensable links in marketing; layoffs are on the rise in this area, which is an important one for white collar workers.

The tourism sector, which is trying to keep the city afloat, has come to cater mostly to Middle Eastern visitors. Due to the Turkish lira’s dramatic depreciation, sightseeing, accommodation and dining in Istanbul are now going for a song.

Among ordinary Istanbulites, the rising costs of living and unemployment worries are the main topics of conversation nowadays. In 2018, Turkey’s consumer inflation hit 20.3%. The rate for Istanbul was not much better, standing at 19%. The country’s non-agricultural unemployment, or urban unemployment, was 13.5% in September, tending upward. Given that Istanbul’s jobless rate is usually 2% higher than the national average, urban unemployment in the city has reached more than 15%.

Now that the 31 March local elections coincide with a serious economic crisis, Istanbulites are expected to largely influence the message of the electorate. Arguably, the long municipal reign in Istanbul of political Islam itself owes much to opportunities spawned by crisis. The Islamist movement originally appealed only to traditionally conservative Istanbul districts such as Uskudar and Eyup, but its voter base grew notably in the 1990s as its message resonated with migrant masses from provincial Anatolia, which the winds of globalization had propelled to the city. While the left-wing and social democrat parties failed to reach out to the impoverished masses swarming the city’s outskirts, political Islam managed to fill the vacuum.

In the local polls in 1994, which was a crisis year, the four center-right and center-left parties mustered 70% of the vote in Istanbul, but because they did not care to form alliances, the Welfare Party, to which Erdogan belonged at the time, grabbed the metropolitan municipality with just 25% of the vote, marking the beginning of the 25-year dominance of political Islam. The 1999 election was basically a replay, as centrist parties failed to learn a lesson from their previous defeat, letting the Islamists retain Istanbul with 27% of the vote.

In the November 2002 general elections, the AKP, the new party of the Islamists, came in first with 34% of the vote and was able to form the government alone, courtesy of the intricacies of Turkey’s electoral system. In the 2004 local elections, the AKP won Istanbul with 45% of the vote.

In the next local polls, in 2009 — a year in which Turkey’s economy shrank nearly 5% amid global financial woes — the AKP was still the winner, but its support dropped to 38% in the overall vote and 40% in Istanbul, which was 5% less than what the party had garnered in the 2007 parliamentary polls. The main opposition Republican People’s Party (CHP), meanwhile, got 33%, reducing the AKP’s lead to 5%, which was a clear but inconclusive repercussion of the economic crisis.

Now, a similar crisis climate prevails ahead of the municipal polls. The opposition is rather optimistic, given that the AKP got 42% in the general elections in June 2018, a notable decline from nearly 50% in November 2015. Moreover, it had to seek an electoral alliance with the Nationalist Movement Party, with the pair barely managing 50.7% together.

The CHP, which reckons the AKP’s support could have dropped further as the crisis deepened in the past six months, is hopeful of winning Istanbul with the support of other opposition parties. The AKP, meanwhile, appears highly alarmed over the prospect of losing the city. Erdogan nominated parliament speaker and ex-premier Binali Yildirim to run for the mayor’s office, but in order to keep the speaker’s seat in case of a defeat, he proclaimed that Yildirim did not have to resign from his current post, although this violates the constitution.

Such unlawful behavior compounds worries over the integrity of the elections, stemming from serious vote-rigging allegations in recent years. The opposition appears close to victory in Istanbul this time, but whether it will be allowed to triumph remains questionable.

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↧

Fortnightly, 23 January 2019

January 23, 2019, 1:10 pm

≫ Next: North American Trade Newsletter #1

≪ Previous: Fortnightly, 9 January 2019

23 January 2019
17 Shvat 5779
17 Jumada Al-Awal 1440

TOP STORIES

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel & Ukraine Sign Bilateral Free Trade Agreement
1.2 Israel Inaugurates New International Airport to Boost Eilat Tourism

2: ISRAEL MARKET & BUSINESS NEWS

2.1  OurCrowd and Korea’s KEB Hana Bank Sign Investment and Partnership MOU
2.2  Cynerio Secures $7 Million Seed Round Funding to Drive US Market Development
2.3  Check Point Software Acquires ForceNock, a Web Application and API Protection startup
2.4  Foretellix Closes $14 Million Series-A Funding for Deployment of Autonomous Vehicles
2.5  Colu Raises $7 Million
2.6  Hainan Airlines to Launch Tel Aviv – Shenzhen Route
2.7  Japanese and Israeli Business Leaders Collaborate on AI-Powered Industry 4.0

3: REGIONAL PRIVATE SECTOR NEWS

3.1  NuScale and JAEC Agree to Explore SMR Deployment in Jordan
3.2  Hyatt House Debuts in Saudi Arabia with the Opening of Hyatt House Jeddah Sari Street
3.3  Egypt’s Very Own Zooba to Open Branch in NYC
3.4  Renault Manufactures over 400,000 ‘Made in Morocco’ Cars
3.5  Energean’s Israeli Fields Remain on Track for First Gas in 2021

4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1  Amman Enforces Regulations to Turn Itself Into a Smoke-Free City
4.2  UAE’s Masdar Plans First US Renewable Energy Investment
4.3  Renewables Accounted for 93% of Turkey’s Installed Power Last Year

5: ARAB STATE DEVELOPMENTS

5.1  Qatar to Invest $500 Million in Lebanese Government Bonds
5.2  Lebanese Inflation Stood at 6.07% by the End of 2018
5.3  Tourist Spending in Lebanon up by 10.46% in Annual Terms in 2018
5.4  Total Number of Registered New Cars in Lebanon Fell 11.46% in 2018
5.5  Jordan Sees 3.7% Average Increase of its Inflation Rate for December 2018
5.6  Jordan & Egypt Sign Gas Supply Agreement for 2019
5.7  Jordan’s Senate Approves 2019 Budget, Recommending Transparency Measures

Arabian Gulf

5.8  UAE Economy to Grow by an Average of 3.8% Annually to 2023
5.9  Some 73% of UAE Expats Earn More Than They Could in Their Home Country
5.10  IMF Lowers Growth Forecast for Saudi Arabia
5.11  Saudi Private Sector Growth Slows to 9 Year Low in 2018

North Africa

5.12  Egypt Reports Initial Budget Surplus of EGP 20.8 Billion in First Half of FY 2018/19
5.13  Egypt Ushering in E-Payments
5.14  Florida Companies Are ‘Well-Suited’ to Do Business in Morocco

6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1  Greece’s Public Debt on the Rise
6.2  Greek Households Have Lost 28% of Their Assets Over the Past Decade
6.3  Greek Supermarket Sales Increased 2.2% in 2018

7: GENERAL NEWS AND INTEREST

ISRAEL

7.1 PM Netanyahu Visits Chad as Ties with Israel are Renewed‎

REGIONAL

7.2 Pope to Visit the UAE on 3 – 5 February
7.3 Greek PM Tsipras Wins Confidence Vote – Boosting Macedonia Accord

8: ISRAEL LIFE SCIENCE NEWS

8.1  Olympic Committee of Israel and Technion Established Joint Research Center
8.2  NRGene & TOYOTA Collaborate on Strawberries for Better Local Production for Japan
8.3  NRGene and Macrogen Launch Ultra-High-Density SNP Genotyping Service
8.4  ChemomAb Clinical trial of CM-101 in Patients with Non-Alcoholic Fatty Liver Disease
8.5  Lumir Lab, a Cannabis Lab, Set up at Hadassit on Hebrew University’s Ein Kerem Campus
8.6  SeeTree Raises $11.5 Million
8.7  Tyto Care Adds $9 Million More to its Series C Round
8.8  Yofix Launches Clean-Label, Plant-Based Yogurt Alternative
8.9  Assuta to Raise $150 Million VC Health Fund
8.10  Kitov Announces Pricing of $6 Million Registered Direct Offering
8.11  Itamar Medical Announces Definitive Private Placement Agreement for $11.5 Million
8.12  Aidoc’s Artificial Intelligence Helps Antwerp University Hospital Radiologists Save Lives

9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 mPrest Partners With SDG&E to Deliver Intelligent Underground Distribution Cable Analytics
9.2  Magal Awarded $2.5 Million for an Integrated Security Solution for the Spanish Port of Huelva
9.3  COTI Launches TestNet – Aimed at Streamlining Remittance Payments & Stablecoins
9.4  BigID & Ionic Security Enhance Data Governance & Privacy for Multi-Cloud Compliance
9.5  Syte Announces New Visual Search Navigation Tool for Retailers
9.6  Eyesight Bringing Advanced Driver Monitoring to Automotive World
9.7  Ethernity Networks Successfully Completes Delivery of Its ACE-NIC100 for Major Korean OEM
9.8  Brose & Vayyar Collaborate On Sensor Technology for New Door and Seat Functions
9.9  Kornit Digital Launches the Atlas, the Next-Generation Direct-To-Garment Printing Platform
9.10  ELTA Systems to Supply Compact Multi-Mission Radars to Finland
9.11  VDOO Releases Runtime Protection Agent for Connected Devices

10: ISRAEL ECONOMIC STATISTICS

10.1  Israel’s Inflation Falls by 0.3% in December, Housing Prices Still Falling
10.2  Israel’s Third Quarter Growth Figure Revised Upwards
10.3  Israel’s Unemployment Level Reaches Low of 4.1% in 2018
10.4  Israel Climbs to 5th Place in Bloomberg Innovation Index

11: IN DEPTH

11.1  ISRAEL: IVC–Meitar Exit Report 2018: Israeli Exits Reached $12.63 Billion in 103 Deals
11.2  GCC: Moody’s Says Stable Outlook But Reforms & Unemployment Pose Challenges
11.3  GREECE: S&P Affirms Greece’s ‘B+/B’ Ratings; Outlook Positive

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Israel & Ukraine Sign Bilateral Free Trade Agreement

On 21 January, Prime Minister Netanyahu met with Ukrainian President Poroshenko in Jerusalem, when Economy and Industry Minister Cohen and Ukrainian Economic Development and Trade Minister Kubiv signed a bilateral free trade agreement expected to increase annual trade between the two countries from $800,000 to $1 billion a year. Netanyahu said Poroshenko’s visit – his third to Israel since entering office in 2014 – was a testament to the strong ties between Ukraine and Israel, which Netanyahu said “have deep historical and cultural roots.”

Netanyahu thanked Cohen, First Vice Prime Minister of Ukraine Kubiv, and Jerusalem Affairs and Heritage Minister Elkin, who chairs the Israel side of the Joint Ukrainian-Israeli Intergovernmental Commission on Trade and Economic Cooperation, for their efforts in finalizing the free trade deal. The prime minister said that during Poroshenko’s visit, the leaders would also discuss other ways of increasing cooperation in a variety of fields, including technology, health, aerospace and science.

In a meeting with President Reuven Rivlin earlier that day, Poroshenko said he could not imagine better relations than those Kiev has with Jerusalem. Rivlin hailed the signing of the free trade deal, which he said would deepen bilateral ties. (Various 22.01)

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1.2 Israel Inaugurates New International Airport to Boost Eilat Tourism

On 21 January, Prime Minister Netanyahu and Transportation and Road Safety Minister Katz inaugurated the Ramon International Airport in southern Israel. The new airport will serve the southern resort city of Eilat, situated about 12 miles to its south. The city’s old airport can handle only eight flights an hour and no wide-body aircraft.

The airport, constructed at a cost of some $500 million, has an annual capacity of 2.5 million passengers, with room for expansion. It is able to handle 20 takeoffs and landings an hour and accommodate large aircraft, such as Boeing 747s. Officials hope the new airport will help make Eilat a more attractive destination for tourism and a top pick for international conferences, in part because it serves as a transit point for tourists who want to cross from Israel into Egypt and Jordan.

Ramon International Airport is the first civilian airport to be built in Israel since 1948. It is named in honor of the first Israeli astronaut, Ilan Ramon, who died in the 2003 Columbia space shuttle disaster, and Ramon’s son Assaf, an Israeli Air Force pilot who died in a training accident in 2009. (Various 21.01)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 OurCrowd and Korea’s KEB Hana Bank Sign Investment and Partnership MOU

OurCrowd announced its latest institutional partner in Asia, with a portfolio investment from South Korea’s KEB Hana Bank, a subsidiary of the Hana Financial Group. Hana Financial Group is one of the largest bank holding companies in South Korea and KEB Hana is the country’s most acclaimed Private Bank. Along with an equity stake for the bank in a cross section of current and future OurCrowd portfolio investments, OurCrowd and KEB Hana have entered into an MOU agreement to pursue cooperation in support of Korea’s innovation ecosystem, aimed at creating key relationships for Korea’s major corporations seeking technology solutions for the future.

Last year, OurCrowd and its seed stage incubator Labs/02, signed a collaboration agreement with two of South Korea’s leading venture capital firms, DTNI and Yozma Group Korea. These agreements, facilitated by the Korea-Israel Industrial R&D Foundation, aimed at strengthening bilateral strategic collaboration, supporting investment partnerships, and focusing on rapidly growing deep-tech startups in both countries. OurCrowd plans to feature several innovative startups from South Korea as part of a special pavilion at the upcoming Global Investor Summit on 7 March 2019 in Jerusalem’s International Convention Center.

Jerusalem’s OurCrowd is a global investment platform, bringing venture capital opportunities to accredited investors worldwide. A leader in equity crowdfunding, OurCrowd vets and selects companies, invests its own capital, and invites its accredited membership of investors and institutional partners to invest alongside in these opportunities. OurCrowd provides support to its portfolio companies, assigns industry experts as mentors, and creates growth opportunities through its network of strategic multinational partnerships. (OurCrowd 09.01)

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2.2 Cynerio Secures $7 Million Seed Round Funding to Drive US Market Development

Cynerio announced the completion of its $7 million funding round to fuel growth in North America for its 100% healthcare focused cyber security platform. Investors include global VCs, Accelmed, a leading investment firm focused on value creation for medical device companies and technologies, RDC (a joint venture between Elron and Rafael), which invests in exceptional medical device and cybersecurity companies and MTIP, a leading venture capital firm who is an expert in digital health.

Hospitals require a security solution that will protect their systems without being intrusive or aggressive. Cynerio delivers complete visibility into a healthcare organization’s IoMT ecosystem, protecting it from cyber threats and helping the organization meet HIPAA regulatory requirements.

Tel Aviv’s Cynerio was founded to deliver a cybersecurity solution that is 100% designed for healthcare providers, based on the industry’s first technology that thoroughly analyzes the medical workflows in the IoMT ecosystem, to automatically discover all the entities on the network, provide an ongoing healthcare specific risk analysis, accurately detect anomalies and stop threats to prevent service disruption, data theft and compliance violations. Rambam Hospital and Tel Aviv Medical Center (Ichilov) are two of the world’s top healthcare organizations using Cynerio’s technology to protect its sensitive data. The company is now focused on US market development. (Cynerio 09.01)

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2.3 Check Point Software Acquires ForceNock, a Web Application and API Protection startup

Check Point Software Technologies, a leading provider of cyber security solutions globally, has acquired ForceNock Security of Tel Aviv, Israel. ForceNock developed a Web Application and API Protection (WAAP) technology which utilizes machine learning, behavioral and reputation-based security engines. Check Point plans to integrate ForceNock’s technology into its Infinity total protection architecture.

ForceNock, founded in 2017 and based in Tel Aviv, Israel, developed a patent-pending, state-of-the-art machine learning, behavioral and reputation-based security engine for Web Application and API Protection (WAAP), that provides highly accurate protection, is simple to deploy and demands zero tuning. The company’s technology frees security teams from managing endless configurations and rules while continuing to maintain the highest level of security. (Check Point 14.01)

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2.4 Foretellix Closes $14 Million Series-A Funding for Deployment of Autonomous Vehicles

Foretellix closed $14 million of series-A funding. Led by 83North, Jump Capital, and Nextgear Ventures, the investment will accelerate Foretellix’s development, customer programs and deployment of its coverage driven verification solution. The company has now raised over $16 million since it was founded.

Foretellix is providing leading developers of autonomous vehicles with the ability to realize and demonstrate the extremely high level of safety required to unleash the full potential of the autonomous revolution. Foretellix develops coverage driven verification solutions to ensure that the autonomous vehicle behaves properly in the 100’s of millions of critical driving scenarios, and are therefore safe for broad deployment. Foretellix also automates the extraction and analytics of the safety related coverage metrics, representing the percentage of scenarios proven to work in a wide range of possible situations and conditions. These metrics are required by developers, consumers, suppliers, insurance companies and regulators. This solution works with all required driving platforms, including simulators, X-in-the-loop configurations, test tracks and test vehicles.

Tel Aviv’s Foretellix develops a coverage driven verification framework, intelligent automation and analytics to realize the safety of autonomous vehicles, and to extract the metrics to prove it. This is enabling the industry to transition from ‘quantity of miles’ to ‘quality of coverage’ and broad deployment. Foretellix was founded by a very experienced team using proven coverage driven technologies and methods for the verification of complex semiconductor products. (Foretellix 16.01)

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2.5 Colu Raises $7 Million

Colu has raised $7 million from US investor Patrick Byrne, CEO of online retailer overstock.com. Colu aims to create a local currency using blockchain technology. Colu refused to disclose the exact amount raised from Byrne and the company value for the round, saying only that the company did not lack cash and would conduct its next financing round in 2020. The investment by Byrne, a strategic investor, comes in addition to just under $40 million raised by the company since it was founded in 2014. Some $23 million of this was raised in Colu’s initial coin offering (ICO) in February 2018, compared with the company’s $50 million target in that offering, although the currency, CLN, subsequently lost over 90% of its value and was almost completely wiped out.

Colu intends to encourage use of its app with its own subsidies, or through subsidies from local authorities cooperating with it. For example, in one of the cities that Colu cooperate with, economic activity by businesses in the town center was affected by a fire. Instead of compensating the businesses that were damaged directly, the local authority wants to give people an incentive to make purchases from that area with the help of Colu, so that the subsidy will reach business owners indirectly through an expansion of economic activity, instead of going directly into their pockets.

Tel Aviv’s Colu enables people to exchange digital cash directly with one another, increasing social capital and economic participation. Colu’s Economy in a Box, based on blockchain technology, includes a digital control panel and merchant tools software, through which users can monitor and manage their economies. It also has a mobile app that enables users to send and receive assets in multiple currencies. Colu enables people to exchange digital cash directly with one another, increasing social capital and economic participation. Colu’s Economy in a Box, based on blockchain technology, includes a digital control panel and merchant tools software, through which users can monitor and manage their economies. It also has a mobile app that enables users to send and receive assets in multiple currencies. (Globes 21.01)

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2.6 Hainan Airlines to Launch Tel Aviv – Shenzhen Route

Hainan Airlines is launching a new route from Tel Aviv to Shenzhen in China. The new route will replace the Chinese carrier’s flights between Tel Aviv and Guangzhou.

Shenzhen, which has 20 million residents, is a 30-minute ride from Guangzhou on the high-speed railway between the two cities. Hainan will receive a substantial grant for the new route for moving the route from the Shenzhen local government, which wants to make the city an international hub. Hainan operates flights from Shenzhen to a number of destinations, including Osaka, Japan; Auckland, New Zealand; and Brisbane, Australia, which creates the possibility of connection flights from Israel to these destinations. Hainan also operates direct flights from Tel Aviv to Beijing and Shanghai.

Due to Shenzhen’s proximity to Hong Kong, Hainan will not receive a grant from the Israeli Ministry of Tourism for opening the new route, but the grant it receives from the Shenzhen government will make up for this. The large companies located in Shenzhen, including Huawei and Tencent, make the city primarily a business destination. Termination of Hainan’s route from Guangzhou will enable another Chinese airline, China Eastern, to replace it with its own direct flights to Tel Aviv. A third Chinese airline, Sichuan Airlines, launched a direct route from Tel Aviv to Chengdu, the capital of Sichuan Province, in 2018. (Globes 16.01)

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2.7 Japanese and Israeli Business Leaders Collaborate on AI-Powered Industry 4.0

Musashi Seimitsu Corporation, partly owned by Honda Motor Co., and Poliakine Innovation, are partnering to develop artificial intelligence applications that will enable the future of Industry 4.0. The international partnership was signed during the Economy summit held recently in Jerusalem with the presence of Japan and Israel Governmental ministers of Economy.

Earlier, the Japanese Minister of Commerce and the Israeli Minister of Economy and Industry shook hands on an agreement that will bring together innovators from both nations to develop Artificial Intelligence solutions to further the development of Industry 4.0.

Japan-based Musashi and the Israel based Innovation Center have declared a partnership to develop AI applications that will enable the future of Industry 4.0. Musashi organization, a global leader in powertrain parts manufacturing with more than 30 global manufacturing plants including differential assemblies, transmission gears, camshafts as well as Linkage and suspension parts, has joined forces with Ran Poliakine, head of the Jerusalem-based Innovation Center, that brings together great technological minds in the area of Artificial Intelligence, SW engineering, HW engineering, mathematics and physics.

The partnership will engage in the mutual development of an Automated Guided Vehicle (AGV) for Industrial use. The Innovation Center will develop solutions to disrupt manufacturing and production domains, therefore providing a safer and more efficient environment that will enhance the global value chain. (Poliakine 15.01)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 NuScale and JAEC Agree to Explore SMR Deployment in Jordan

Portland, Oregon’s NuScale Power has signed a memorandum of understanding (MOU) with the Jordan Atomic Energy Commission (JAEC), to evaluate NuScale’s small module reactor (SMR) nuclear power plant for use in Jordan. The agreement continues to showcase the immense international interest in NuScale’s innovative nuclear technology.

JAEC is the government entity leading the development and implementation of nuclear strategy and managing the nuclear program in Jordan. Through this MOU, NuScale and JAEC will collaborate on conducting a joint feasibility evaluation of NuScale’s SMR, which will inform JAEC’s decision on moving forward with the project as part of Jordan’s planned deployment of nuclear power plants.

JAEC oversaw the implementation of several key and notable projects in Jordan including the Sub-Critical Assembly, the exploration of uranium in the Central Jordan area, and the Jordan Research and Training Reactor (JRTR) – Jordan’s first nuclear reactor. Current projects for JAEC include the uranium mining in Jordan and the Nuclear Power Plant (NPP) development and implementation (including SMRs). NuScale’s scalable multi-module plant design permits a high degree of flexibility for deployment in a wide range of conventional and unique electrical and thermal applications. This includes economic energy production, making it a particularly attractive energy source for desalination processes at various scales. NuScale has seen considerable interest in its SMR technology in regions of the world, like the Middle East, where fossil fuels are the source of heat and electricity for desalination. (NuScale Power 15.01)

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3.2 Hyatt House Debuts in Saudi Arabia with the Opening of Hyatt House Jeddah Sari Street

Chicago’s Hyatt Hotels Corporation announced the entry of the Hyatt House brand into the Middle Eastern market with the opening of Hyatt House Jeddah Sari Street in the Kingdom of Saudi Arabia. The opening of the Hyatt House hotel is a significant step towards increasing Hyatt’s brand footprint in the extended stay segment and growing Hyatt’s brand presence in the Middle East with innovative hospitality offerings in key locations and gateway cities.

Hyatt House Jeddah Sari Street is located in the Al Salamah District, in close proximity to Madinah and Thaliaya Streets, which connects to the Corniche, Jeddah’s coastal resort area. The 102-residentially inspired upscale guestrooms, studio and one-bedroom kitchen suites, along with restaurant, fitness center and prayer rooms, provide the ideal home-away-from-home setting. The Hyatt House brand launched in 2012 and offers more than 85 locations throughout the United States, China, Germany, Mexico, Turkey and Puerto Rico. (Hyatt House 22.01)

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3.3 Egypt’s Very Own Zooba to Open Branch in NYC

According to an official press release, Egyptian food restaurant chain Zooba will be opening its very first US branch in Manhattan’s Nolita district. The Egyptian chain, which describes its achievement as the first ever restaurant concept 100% homegrown in Egypt to launch in the US, was able to secure $ 4 million to fund the flagship outlet. Nolita, its name deriving from ‘North of Little Italy’, is a charming and picturesque neighborhood in Manhattan, known for its boutiques and stores.

Zooba’s first branch opened in Zamalek in 2012 with a vision to have a Zooba in every major city in the world. It has six branches in Maadi, Zamalek, Tagamou, Heliopolis, Sheikh Zayed and Nasr City.

In June 2018, Zooba announced that it had partnered with SADF Trading and Development, a company that operates and scales an F&B franchise, which would help them open in 20 different locations over the following seven years. The first new international branches to open are to be in Saudi Arabia and Bahrain as the chain seeks to expand to neighboring countries in the MENA region where Egyptian food is well-reputed. In 2016, Egypt represented by Zooba won first place at the London Falafel Festival in the Borough Market of London. (ES 14.01)

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3.4 Renault Manufactures over 400,000 ‘Made in Morocco’ Cars

Renault Group positioned itself as a major industrial platform in Morocco by manufacturing 402,155 cars in 2018, including 318,600 units in Tangier and 83,550 in Casablanca. The French car manufacturer exported almost 90% of the produced units to 74 countries. Renault exported 358,779 “made in Morocco” cars last year, which is 7% more than the 301,336 cars it exported the previous year. The French carmaker has evolved from making 10,000 cars and having 1,600 employees in 2005 in Morocco to 11,000 employees now. Renault and its subsidiary Dacia remain among the most sold cars in the domestic market.

In 2018, Dacia sold a record 49,649 cars (28% market share) and Renault sold 25,769 cars (14.5% market share). Six of Renault’s models rank among the top ten bestsellers in Morocco last year: Dacia Logan (13,280 sales), Renault Clio (12,470 sales), Dacia Dokker (12,434 sales), Sandero (11,918 sales), Duster (8,106 sales), and Renault Kangoo (5,544 sales). Through an extension project of its SOMACA plant in Casablanca launched in October last year, Renault aims to double its production capacity by 2022 and achieve a production capacity of 1 million vehicles by 2025. Moroccans bought 177,400 cars in 2018, compared to 168,136 vehicles in 2017, up by 5%. In 2017, the North African country produced 345,000 passenger vehicles, compared to South Africa’s 331,000. (MWN 18.01)

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3.5 Energean’s Israeli Fields Remain on Track for First Gas in 2021

Greece’s Energean Oil and Gas says its Israel fields Karish and Tanin remain on track to deliver first gas into the Israeli domestic market in Q1/21. Energean also secured $12.9 billion of future revenues through 4.6 bcm/yr of contracted gas sales, firmly underpinning the project’s economics. Energean added that there would be positive momentum in 2019, which will include the drilling of at least six new wells across their acreage in Israel and Greece, targeting significant increases in reserves, resources and production.

In Israel Energean continues to see increasing demand for gas and are aiming to fill the 3.4 bcm/yr of spare capacity in their FPSO in the medium term. The next visible milestone will be mobilization of the Stena Drillship in February ahead of spudding of Karish North in March. The Greek company’s 2019 drilling program will target up to 2.3 Tcf of gross prospective gas resources and is well aligned with its exploration strategy to target resources that can be quickly, economically and safely monetized. During 2019, Energean expects to deliver average production of between 5,000 and 6,000 bopd. (Various 16.01)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Amman Enforces Regulations to Turn Itself Into a Smoke-Free City

The Greater Amman Municipality (GAM) carried out 1,242 measures last year in a crackdown on smoking in public places in line with laws and regulations, foremost of which is Public Health Law (47) of 2008. GAM had issued warnings and fines for those found in breach of the law and, in cooperation with the concerned bodies from the private and public sectors, it had launched awareness programs. The municipality will also fully enforce the law on unlicensed restaurants and coffee shops that serve shisha (water pipe) in disregard of health requirements.

GAM has launched the “Amman Healthy City” initiative in cooperation with the World Health Organization (WHO), the Bloomberg Philanthropies and the Vital Strategies, as the capital was designated among the top 50 cities in the world in combating smoking and seeking to become smoke-free cities. On 21 January, in cooperation with GAM and Bloomberg Philanthropies, the WHO in Amman launched the campaign “The law protects your health… put it out,” to enforce the public health law and prevent smoking in public spaces and official institutions. (Petra 22.01)

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4.2 UAE’s Masdar Plans First US Renewable Energy Investment

Abu Dhabi Future Energy Company, better known as Masdar, announced it is acquiring stakes in two wind farms in the United States. It will buy John Laing Group’s stakes, its first North American renewable energy investment. Masdar said it was buying stakes in the Rocksprings wind farm in Texas and the Sterling wind farm in New Mexico. The deal is expected to close in H1/19, Masdar said, without disclosing the value of the deal and the size of the stakes purchased. Following the transaction, Masdar will own interest in a partnership with French renewable power producer Akuo Energy, with whom Masdar already has an ongoing partnership – the 72 MW Krnovo Wind Farm, Montenegro’s first wind energy project.

The 149MW Rocksprings project was commissioned in 2017 and comprises 53 of General Electric’s 2.3MW wind turbines and 16 of its 1.72MW turbines at a site in Val Verde County, taking advantage of the exceptional wind conditions characteristic of the Texas region. The Sterling project in Lea County, New Mexico has a total installed capacity of 29.9MW provided by 13 GE 2.3MW turbines and was also commissioned in 2017. (AB 15.01)

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4.3 Renewables Accounted for 93% of Turkey’s Installed Power Last Year

In 2018, Turkey added some 4,025 megawatts (MW) to its installed power capacity, around 93% of which are in the form of renewables, according to Energy and Natural Resources Minister Donmez. The minister wrote that the majority of Turkey’s newly installed power capacity – around 642.1 MW – was in the solar energy sector, followed by hydroelectric power with 889.9 MW. Meanwhile, an installed capacity of 509.4 MW was put into use last year, of which 331 MW uses lignite and 271.3 MW uses natural gas. Last year, 218.8 MW of installed power generated using geothermal energy was put into use. It was followed by 139 MW using biomass and 24 MW using imported coal.

The total new power generation in 2018 was 4,025 MW, of which 40.8% was provided by solar, 22.1% by hydroelectricity. Another 12.7% of the capacity came from wind power while 8.2% was provided by lignite-fired thermal power. These sources were followed by natural gas with 6.7%, geothermal with 5.4%, biomass with 3.5%, and imported coal with 0.6%. Thus, along with the other items that came into power generation, domestic and renewable energy sources constituted 93% of the total installed capacity last year. (Daily Sabah / AA 14.01)

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5: ARAB STATE DEVELOPMENTS

5.1 Qatar to Invest $500 Million in Lebanese Government Bonds

Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman Al-Thani announced that Qatar it will invest $500 million in Lebanese government bonds to support the country’s struggling economy.

Lebanon’s dollar-denominated bonds rose across the curve on the news, with the 2025 issue up almost 1 cent and the paper due in 2037 adding 1.2 cents in early trade. The announcement came a day after Qatar’s ruler, Sheikh Tamim bin Hamad Al-Thani, made a short rare visit to Lebanon where he met President Michel Aoun and took part in an Arab economic summit. Lebanon’s economy has been struggling from massive debt, little growth and high unemployment. (IH 21.01)

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5.2 Lebanese Inflation Stood at 6.07% by the End of 2018

According to the Central Administration of Statistics (CAS), the Lebanese economy’s average inflation rate stood at 6.07% year-on-year (y-o-y) by the end of 2018 since the average Consumer Price Index (CPI) reached 106.65 by December 2018 compared to 100.55 during the same period last year. In reality, consumer prices went up across all sub-categories. In details, the average price of Housing and utilities (Housing water, electricity, gas and other fuels) constituting a combined 28.4 % of the CPI, witnessed a yearly rise of 6.81%, on the back of increases in its components. Owner-occupied rental costs (grasping 13.6% of this category) and Water, electricity, gas and other fuels (grasping 11.8% of this category) rose by 3.83% y-o-y and 1.78% y-o-y, respectively. Also, the average costs of Food and non-alcoholic beverages (20% of CPI) rose by a yearly 5.16% by Q4/18. As for the average prices for Transportation (13.10 % of CPI), they increased by 7.93% y-o-y, noting that the average price of 2018 was $71.69 per barrel up by 28.34% compared to the same period last year. In addition, the average price for Health (7.7% of CPI), Education (4.33% of CPI), and Clothing and footwear recorded a yearly upticks of 5.01%, 4.42% and 15.25%, respectively. The rise in the Clothing and footwear can be linked to the yearly increase in the average EUR/USD rate by 4.50%. (CAS 22.01)

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5.3 Tourist Spending in Lebanon up by 10.46% in Annual Terms in 2018

According to Global Blue, tourist spending in Lebanon rose by 10.46% YTD, affecting positively the YTD- year-to-date growth rate that reached 6.45% by December 2017. The number of refund transactions rose by 5.53% year-on-year by December 2018. In details, Q4/18 witnessed a yearly growth of 16.75% and the highest increase in this quarter was executed during the month of November that recorded a rise of 31.49% in the number of refund transactions while the lowest growth rate was recorded during December and reached 22.09%. Tourists from the Arab countries remained the largest spenders in Lebanon, with Saudis, Emiratis, Syrians and Kuwaitis, in particular, grasping shares of 12%, 11%, 10% and 7% of total spending, respectively. On a yearly basis; tourist spending by Syrians, Qatari and Egyptians rose by 64.71%, 60.47% and 25.93%, respectively. Meanwhile, spending by Canadians and Saudi Arabian visitors fell by 20.59% and 15.05% respectively. In 2018, tourists expended 67% of their total spending on Fashion and clothing, followed by 18% on Watches and jewelry, noting that spending on Fashion and clothing grew 2.86% in 2018 and spending on watches and jewelry grew by 21.4% in 2018. (Blom 15.01)

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5.4 Total Number of Registered New Cars in Lebanon Fell 11.46% in 2018

According to the Association of Lebanese Car Importers (AIA), the total number of newly registered commercial and passenger cars deteriorated by an annual 11.46% to stand at 35,301 by the end of 2018. This decrease was driven by the 11.31% yearly drop in the number of newly registered passenger cars to 33,012 and the 13.49% drop in the newly registered commercial vehicles to 2,289 by December 2018. In terms of car brands, Kia maintained its top rank, with the largest share of 15.18% of newly registered passenger cars, followed by Hyundai and Toyota with shares of 13.08% and 12.59 % respectively and Nissan with a 12.10% of the total. In terms of sales per importer, RYMCO acquired the biggest bulk of the total newly registered cars with 15.52%, followed by NATCO (14.25%), BUMC (12.89%) and Century Motor Co (12.52%). (AIA 14.01)

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5.5 Jordan Sees 3.7% Average Increase of its Inflation Rate for December 2018

The monthly report on inflation in Jordan issued by the Department of Statistics indicates that the Consumer Price Average (Inflation) reached 125.3 in December 2018 against 120.8 during the same month of 2017, recording an increase of 3.7%. The main commodities groups, which contributed to this increase, were Cereals and its products by 1.25%, Transport by 0.60%, Tobacco and cigarettes by 0.59%, Vegetables, Dried and Canned Legumes 0.48% and Dairy and its products and eggs 0.31%. Meanwhile, the main commodities groups which witnessed a decrease in their prices were Meat & poultry by 0.50%, clothes by 0.04%, Fruits & nuts by 0.02% and sugar and its by-products by 0.01%. The Consumer Price Average for December 2018 has decreased by 0.7% compared with the previous month (November) 2018.

The report also shows that the Consumer Price Average for 2018 has increased by 4.5% compared with the same period of 2017. As for the core inflation of the consumer Price index for December 2018 (which is calculated after excluding the most fluctuating commodities’ prices of food, fuel , lighting and transport group) it has reached 129.4 against 127.3 recording an increase of 1.7% during the same month of 2017. On the annual level the consumer price index of 2018 reached 128.6 against 125.7 compared with 2017 representing a growth by 2.3%. (DoS 14.01)

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5.6 Jordan & Egypt Sign Gas Supply Agreement for 2019

Jordan and Egypt signed an agreement to supply the Hashemite Kingdom with about half of the electricity grid’s needs of the natural gas for 2019. The agreement, which includes amendments to the sale and purchase of natural gas agreements between the two countries, provides quantities of Egyptian gas exported to Jordan in 2019. This equates to half the electricity grid’s needs in the Kingdom. The rest of the needs will be met through Shell International, which supplies Jordan with liquefied gas through the port of Aqaba, and from local energy sources. These agreements are important in enhancing the stability of the Kingdom’s electricity grid and ensuring the security of supplying electricity at prices below the price of liquefied gas. (Petra 13.01)

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5.7 Jordan’s Senate Approves 2019 Budget, Recommending Transparency Measures

On 20 January, the Jordanian Senate endorsed the 2019 state budget bill and the draft law governing the budgets of independent public institutions, as referred by the Lower House. The state budget draft law forecasts the GDP for the current year to increase by 2.3%, 2.5% next year and 2.7% in 2021. The budget statement referred by the Lower House to the Senate estimated the volume of local revenue in 2019 to reach JOD8 billion, citing a 14.8% increase from 2018 that is primarily attributed to the rise in tax and non-tax revenues by 15.9% and 12.9%, respectively.

The Senate’s Financial and Economic Committee said the committee’s report included 29 recommendations, the most significant of which include the need to address distortions in sales tax, following up on the merging of independent government institutions and implementing the economic reform program supported by the International Monetary Fund. The recommendations also included commitment on the government’s part to securing sufficient allocations, especially for the operational expenses of security bodies, as well as slashing public expenditures. To ensure transparency and accountability in case the allocations are insufficient, the report said, the government must issue a budget supplement ahead of any spending which is not stipulated in the budget. (JT 20.01)

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►►Arabian Gulf

5.8 UAE Economy to Grow by an Average of 3.8% Annually to 2023

The UAE economy is forecast to grow at an average 3.8% annually in the next five years, supported by an increase in investment flows and a rise in private consumption. The average real gross domestic product – an inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year – of the UAE between 2019 and 2023, will also be boosted by the expansionary fiscal policies of the Government, the Dubai Chamber of Commerce said in its UAE Macroeconomic Model report. A growing number of infrastructure and construction investments in the run up to Expo 2020, will also bode well for the overall GDP growth of the second-biggest Arabian Gulf economy. A recovery in private consumption and sales of highly cyclical consumer products is expected, extending to products such as vehicles, furniture, household appliances and medical equipment.

The non-oil economy of the UAE, is projected to grow by an average of 4.1% annually between 2019-23, compared to the 2.8% recorded in the 2014-18 period. The non-oil sector’s growth will be driven by other sectors including transport and communications, which are set to grow by 7.9% over the five year period, followed by construction, expected to expand by 4.2%, and real estate and business services that are expected to record a growth of 3.8% until 2023, according to the chamber. Recent measures to reduce the cost of doing business in the UAE are also expected to support growth within the country’s small and medium-sized enterprises and private sector businesses.

The UAE’s overall economy, which grew only by 0.8% in 2017, mainly on the back of Opec-led oil output cuts and crude price declines, is set to accelerate this year amid a slew of Government measures aimed at propelling the non-oil sector, which accounts for more than 70% of the country’s GDP. The Central Bank of the UAE forecasts the economy to grow 4.2% in 2019 as the Government reforms and stimulus measures start yielding results. (The National 14.01)

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5.9 Some 73% of UAE Expats Earn More Than They Could in Their Home Country

Nearly three-quarters of expats working in the UAE earn more than they could in their home country, according to HSBC’s Expat Explorer survey. The UAE has been ranked the fourth best place to work in the world, marking its third consecutive year in the top five, and behind only Germany, Bahrain and the UK. The survey of more than 22,000 expatriates from the international bank reveals that career ambition is the number one reason why people take the plunge and settle abroad.

Among the primary reasons expats highlighted the UAE as one of the top career destinations was for the benefits packages offered by employers (ranked first) and its earnings prospects (ranked third). Some 75% of expats in the UAE receive an annual airfare allowance to their home country and 85% receive health and medical allowances compared to global average of 17% and 43% respectively. Nearly three quarters of expats in the country (73%) said that they earn more than in their home country. (AB 15.01)

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5.10 IMF Lowers Growth Forecast for Saudi Arabia

In its World Economic Outlook update for January, the global lender lowered its projection for Saudi Arabia’s gross domestic product growth this year to 1.8%, based on low oil prices and crude output along with rising geopolitical tensions. This is down from 2.4% in its October report. However it raised its forecast for next year by 0.2%, to 2.1%. Riyadh has projected 2.6% GDP growth for 2019.

The world’s top crude exporter, the kingdom has been hit hard by tumbling oil prices and saw its economy shrink by 0.9% in 2017. It has since rebounded, with healthy 2.3% growth in 2018, mainly thanks to higher oil prices and output.

Major Gulf oil exporters, including Saudi Arabia, have posted budget deficits since the crash of the global oil market in 2014. Riyadh has posted an accumulated budget shortfall of $313 billion over the past five years and projects a $32 billion deficit for 2019. Brent crude had hit $85 a barrel in early October, but prices plunged more than 40% over the following two months on oversupply and fears a trade war between the United States and China could slash demand. They partially rebounded to just above $60 a barrel since a new deal came into effect, under which OPEC and non-OPEC oil producers agreed to trim output by 1.2 million bpd. Oil prices have remained volatile in recent months, hitting $55 a barrel in early January. (AB 21.01)

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5.11 Saudi Private Sector Growth Slows to 9 Year Low in 2018

Saudi Arabia’s non-oil private sector grew at its slowest rate in nine years during 2018, according to the Emirates NBD Purchasing Managers’ Index (PMI) for the Gulf kingdom. The headline PMI, which collects data from a monthly poll of business conditions in the private sector, averaged 53.8 during last year compared to an annual average of 58.0 over the previous eight years. In December, the PMI fell to 54.5 from a year-high of 55.2 in November, with the rate of job creation slipping to a 20-month low.

While output dipped from its recent peak in November, it remained comfortably above the 2018 average of 57.6, coming in at 58.2. New orders followed a similar trend, falling from November but at 58.4 still stronger than seen earlier in the year. However, new export orders remained weak implying that the bulk of new orders are being driven by domestic demand, achieved through continued price discounting. Output prices decreased at a marginally faster pace in December, as firms continued to cite strong domestic competition.”

Despite easing since November, output growth in December remained quicker than the average over 2018 as a whole. The survey indicated that business activity had risen in part due to stronger demand, with companies noting a further – albeit slightly slower – increase in inflows of new business. New export orders were up for a third straight month but only fractionally, indicating that the pick-up in demand was centered on the domestic market. While underlying market conditions were reported to have improved, the survey continued to point to strong competitive pressures across the private sector and, on average, firms reduced selling prices in order to help support sales. (AB 12.01)

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►►North Africa

5.12 Egypt Reports Initial Budget Surplus of EGP 20.8 Billion in First Half of FY 2018/19

Egypt achieved an initial budget surplus of EGP 20.8 billion during the first half of the 2018/19 fiscal year, Finance Minister Mohamed Maait said on 21 January. The 2018/19 budget’s expenditures total EGP 1.41 trillion and projected revenues are targeted at EGP 990 billion. The minister described these figures as good results, saying that this initial surplus represents 0.4% of the GDP, compared to an initial deficit of 0.3% of the GDP in the same period of the previous fiscal year. Maait explained that the positive figures are partly due the government’s policy of encouraging investments in infrastructure in order to attract private sector business activity to all vital economic sectors.

The 2018/19 budget aims to reduce the debt rate of state bodies to 93% of the GDP, while achieving a real growth rate of 5.8%, he added. In 2017/18 fiscal year, Egypt’s budget deficit recorded 9.8% of GDP down from 10.9% in the previous fiscal year, the lowest level below the 10% benchmark for six years. It was also the first time in 15 years for the final state budget account to record a primary surplus of EGP 4.4 billion. The 2017/2018 primary balance figures do not take into consideration interest payments on outstanding government debts for the fiscal year, which stood at EGP 438 billion. (Ahram Online 21.01)

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5.13 Egypt Ushering in E-Payments

The new Egyptian national e-payment card Meeza (meaning “merit” in Arabic) is being released onto the market through the National Bank of Egypt (NBE) and Banque Misr and will soon be rolled out at other banks such as Banque du Caire. Meeza is the latest financial inclusion initiative by the Central Bank of Egypt (CBE) to push towards more cashless payments in Egypt. The prepaid card can be recharged through the banks or ATMs as many times as its holder desires before it expires. Only an ID is required to issue the card — people 16 years or older can access Meeza cards — and it is exempted from administrative fees for the first month.

An NBE statement explained that Meeza would be available at all its branches in the second half of January to serve the needs of a wide stratum of people. Fees after the first month are set at LE25, according to the NBE. People can also use the Meeza card without the need to open a bank account. Shopping online, making transfers and paying for different government and private-sector services are some of the merits granted to Meeza holders, who can also withdraw cash from ATMs, pay government bills, and buy from a wide network of merchants who have point-of-sale terminals. Meeza provides the same services offered by Visa and MasterCard, but it can only be used locally. Its holder should also have a valid balance on the card, since it is prepaid. The card is issued by the Egyptian Banks Company in cooperation with the Ministry of Communications and Information Technology, the CBE, and a number of banks in the domestic market. The CBE aims to issue 20 million Meeza cards in the next three years.

The Ministry of Finance announced in September that Meeza cards would be able to handle all government payments, such as pensions and subsidies, within the framework of amendments to the public accounting system that dictates that all government payments should be electronically settled in 2019. (DNE 19.01)

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5.14 Florida Companies Are ‘Well-Suited’ to Do Business in Morocco

Enterprise Florida (EFI), the state’s principal economic development organization, is planning a business delegation of small and mid-sized Florida manufacturers and services providers on an export sales mission to Casablanca. The trade mission is scheduled for 14 – 18 April with the aim to facilitate business cooperation between the Florida delegates and their counterparts in Morocco. EFI also noted the Free Trade Agreement (FTA) signed between Morocco and the US in 2006, the only U.S. FTA with an African nation. The FTA eliminated a 95% tariff on traded consumer and industrial goods exported to Morocco.

As part of the export sales mission, EFI will set up “pre-screened, one-on-one Gold Key meetings” with interested Moroccan companies, in coordination with the US Commercial Service. Based on a first-come, first-served rule, the organization will select only 12 small and mid-sized Florida companies for the Gold Key package. (MWN 16.01)

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6: TURKISH, CYPRIOT & GREEK DEVELOPMENTS

6.1 Greece’s Public Debt on the Rise

Greece’s public debt reached €334.988 billion in the third quarter of 2018, an increase of €21.493 billion over that of the same quarter in 2017, the Greek National Statistical Authority (ELSTAT) said. The Greek statistical authority noted that Greek public debt in the third quarter of 2017 was €313.495 billion. At the same time, the European Union’s Statistic Authority, Eurostat, announced on Monday that the Eurozone’s public debt represented 86.1% of the E.U.’s GDP for the third quarter of 2018. The Eurozone’s debt fell by 2.1% compared to the same quarter of 2017. Greece continues to hold the Eurozone’s highest ratio of public debt compared to its GDP, with 182.2%, followed by Italy at 133% and Portugal at 125%.

According to the figures published by ELSTAT, Greece’s revenues from income and property taxes during the third quarter of 2018 increased by €446 million, totaling 23.7% of total tax revenues for the quarter. Several sources of revenue recorded a slight increase compared to the third quarter of 2017 as well. The total amount of money brought in by the Greek government in July, August and September of 2018 was €23.260 billion, an increase of €302 million compared to 2017. Public spending in Greece for the same period was higher by an amount of €441 million, reaching €20.892 billion. The spending included social benefits, public sector salaries and many other types of expenditures. (ELSTAT 21.01)

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6.2 Greek Households Have Lost 28% of Their Assets Over the Past Decade

Greek households lost 27.9% of their assets in the decade from 2008 to 2018, Alpha Bank noted in its weekly financial bulletin. The lender’s analysts say that this drop was the biggest in the Eurozone, followed by those recorded in Spain, Italy and Cyprus, while Germany recorded significant gains during the same period. Households in Greece have recorded the biggest decline in the Eurozone’s non-financial wealth after their counterparts in Spain, a development that mainly results from the slide in the Greek property market in previous years. Nevertheless, realty is currently showing signs of recovery in terms of both residential and commercial properties, with the house price index climbing 1.3% in January-September 2018 on an annual basis, while the price indexes for offices and retail spaces have climbed 7.4% and 3.1% respectively. The Alpha bulletin notes that household expectations regarding their spending capacity, employment conditions and the general economic situation are on the rise. (GR 21.01)

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6.3 Greek Supermarket Sales Increased 2.2% in 2018

Greek supermarket sales recorded a rise in sales in 2018 for the second year in a row, as the sector appears to be entering a period of relative normality after its dramatic developments and radical restructuring. Last year also saw significant merger and acquisition activity, though not of the scale of previous years and without any bankruptcies, while the smooth course is also set to continue this year.

Data research company Nielsen reported that supermarket sales grew 2.2% last year compared to 2017 (a figure concerning stores of 100 square meters or larger on mainland Greece and the island of Crete). That means turnover amounted to about €9.36 billion in 2018, from about €9.16 billion in 2017 and €9.02 billion in 2016. Still, so-called fast-moving consumer goods (FMCG) – everyday products bought on a frequent basis – underperformed and only posted a year-on-year increase of 1.8% in 2018. Nielsen argued that the overall positive picture of the sector is due to an increase in demand and marginal inflationary trends, and has led to the restructuring of the retail chain branches. (eKathimerini 16.01)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 PM Netanyahu Visits Chad as Ties with Israel are Renewed

On 20 January, Prime Minister Benjamin Netanyahu and Chad President Idriss Deby announced at the Presidential Palace in Ndjamena, the capital of Chad, the resumption of diplomatic relations between Chad and Israel. The two sides signed an official memorandum on the resumption of relations between the two countries. Other agreements for agricultural systems, military equipment and weapons were also signed. (MFA 20.01)

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*REGIONAL:

7.2 Pope to Visit the UAE on 3 – 5 February

The UAE will be welcoming Pope Francis from 3 -5 February on his first visit to the Arabian Gulf region. His visit is ostensibly to participate in the Global Interfaith Conference on Human Fraternity. The Pope’s visit coincides with the visit of the Grand Imam of Al Azhar Dr Ahmad Al Tayeb, where the two prominent religious figures will hold a historic meeting to launch a global humanitarian message. The program will include the inauguration of the region’s first historic mass to be marked by Pope Francis in the presence of 135,000 followers of the Catholic Church.

A Roman Catholic Bishop has been seated in the UAE since 1974. St. Joseph’s Cathedral is the seat of the Apostolic Vicar of Southern Arabia, Bishop Paul Hinder. St. Joseph’s was established nine years earlier, six years before the late Shaikh Zayed Bin Sultan Al Nahyan united the UAE as a nation in 1971.

Over one million Christians (about one-ninth of the current UAE population) live and work in the country. While many different Christian faiths worship in churches throughout the UAE, most of the Christian population is Roman Catholic. An estimated 135,000 Catholics from the UAE and abroad are expected to attend the mass to be marked by Pope Francis, which will be held at Zayed Sports City. Today, there are 76 churches and places of worship in the UAE for people of different faiths. (GN 21.01)

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7.3 Greek PM Tsipras Wins Confidence Vote – Boosting Macedonia Accord

Greek Prime Minister Alexis Tsipras won a confidence vote in parliament on 16 January, clearing a major hurdle for Greece’s approval of an accord to end a dispute over Macedonia’s name and averting the prospect of a snap election. Tsipras called the confidence motion after his right-wing coalition partner Panos Kammenos quit the government on 13 January in protest over the name deal signed between Athens and Skopje last year. Parliament gave Tsipras 151 votes, meeting the threshold he required in the 300-member assembly. His leftist Syriza party has 145 seats in parliament while additional support was gleaned by defectors of Kammenos’s ANEL party and independents.

Greek opponents of the agreement say Macedonia’s new name – the Republic of North Macedonia, reached after decades of dispute between Athens and Skopje, represents an attempt to appropriate Greek identity. Macedonia is the name of Greece’s biggest northern region. The deal was signed between the two countries in mid-2018, contingent on ratification of parliaments in both countries and a necessary step for the tiny Balkan state to be considered for European Union and NATO membership. The Macedonian parliament recently ratified the pact. It has yet to be brought to a vote by Greece, though that is expected this month. (Various 16.01)

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Olympic Committee of Israel and Technion Established Joint Research Center

The Olympic Committee of Israel and Technion have established a joint research center to advance Olympic Sports in Israel. The Israeli Olympic Sports Research Center aims to encourage studies that will enhance Olympic sports in Israel in line with US and European models. The (joint) establishment of the center will position Israel in an advantageous position over its competitors in world sports with regards to scientific knowledge and technology. The fields of biomechanics, motion analysis, and technological development are areas of application that will now receive special attention so the performance of Israeli athletes can be improved.

The joint research activity has already begun. The center’s first research goal is related to windsurfing – to research surfer/ surfboard compatibility in order to provide the athlete with best performance ability. It was found that a certain surfboard model can have various types of fins and this can make a difference in the athlete’s performance. This difference requires each surfer to examine and test the selected fin over time, but this takes much effort and sometimes even causes the fins to break.

The new agreement was signed by the Olympic Committee in Israel, the Technion and the Technion Institute for Research and Development. The strategic agreement for the establishment of the new Israeli Olympic Sports Research Center was initiated following a seminar held at the Technion for Olympic sports coaches and in recognition of the need for extensive and in-depth research on various aspects of sports. (Technion 30.12)

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8.2 NRGene & TOYOTA Collaborate on Strawberries for Better Local Production for Japan

NRGene and Japan’s Toyota announced the decoding of a leading commercial strawberry genome, a key milestone in the development of high-quality, locally-produced fruits for the Japanese market. The combination of NRGene’s assembly of the strawberry genome and Toyota’s GRAS-Di DNA analysis technology will enhance the development of natural strawberry varieties better suited to the Japanese market. NRGene’s DeNovoMAGIC 3.0 genomic big-data artificial intelligence (AI) tool is being used to develop the first high-quality, comprehensive genome assemblies of complicated food genomes, including wheat, potato and shrimp. Strawberries have one of the most complex genomes ever assembled, as they encompass eight copies of every gene (by comparison, humans have just two copies). Assembling the strawberry genome could increase natural breeding efficiency and lead to the development of more productive varieties.

In addition to its core business of making ever-better cars, Toyota has been working since 1999 to enrich communities through a range of business initiatives that positively impact the environment. Prominent examples include plant improvement techniques to identify disease-resistant sugar cane genes and analysis of the strawberry genome. With the world now facing an aging farming population and declining food self-sufficiency, Toyota is pursuing projects with NRGene to further support and encourage the development of the agricultural industry.

Ness Tziona’s NRGene is a Genomics company that provides turn-key solutions to leading breeding companies. Using advanced algorithmics & extensive proprietary databases, we empower breeders to reach their full potential by achieving stronger and more productive yields in record time. NRGene’s tools have already been implemented by some of the leading agribiotech companies worldwide, as well as the most influential research teams in academia. (NRGene 13.01)

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8.3 NRGene and Macrogen Launch Ultra-High-Density SNP Genotyping Service

NRGene and Rockville, Maryland’s Macrogen Corp launched a joint sequencing-based genotyping service, ArrayMAGIC, at the Plant and Animal Genome (PAG) conference in San Diego. The new offering provides ultra-high-density single nucleotide polymorphism (SNP) genotyping at a low cost per data-point, making this valuable technology more accessible for a wide range of agricultural applications.

The new service is designed to make high-quality SNP genotyping affordable and available as needed. ArrayMAGIC customers will benefit from a simple, yet comprehensive “tissue to knowledge” experience, tapping into the expertise of all three participating companies. To streamline the process, a dedicated website will be launched to advise customers on how to send samples to Macrogen Corp. A novel, cost-effective sequencing library prep method, provided by iGenomX, is employed to create an ultra-low coverage sequence dataset for each sample. NRGene then leverages its extensive proprietary database and analytical tools to impute a high-resolution SNP set from this data.

Rehovot’s NRGene is a genomics company that provides turn-key solutions to leading breeding companies. Using advanced algorithmics & extensive proprietary databases, we empower breeders to reach their full potential by achieving stronger and more productive yields in record time. (NRGene 12.01)

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8.4 ChemomAb Clinical trial of CM-101 in Patients with Non-Alcoholic Fatty Liver Disease

ChemomAb, a clinical-stage biopharmaceutical company focused on the development of novel therapies for fibrotic-inflammatory diseases, announced dosing of the first patient in a Phase 1b repeated dose clinical trial with CM-101 in non-alcoholic fatty liver disease (NAFLD) patients. The company’s lead investigational drug candidate, CM-101, is targeting the chemokine CCL24, an important driver of fibrotic processes. The Phase 1b clinical trial is a randomized, double-blind, placebo-controlled study designed to evaluate the safety, tolerability, pharmacokinetics and pharmacodynamics in people with nonalcoholic fatty liver disease. Patients will be randomized to receive doses of CM-101 or placebo for 12 weeks followed by a recovery phase.

Ramat HaChayal’s ChemomAb is a clinical-stage biopharmaceutical company that specializes in the development of proprietary monoclonal antibodies directed towards novel targets for the treatment of fibrotic-inflammatory disorders including NASH as well as orphan indications. The antibodies are designed to treat patients with fibrotic and inflammatory diseases through a novel dual mechanism of action that interferes with fibrosis processes directly as well as attenuates the inflammatory process that supports the fibrotic milieu and disease progression. The leading compound, CM-101, was selected after meticulous testing in a series of pre-clinical animal models simulating human disorders and has shown promising safety and efficacy as well as a novel mechanism of action. (ChemomAb 10.01)

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8.5 Lumir Lab, a Cannabis Lab, Set up at Hadassit on Hebrew University’s Ein Kerem Campus

Tel Aviv’s Asana Bio Group, now taking its first steps towards growing cannabis in Malta, has invested $2.3 million in founding Lumir Lab, a company that will run a laboratory for research on cannabinoids, the active ingredients in the cannabis plant. The laboratory is designed to provide analysis services for the composition of active ingredients in the cannabis plant and adaptation of its strains to specific diseases. The laboratory will be based on the abilities of Hebrew University Prof. Lumir Hanus, a cannabis researcher who has worked for decades with the biggest authority on medical cannabis, Prof. Raphael Mechoulam. During his 50 years of research, Hanus has directed and isolated over 1,000 active ingredients in the plant, according to the company.

The laboratory company will be located on the Hebrew University of Jerusalem’s biotech campus, but will be a private company not owned by the university. Lumir Lab’s first cooperative effort will be with Gynica, a research and development company for treatment of endometriosis, a painful disease in which the layer of tissue that normally covers the inside of the uterus grows outside of it. Lumir Lab will help Gynica detect the best composition of active ingredients in cannabis for treating endometriosis and which strains of cannabis contain this composition. The laboratory does research only on plants and cells, but it can mediate between Gynica and Hadassah Medical Center in carrying out research on animals and people, if the product reaches this stage. (Hadasit 14.01)

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8.6 SeeTree Raises $11.5 Million

SeeTree has come out of stealth and announced that it has closed a $11.5 million Series A financing round led by Hanaco Ventures, and with the participation of investors from its seed round, including Canaan Partners Israel and Uri Levine and his investors group, as well as iAngels and Mindset. The company has raised $15 million to date including this latest financing round.

SeeTree also announced that it is launching a new agritech service for permanent crop growers who are looking to gain deeper insight into the health and productivity of their trees. The end-to-end service provides growers with intelligence on individual trees and tree clusters from the air, ground, and underground. Data extraction is performed using high-resolution, multi-dimensional sensing imagery obtained from drones, paired with ground sensors and rangers with boots-on-the-ground who acquire samples for further analysis.

Tel Aviv’s SeeTree offers complete transparency into the health and production of each of a grower’s trees by leveraging the most powerful innovations available. An end-to-end Intelligence Network provides visibility, monitoring and actionable analytics to optimize farming. SeeTree uses the power of machine-learning algorithms to get smarter and offer the most precise window into the strength of trees. (Various 16.01)

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8.7 Tyto Care Adds $9 Million More to its Series C Round

Netanya, Israel Tyto Care brought in $9 million in additional strategic funding from Sanford Health, Itochu and Shenzhen Capital Group. The new backing extends a nearly $25 million Series C round led by Ping An Global Voyager Fund that was announced last year and brings the round’s total to $33.5 million. The new funding will allow Tyto Care to continue pursuing plans for growing its telehealth business, which include expansion into Asian and European markets.

Since the earlier part of Tyto Care’s Series C funding round last year, the company has made its interest in international markets clear. The service launched in Canada last summer after receiving approval from its government, and scored a CE Mark during the fall. But while Tyto Care’s approach of pairing virtual care with purpose-built connected monitoring tools helps it stand apart from the crowd, it still has to contend with the larger and more established names in telehealth. American Well, Doctor on Demand, Teladoc, MDLive and HealthTap are all in higher demand.

Tyto Care offers a remote consultation service, which it supports with a number of devices that are designed to better enable these virtual visits. Housed within the remote care kits sold to providers, insurers and consumers alike are a camera, a basal thermometer, an otoscope, a stethoscope and tongue depressor, all of which transmit a user’s specific biometrics to the physician. The calls themselves are handled through an app, and can yield a diagnosis, treatment plan and prescription if necessary. (Tyto Care 17.01)

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8.8 Yofix Launches Clean-label, Plant-based Yogurt Alternative

Ashdod’s Yofix Probiotics, the winner of PepsiCo’s European Nutrition Greenhouse Programme 2018, launched its first dairy-free, soy-free yogurt alternative line with three fruit flavors. The products are based on a unique, clean-label formula made from just a few natural ingredients. It is traditionally fermented and contains live probiotic cultures plus the prebiotic fibers that feed them. The new product line is environmentally friendly and vegan, and leaves a low carbon footprint since there is no use of cow milk and, unlike almond or cashew, does not require a great amount of water. Most importantly, the production process is carefully designed to ensure zero waste. All raw materials utilized in production remain in the final product.

Increasingly important to health-minded consumers is the health of the environment, driving them toward sustainable products that leave a minimum footprint. Unfortunately, most of the yogurt alternatives on the market can’t meet dairy yogurt when it comes to taste, texture, and nutrition. Or, to be a good source of protein, calcium and fiber, they compromise organoleptic characteristics. Yofix offers a new-generation yogurt alternative that hits all the marks for flavor, texture, nutrition, and eco-friendliness. It has no added sugars, flavors, colors, or preservatives.

The company launched the plant-based yogurt line with Strauss Dairies in Israel in December under the ONLY brand in three flavors to target the rapidly expanding demand for vegan, flexitarian and lactose-intolerance populations. The start-up was the first company to join The Kitchen, the leading food-tech incubator and seed investor in Israel, and part of the Strauss Group, the main investor in Yofix. (Yofix Probiotics 15.01)

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8.9 Assuta to Raise $150 Million VC Health Fund

The Assuta chain of medical clinics and private hospitals, controlled by Maccabi Health Services with a 95% stake, has founded a venture capital fund for investing in medical devices in the later stages of development (before or just after regulatory approval) and digital medicine. The fund will be called Assuta Life Sciences Ventures – Alive. Some $37 million of the initial $50 million to be raised by the fund in the first stage has already been raised, with the rest of the initial sum slated for completion in the first quarter. The fund plans to reach $150 million by mid-year.

Assuta operates private hospitals in Tel Aviv, Rishon LeZion, Haifa and Beer Sheva; a public hospital in Ashdod; and a number of private clinics that are not full hospitals in Tel Aviv, Ashdod and Ra’anana.

As reported last July by Globes, Assuta’s 2016 revenue totaled NIS 1.5 billion, 40% of which came from treatment of Maccabi Health Services members and the rest from private revenue. The chain has grown rapidly in recent years, and its private activity has more than doubled. The chain was profitable as of 2016, when its profit was $400 million. The profits are not given to Maccabi Health Services; they are retained by Assuta for development purposes. The chain bought, brought to Israel, or developed its own unique technologies in recent years. Assuta operates a unit for clinical research that for several years has provided it with a direct connection to the life sciences industry in Israel and overseas. The Assuta group also offers stipends for research by its staff and by external concerns. (Globes 21.01)

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8.10 Kitov Announces Pricing of $6 Million Registered Direct Offering

Kitov Pharma has entered into definitive agreements with institutional investors providing for the issuance of 3,428,572 American Depositary Shares (ADS) at a purchase price of $1.75 per ADS in a registered direct offering. Kitov will also issue unregistered warrants to purchase up to 2,571,430 ADSs. The warrants will have a term of 5.5 years, be exercisable immediately following the issuance date and have an exercise price of $2.00 per ADS. The offering is expected to result in gross proceeds of approximately $6 million. H.C. Wainwright & Co. is acting as the exclusive placement agent in connection with this offering.

Tel Aviv’s Kitov Pharma is an innovative pharmaceutical drug development company. Leveraging deep regulatory and clinical-trial expertise, Kitov’s veteran team of healthcare and business professionals maintains a proven track record in streamlined end-to-end drug development and approval. Kitov’s flagship combination drug, Consensi, treating osteoarthritis pain and hypertension simultaneously, was approved by the FDA for marketing in the U.S and is partnered in the U.S., China and South Korea. In addition, Kitov’s NT219, a novel patented small molecule designed to overcome cancer drug resistance, is currently in pre-clinical development. (Kitov Pharma 16.01)

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8.11 Itamar Medical Announces Definitive Private Placement Agreement for $11.5 Million

Itamar Medical has raised $11.5 million in a private bridging placement. US investors led the round, including a fund managed by Deerfield Management, a large veteran investment company specializing in the life sciences, and funds Triple Gate Capital, West Elk Partners, and Alpha Capital. The Israeli investor in the round is More Investment House. Itamar Medical was advised by Cybele Investments, which handles capital market affairs for the company, including financing rounds.

The share price for the round was NIS 1.17, a 16% discount on the market price. A bridging round at such a discount is often used to recruit strong investors before a public offering and to make sure that the company embarks on the offering with a full treasury. The addition of more investors before a public offering is possible.

Completion of the bridging round requires approval from the US Securities and Exchange Commission (SEC), because the US investors received ADS (American Depositary Shares), a US security that tracks a share on a foreign stock exchange, and the ADS will be registered in the US. The SEC is currently paralyzed by the US governmental shutdown, but the Israeli part of the round can be completed.

Itamar Medical has developed a system for home diagnosis of breathing disorders during sleep. The system is marketed mainly through cardiologists, because of the close connection between heart failure during sleep and metabolic syndrome (heart disease, obesity, and diabetes).

Caesarea’s Itamar Medical is a medical device company focused on leading the integration of Sleep Apnea management into the cardiac patient care pathway. Their core strategies include (i) the development, manufacturing and sales of the WatchPAT diagnostic product line based on the proprietary PAT® signal that was proven as a simple, comprehensive, reliable and scalable alternative to airflow and it enables point-of-deployment versatility; and (ii) Total Sleep Solution – a product that includes a field support organization, partnerships, as well as core and supporting technologies that enable all physicians in general and Cardiologists in particular to provide a seamless and full continuum of care to Sleep Apnea patients as part of their care pathway. In addition, the company has developed and is currently marketing the EndoPAT system – an endothelial function assessment tool for risk classification used by clinicians, researchers and pharma companies to easily and reliably quantify and track arterial health. (Itamar 17.01)

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8.12 Aidoc’s Artificial Intelligence Helps Antwerp University Hospital Radiologists Save Lives

Tel Aviv’s Aidoc announced that Antwerp University Hospital has purchased Aidoc’s neuro solution. Aidoc identifies time-sensitive and life-threatening conditions in CT scans, flagging them to ensure that the images are seen immediately by a radiologist. This results in faster diagnoses and higher quality patient care. Antwerp University Hospital was among the first institutions in Europe to incorporate Aidoc’s cutting-edge technology. Earlier last year, the university hospital was the first facility in Europe to incorporate Aidoc’s solution into their clinical workflow in order to better detect two life-threatening conditions: cervical spine (C-spine) fractures and intracranial hyperdensities (ICH).

Radiology is one of Antwerp University Hospital’s focal points, performing 160,000 procedures per year, offering high-quality patient care, and embracing ground-breaking research. The hospital prides itself in its forward-thinking radiology department, which is constantly taking steps to increase efficiency through the incorporation of innovative technologies. The ability of the hospital to apply Aidoc’s solution into their already existing GE PACS without making any changes to their workflow is revolutionary for both the patients and the radiologists. The adoption by Antwerp University Hospital is expected to be quickly followed by other top hospitals in the region. (Aidoc 21.01)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 mPrest Partners With SDG&E to Deliver Intelligent Underground Distribution Cable Analytics

mPrest has delivered to San Diego Gas & Electric (SDG&E) its URD Cable Fleet Maintenance Optimization application, an AI enhanced tool that predicts impending cable failures and enables SDG&E to optimize URD cable fleet maintenance operations. mPrest and SDG&E will be jointly delivering a paper that presents their breakthrough data-driven approach to URD cable maintenance at the upcoming DistribuTECH 2019 conference.

Utilities’ limited visibility into the condition of their cable fleets makes it difficult to prioritize maintenance and replacement activities, predict impending failures, and prevent them before they happen. Using AI and a combination of system information, and the utility’s operations and engineering insights, mPrest is able to provide an application that provides superior operational and financial results. mPrest’s interactive budget optimization tool allows SDG&E’s technical teams to import and analyze historical data regarding failures and current fleet performance. They can then obtain a breakdown of the most relevant features affecting cable lifespan, as well as a detailed and prioritized list of cable segments to be replaced given a specified budget.

By gaining better insight into cable failure probability, at a segment level, SDG&E is now able to implement intelligent predictive maintenance, thus reducing the need for costly reactive cable replacement. By combining financial and analytical tools, SDG&E’s financial team can build a proactive budget, based on the cable replacement prices for the reactive and proactive cases, broken down into both CapEx and OpEx costs.

Tel Aviv’s mPrest is a global provider of mission-critical monitoring, control and big data analytics software. Leveraging the power of the Industrial IoT, mPrest’s integrative “system of systems” is a proven catalyst for digital business transformation. Their innovative management solutions have been deployed in next-gen applications for carrier service providers, system integrators, smart cities as well as IoE (Internet of Energy) applications for power utilities, defense and HLS. (mPrest 14.01)

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9.2 Magal Awarded $2.5 Million for an Integrated Security Solution for the Spanish Port of Huelva

Magal Security Systems has won a $2.5 million contract to deliver technology and services to the Port of Huelva in Spain. This new project is an extension of the overall security solution which was delivered by Magal to the port in prior years. The solution includes the coverage of the port’s perimeter with anti-climb smart fences, combined day/night and thermal cameras using dual thermal and CCD technologies.

Yehud’s Magal is a leading international provider of solutions and products for physical and cyber security, as well as safety and site management. Over the past 45 years, Magal has delivered tailor-made security solutions and turnkey projects to hundreds of satisfied customers in over 80 countries – under some of the most challenging conditions. (Magal Security Systems 14.01)

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9.3 COTI Launches TestNet – Aimed at Streamlining Remittance Payments & Stablecoins

COTI has just launched its TestNet. The move will bring enterprises, merchants, governments, decentralized payment networks and stable coin issuers that much closer to making digital currencies viable for everyday mainstream use. A number of companies will soon begin using COTI’s technology, including payment processors like Processing.com, top remittance companies such as Millenning, stable coins like Ormeus Cash (OMC), and countless others. Orme’s Trustchain integration will enable OMC to be accepted by merchants all around the world as payment for goods and services while bypassing the roadblocks experienced by traditional blockchain-based payment networks.

As for Millening, it will be utilizing COTI’s Trustchain technology to supply users with optimized remittance solutions from Singapore to European countries and other locations around the world. With COTI’s extreme scalability, near zero fees and price stability mechanisms, cross-border remittances will become instantaneous, low cost and highly secure. The TestNet release features a number of key innovations from the COTI R&D team, including the Trust Score Update Algorithm (TSUA), Arbitration Service, one-click payment requests, DSP consensus, node managers and more.

COTI’s TSUA has been designed to efficiently collect data on user behavior and to relay the information to decentralized Trust Score Nodes. Trust Scores are then updated and used by the Trustchain Algorithm to validate and confirm transactions faster at a rate of tens of thousands of transactions per second (TPS). COTI has also developed an Arbitration Service that offers dispute resolution through a decentralized collective of highly trusted network participants. This is a major development in the cryptocurrency sphere, which currently does not safeguard users against errors, fraud and counterparty abuse. (COTI 14.01)

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9.4 BigID & Ionic Security Enhance Data Governance & Privacy for Multi-Cloud Compliance

BigID and Atlanta’s Ionic Security, a pioneer of high-assurance data trust, announced a partnership to enable organizations to automate policy enforcement and auditability driven by data intelligence. The partnership removes barriers to cloud adoption for organizations struggling with compliance, allowing them to take a consolidated and granular approach to protecting sensitive data by integrating BigID discovery and classification with the Ionic Data Trust Platform’s real-time policy management. Together, BigID and Ionic provide an automated, accurate, and scalable solution that identifies, classifies, and enforces data control policies over sensitive personal information and other critical data. This reduces the risk of unauthorized access and ensures compliance with the growing body of data privacy and protection laws and regulations.

Enterprises can limit risks, along with the potential exposure from manual control misconfiguration, cloud environment policy silos and cloud lock-in, through the programmatic integration of BigID’s data intelligence with the persistent and real-time policy enforcement capabilities of Ionic’s Data Trust Platform. This integration allows organizations to gain the cost, operational, and functional benefits of cloud services while balancing security, privacy, and compliance risks. The current integration will be available to new and existing customers immediately. BigID and Ionic plan to extend the scope of the partnership through support for additional use cases and leverage BigID’s technology advances in unstructured data discovery over the course of 2019.

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9.5 Syte Announces New Visual Search Navigation Tool for Retailers

Syte is releasing a new Visual Search Navigation tool for retailers which will allow their shoppers to navigate, filter, and search for products entirely through visuals. With Syte’s Visual Search Navigation (VSN) implemented on a retailer’s site, shoppers can filter and browse using visual icons. VSN allows shoppers to show, instead of explain, what they are looking for. With Syte’s Visual Search Navigation (VSN) implemented on a retailer’s site, shoppers can filter and browse using visual icons. VSN allows shoppers to show, instead of explain, what they are looking for.

Powered by their pre-existing Deep Tagging solution which uses visual AI to assign detailed textual tags to a retailer’s inventory using only the product image, Visual Search Navigation will allow shoppers to use animated icons to guide their product navigation. Users can narrow down their search until they are left with a batch of products that match exactly what they were searching for.

Tel Aviv’s Syte is a visual AI technology provider that improves retailer’s site navigation, product discovery and user experience by powering solutions that engage and convert shoppers. With Syte, retailers can leverage shoppers’ inspiration and existing product interest to ensure they present the right products at the right time. Partnerships with technology innovators such as Microsoft, SAP, Naver and Oracle have established Syte as a leader in the market. Powering the visual search within Samsung and other leading phone manufacturers allows Syte to increase the reach of their retail clients. Brands currently using Syte’s technology include Farfetch, Nike, Marks & Spencer and Bonprix. (Syte 16.01)

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9.6 Eyesight Bringing Advanced Driver Monitoring to Automotive World

Herzliya Pituah’s Eyesight, the leading AI computer vision company, demonstrated its cutting-edge “Driver Sense” Driver Monitoring System (DMS) at Automotive World in Tokyo. The announcement comes after Eyesight was given an Excellence Award for promoting trade relations between Israel and Japan.

Eyesight’s Driver Sense, Driver Monitoring System, monitors a driver’s gaze direction, pupil dilation, eye openness, blink rate and head position. Using ultra-efficient algorithms, it detects levels of drowsiness and distraction quickly, even on low-power embedded systems. The system also recognizes the identity of the driver, allowing for automatic customization of the seat, mirrors and entertainment. Eyesight is also celebrating the announcement that the company has won a special award for excellence in promoting trade relations between Israel and Japan in the field of computer vision and AI. The award, from the Israel-Japan Friendship Society and Chamber of Commerce, recognizes Eyesight’s leading position in the computer vision sector and its relationships with Japanese technology companies.

Eyesight’s Driver Sense DMS has won design awards with leading “Tier-1” companies in the industry, who will integrate the technology into their new vehicles. Eyesight recently announced that it had teamed up with Samsung to provide a bundled hardware and software solution that will offer advanced capabilities and quick time to market for the carmakers and Tier-1 manufacturers. Additionally, Eyesight’s is now offering “Fleet Sense” an aftermarket DMS solution to be used to monitor and protect drivers and other road users in the fleet industry, where drowsiness can be a particular problem. (Eyesight 16.01)

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9.7 Ethernity Networks Successfully Completes Delivery of Its ACE-NIC100 for Major Korean OEM

Ethernity Networks has successfully completed delivery of its 100Gbps ACE-NIC100 FPGA SmartNIC to a major Korean OEM. The ACE-NIC100 will be incorporated into commercial off-the-shelf (COTS) servers that come with fewer CPU cores compared to regular data center servers, resulting in significant power and cost reduction. The combination of the powerful ACE-NIC100 with edge-optimized COTS servers deliver a high-performance yet affordable and energy efficient platform, ideal for network edge virtualization. The contract between Ethernity and the Korean OEM specified the final delivery of a customized solution on FPGA, embedding Ethernity’s rich networking features including hierarchical QoS, flow classification, protocol offloading, and routing, with scheduled end-of-year acceptance by the customer.

Lod’s Ethernity Networks provides innovative software-defined networking and security solutions on programmable hardware for accelerating telco/cloud networks. Ported onto any FPGA, Ethernity’s software offers complete data layer processing with a rich set of networking features, robust security, and a wide range of virtual functions to optimize your network. Their ACE-NIC smart network adapters, ENET SoCs, and turnkey network appliances offer best-in-class all-programmable platforms for the telecom, cloud service provider, and enterprise markets. (Ethernity Networks 16.01)

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9.8 Brose & Vayyar Collaborate On Sensor Technology for New Door and Seat Functions

German automotive supplier Brose is now working together with sensor specialist Vayyar on the realization of autonomous vehicles by integrating innovative sensor systems in power adjustment systems and drives in interior and exterior applications.

Electronics play a key role in this endeavor. Brose is a world market leader in mechatronic systems for doors and lift gates, as well as a leading supplier of power seat structures. The company also has more than 30 years of experience in the field of electronics where it has around 600 employees and supplies over 75 million electronic systems and sensors annually. Brose doors, equipped with Vayyar’s sensors, enable a full protection of the door without compromising design and at a minimal footprint in a single location. Precise interior monitoring in 3D adds functions such as anti-theft protection, gesture control and recognition of vital signs such as breathing rates. Precise sensing of occupancy and the position of seats also makes it possible to eliminate previously required components. Customers value this approach to doors and interior monitoring: there have been several development requests and the companies have already equipped the first test vehicles with prototypes.

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9.9 Kornit Digital Launches the Atlas, the Next-Generation Direct-To-Garment Printing Platform

Kornit Digital announced the introduction of the Kornit Atlas. Following the success of Kornit’s Storm HD6 and Avalanche HD6 / HDK, the Atlas is the first instance of the company’s next-generation direct-to-garment printing platform, providing garment decorators and screen printers a unique tool for mastering the current and future challenges of the textile supply chain.

The Kornit Atlas is a heavy-duty system created for super-industrial garment decoration businesses. It was designed to deliver a typical annual production capacity of up to 350,000 impressions, optimizing production efficiency and cost of ownership. The Kornit Atlas is aimed at highly productive garment decorators, mid to large size screen printers and innovative businesses looking to combine state-of-the art technology with lowest cost of ownership. The system is equipped with new recirculating print heads and comes with a newly developed ink, NeoPigment Eco-Rapid. The Kornit Atlas is equipped with a unique printing engine, featuring an enhanced version of Kornit’s HD technology, complemented by a professional RIP (raster image processing) software solution, and produces prints that meet the highest standards of retail quality and durability. The all-new Atlas comes ready for Kornit’s future releases of its cloud-based business intelligence, productivity analytics and optimization software platforms, scheduled to be released in the second half of 2019. It will allow for easy future network connectivity required to support fleet management and optimization of global multi-systems and multi-site enterprises.

Rosh HaAyin’s Kornit Digital develops, manufactures and markets industrial digital printing technologies for the garment, apparel and textile industries. Kornit delivers complete solutions, including digital printing systems, inks, consumables, software and after-sales support. Leading the digital direct-to-garment printing market with its exclusive eco-friendly NeoPigment printing process, Kornit caters directly to the changing needs of the textile printing value chain. Kornit’s technology enables innovative business models based on web-to-print, on-demand and mass customization concepts. With its immense experience in the direct-to-garment market, Kornit also offers a revolutionary approach to the roll-to-roll textile printing industry: Digitally printing with a single ink set onto multiple types of fabric with no additional finishing processes. (Kornit Digital 15.01)

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9.10 ELTA Systems to Supply Compact Multi-Mission Radars to Finland

ELTA Systems, a subsidiary of Israel Aerospace Industries (IAI), was awarded a “significant” contract to supply Compact Multi-Mission Radars (C-MMR) ELM-2311 to the Finnish Defense Forces. Operationally proven, the radars will provide the Finnish Army with the capability of locating and tracking incoming Rockets, Artillery shells, and Mortars (RAM), and shall provide an interface for alerting the Army’s counter weapons systems. Supporting multi-mission capabilities, the radar can simultaneously operate as Artillery Weapon Location and Air Surveillance radar, thereby seriously inhibiting an opponent’s use of aerial threats. The radar was tested in Finland in spring 2018 to the customer’s satisfaction. The systems are scheduled to be delivered in 2021.

The ELM-2311 is a compact mobile C-band radar system. The radar implements advanced 3D Active Electronically Steered Array (AESA) antenna technology and is transportable on a single vehicle for maneuvering forces. The radar locates hostile weapon locations and calculates Point of Impact (POI) and Point of Origin (POO) in real time while simultaneously providing friendly-fire ranging.

ELTA has sold over 100 MMR systems worldwide. They have been deployed and are fully operational and combat-proven. The MMR family has grown and evolved throughout the years to offer capabilities for air surveillance, air defense, Artillery Hostile Weapon Location and Friendly Fire Ranging.

Ashdod’s ELTA Systems (http://www.elta-iai.com), a group and subsidiary of Israel Aerospace Industries, is one of Israel’s leading defense electronics companies and a global leader in its area of expertise. ELTA operates as a Defense Systems House, focused on electromagnetic sensors (Radar, Electronic Warfare and Communication) and integrated solutions. ELTA Systems’ products are designed for Intelligence, Surveillance, Target Acquisition and Reconnaissance (ISTAR), Early Warning and Control, Homeland Security (HLS), Self-Protection and Self-Defense, and Fire Control applications. ELTA Systems’ products include systems, subsystems and critical technological sub-assemblies and components, designed and produced in-house. (IAI 21.01)

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9.11 VDOO Releases Runtime Protection Agent for Connected Devices

VDOO announced the availability of its ERA – Embedded Runtime Agent for ongoing connected device security. The VDOO agent is automatically tailored for each device based on an analysis of its firmware binary by Vision – VDOO’s analysis platform, focusing on the device’s threat landscape and resources, while avoiding any significant performance or functionality impact to the device.

VDOO’s end-to-end platform facilitates security and trust for IoT devices throughout the entire device lifecycle in a cost and effort efficient manner — from security analysis to implementation, certification and post-deployment security enablement. The VDOO Vision Analysis Platform is a web-based service that performs automated analysis of a device’s firmware and determines its security gaps and requirements. Following the device’s analysis, the VDOO platform offers detailed guidance for vendors to efficiently and properly implement the identified requirements. Once security features have been implemented, the platform validates this, and provides a physical and digital certification to communicate the device’s security standing to the world.

Completing the end-to-end solution are the VDOO Embedded Runtime Agent (ERA) and Honeypot (Quicksand). The agent just released provides post-deployment detection, prevention, and mitigation capabilities against zero-days, known attack methods, and embedded devices’ malware. VDOO’s IoT honeypot works on a physical device or via emulation, providing intelligence to prepare mitigations, predict future attacks, and reveal new vulnerabilities.

Herzliya’s VDOO was established in 2017 to pioneer the space of embedded systems, with an end-to-end solution of security automation, certification, and protection. The VDOO founders’ backgrounds include an endpoint cybersecurity startup acquired by Palo Alto Networks, as well as notable experience serving in the Israeli Intelligence Elite Unit. (VDOO 21.01)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israel’s Inflation Falls by 0.3% in December, Housing Prices Still Falling

Israel’s Consumer Price Index (CPI) fell by 0.3% in December, the Central Bureau of Statistics reported on 15 January, in the lower range of analysts’ predictions. The CPI rose 0.8% in 2018, below the Bank of Israel’s annual target range for inflation between 1% and 3%. This was the second successive month that the CPI fell 0.3%, largely due to the fall in oil prices on world markets. Notable price falls in December included fuel for vehicles (7.1%), accommodation and travel (9.9%) and fresh vegetables (1.2%). Notable price rises included clothing (4.3%) and fresh chickens (1%).

The Central Bureau of Statistics also published the Housing Price Index today for October – November. The index showed that the price of the average deal falling 0.4% in October-November compared with September-October. Housing prices have fallen 2.3% over the past 12 months. (CBS 15.01)

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10.2 Israel’s Third Quarter Growth Figure Revised Upwards

The Central Bureau of Statistics announced on 16 January that Israel’s GDP grew by an annualized 2.3% in Q3/18. The figure was upwardly revised from the previous 2.1% estimate and is now the same as the initial estimate from November 2018. The economy grew by 0.6% in the second quarter and 4.4% in the first quarter. Business product grew by an annualized 2.0% in the third quarter, following increases of 1.4% in the second quarter and 4.6% in the first quarter.

Imports of goods and services rose by an annualized 5.3% in the third quarter, after rising only 0.1% in the preceding quarter. Spending on private consumption was up by an annualized 2.3% in the third quarter, and per capital spending on private consumption rose by 0.3%. Per capita spending on private consumption in annualized figures fell 4.2% in the second quarter and jumped 7.3% in the first quarter. Investment in fixed assets plummeted by an annualized 10.4% in the third quarter of 2018, following a 5.7% drop in the preceding quarter. (CBS 16.01)

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10.3 Israel’s Unemployment Level Reaches Low of 4.1% in 2018

Unemployment in 2018 dropped to an all-time low of 4.1% of the population, according to figures published by the Israeli Employment Service. The number of claims for guaranteed minimal income from the government dipped by 11%, and over the past five years, the total number of people filing that claim has dropped by 39%. Over the course of 2018, the monthly average of people who were fired or quit their jobs stood at 20,300 – compared to a monthly average of 19,600 in 2017. In total, 402,730 people filed unemployment claims in 2018, a 4.4% drop compared to the previous year. (Various 14.01)

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10.4 Israel Climbs to 5th Place in Bloomberg Innovation Index

Bloomberg ranked Israel in fifth place in its innovation index for 2019, ahead of the US (eighth place), Singapore (sixth place) and Japan (ninth place). The annual index is being published for the seventh time. Israel was rated 10th place last year, with better patent registration being responsible for a large part of the improvement in ranking. Bloomberg put South Korea in first place on the index for the sixth time, due to new investments in key technologies and a regulatory plan for encouraging startups. Germany advanced into second place due to investment in production and research by many of its industrial giants, such as Volkswagen, Daimler, and Bosch. Third and fourth places were taken by Finland and Switzerland, respectively. (Globes 22.01)

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11: IN DEPTH

11.1 ISRAEL: IVC–Meitar Exit Report 2018: Israeli Exits Reached $12.63 Billion in 103 Deals

In 2018, exits activity reached $12.63 billion in 103 deals, including four large deals, each over $1 billion:

-Orbotech – acquired by KLA-Tencor for $3.4 billion (Subject to closing)

-Imperva – acquired by Thoma Bravo for $2.1 billion

-Mazor Robotics – acquired by Medtronic for $1.6 billion (Subject to closing)

-SynaMedia (formerly NDS) – acquired by Permira for $1 billion

The total number of exit deals slightly decreased to 103 compared to 133 in 2017. According to IVC–Meitar Exit Report, the decrease is due to a decrease of M&A deals of $20 million and below.

Shira Azran, Partner at Meitar Liquornik Geva Leshem Tal & Co.: “The aggregate value of the exits in 2018 was significant, approx. $12.63 billion. A closer look at the data reveals mixed trends. On the one hand, four exits exceeded $1 billion and these deals have become part of the industry. On the other hand, during 2018 we saw a decrease in the number of exits of private companies between $250 million and $ 1 billion.” According to Azran: “An examination of the investment data indicates an increase in 2018 in general, and in particular, the number of large-scale investments in growth companies increased significantly. For example, the number of companies raising amounts of more than $30 million, rose to a peak of 62 transactions in 2018. This combination of a significant increase in the volume of investments in growth companies and a relative stagnation in exits value, highlights the fact that Israel is building a strong and significant infrastructure of companies that in the coming years will examine their ability to reach an exit that reflects a significant return to investors”. Azran adds that “examining worldwide trends, shows a trend of decrease in the number of transactions compared to an increase in overall value. This trend, in addition to consolidation of buyers, leads us to believe that in order to realize significant exit value buyers will be looking mainly for companies whose acquisition will lead to a significant impact on their activity. For certain companies this may mean that their right course of action will be to consolidate resources, thereby enabling a more significant fingerprint that will appeal to international buyers. ”

Exits by Type and Deal Size

While VC-backed deals remained at stable levels in 2018, a significant drop of 58% was noted in the non-VC-backed exits.

2018 IPO and Buyout numbers retained their historical ranges. Five Israeli life science companies completed their IPO in the US, raising an aggregate of $246 million. Three Israeli companies completed an IPO in Australia, raising a modest $12 million.

M&A values in 2018 totaled $11.1 billion compared to $6.3 billion in 2017. M&A numbers dropped 20% from 111 to 89 transactions in 2018. The four large exits above $1 billion counterbalanced a decline in the number of exits in the range of $250 million to $1 billion, from five in 2016 and eight in 2017 to just three in 2018*.

* Excluding exits over $5 billion, public companies and divestitures.

Benzi Segev, CEO of IVC Research Center: “The Israeli start-up landscape in 2018 took another step in the global direction of more money funneled into less deals. This pattern was noted on both sides of the tech deal activity – M&A and funding. Looking 12 to 18 months ahead, the fundamentals for long term growth already exist – amounts and numbers of large investments are on the rise, but it remains to be seen if the local scene could use these resources to grow.”

Exits Ratio and Time to Exit

Analysis of exit value versus amount invested showed the average ratio continuing to decline mostly in non-VC-backed companies, from 5.19 in 2017 to 4.79 in 2018. The VC-backed ratio declined to 2.61 compared to 2.92 in 2017.

According to the IVC-Meitar Exit Report, in 2018 there were 34 VC-backed companies reaching an exit after more than five years of activity, similar to the level in the last 5 years for VC-backed exits. However, the number of non-VC-backed companies that reached an exit in less than 5 years since establishment decreased nearly 60% in 2018, to only 15, compared to 34 and 36 in 2016 and 2017, respectively.

Exits by Sector and Technology Clusters

In 2018, the number of life sciences companies with exit activity continued to grow (24 deals including 7 IPOs). Exit values kept to the same level as 2017, reaching $2.98 billion.

While the number of deals in the IT & software sector remains stable, the value of 2018 exits increased to $4.49 billion from $3.31 billion in 2017.

AI (Artificial Intelligence) exit values soared in 2018 mostly due to the Datorama deal ($850m), reaching $1.15 billion, almost four-times higher compared to $307 million in 2017. This increase positively affected the AI exit ratio, 7.02 in 2018 compared to 2.11 in 2017. The number of AI exits remains in historical figures.

Cyber security exit values in 2018 set a record – $2.81 billion in 12 deals compared to $1.35 billion in 14 deals in 2017. The cyber exit ratio dramatically increased to 14.91 compared to 3.89 in 2017.

IVC Research Center is the leading online provider of data and analyses on Israel’s high-tech & venture capital industries. Its information is used by all key decision-makers, strategic and financial investors, government agencies, and academic and research institutions in Israel. IVC-Online Database showcases over 8,300 Israeli high-tech startups, and includes information on private companies, investors, venture capital and private equity funds, angel groups, incubators, accelerators, investment firms, professional service providers, investments, financings, exits, acquisitions, founders, key executives and multinational companies.

Meitar Liquornik Geva Leshem Tal is Israel’s leading international law firm and undisputed leader in the technology sector. The firm’s Technology Group numbers over 100 seasoned professionals who specialize in representing technology companies, cooperating with attorneys from complementary practice areas, such as taxation, intellectual property, and labor law and dozens of attorneys from other practice areas. (IVC-Meitar 15.01)

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11.2 GCC: Moody’s Says Stable Outlook But Reforms & Unemployment Pose Challenges

On 16 January, Moody’s Investors Service says that its outlook for sovereign creditworthiness in 2019 in the Gulf Cooperation Council (GCC) is stable overall, reflecting its expectations for the fundamental credit conditions that will drive sovereign credit over the next 12-18 months. Stronger oil prices during most of 2018 reduced fiscal and external pressures for GCC countries in the short term. But periods of higher oil prices tend to undermine the impetus for governments to diversify their fiscal bases and rein in spending, leaving their credit profiles exposed to future phases of lower oil prices.

In 2019, geopolitical tensions will also remain a key source of risk, as well as a catalyst for rising military-related fiscal spending. Longer term, climbing unemployment if nationalization policies do not increase job availability to match demand from nationals will pose political and social risks.

Five of the six GCC governments that Moody’s rates currently have a stable outlook, while one, Oman (Baa3 negative), has a negative outlook. At the start of 2018, by contrast, three of the six carried a negative outlook. While the likelihood of downgrades has diminished, it is partly from lower rating levels, following actions on Bahrain (B2 stable) in 2018.

GDP growth in the GCC will be broadly unchanged this year, as the cuts in oil production agreed by OPEC+ nations lead to stable or slightly decelerating oil GDP growth, while non-oil GDP growth picks up only modestly. Against that backdrop, Moody’s expects unemployment to be broadly unchanged or rise slightly further across the region. Over the longer term, demographic trends will cause joblessness to climb, unless the participation of nationals in the private sector increases significantly.

With most fiscal reforms now likely behind the GCC, oil prices and production will be the major drivers of fiscal balances over the coming year. Under Moody’s current assumptions of oil prices averaging $75 per barrel (bbl) in 2019, fiscal balances will strengthen modestly compared to 2018.

However, the sharp drop in oil prices in the fourth quarter of 2018 highlights the vulnerability of GCC governments’ credit profiles to future oil price declines. Should prices stay near $60/bbl, budget deficits would be materially wider and debt likely higher than we currently project.

Geopolitical tensions will also continue to simmer and could escalate in 2019 if the re-imposition of economic sanctions on Iran prompts it to embark on a more interventionist foreign policy stance in the Middle East. Military spending in many GCC states is already elevated, and a pickup in tensions prompting increased defense expenditure could put additional pressure on fiscal balances. A closure of the Strait of Hormuz by Iran would have a sizeable impact on GCC sovereigns’ credit profiles, but remains relatively unlikely. (Moody’s 16.01)

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11.3 GREECE: S&P Affirms Greece’s ‘B+/B’ Ratings; Outlook Positive

On Jan. 18, 2019, S&P Global Ratings affirmed its ‘B+/B’ foreign and local currency long- and short-term sovereign credit ratings on Greece. The outlook is positive.

Outlook

The positive outlook signifies that we could raise our ratings on Greece within the next 12 months if the economic recovery strengthens. This could result from further economic reforms implemented by the government. Another potential trigger for an upgrade would be a marked reduction in nonperforming assets in Greece’s impaired banking system, as well as the elimination of all remaining capital controls. Mitigation of fiscal risks related to the pending court decisions regarding the past pension system reforms could also trigger a rating upgrade.

We could revise the outlook to stable if, contrary to our expectations, there are reversals of previously implemented reforms, or if growth outcomes are significantly weaker than we expect, restricting Greece’s ability to continue fiscal consolidation, debt reduction, and financial sector restructuring.

Rationale

Our ratings on Greece reflect the stabilizing economic outlook, accompanied by solid budgetary performance and a very favorable government debt structure, balanced against the country’s high external and public debt burdens as well as a difficult situation in the banking system, characterized by a large stock of nonperforming loans, a challenged monetary transmission mechanism, and capital controls.

In terms of maturity and average interest costs, Greece has one of the most advantageous debt profiles of all our rated sovereigns. Our rating pertains to the commercial portion of Greece’s central government debt, which is less than 20% of total Greek debt, or less than 40% of GDP. The final disbursement from the European Stability Mechanism (ESM) program provided Greece with a sizable cash buffer, which we estimate will meet central government debt servicing into 2022. We project that Greece’s debt-to-GDP ratio will decline from 2019, aided by a recovery in nominal GDP growth.

Institutional and Economic Profile: Following the ESM program exit, Greece’s economic recovery prospects are promising

-Greece graduated from its ESM program in August 2018, having secured further debt relief and a sizable cash buffer.

-We project that the economy will grow by 2.4% on average over 2019-2022 as domestic demand strengthens and solid export performance continues.

-The pace of further economic reforms may be negatively affected by potential political maneuvering during 2019, an election year.

Following real GDP growth that we estimate at about 2.1% in 2018, we expect the economy will expand by about 2.4% in 2019, before the pace gradually strengthens over 2020-2022. Employment growth continues to be solid: We forecast above 2% growth annually through 2022, although the economy would benefit from a higher share of permanent jobs, given that in 2018 slightly more than half of new employees were hired on temporary contracts.

Over the next three years, we expect Greece’s economic growth will surpass the Eurozone average, including in real GDP per capita terms, reflecting a steady recovery following a deep and protracted economic and financial crisis. We also expect economic performance to remain balanced, with domestic demand and exports continuing as the key drivers of growth. In this context, we expect slowly rising private consumption on the back of improved employment prospects. A key constraint on the economic outlook remains authorities’ decision to subordinate public investment spending (including on education) to current expenditure, particularly on social transfers. The outlook for private investment is also still subdued, given the challenges to the banking sector, and only modest net foreign direct investment (FDI) inflows compared with peers.

Absent the materialization of external risks, such as from mounting global protectionism and a faster-than-forecast slowdown in Eurozone economic growth, Greece’s export sector is well positioned to benefit from its reinforced competitiveness. In this context, Greece’s labor cost competitiveness has improved to its level before 2000 and, together with the reorientation of domestic businesses from domestic to external demand, has resulted in almost a doubling of the share of exports of goods and services (excluding shipping services) in GDP terms, from 19% in 2009. Greece’s market shares in global trade have increased correspondingly and we expect further gains over the forecast period through 2022.

Since 2015, policy uncertainty has receded, and in August 2018, the Syriza-led government exited the country’s third consecutive lending program, having overseen large fiscal and external adjustments. Nevertheless, we believe that a faster economic recovery could result from additional reforms to the product and services markets as well as improvements in the banking sector with respect to its capacity to fund the economy.

Although Greece’s labor cost competitiveness has been restored, we believe that its competitiveness in other areas remains weak. While its labor market is arguably highly flexible, Greece compares poorly with its peers due to its many impediments to competition in its product and professional services markets, alongside relatively weak property rights, complex bankruptcy procedures, an inefficient judiciary and the low predictability of the enforcement of contracts. As a consequence, while net FDI inflows have recently improved, they may not be sufficient to fund a more powerful economic recovery. At the same time, a possible reversal of labor reform, which could reintroduce collective wage negotiations at the national level, might weaken the ongoing recovery in the job market by reducing companies’ flexibility to navigate a tough economic situation. Over the long term, however, in the absence of reforms to the business environment, we think that GDP growth is unlikely to exceed 3% on a sustained basis, constrained by administrative burdens and anti-competitive behavior across the economy – particularly concentrated in the services sector.

The inability of Greece’s banks to finance the economy is also weighing on the strength of the recovery. Without access to working capital, the broader small and midsize enterprise sector–the economy’s largest employer–remains in varying degrees of distress. Private sector default is widespread, including on tax debt, and the process of declaring bankruptcy is particularly convoluted relative to EU norms. Moreover, the economy’s ability to attract foreign investment to finance growth remains weak. Complacency in addressing structural problems may not adversely affect macroeconomic outcomes or sovereign debt servicing ability in the medium term, but would likely cap Greece’s growth prospects in the long run.

Following the successful termination of the ESM program, Greece is subject to quarterly reviews by the European Commission under the “enhanced surveillance framework.” Ongoing debt relief and the return of profits on Greek bonds held by the European Central Bank (ECB) and the Eurozone’s national central banks will be subject to ongoing compliance with the program’s objectives. The use of the cash buffer for purposes other than debt servicing will have to be agreed with the European institutions. We therefore believe that the Greek authorities will be strongly incentivized to avoid backtracking markedly on most previously legislated reforms.

The next general election is scheduled for October 2019, although early elections cannot be excluded given the recent departure of the government’s junior coalition partner. Given that 2019 will also see local and European elections, it is very likely that the polarization of the political landscape will escalate in the coming months. In our view, this represents a risk that areas such as privatization, increasing the efficiency of the judicial system, and further improvements in the business environment will face delays. Moreover, a more resolute approach toward the reduction of nonperforming exposures (NPEs) in the banking sector may see little further progress before the electoral challenges play out. However, we expect Greece’s economic and budgetary policies to broadly comply with its commitments made at the time of the termination of the ESM program.

Flexibility and Performance Profile: Greece’s government debt is finally declining

-We project general government debt will decline during 2019-2022.

-The creation of cash buffers via the final ESM program disbursement limits risks to debt repayments over our forecast horizon.

-Although improved, the banking sector faces multiple challenges.

Following a large budgetary adjustment since the start of the economic and financial crisis, Greece has established a track record of exceeding budgetary targets via rigid expenditure controls and improved revenue performance. In 2018, we estimate that the primary balance was about 3.7% of GDP, outperforming the target agreed with the creditors of 3.5% of GDP, although slightly below the government’s own target of 4.0% of GDP. The underperformance against the government’s own target is mainly a result of a delayed payment to the government for the concession of Athens International Airport, now scheduled for January 2019. As a result of the better-than-planned budgetary performance, contingent deficit reducing measures, such as pension spending cuts, did not need to be implemented. The 2018 performance was characterized by higher government revenues, in particular from higher indirect taxes, which appears to have nevertheless been lower than the government’s own plans. In addition, primary expenditure was lower than budgeted (government expenditure without interest payments), reflecting compliance with the spending restraints in place, including in health care and the public sector wage bill. While headline consolidation progress has been dramatic, it is notable that key components of spending on human capital, particularly on education and health, have been cut sharply to below European averages since the beginning of the crisis.

The 2019 budget includes a series of measures aimed at improving hiring incentives, including focusing on reducing the temporary character of the current employment structure. For example, in the education sector, 4,500 teachers and specialized staff will be hired on a permanent basis for positions currently occupied by temporary teachers, without an impact on the overall headcount in the public sector. The budget also includes a reduction of social security contributions for independent professionals, the self-employed, and farmers, as well as a subsidy to social security contributions for the young. Finally, the government aims at reducing the tax burden on the economy by reducing tax rates on corporate income, dividends and basic property.

The execution of the 2019 budget could be negatively affected by pending court rulings on a past government decision on public sector wages, as well as on the 2012, 2015, and 2016 pension system reforms. In our view, this would make compliance with the 2019 primary balance target more difficult. Moreover, given the upcoming elections, political maneuvering of the government could lead to lower compliance with its expenditure ceiling.

If these risks do not materialize, we project that in 2019-2022 Greece will report general government primary surpluses above the 3.5% of GDP target agreed with official creditors, which should see gross general government debt decrease to about 150% of GDP in 2022 from an estimated 181% in 2018. Net of cash buffers, we project that net general government debt will decline below 140% of GDP in 2022. Even in nominal terms, we forecast gross general government debt to decline from 2019, in line with the central government amortization schedule and our expectation of headline fiscal surpluses.

Despite the size of its debt, the average cost of servicing this debt, at 1.7% at the end of 2018, is significantly lower than the average cost of refinancing for the majority of sovereigns rated in the ‘B’ category. We anticipate that, even with increasing commercial debt issuance, the proportion of commercial debt will remain less than 20% of total general government debt through year-end 2021. We therefore expect a gradual reduction in interest costs relative to government revenues. We estimate the average remaining term of Greece’s debt at 18.5 years in September 2018, although this is set to increase further with the implementation of the debt relief measures granted in June.

In 2018, Greek banks made further progress in reducing their NPE stocks, which at the end of June stood at €88.6 billion (excluding off-balance-sheet items) from the peak in March 2016 when they reached €107.2 billion. Despite the improvement in reducing the stock of NPEs, about one-third of banks’ loan books are likely to remain impaired until 2021 even if their ambitious plans to tackle NPEs succeed. Initiatives to tackle the high stock of NPEs are underway, including the implementation of out-of-court restructuring, the development of a secondary market, and electronic auctions. However, we think that write-offs will remain one of the most important means of reducing these exposures over the next few years. The large stock of NPEs constrains the effective transmission of ECB monetary policy into the Greek economy, in our opinion. Based on experience in other peers, like Spain, Ireland, Slovenia and Cyprus, we believe that a faster decline in NPEs may not be possible without a more resolute approach and involvement of additional government support. We therefore consider the banking sector as a moderate contingent liability for the government’s balance sheet. Besides constraints on effectiveness of monetary policy transmission emanating from the abovementioned large NPEs in the banking sector, the Greek economy’s unsynchronized character with respect to the rest of the monetary union in terms of price trends and capital controls weigh on our monetary assessment.

At the same time, the liquidity of the banking system has significantly improved. The banks continued to reduce their reliance on official ECB financing, including on the more costly emergency liquidity assistance, which we expect to be fully repaid in early 2019. An uptick in deposits has helped, as have repurchase transactions with international banks. While deposits into the banking system have been growing–household and corporate deposits grew by about 6% in 2018 – confidence has not returned to the extent that would enable a full dismantling of capital controls, although these have been eased, most recently in October 2018. Over the past year, Greece’s systemically important banks have issued covered bonds – like the sovereign, this was their first market foray since 2014. With Greece having graduated from the ESM program, its banks lost the waiver that allowed them to access regular ECB financing using Greek government bonds as collateral. However, despite the loss of the waiver, the banks’ funding was not disrupted.

Greece has had a significant adjustment in its external deficit. The current account deficit fell from nearly 14.5% of GDP in 2008 to the record low of 0.8% of GDP in 2015, mainly via significant import compression, before widening somewhat as the economy started to recover. In 2018, the solid export performance, including the substantial growth in the services surplus was more than offset by a higher oil deficit and import growth. We project the current account deficit will decline slightly over our forecast period with further improvement in export performance, but expansion of imports on the heels of consumption and investment recovery as well as a slowdown in global economic trade could lead to a wider current account deficit. (S&P 18.01)

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North American Trade Newsletter #1

January 27, 2019, 12:50 pm

≫ Next: North American Trade Newsletter #2

≪ Previous: Fortnightly, 23 January 2019

North American Trade Newsletter

OFFICE OF INTERNATIONAL BUSINESS DEVELOPMENT

Middle East Regional Office

Tel: 02.571.0199

Email: seth.vogelman@atid-edi.com

To: Regional Importers

From: Mr. Seth J. Vogelman, Director

Date: 19 June 2018

Re: North American Trade Newsletter #1 – June 2018

North American Trade Newsletter #1 features companies and products from our client province of Ontario. All are looking for agents, representation or distribution in the region.

Plastic Drywall Tools, Drywall Accessories & Adhesive Spreaders
Oil Bypass Filtration Systems
Seating & Positioning Systems for Wheelchairs
Consulting Engineering for Aerospace, Military & Nuclear Industries
Seating Platforms, Bleachers, Retractable Stages and Gymnasium Equipment
Amine Reclamation Systems
Modular Thermal Treatment and WTE Technology for Solid Waste
Canadian Standard Home Medical Devices

►To receive additional information about these companies, please contact our office.

Please send us your complete company details when asking for information on the North American firms. This will help us to have the company to reply to you in a fast and efficient manner.

(1) IP produces its own line of Plastic Drywall Tools, drywall accessories and adhesive spreaders as well as providing custom molding for various customers. IP has 3 DIY product systems:

Mini Mastic: including nail hole/crack fillers for drywall and concrete. 4 high quality caulking versions: white and translucent for kitchen/bathroom, woodfiller and grout.
Mudgun: applies the perfect line of joint compound on drywall joints.
Hand Sander with interchangeable connections for pole attachment or hand use.

►Looking for a stocking distributor.

(2) G2F is ISO 9001:2015 certified in manufacturing, design and distribution of Oil Bypass Filtration Systems. G2F products allow the various industries to acquire huge dollar savings with a significant impact on the environment. G2F is designed for Low Pressure (LP) and High Pressure (HP) applications. There are 3 different sizes of high-pressure models and low pressure models. G2F maintains oil viscosity and prevents valves from failing; increasing equipment performance and dramatically extends oil and hydraulic component life. The G2F Filter System operates on a bypass; filtering down to 1 micron in contamination removal and water at a rate of 99.97%. G2F is looking for a Sole Exclusive Distributor for Israel.

(3) VWSS is a manufacturer of ADP approved Seating and Positioning Systems for Wheelchairs, including cushions and back supports. Since 1992, VWSS has been developing memory foam products that significantly redistribute pressure to maintain skin integrity, provide positioning support and comfort. Their cushions, which are made up of the VerySOFT, VerySOFT-DLT, VIVE, VIVE-DLT, EPIC and EPIC Plus, are designed to meet users’ varying needs. Back supports (the VIVA, VISCOUNT and VIRTUOSO) accommodate any wheelchair frame and provide excellent seating support for the user. Their VG Arm Trough, VG Half Lap Tray and VG Full Lap Tray provide comfort and arm support for the users.

(4) TE is a Consulting Engineering, Certification and Qualification Testing Company serving the aerospace, military and nuclear industries. TE‘s specialties are in Mechanical and Structural areas, such as: equipment design and development; piping design and stress analysis; pipe hangers design and analysis; machine design; automation; instrumentation and controls; implementation of quality assurance systems, procedures and training. The company has diversified experience in many fields, including Nuclear Power Plants, Aerospace, Military and Chemical & Petrochemical. TE is looking for an agent in Israel.

(5) SS manufactures Seating Platforms, Bleachers, Retractable Stages and Gymnasium Equipment, including custom platforms and telescopic seating solutions. They have installations in over 39 countries. Their retractable stages are designed to provide an answer to the problem of space limitations. Available in two models, Recessed Mounted, which retracts into the wall and Surface Mounted which folds up against an existing wall. SS has a complete line of Basketball Backstops and Goals to suit any indoor or outdoor area. The backstops are available in several different styles and composition. Back boards are available in steel, glass or wood. Looking for agents and contractors.

(6) ET manufactures Amine Reclamation Systems used in refineries and petrochemical plants. Amine circuits experience accumulation of impurities called Heat Stable Salt (HSS) formed through the degradation of amine, oxidation of H₂S, or presence of carbon monoxide or cyanide in the process gas. Symptoms of excessive HSS levels. ET’s amine reclamation systems are designed to purify contaminated amine, in-situ, and essentially eliminate the common symptoms of high HSS levels. ET has supplied over 70 systems, worldwide and their clients have come to appreciate the operational and economic benefits resulting from a continuous amine purification system. Looking for agents.

(7) EWS is aleading supplier of small and medium size Modular Thermal Treatment and WTE technology for solid waste. Their proven and scalable solutions range from 1 tonne/day small mobile containerized systems to 300 tonnes/day turnkey municipal energy-from-waste plants. EWS has successfully deployed over 80 projects in 18 countries. Their unique dual chamber combustion process, combined with our step-hearth technology, means EWS delivers a proven, bankable solution for military and natural resource companies, small and remote communities and industries looking for waste disposal and energy recovery solutions. EWS currently is actively seeking a Strategic Partner. Ideally this Strategic Partner license the technology, manufacture the equipment and develop waste projects.

(8) TT is a Medical Device Company whose products are designed and manufactured according to the Highest Canadian Standard and are registered and licensed with Health Canada. Their product line currently includes the following:

Wristband Pulse Oximeter: Built-in rechargeable battery and can also connect to a computer to transfer data to your computer enabling further analysis.
Oximeter with PC software: Flash memory. PC download, software included. Rechargeable battery.
Fetal Monitor can detect heartbeats as early as 11 weeks of pregnancy. It has also has recording feature.
Blood Pressure Monitor

►TT is interested in finding an exclusive agent and distributor for their lines.

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In order to receive additional information about any of these inquiries, please contact our office.

You are also invited to send us product requests, for we can also attempt to source virtually any product from North American manufacturers. We request you provide as many specifications as possible, for this will facilitate our search for you. This service is also free of charge concerning our North American client states.

If you should have any further questions, or if we may be of any additional assistance, please feel free to contact our office at Tel: 02.571.0199 or at email: seth.vogelman@atid-edi.com.

Best Regards.

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