Fortnightly, 1 June 2016

Fortnightly, 1 June 2016

June 1, 2016


1 June 2016
24 Iyar 5776
25 Shaban 1437




1.1  Natural Gas Deal Revived Due to Reworked Clause Previously Nixed by Court
1.2  Ministry of Finance Considering Measures to Encourage Growth
1.3  Knesset Committee Approves Investment Provident Funds


2.1  Startup Accelerator Opens in Jerusalem
2.2  Saguna Networks Secures $5 Million in Funding Round Led by CE Ventures
2.3  First Italian Air Force G550 Arrives in Israel for AEW Mods
2.4  Glide Raises $8 Million to Focus on Smartwatches
2.5  Sensifree Secures $5M in Series A Financing Led by TransLink Capital
2.6  Volkswagen Invests $300 Million in Israeli Taxi-Hailing Company Gett
2.7  Votiro Raises $4 Million in Series A Round to Neutralize Zero-Day Threats
2.8  United Adds Flights to Tel Aviv-San Francisco Route
2.9  Demisto Raised $6 Million in Series A Funding
2.10  Leviathan Partners Signs $3 Billion Gas Deal


3.1  Arby’s Signs Agreement for 25 New Restaurants in Kuwait & Saudi Arabia
3.2  Dnata Considers Second North American Acquisition
3.3  Chinese Investors Confirm Plan to Build Oman Industrial Park
3.4  Covalon Wins Tender at King Abdullah Medical City in Saudi Arabia
3.5  Papa John’s International Among First U.S. Brands to Enter Tunisia
3.6  PayPal Halts Operations in Turkey as Local Authorities Reject License Application


4.1  Israel’s Largest Solar Energy Array Inaugurated


5.1  Average Deflation in Lebanon Fell to 2.9% by April 2016
5.2  Lebanon’s Trade Deficit Widened to $5.28 Billion by April 2016
5.3  Number of Tourists to Lebanon Up By a Yearly 8% by April 2016
5.4  Jordan & China Stress Need to Improve Ties

♦♦Arabian Gulf

5.5  Bahrain’s GDP Forecast to Grow by 2.9% in 2016
5.6  Bahrain’s Inflation Rises to Highest Mark Since Dec 2013
5.7  State of Qatar’s Proposed Eurobonds Assigned ‘AA’ Ratings
5.8  Qatar Slashes Healthcare Spending Though World Cup Escapes Cuts
5.9  Abu Dhabi Lays Off Staff as Arabian Gulf Austerity Tightens
5.10  UAE Sets Up Firm to Operate First Nuclear Power Plants
5.11  Oman Parliament Votes to Raise Taxes in Three Industries

♦♦North Africa

5.12  Egypt’s First Half GDP Growth 4.5%
5.13  Egyptian Drug Prices To Drop If Shortage Not Solved In 3 Months
5.14  Moroccan E-Commerce Websites Earned MAD 24.09 Billion in 2014


6.1  Turkey’s Foreign Trade Deficit Continues to Fall Amid Oil Plunge
6.2  Greek Unemployment Down Slightly in February
6.3  Greek GDP 1st Quarter Contraction Worse Than Expected
6.4  Greece Near Bottom in Global Competitiveness Survey



7.1  Avigdor Lieberman Installed as New Defense Minister
7.2  Ontario Science Centre Collaborates with Bloomfield Science Museum
7.3  Arab Israeli Wins First ‘Miss Trans Israel’ Pageant
7.4  Shavuot Holiday Begins on Eve of 11 June
7.5  Ramadan Begins on Eve of 6 June


7.6  Jordan’s King Abdullah Dissolves Parliament & Orders New Elections


8.1  Gamida Cell Announces $4.4 Million Grant from the Israeli Government
8.2  Mazor Robotics Signs Strategic Agreements With Medtronic
8.3  Nucleix Raises $3 Million
8.4  OrbiMed Launches $307 Million Israel Venture Capital Fund
8.5  MedyMatch Presents at Israel’s BioMed Conference
8.6  FDA Approves Medic Vision SafeCT-29 that Helps Achieve Radiation Safety
8.7  Health Canada Approves Insightec’s Exablate Neuro System Tremor Treatment
8.8  Zebra Medical Vision Raises $12 Million
8.9  Check-Cap Preliminary Data Evaluating its Preparation-Free Colon Screening Capsule
8.10  Nano Dimension & Accellta Successfully BioPrint Stem Cell-Derived Tissues
8.11  Steak TzarTzar Farms Insects To Fight World Hunger
8.12  Ultra Health Cannabis forms Joint Venture With Panaxia
8.13  NeuroRx Wins Startup Competition at IATI-Biomed 2016
8.14  Rosetta Genomics Confirms Validity of its Novel Thyroid Nodule Classification Assay
8.15  HIL Applied Medical Acquires Nanolabz
8.16  CollPlant Receives OCS Authorization for a NIS 12 Million in R&D Projects
8.17  BioRap Technologies Collaborates with Pfizer for Novel Immunomodulators R&D
8.18  Intec Pharma Receives Approval for $5.2 Million Grant


9.1  Israel Successfully Tests Iron Dome Defense System at Sea
9.2  New FDM 3D Printer Enhancements Make Stratasys Solutions Stronger
9.3  StoreDot Unveils World’s First MolecuLED TV
9.4  ECI Wins Leading Lights 2016 Award for Most Innovative Security Strategy
9.5  Allot Demonstrates Security VNF & vCPE Interoperability
9.6 Announces Partnership with XMPie
9.7  Faception Claims It Can Spot Terrorists
9.8  Optimal+ Selected by Xilinx for Real-Time Analytics for Wafer Sort Operations
9.9  LightCyber Brings Behavioral Attack Detection to UK Organizations
9.10  Anodot Named a 2016 ‘Cool Vendor’ in Analytics by Gartner
9.11  ElectRoad Can Turn Any Road Electric
9.12  Demisto Introduces Industry’s First ChatBot to Improve Security
9.13  Javelin Networks Named a Cool Vendor by Gartner
9.14  SodaStream Launches Homemade Beer System


10.1  Unemployment in Israel Reaches Historic Low
10.2  WHO Finds Israeli Life Expectancy Among Highest in World
10.3  Bankruptcies in Israel Increase by 55% in 3 Years


11.1  JORDAN: Jordan in Negotiations With Potential Partners in Nuclear Project
11.2  IRAQ: IMF Deal Supports Iraq in Face of Multiple Challenges
11.3  IRAQ: How Much Will the $15 Billion IMF Loan Really Cost Iraq?
11.4  OMAN: Ratings on Sultanate of Oman Affirmed At ‘BBB-/A-3’; Outlook Stable
11.5  EGYPT: Fitch Affirms Egypt at ‘B’; Outlook Stable
11.6  EGYPT: Will Sisi Squander His Chance To Fix Egypt’s Economy?


1.1  Natural Gas Deal Revived Due to Reworked Clause Previously Nixed by Court

The Israeli government officially approved an altered version of the natural gas deal, after the deal’s previous incarnation was controversially vetoed by the Supreme Court.  Under the new agreement, a clause forbidding subsequent governments from changing the deal for 10 years has been scrapped.  That clause has been replaced instead with a compromise text, which would mandate compensation to the US-led consortium purchasing the rights over the Leviathan natural gas field in the Mediterranean, in the event that the deal was indeed changed by any future Israeli government.

A breakthrough has been achieved in the negotiations over a deal that would regulate the exploration, harvesting and development of Israel’s offshore gas fields.  The framework agreement was contested by multiple legal petitions seeking to repeal it.  Most recently, Israel’s High Court of Justice overturned the landmark deal, giving the Knesset a year to amend the plan or risk cancellation of the deal altogether.  The court cited a clause in the deal that would prevent Israel from making significant regulatory changes for the next 10 years as the main reason for scuttling it, arguing that the clause, dubbed the “stability clause,” restricts the Knesset’s powers.

The initial “stability clause” stipulated that the government could not impose regulatory changes, such as breaking up suspected monopolies, on the consortium for a full 10 years from when the deal was signed.  On 18 May, the companies and Energy Minister Steinitz reached an agreement on a new framework that in effect softened the contested clause.  According to Steinitz’s office, the representatives of the energy companies agreed to rework the clause to allow future governments to amend the deal, should changes become necessary – something that the previous clause restricted.

Netanyahu has previously warned that efforts to stymie or delay the deal would result in potential customers giving up in frustration and turning to other gas-producing countries instead – many of whom are overtly hostile to Israel.  (Various 19.05)

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1.2  Ministry of Finance Considering Measures to Encourage Growth

Israel’s Ministry of Finance is considering emergency measures to encourage growth that will allow deviations from the permitted spending ceiling and help close the gap created in the state budget.  The growth issue is the focus of disputes between the Ministry of Finance budget department, which has warned against increasing the budget deficit target from 2.5% to 2.8%, and the prime minister and accountant general, who believe that a 0.3% increase in the budget deficit should be allowed in order to increase growth-encouraging spending.

Senior Ministry of Finance officials met with Prime Minister Netanyahu to present him with the main points of the two-year budget for 2017-2018.  The meeting was overshadowed by the disappointing growth figures for the first quarter showing a drop to 0.8% in the annualized growth rate (while the forecast for 2016 is 2.8-2.9%) and a warning note by leading credit rating agency Moody’s following those data.

In view of the figures, the prime minister spoke of the need to encourage growth in the economy with measures such as increasing infrastructure investments and increasing the Ministry of Economy and Industry Chief Scientist’s R&D budget.  Ministry of Finance budget director Levy, on the other hand, argued for the importance of maintaining budgetary restraint, and mentioned concern about a reversal of the downtrend in the ratio of government debt to GDP, regarded by the credit rating agencies as the principal strong point of the Israeli economy.  Accountant General Abadi-Boiangiu, who is responsible for professional management of the state debt, said that increasing the budget deficit to 2.8% would not worsen the ratio of debt to GDP.

Underlying the budget department’s position is a large gap created in the 2017 budget.  According to the 2017 budgetary frameworks, a deviation of less than NIS 10 billion was expected, which is actually NIS 15 billion, composed of a deviation of almost NIS 11 billion from the legal spending ceiling and NIS 4 billion from the deficit target.  (Globes 29.05)

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1.3  Knesset Committee Approves Investment Provident Funds

On 23 May, the Knesset Finance Committee approved the Ministry of Finance’s new capital saving scheme, an investment provident fund.  The investment limit will be NIS 70,000 a year per individual.  The Ministry of Finance had originally intended a limit of NIS 100,000 per person, while the Israel Securities Authority, which opposes this product, sought to reduce the limit to NIS 50,000.

This is a new saving product that will be an attractive alternative to mutual funds, managed portfolios and bank deposits.  The maximum management fee on this product, which is similar to an insurance company investment policy, will be 1.05% annually on the cumulative amount together with a management fee of 4% on annual deposits in the fund, in line with the maximum on pension provident funds and executive insurance since 2013.

The current management fee structure is problematic and is likely to be changed, since saving programs for individuals carry a 2% management fee on the cumulative sum and no fee on new deposits.  Furthermore, investment provident funds will probably be characterized by large one-time deposits and not regular small deposits, and it makes no sense at all to charge someone who deposits NIS 70,000 a fee of 4% on this amount.  The new regulations now have to pass second and third readings in the Knesset plenum.

Deposits in the investment provident fund will be made from the saver’s after-tax income, and the savings will be subject to capital gains tax only on redemption and not during the life of the program.  Savers who keep their money in the investment provident fund until the age at which they are entitled to an old age allowance and choose to withdraw the money by way of a monthly allowance and not a one-time capital payment will be exempt from capital gains tax on their savings.  (Globes 23.05)

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2.1  Startup Accelerator Opens in Jerusalem

The MassChallenge startup accelerator, which calls itself the world’s friendliest accelerator, has accepted 48 new startups for a special program in Jerusalem, which it launched on 22 May at an event in the Mahane Yehuda open air market, where the accelerator will operate.  The accelerator’s projects are from around the world, not just Israel.  Some 500 projects have been incorporated: 150 of which are from other countries, including Turkey, Nigeria, South Korea, Cameroon and the US.  Some 45% of the companies accepted to the accelerator are from the high-tech industry, 20% from the life sciences, 10% from social initiatives and the result are scattered among other fields.

The entrepreneurs and companies taking part in the program will benefit from the accelerator’s work environment, training, and access to the chain’s professional partners in Israel and throughout the world.  In Israel, the program will finish on October 27 with a ceremony at which prizes of up to NIS 1 million will be given to the outstanding companies.  In addition to MassChallenge, Israel will send seven Israeli startups to the accelerator program in Boston.  This program is a non-profit accelerator active in Boston, London, Switzerland, and Jerusalem.  Over the past six years, 835 companies have participated in MassChallenge’s global programs, and have raised over $1 billion.  The annual revenue of these companies amounts to more than $500 million, and they have generated 8,500 new jobs.  (Globes 22.05)

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2.2  Saguna Networks Secures $5 Million in Funding Round Led by CE Ventures

Yokneam’s Saguna Networks, the Mobile Edge Computing (MEC) pioneer making mobile broadband faster, simpler and more agile, announced that it closed a new $5 million financing round led by CE Ventures and supported by the company’s existing shareholders.  Saguna will use the funding to expand the company’s MEC offering and global market presence.  Saguna helps mobile operators improve user experience, network economics and monetization by bringing distributed cloud-computing into the Radio Access Network (RAN); as close as possible to mobile users.  With Saguna’s solution, mobile operators can deploy new revenue generating services for content delivery, Internet of Things (IoT), retail and enterprise applications.  The Company’s standard-based MEC solution, Saguna Open-RAN, creates an open ecosystem and growth engine inside the RAN. The solution features fully-virtualized, scalable architecture adding value to 4G networks, 5G and HetNets.  (Saguna 23.05)

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2.3  First Italian Air Force G550 Arrives in Israel for AEW Mods

The first of two Gulfstream G550 business jets for the Italian air force has arrived at Israel Aerospace Industries’ facilities, ahead of reconfiguration into an airborne early warning and control (AEW&C) aircraft.  In 2012 the Israeli air force (IAF) selected the Leonardo M-346 for its advanced trainer requirement and, under the deal, Italy signed a contract to buy two G550s with an advanced AEW suit, similar to the one operated by the IAF.  The first G550 with the Elta AEW suite is expected to be delivered in 2020, and according to the contract, IAI will also supply an observation satellite to Telespazio.  The G550s have been modified and fitted by Gulfstream with the radomes to house the antennas of the Elta radar.  The second aircraft to be modified is expected to arrive shortly.  IAI has previously supplied G550-based AEW&C aircraft to the air forces of Israel and Singapore, which operate a combined six of the model. (Flightglobal17.05)

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2.4  Glide Raises $8 Million to Focus on Smartwatches

Jerusalem’s Glide has raised an $8 million round of “bridge financing,” which was structured as convertible debt.  The investment came from a “syndicate of new strategic investors” with participation from all Series B investors – Menlo Ventures, Marker LLC, and Two Sigma Ventures.  The Jerusalem-based startup also recently laid off 25% of employees in order to focus on smartwatches.  Glide has raised $36.5 million to date, including the latest financing.  In 2013, the company launched the Glide app in 2013, which allows users to quickly send short video messages to friends, in a similar way to which text messages work.  The free app has been downloaded “tens of millions” of times, resulting in “billions of messages” being sent.  (Globes 25.05)

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2.5  Sensifree Secures $5M in Series A Financing Led by TransLink Capital

Sensifree has completed a $5 million Series A round of financing.  TransLink Capital led the investment round with participation from existing and new investors, including UMC Capital, a subsidiary of United Microelectronics Corp. and an undisclosed strategic investor.  The investment adds to seed investment made by Samsung’s Catalyst fund and brings Sensifree’s total funding since launching its revolutionary RF-based biometric sensor technology to $7 million.  The funding will help the company aggressively expand its engineering and product development teams, and accelerate its business development efforts. TransLink Capital Venture Partner and Senior Advisor, Eric Hsia, will join the Sensifree Board of Directors.

Petah Tikva’s Sensifree is the pioneer of patented, low power electromagnetic sensors that accurately collect a range of continuous biometric data without the need to touch the human body.  The Company’s first product is a heart rate sensor for wearable devices for wearable applications such as traditional watches, activity trackers and smart clothing.  (Sensifree 24.05)

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2.6  Volkswagen Invests $300 Million in Israeli Taxi-Hailing Company Gett

Israeli tax-hailing company Gett (formerly Get Taxi) has raised $300 million from Volkswagen.  The strategic investment – which will allow Volkswagen to expand on-demand mobility services in Europe – comes on the same day as Toyota’s undisclosed investment in Uber, and several months after General Motors invested $500 million in ride-sharing app Lyft.  The plan is for VW to offer on-demand ride services to its business customers, while Gett drivers will be offered discounted VW cars for their taxis.

The Volkswagen Group is hoping that by partnering with Gett, it will be able to keep up with other automotive giants which have already jumped on the on-demand mobility bandwagon.  Automakers fear that the rise of ride-sharing apps and on-demand transportation services such as Gett, Uber, Lyft and Via (another Israeli startup) could lead to a decline in car ownership.  That’s why they’re either investing in such startups or starting their own mobility divisions.  (Gett 25.05)

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2.7  Votiro Raises $4 Million in Series A Round to Neutralize Zero-Day Threats

Votiro completed a $4 million financing round led exclusively by Redfield Asset Management.  The capital will be used to expand Votiro’s team and continue the rapid growth of the Company’s patented solutions and product portfolio.  With the sophisticated nature of today’s cyberattacks, secure email gateway solutions struggle to properly protect organizations from malicious email.  Most cybersecurity solutions are designed to combat known threats, but when unknown threats-such as zero-day or undisclosed exploits-penetrate an enterprise’s network, the cost and the harm to the company’s reputation can be devastating.

By disarming threats in all files attached to incoming email messages, Votiro’s neutralization technology prevents zero-day exploits from penetrating an organization’s network.  To neutralize unknown and zero-day threats, Votiro processes all attachments and removes all active code.  The cleansed attachments, which preserve the integrity and functionality of the original files, can then safely continue on to the organization’s email server.

Tel Aviv’s Votiro provides organizations with protection against undisclosed and zero-day exploits that are used in cyberattacks.  The company’s secure email gateway and patented Zero-Day Exploit Protection technology cleanse incoming files of potential cyber threats.  (Votiro 25.05)

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2.8  United Adds Flights to Tel Aviv-San Francisco Route

Two months after launching direct flights between Tel Aviv and San Francisco, United Airlines announced that it was increasing the frequency of its flights on the route from three a week to one daily.  The daily flights will begin on 8 October on Boeing 787 Dreamliners.  The additional flights will operate according to the same timetable as that of the existing flights. Flights to San Francisco will leave Ben Gurion Airport every day at 00:55 AM and reach San Francisco at 6:00 AM on the same day.  Return flights will take off every day from San Francisco at 8:00 PM and land at Ben Gurion Airport at 8:15 PM of the following day (Israel time).  The flight time will be 15:05 hours westward and 14:10 hours eastward.  Tickets to San Francisco cost $1,200 for tourist class and $4,500 for business first class.  (Globes 26.05)

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2.9  Demisto Raised $6 Million in Series A Funding

Demisto has emerged from stealth mode and raised $6m in Series A funding.  Their backers included Accel, Cylance CEO Stuart McClure, Lookout CTO Kevin Mahaffey and Blue Coat Systems president Mike Fey.  The new funding will be used to expand sales and marketing efforts, and to grow partner ecosystem integrations.  Demisto has just launched Demisto Enterprise, its Bot-powered security ChatOps platform that automates and streamlines security operations and brings enhanced collaboration to incident management processes.  (Demisto 25.05)

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2.10  Leviathan Partners Signs $3 Billion Gas Deal

On 29 May, the partners in the Leviathan natural gas reservoir announced the signing of a gas supply agreement with the IPM company in Be’er Tuvia, Israel.  The partnership will supply 13 BCM of gas to the power station slated for construction in the Be’er Tuvia industrial zone.  The value of the 18 year agreement is estimated at $3 billion.  The contract is the second for the partners, following a contract with Edeltech, owned by the Edelsberg family, last January.  The IPM power station is controlled by Triple M and Israel Power Management 3000. It is designed for construction on a 62-dunam (15.5-acre) site, and will produce 430 megawatts of electricity using combined cycle power technology (natural gas as the main fuel and diesel oil as a backup).

The government recently approved the revised natural gas plan, with the omission of the commitment to refrain from changing anything in the gas sector for the next 10 years.  The gas companies assert that the approval of the plan enabled them to sign the agreement with IPM.  Noble Energy added that the agreement shows its continued commitment to developing Leviathan and the natural gas industry in Israel.  (Globes 29.05)

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3.1  Arby’s Signs Agreement for 25 New Restaurants in Kuwait & Saudi Arabia

Arby’s Restaurant Group, Inc. (ARG), parent company of the franchisor of the Arby’s brand, announced an international franchise development agreement with Al-Kharafi Global for General Trading & Contracting Company (Kharafi Global) to open 25 new Arby’s restaurants in Kuwait and Saudi Arabia over the next seven years.  This news follows a strong year of development for Arby’s in 2015 with 69 new restaurant openings globally along with agreements for 138 new restaurants announced in Q1/16.

Arby’s, founded in 1964, is the first nationally franchised sandwich restaurant brand, with more than 3,300 restaurants worldwide.  Arby’s Restaurant Group is the parent company of the franchisor of the Arby’s brand and is headquartered in Atlanta, Ga.  (ARG 24.05)

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3.2  Dnata Considers Second North American Acquisition

Emirates Group’s aviation services unit dnata is in talks to acquire a Canadian cargo handling business in what would be its second North American acquisition since entering the market.  Dnata acquired Ground Services International (GSI) last month.  The ground-handling operator is present at more than 20 airports, including “major international gateways,” in the United States.  Dnata reported a record a AED1.1 billion profit for the 12 months ending 31 March and has made a series of acquisitions in airport and travel services companies globally in recent years.  The company has AED3.5 billion in cash assets at its disposal.  dnata plans to acquire part — or whole — of at least two other airport services companies in the United States, but declined to disclose who the companies were.

Dnata is entering the North American market amid an ongoing row between American and Middle East airlines, including dnata’s sister company, Emirates, also owned by the Emirates Group.  American, Delta and United accuse Emirates, Etihad Airways and Qatar Airways of receiving US$42 billion in state subsidies from their government owners, an allegation the Middle East carriers deny.  (Aviation 19.05)

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3.3  Chinese Investors Confirm Plan to Build Oman Industrial Park

A group of Chinese investors have signed an agreement to build an industrial park at Oman’s southern port of Duqm in a project that could attract billions of dollars of investment.  The Omani government is working to develop the area around Duqm, on a stretch of barren coast 550 km south of the capital Muscat, into a major business zone as part of efforts to diversify the economy beyond oil.  The industrial park deal, signed during a visit to Oman by Wang Yong, a member of China’s State Council, could provide a big boost to that project and reduce pressure on Omani state finances, which have been hurt by low oil prices.

The Omani state authority developing Duqm predicted the 1,172-hectare industrial park would attract $10 billion of investment by 2022, including $370 million which the Chinese side would spend on infrastructure.  Oman Wanfang, the Chinese-owned company that will manage investments at the industrial park, said it would include light and heavy industry as well as a $150 million, five-star hotel, a $100 million hospital and a school.  Planned investments include an oil refinery, a cement plant, a factory making pipes for the petroleum industry, an automobile assembly plant, and a 1 GW solar power generation facility.

Oman Wangfang is a subsidiary of China-Arab Wanfang Investment Management Co, which was established with government backing in 2015 by companies in the northwestern Chinese region of Ningxia, according to the parent firm’s website.  (Reuters 23.05)

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3.4  Covalon Wins Tender at King Abdullah Medical City in Saudi Arabia

Mississauga, Ontario’s Covalon Technologies, an advanced medical technologies company, announced that via its exclusive distribution partner, Covalon has been awarded a tender for both IV Clear and SurgiClear products at the King Abdullah Medical City in Mecca, Saudi Arabia.  With over 1,500 beds, King Abdullah Medical City is one of the most influential hospitals in the Middle East, given its location in Mecca where over 14 million people will visit over the next 15 weeks.

Covalon Technologies researches, develops and commercializes new healthcare technologies that help save lives around the world.  Covalon’s patented technologies, products and services address the advanced healthcare needs of medical device companies, healthcare providers and individual consumers.  Covalon’s technologies are used to prevent, detect and manage medical conditions in specialty areas such as wound care, tissue repair, infection control, disease management, medical device coatings and biocompatibility.  (Covalon Technologies 31.05)

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3.5  Papa John’s International Among First U.S. Brands to Enter Tunisia

Louisville, Kentucky’s Papa John’s International, will be among the first U.S. restaurant brands to enter Tunisia.  Following Egypt, Tunisia will be only the second country in Africa to boast a Papa John’s franchise.  Tunisia recently opened their borders to outside franchising.  Franchisee, Mr. Sofiene Ghali, a Tunisian leader in the QSR industry, is excited to bring a high-quality hand-made pizza to his home country.  Owning and operating over 25 hamburger and sandwich restaurants, Mr. Ghali knows that one of the first U.S. restaurant brands to enter Tunisia should satisfy what the citizens are craving – high quality, freshly made pizza.

Headquartered in Louisville, Kentucky, Papa John’s International, Inc. (NASDAQ: PZZA) is the world’s third-largest pizza delivery company.  For 14 of the past 16 years, consumers have rated Papa John’s No. 1 in customer satisfaction among all national pizza chains in the American Customer Satisfaction Index (ACSI).  (Papa John’s International 31.05)

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3.6  PayPal Halts Operations in Turkey as Local Authorities Reject License Application

Global online payment platform PayPal has announced that it stopped operations in Turkey, as it could not get the necessary license from local authorities, in a written statement on 30 May.  PayPal noted it would continue its efforts to take the required licenses in Turkey.  Customers in Turkey will not be able to send or receive money through their PayPal accounts as of 6 June.  (Various 31.06)

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4.1  Israel’s Largest Solar Energy Array Inaugurated

The largest solar energy array in Israel was inaugurated in late May.  The Zmorot solar park, owned by the French electric utility company EDF, is expected to generate 50 MWp of clean energy.  The plant is the French company’s eleventh solar array in Israel.  The NIS 330 million project is trailed by the former largest solar park – also owned by EDF – at Kibbutz Ketura (40 MWp).  EDF began planning the project in 2010 with its local partner Solex and received all the necessary permits by 2013.  It installed 200,000 photovoltaic panels over 153 acres at the site.  EDF Israel now generates 160 MWp of electricity in Israel.  The company is currently working to advance new solar projects (including electricity storage) and wind projects.”

In Israel, the 2% of electricity generated from renewable sources is produced solely from solar energy.  Israel hosts two small wind farms, but they rely on older technology.  EDF is currently in the process of applying for permits to construct a 150 MW wind farm, but the project has been opposed by some environmental organizations which claim the farm would obstruct birds and bats and by the Electricity Authority as well because of disagreements over the tariff.  (Globes 24.05)

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5.1  Average Deflation in Lebanon Fell to 2.9% by April 2016

Lebanese consumer prices maintained the downward trend by the fourth month of 2016 as reflected by the Consumer Price Index (CPI) that dropped by an average of 2.9% y-o-y by April 2016.  According to the Central Administration of Statistics (CAS), the average CPI decreased from 97.62 points by April 2015 to 94.78 points by the end of April 2016.  The depreciation of the euro, the local and global economic slowdown and the decline in oil prices were the primary reasons behind this deflation.  In terms of CPI’s components, average prices of food and non-alcoholic beverages (20.6% of CPI) declined by 1.7% y-o-y by April 2016, while transportation (13.1% of CPI) and water, electricity, gas & other fuels (11.9% of CPI) witnessed average yearly drops of 5.3% and 16.2%, respectively.  The other sub-indices that waned were health (7.8% of CPI) and communication (4.6% of CPI), posting a 3.8% and 0.4% y-o-y average declines, respectively. However, the education sub-index, constituting 5.9% of the CPI, augmented annually by 1.50% by April 2016.  Furthermore, average restaurants & hotels prices (2.6% of CPI) went up by 2.8% y-o-y by April 2016.  In addition, the actual rent sub-index for households (old and new rent), with a stake of 3.4% of the CPI, increased by an annual average of 1.8%.  On the other hand, the slight rise in oil prices and the appreciation of the euro during the month of April alone led to a 0.8% month-on-month (m-o-m) increase in consumer prices.  In details, transportation (13.1% of CPI) and water, electricity, gas & other fuels (11.9% of CPI), witnessed monthly growths of 3.7% and 2.8%, respectively.  (CAS 22.05)

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5.2  Lebanon’s Trade Deficit Widened to $5.28 Billion by April 2016

According to data from the Lebanese customs, Lebanon’s trade deficit reached $5.28B in the first four months of 2016, up by 14% from the $4.63B registered by April 2015.  Exports dropped by an annual 2.56% to $953.23M while imports grew by an annual 11.09% to $6.23B.  Prepared foodstuffs, beverages and tobacco accounted for 16.39% of exports, followed closely by stakes of 15.74% for pearls, precious stones and metals and 14.35% for machinery and electrical instruments.  The value of exports in all of the top classified categories witnessed yearly declines: Exports of prepared foodstuffs, beverages and tobacco dropped by 4% year-on-year (y-o-y) to $156.20M by April 2016.  Exports of pearls, precious stones and metals fell by 2% y-o-y to $150.03M by April 2016 Exports of machinery and electrical instruments ticked down by 0.1% y-o-y to $136.78M by April 2016.

As for imports, the largest value was held by mineral products with 25% followed by shares of 10.93% for products of the chemical or allied industries and 9.43% for machinery and electrical instruments.  Imports of mineral products grew substantially from $933.27M by April 2015 to $1.56B by April 2016, which is mainly linked to the 57% increase in total imported volume.  Imports of products of the chemical and allied industries rose by an annual 4% to $681.33M.  Imports of machinery and electrical instruments slid by 13% yearly to amount to $582.49 million.

The top import destinations for the first four months of the year were China, the US, Italy, Holland and Germany with respective shares of 11%, 8%, 8%, 7% and 6%.  The top export destinations by April 2016 were South Africa, Saudi Arabia, United Arab Emirates, Syria and Iraq with respective shares of 12%, 12%, 9%, 7% and 6%.  (CAS 31.05)

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5.3  Number of Tourists to Lebanon Up By a Yearly 8% by April 2016

According to Lebanon’s Ministry of Tourism, the number of tourists who visited Lebanon in the first four months of the year increased by a yearly 8% and totaled 428,947.  Arab tourists, representing the third of total tourists, saw their number rise by only 1% year-on-year to 140,307 by April this year.  The number of incomers from Iraq, who usually come to Lebanon to escape the tough conditions in their country rather than for tourism, grew by an annual 15% to 60,725 and the number of Egyptian tourists grew by an annual 9% to 25,891 by April 2016.  In late February, the diplomatic crisis between Lebanon and Saudi Arabia resulted in the issuance of travel bans preventing GCC nationals from going to Lebanon.  Therefore, the number of incomers from Saudi Arabia, Kuwait and the UAE all registered annual drops of 39%, 35% and 51% to reach 9,639, 6,078, and 1,075, respectively.  The number of European visitors, also representing the third of total tourists, increased by a yearly 10% to 143,203 by April.  French tourists saw their number rise by an annual 8% to 37,594 while UK tourists saw their number grow by 18% to 17,481.  Visitors from Germany also rose in number from 16,893 by April 2015 to 18,655 by April 2016.  American tourists, constituting the third largest share of the total (15% of total tourists), also increased by an annual 9% to 63,230 by April 2016.  The number of visitors from the US and Canada rose from 28,835 and 20,503 by April 2015 to 31,933 and 22,355 by April 2016, respectively. In the month of April alone, the number of tourists to Lebanon increased by a yearly 5% from 116,703 in April 2015 to 122,431 in April 2016.  (MoT 27.05)

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5.4  Jordan & China Stress Need to Improve Ties

Jordanian Prime Minister Ensour met with visiting China State Councilor Wang Yong and his accompanying delegation to discuss bilateral relations and developments in the Middle East.  During the meeting, which was attended by several Jordanian ministers, Ensour stressed the distinguished relations between Jordan and China and the need to enhance them in all fields.  He noted that Jordan can be a starting point for China’s industrial and trade activities in the region, citing the stability and security that Jordan enjoys, its good relations with neighbors and its investor-friendly regulations and laws.

Hosting Syrian refugees poses the primary challenge resulting from the crisis, Ensour told the visiting delegates, noting that the cost stands at around JD3billion a year, mainly shouldered by the Treasury because of scarcity of international aid.  Wang asserted that Jordanian-Chinese relations have noticeably developed during the past few years, underlying the significance of the King’s successful visit to China last September in which he signed a joint statement with the Chinese President, Xi Jinping, to create a road map for strategic relations.  (WAM 25.05)

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►►Arabian Gulf

5.5  Bahrain’s GDP Forecast to Grow by 2.9% in 2016

Bahrain’s gross domestic product (GDP) is forecast to grow by 2.9% this year, according to the country’s Economic Development Board (EDB).  Bahrain’s non-oil sector growth reached 3.9% last year.  The continued downward pressures on oil prices, along with steps toward fiscal re-engineering, is likely to curb growth in the near-to medium-term.  However, this negative impact is likely to be countered by the large pipeline of infrastructure projects planned in Bahrain.  During 2015 as a whole, the growth contribution of the non-oil private sector was 2.8% while government services contributed 0.3% and the oil sector saw negative growth of 0.2%.

Growth in Q4/15 was led by private education and healthcare which grew by 6.9% during the year as a whole.  The construction sector expanded by 6.4% while the hotel and restaurants sector expanded by 7.3%.  Transportation and communications grew by 5.9% and manufacturing expanded by 4.1%.  More than 80% of Bahrain’s real GDP was generated by an increasingly diverse non-oil sector in 2015 while the oil and gas sector accounted for 19.7%.  The GCC region accounted for about 28% of Bahrain’s total non-oil trade and 50% of the total value of non-oil exports.  (AB 18.05)

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5.6  Bahrain’s Inflation Rises to Highest Mark Since Dec 2013

Inflation in Bahrain rose to its highest level since December 2013, according to official figures published on 23 May.  Bahrain’s statistics office released the April consumer price data, showing inflation at 3.8% year-on-year, its highest for 29 months.  Housing and utility costs, which account for 24% of consumer expenses, rose 3.8% from a year earlier.  Prices of food and non-alcoholic beverages, which account for 16% of the basket, climbed 5.9%, the figures showed.  (Various 24.05)

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5.7  State of Qatar’s Proposed Eurobonds Assigned ‘AA’ Ratings

S&P Global Ratings has assigned its ‘AA’ long-term issue ratings to the proposed Eurobonds to be issued by the State of Qatar (AA/Stable/A-1+).  They expect the bonds will be issued in two series, of likely 5 and 10 years’ duration.  With Qatar’s government revenues dipping to an estimated 32% of GDP in 2016 from an average of 42% of GDP over 2010-2014, due to lower hydrocarbon prices, S&P forecast a government budget deficit of 8% of GDP this year, including their estimates of a corrective fiscal response.  This Eurobonds’ issuance is consistent with our expectation that Qatar will finance this deficit through debt, rather than by drawing upon its substantial assets.  (S&P 23.05)

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5.8  Qatar Slashes Healthcare Spending Though World Cup Escapes Cuts

Qatar has cut its planned spending on building healthcare facilities by about two-thirds this year following the drop in energy prices, although expenditure on its World Cup-related projects should be unchanged.  The world’s top liquefied natural gas exporter is one of the richest countries per capita but it faces a 46.5 billion riyal ($12.8 billion) budget deficit this year because of the continued lower oil and gas prices.  Like other Gulf states, it is turning to international markets to bridge the gap – it is expected to price its first sovereign bond issue in four years on Wednesday – but it is also having to reduce and prioritize state spending.

Qatar’s Public Works Authority (Ashghal) is responsible for planning, design, construction and delivery of all infrastructure projects and public buildings in Qatar.  It aims to build 60-70 new primary healthcare centers over the next decade.  This year, it was meant to award contracts to build seven of these but that number has been cut to three.  Ashghal will spend 2.5 billion riyals building healthcare facilities this year, instead of 7 billion riyals as previously planned.  The authority has cut its 2016 budget for public buildings, which includes schools, healthcare and public parks, by 50-60 percent versus what it had originally expected to spend.  (AB 25.05)

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5.9  Abu Dhabi Lays Off Staff as Arabian Gulf Austerity Tightens

Thousands of layoffs at state-linked companies in Abu Dhabi are a fresh sign the Gulf’s wealthy oil states are hunkering down for a long period of austerity as low crude prices pressure their economies.  Since mid-2015, the UAE, Saudi Arabia, Qatar and other countries in the region have curbed spending on some construction projects and reduced energy subsidies to limit budget deficits caused by cheap oil.  Now some governments are also starting to reduce staff at the companies they control, many in the energy industry, to ensure the firms are not a drain on state finances if oil prices stay low for several years.

Abu Dhabi’s National Oil Co (ADNOC), which employs about 55,000 people, has cut hundreds of jobs in the past few months and will have reduced its workforce by at least 5,000 by the end of 2016.  The reduction will occur across most of its 17 subsidiaries as part of a restructuring following a reshuffle of the firm’s leadership.

In Qatar, state-controlled firms such as Qatar Petroleum and Qatar Rail have been laying off staff.  State companies in other states such as Saudi Arabia and Oman have been looking at ways to reduce costs but have so far not resorted to major job cuts.  Most cuts at state firms in Abu Dhabi and elsewhere involve foreign staff because governments want to limit unemployment among their citizens.  Nevertheless, job losses are contributing to an economic slowdown in the region.  The IMF has predicted Abu Dhabi’s gross domestic product growth will fall to 1.7% this year from 4.4% in 2015.  (Reuters 22.05)

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5.10  UAE Sets Up Firm to Operate First Nuclear Power Plants

The Emirates Nuclear Energy Corporation (ENEC) has announced the formation of a new subsidiary called Nawah Energy Company to operate and maintain the UAE’s first nuclear reactors at Barakah.  The ENEC board of directors mandated ENEC management to proceed with the formation of the operating company and to ensure the transfer and provision of all required resources to form the operating subsidiary.  It added that Nawah’s mission will be to “safely and reliably generate electricity from nuclear energy”, and aims to become a globally recognized nuclear utility in the safe operation of nuclear energy plants.

ENEC said last month that the project at Barakah is progressing steadily – Unit 1 is now more than 87% complete, Unit 2 is 68% complete, Unit 3 is 47% complete and Unit 4 is 29% complete.  Overall, construction of Units 1 to 4 is now more than 62% complete.  Pending regulatory approval, the four units in Barakah are scheduled to be delivered by 2020, providing nuclear energy to the UAE grid.  When the four reactors are completed, the UAE’s nuclear energy program will provide approximately 25% of the UAE’s electricity needs and save up to 12 million tons of greenhouse gas emissions each year.  (AB 17.05)

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5.11  Oman Parliament Votes to Raise Taxes in Three Industries

Oman’s parliament voted on 26 May to sharply raise taxes on the petrochemical industry, non-oil natural resources and liquefied natural gas companies in a drive to address a budget deficit.  The legislation, which is subject to approval by the sultan, raises the tax rate of LNG companies to 55% from 15%. Tax rates for petrochemical companies and on exports of non-oil natural resources, both currently at 12%, would rise to 35%.  Both houses of the Council of Oman, one elected and one appointed, voted in favor of the hikes, which Sultan Qaboos bin Said had sent over for review.

Oman is imposing a series of austerity measures after it posted a budget deficit of about 4.5 billion rials ($11.7 billion) last year.  Gasoline and diesel price subsidies have been cut and similar cuts are planned for electricity and liquid petroleum gas.  (Reuters 27.05)

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►►North Africa

5.12  Egypt’s First Half GDP Growth 4.5%

Egypt’s economy grew 4.5% in first half of 2015/2016 fiscal year, down from 5.5% growth in the previous year, the country’s planning minister said on 28 May.  Total GDP for first half of fiscal year 2015/2016 was 1.4 trillion Egyptian pounds ($158 billion) in the first half compared with 1.275 trillion pounds in the same period last year, the minister said.  Second quarter growth for 2015/2016 was 3.8% from 4.3% a year earlier, Planning Minister Ashraf al-Arabi told a press conference.  (Al-Masry Al-Youm 28.05

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5.13  Egyptian Drug Prices To Drop If Shortage Not Solved In 3 Months

Egyptian Health Minister Emad pledged on 31 May to reverse his recent decision to raise the price of pharmaceutical drugs if he cannot make up the shortage in supply within three months.  In an effort to combat an increasing shortage in local supply, Emad announced earlier this month that the price of medicines costing less than LE 30 would be raised by 20%.  Now, according to a new press statement, the minister said he had met with pharmaceutical industry officials and drug manufacturing companies to inform them of the time limit on turning around the crisis.  He urged them to make up for the shortage within three months or prices would be decreased again.  He added that 75 types of medication produced by international companies in Egypt would be provided on the market at low prices.  (Al-Masry Al-Youm 31.05)

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5.14  Moroccan E-Commerce Websites Earned MAD 24.09 Billion in 2014

Lahcen Haddad, Morocco’s Minister of Tourism, spoke at a conference on “Global Economic Mutations and Growth Perspectives” on 26 May.  Haddad underlined the importance of digital media as a “vector for job opportunities” and suggested that the use of digital technologies and mass communication outlets will enable economic growth.

Globally, E-commerce is predicted to contribute 50% to global GDP by 2025.  Haddad said that a “digital revolution” is imminent, as the evolution of E-commerce in Morocco is particularly promising.  In Morocco, the average online e-cart of a consumer is about MAD 709, close to that of an American online consumer’s average e-cart which amounts to approximately $73.  Various facets of E-commerce are appealing to Moroccan internet users, such as its rapid service, large number of choices in products, and the possibility of easily comparing prices.  The relevance of E-commerce to Moroccans in Morocco is significant.  Approximately 903,000 Moroccans shopped online in 2014.

E-commerce websites accumulated a total of MAD 24.09 billion in transactions [in 2014] and MAD 23.1 billion in 2013, amounting to annual growth of 4.29%, according to the National Federation of E-commerce in Morocco (FNEM).  (MWN 29.05)

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6.1  Turkey’s Foreign Trade Deficit Continues to Fall Amid Oil Plunge

Turkey’s foreign trade deficit has fallen sharply in April 2016 compared to the same period last year, mainly due to lower energy prices, the Turkish Statistical Institute (TUIK) said in a report issued on 31 May.  The foreign trade deficit was down by 16.3% compared with the same month last year, falling to $4.2 billion.  Exports for April fell by 10.2% from April last year to $11.99 billion, while imports fell by 11.9% to $16.2 billion.  Turkey’s foreign trade gap was $16.2 billion over the first four months of this year.

Energy imports, which make up the country’s largest import item, declined by 33.8% in April to around $2 billion compared to the same month of 2015.  They saw a drop of 39% over the first four months of the year from the same period of 2015, falling to $8.5 billion amid low energy prices.  However, analysts have warned about rebounding energy prices, which will lessen the positive contribution of the energy slump in lowering Turkey’s foreign trade gap.

The country exported goods worth $1.2 billion to Germany, its largest market, in April. Turkish exports to the U.K. amounted to $838 million, while exports to Italy were worth $583 million.  While the share of the EU in Turkey’s exports was 39.5% in April 2015, this rate rose to 47.3% in April this year, according to TUIK data. The country’s exports to the EU market rose by 7.5% to $5.7 billion in April from the same month of 2015.  China ($1.83 billion), Germany ($1.81 billion) and Russia ($1.15 billion) were the main sources of imports in April.  ((TUIK 31.05)

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6.2  Greek Unemployment Down Slightly in February

Greek unemployment dipped slightly to 24.2% in February from 24.4% the previous month, according to data published on 31 May by the European statistical authority, Eurostat.  In April 2015, Eurozone unemployment was 11%, with the EU rate at 9.6%.  No data was available for Greece for March and April of this year.

In total, there were 21.22 million unemployed people in the EU in April and 16.42 million in the Eurozone.  The highest rates were recorded in Greece in February (24.2%), followed by Spain (20.1%).  The Czech Republic (4.1%), Germany (4.2%) and Malta (4.3%) had the lowest rate of joblessness.  In Greece, the total number of registered unemployed people in February came to 1.16 million, 20.6% for men and 28.7% for women.  (Eurostat 31.05)

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6.3  Greek 1st Quarter GDP Contraction Worse Than Expected

Greece’s economic contraction in the first quarter of the year was bigger than originally thought, as Hellenic Statistical Authority data released on 30 May showed GDP fell 1.4% year-on-year, against a previous estimate for 1.3% drop.  The January-March 2016 period was the third quarter of economic contraction in a row for Greece, following six consecutive quarters of growth.  The Finance Ministry is anticipating a contraction in the second quarter too, before the economy starts recovering in the second half of the year and ends with a 0.7% drop in GDP for the year as a whole.

The slide in economic output is attributed to two main factors.  The first is the 1.3% decrease in consumption, with state consumption shrinking 1.5% on an annual basis.  Figures showed that consumption totaled €41.6 billion in the first quarter (down from €42.2 billion a year earlier).  Private consumption dropped some €400 million and state consumption by €150 million.

The second factor was the 0.3% decline in investment.  The drop in capital investment was sharper, at 2.7%.  Notably, since the third quarter of 2014 – i.e. in the last seven quarters – it was only in two quarters that a drop in capital investment was recorded: in the third of 2015 and the first of 2016.

The negative impact on GDP from the drop in exports was offset by the 12.8% decline in total imports (9.2% in goods and 26.6% in services).  Imports amounted to €13.5 billion in Q1/16, down from €15.5 billion a year earlier.  Therefore the country’s trade deficit dropped from €1.6 billion last year to €1.2 billion this year.

In the five quarters since SYRIZA and Independent Greeks came to power, to end-March 2016, GDP has shrunk 1.3%, private consumption has fallen 1.4%, investment has dropped 1.8%, exports decreased 12.3% and imports 12.7%.  (Elstat 30.05)

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6.4  Greece Near Bottom in Global Competitiveness Survey

Greece slid closer to the bottom of the global competitiveness list in 2015, as it dropped six positions to 56th out of the 61 countries surveyed by the International Institute for Management Development (IMD).  The downward spiral of the Greek economy last year, with the imposition of capital controls and the credit crunch, saw confidence in the country as well as its enterprises drop anew.  Greece had risen to 50th spot in 2014 due to a series of interventions in the labor market, including a reduction in salary costs.

Each country’s position on the list is determined by its performance in four categories that between them count 340 indices.  Greece plummeted in the business efficiency category last year, dropping from 43rd to 57th place.  This is attributed to the credit crunch and local enterprises’ lack of liquidity, primarily as a result of the capital controls.

It is no coincidence that Greece was last (61st) in the indices of financial risk and credit sector operation, while ranking 60th in credit availability to corporations.  This was the same position that Greece ranked in term of its image abroad, which reflects the lack of confidence in the Greek economy and entrepreneurship as well as domestic politics.  In the other three main categories, Greece remained in 58th position for financial returns, it slumped two spots to 59th in government efficiency, and dropped from 35th to 38th in terms of infrastructure.  (eKathimerini 31.05)

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7.1  Avigdor Lieberman Installed as New Defense Minister

On 30 May, the Israeli government formally approved the appointment of Yisrael Beytenu party leader Avigdor Lieberman as defense minister.  The unanimous cabinet approval came after Prime Minister Binyamin Netanyahu finally secured the vital backing of the Jewish Home party, after a compromise deal with Education Minister Naftali Bennett was successfully brokered by Health Minister Yaakov Litzman (UTJ).  Bennett had demanded the creation of a military liaison for the government’s security cabinet, a smaller forum of cabinet members which decides on matters of national security.  The Jewish Home leader insists such a post is needed to avoid security cabinet members being kept in the dark on important developments, pointing to aspects of the 2014 conflict with Palestinian terrorists in Gaza, among other concerns.

Under the compromise brokered by Health Minister Yaakov Litzman, of the haredi United Torah Judaism party, security cabinet members will receive frequent personal briefings from Israel’s National Security Council as an interim measure, while a committee of experts looks at ways to improve procedure.

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7.2  Ontario Science Centre Collaborates with Bloomfield Science Museum

On 20 May, the Ontario Science Centre signed a three-year Memorandum of Understanding (MoU) with the Bloomfield Science Museum Jerusalem with the goal of fostering innovation in science education.  The MoU outlines key areas of collaboration in the fields of science, technology, innovation and STEAM (science, technology, engineering, art and math) education and was signed during the Government of Ontario’s trade mission to Israel from 15 – 20 May.  The two cultural institutions focus on providing interactive and immersive experiences to increase interest in science and technology among students and the general public.  They will collaborate on exhibit development and fabrication; travelling exhibition tour rentals and management; public and curriculum-based programming; program evaluation; and exhibits and programs that focus on women and girls in science and engineering.

The Ontario Science Centre has welcomed more than 50 million visitors since it opened in 1969, implementing an interactive approach now adopted by science centers around the world.  Today, the Science Centre is an international leader in free-choice science learning and a key contributor to Ontario’s education and innovation ecosystems, offering lifelong learning through hands-on, engaging experiences.

The Bloomfield Science Museum Jerusalem is one of Israel’s foremost institutions for informal science education and science communication providing life changing experiences and enables dialogue between various sectors of the community.  It is a cultural anchor in the city of Jerusalem, stimulating creativity and innovation for the future of Israel.  (Ontario Science Centre 20.05)

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7.3  Arab Israeli Wins First ‘Miss Trans Israel’ Pageant

An Israeli from a Catholic Arab family has been crowned the winner of the country’s first transgender pageant.  Talleen Abu Hanna, 21, from the northern city of Nazareth wore a white bridal dress as she was declared the first “Miss Trans Israel” on 27 May at Habima, Israel’s national theater, in Tel Aviv.  The pageant consisted of a swimsuit competition, two formal-wear competitions and a question-and-answer portion.  Abu Hanna described her victory as “historic” and said it promotes equality.  She will represent Israel at the Miss Trans Star International pageant in Spain in August.

Israel is generally tolerant of gay people, and Tel Aviv has emerged as one of the world’s most gay-friendly destinations.  The Israeli city stands in sharp contrast to many parts of the Middle East, where gay people are often persecuted.  (Various 29.05)

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7.4  Shavuot Holiday Begins on Eve of 11 June

On 11/12 June, the Jewish world will observe the holiday of Shavuot.  Shavuot is the second of the three major pilgrim festivals (Passover being the first and Sukkot the third) and occurs exactly fifty days after the second day of Passover.  This holiday marks the anniversary of the day when the Jewish People received the Torah at Mount Sinai.  This is a biblical holiday complete with special prayers, holiday candle lighting and Kiddush, with many forms of work and labor are prohibited.  The word shavuot means weeks and it marks the completion of the seven-week counting period between Passover and Shavuot.  During these seven weeks the Jewish people cleansed themselves of the scars of Egyptian slavery and became a holy nation ready to enter into an eternal covenant with G‑d with the giving of the Torah.  Before the giving of the Torah the Jews were a family and a community.  The experience of Sinai bonded the Jews into a new entity: the Jewish people; the Chosen Nation.  This holiday is likened to their wedding day – beneath the wedding canopy of Mount Sinai, G‑d betrothed the Jews.

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7.5  Ramadan Begins on Eve of 6 June

 Ramadan 2016 is expected to start on the night of 6 June and will continue for 30 days until the evening of 7 July.  Ramadan is the ninth month of the lunar Islamic calendar, which lasts 29 or 30 days according to the visual sightings of the crescent moon according to numerous biographical accounts compiled in Hadiths.  It is the Muslim month of fasting, in which Muslims refrain from dawn until sunset from eating, drinking and sexual relations.  The sawab (rewards) of fasting are many, but in this month, they are believed to be multiplied.  Muslims fast in this month for the sake of demonstrating submission to God and to offer more prayers and Quran recitations.

Ramadan is a time of spiritual reflection and worship.  Muslims are expected to put more effort into following the teachings of Islam and to avoid obscene and irreligious sights and sounds.  Purity of both thoughts and actions is important.  The act of fasting is said to redirect the heart away from worldly activities, its purpose being to cleanse the inner soul and free it from harm.  It also teaches Muslims to practice self-discipline, self-control, sacrifice and empathy for those who are less fortunate; thus encouraging actions of generosity and charity (zakat).

 It becomes compulsory for Muslims to start fasting when they reach puberty, so long as they are healthy, sane and have no disabilities or illnesses.  The elderly, the chronically ill and the mentally ill are exempt from fasting, although the first two groups must endeavor to feed the poor in place of their missed fasting.  Also exempt are pregnant women if they believe it would be harmful to them or the unborn baby, women during the period of their menstruation, and women nursing their newborns.  A difference of opinion exists among Islamic scholars as to whether this last group must make up the days they miss at a later date, or feed poor people as a recompense for days missed.  While fasting is not considered compulsory in childhood, many children endeavor to complete as many fasts as possible as practice for later life.  Lastly, those traveling (musaafir) are exempt, but must make up the days they miss.  Twelver Shi’a believes that those who travel more than 14 miles (23 km) in a day are exempt.

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7.6  Jordan’s King Abdullah Dissolves Parliament & Orders New Elections

Jordan’s King Abdullah appointed veteran politician Hani Mulqi as prime minister after dissolving parliament by royal decree on 29 May, following the end of its four-year term, charging him with holding new elections by October.  The monarch accepted the resignation of Prime Minister Abdullah Ensour, as is customary under the constitution, before appointing an interim head of government.

Under the constitutional rules the election should be held within four months and after the lower house passed an amendment to the electoral laws in March government sources and political analysts say there are likely to be more candidates from political parties vying for votes with traditional tribal and family allegiances.  Jordan’s main political opposition to the government comes from the Muslim Brotherhood movement which is facing increasing legal curbs on its activities, leaving mostly pro-monarchy parties and some independent Islamists and politicians to compete in the elections, the sources say.  (Reuters 29.05)

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8.1  Gamida Cell Announces $4.4 Million Grant from the Israeli Government

Gamida Cell has been awarded a grant of up to $4.4 million from the Israel Innovation Authority (formerly the Office of the Chief Scientist) of the Israeli Ministry of Economy and Industry.  The mission of the Israel Innovation Authority is to encourage innovation and entrepreneurship in various industries, including science and technology, while stimulating economic growth.  The non-dilutive funding will support Gamida Cell’s ongoing research and development efforts including its Phase 3 registration study of NiCord for hematological malignancies (blood cancers like leukemia and lymphoma), and its clinical trials of CordIn for sickle cell disease and thalassemia and NK cells as a potential immune therapy for cancer.

Jerusalem’s Gamida Cell is a world leader in cellular and immune therapies for the treatment of cancer and orphan genetic diseases.  The company’s pipeline of products are in development to treat a wide range of conditions including cancer, genetic hematological diseases such as sickle cell disease and thalassemia, bone marrow failure syndromes such as aplastic anemia, genetic metabolic diseases and refractory autoimmune diseases.  (Gamida Cell 23.05)

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8.2  Mazor Robotics Signs Strategic Agreements With Medtronic

Mazor Robotics entered into two strategic agreements with Medtronic.  One agreement is a two-stage, multi-faceted, commercial agreement for co-promotion, co-development and, upon meeting certain milestones, potential global distribution of certain Mazor products.  The second agreement is for an equity investment by Medtronic in Mazor.

Mazor remains an independent company, which will continue to innovate in spine as well as in other markets, and will continue to sell and fully support the Renaissance System through its own sales team and distribution partners.  Throughout the agreement, current and jointly developed Mazor systems will continue to maintain universal implant compatibility, allowing complete hospital and surgeon freedom in surgical tool, implant and procedure selection.

Caesarea’s Mazor Robotics believes in healing through innovation by developing and introducing revolutionary robotic-based technology and products aimed at redefining the gold standard of quality care.  Mazor Robotics Renaissance Guidance System enables surgeons to conduct spine and brain procedures in a more accurate and secure manner.  (Mazor Robotics 18.05)

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8.3  Nucleix Raises $3 Million

Rehovot’s Nucleix has raised $3 million from Morris Kahn’s Aurum Ventures MKI, OrbiMed Israel Partners and Zohar Zisapel.  OrbiMed and Zohar Zisapel invested in the startup’s first $5.5 million financing round and the company has also raised $3 million from private investors.  Nucleix is involved in the relatively new research field of epigenetics (a situation in which identical genes express themselves in different ways) in order to detect different types of cancers.  Cancer cells are different from healthy cells with chemical patterns, which are added on to or not added on to their genes.  Nucleix has developed a method that can read the epigene patterns in different cells. The company’s first test for the detection of bladder cancer could be available in Europe within a couple of months.  (Globes 23.05)

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8.4  OrbiMed Launches $307 Million Israel Venture Capital Fund

OrbiMed announced the closing of its second Israel-focused venture capital fund, OrbiMed Israel Partners II, with approximately $307 million in capital commitments.  Investors in the Fund include several of the world’s largest healthcare companies, in addition to dozens of institutional investors and family offices.  Consistent with its predecessor fund, OrbiMed Israel Partners II will target all stages and sectors of the healthcare industry, with a focus on biopharmaceuticals, digital health, medical devices and diagnostics companies in Israel.  The fund is targeting to invest in approximately 20 portfolio companies.  Where appropriate, Israel Partners II may co-invest with OrbiMed’s global private equity team, leveraging the full financial and strategic resources of OrbiMed’s 100+ team members and $15 billion global investment platform.

Herzliya’s OrbiMed is a leading investment firm dedicated exclusively to the healthcare sector, with over $15 billion in assets under management.  OrbiMed invests globally across the spectrum of healthcare companies, from venture capital start-ups to large multinational companies utilizing a range of private equity funds, public equity funds, royalty/debt funds, and other investment vehicles.  (OrbiMed 23.05)

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8.5  MedyMatch Presents at Israel’s BioMed Conference

MedyMatch Technology was selected to present at the 2016 Israeli Advanced Technology Industries (IATI) BioMed Conference.  The Biomed conference is the preeminent event for the Israeli life sciences industry, attracting leading members of the healthcare industry from around the globe.

Tel Aviv’s MedyMatch utilizes advanced cognitive analytics and artificial intelligence to deliver real-time decision support tools to improve clinical outcomes in acute medical scenarios. The foundation of clinical discovery and value creation lies in the deep clinical understanding of how to diagnose disease, utilizing the right data (electronic medical record, medical imaging, and genomic data). MedyMatch’s vision includes an innovative approach in re-defining ‘capacity in healthcare’ by applying advanced analytic technologies in the emergency room setting to prognosticate downstream cost of care outcomes. The MedyMatch team of artificial intelligence, machine learning, deep learning and algorithmic experts along with its medical and science advisory boards are achieving breakthroughs in standards of cost and care.  (MedyMatch 24.05)

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8.6  FDA Approves Medic Vision SafeCT-29 that Helps Achieve Radiation Safety

Medic Vision Imaging Solutions announced the FDA clearance of SafeCT-29 to help healthcare facilities achieve compliance as mandated by NEMA XR-29 “Smart Dose” standard.  SafeCT-29 provides full compliance with the XR-29 Dose Check function for CT and PET/CT systems of all vendors and models.  It is the only third-party solution that offers Dose Check functionality without interrupting or interfering with the scanner’s design and operation.  NEMA estimates that one-third of the current CT installation base may not be retrofitted by the OEMs to become XR-29 compliant.  Now there is an alternative solution that can make the 4-slice, 8-slice, some 16-slice CT scanners, as well as the majority of PET/CT scanners, compliant.

SafeCT-29 is a patent-pending, innovative, add-on system that is easy to install and operate. It is fully automatic and maintains the scanner’s workflow.  It connects to the CT console, analyzes dose data in real time, alerts the operator if the dose is too high, and prevents the patient scan until dose levels are changed or confirmed and justified.

Tirat HaCarmel’s Medic Vision Imaging Solutions is a leading provider of cost-effective, vendor-independent image enhancement and dose management solutions for CT exams.  The company’s flagship product, SafeCT, enhances CT images acquired with low-dose protocols.  SafeCT is in routine clinical use at more than 100 major hospitals and imaging centers nationwide, supporting CT scanner systems from all manufacturers.  (Medic Vision 24.05)

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8.7  Health Canada Approves Insightec’s Exablate Neuro System Tremor Treatment

INSIGHTEC announced that Health Canada has approved its Exablate Neuro system for the treatment of essential tremor.  INSIGHTEC’s Exablate Neuro platform is transforming medicine by presenting a non-invasive treatment alternative that combines two technologies: Focused Ultrasound, which is used to lesion the targeted tissue deep in the brain, and Magnetic Resonance Imaging (MRI), which is used to guide the ultrasound waves to the specific target tissue and provide real-time feedback on treatment progress and outcomes.  Essential tremor is the most common movement disorder, affecting millions of people worldwide. It is a progressive and debilitating neurological condition that causes a rhythmic trembling of the hands, head, voice, legs or trunk.  Exablate Neuro was investigated as a treatment alternative for these patients.

Haifa’s INSIGHTEC is a world leader in MR-guided Focused Ultrasound (MRgFUS).  The company, founded in 1999, develops and distributes a non-invasive therapy platform that is transforming medicine.  INSIGHTEC is continuously expanding its applications ranging from functional neurosurgery to oncology and gynecology.  MRgFUS is embraced by world-renowned physicians in more than 120 leading medical facilities around the world, who value both its clinical and economic value.  (INSIGHTEC 24.05)

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8.8  Zebra Medical Vision Raises $12 Million

Kibbutz Shefayim’s Zebra Medical Vision raised $12 million in a funding round led by Utah-based healthcare provider Intermountain Healthcare, with the participation of existing investors.  Intermountain plans to work with Zebra to accelerate the creation of imaging algorithms to improve patient care.  Zebra Medical, founded in 2014, seeks to teach computers to automatically read and diagnose medical imaging data.  Its analytics engine helps physicians and healthcare providers analyze millions of imaging records.  Current algorithms are in the fields of bone health, cardiovascular analysis, liver and lung indications.  The company currently offers algorithms supporting analysis of imaging results for osteoporosis, fatty liver, and emphysema.  (Various 25.05)

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8.9  Check-Cap Preliminary Data Evaluating its Preparation-Free Colon Screening Capsule

Check-Cap announced that preliminary data from pre-clinical and clinical studies were discussed in a podium presentation entitled “A Novel Preparation-Free X-Ray Imaging Capsule for Colon Cancer Screening” during Digestive Disease Week (DDW) 2016, taking place in San Diego from 21 – 24 May.  The presentation included a preliminary analysis of the first participants evaluated in the Company’s ongoing multi-center clinical feasibility study, which aims to establish the safety, functionality and preliminary efficacy of the Check-Cap system.

Data presented showed safe and complete passage for the 75 participants enrolled in a completed study to assess the natural motility of the capsule.  Preliminary analysis of the ongoing clinical feasibility study evaluated data from 54 participants who swallowed Check-Cap’s scanning capsule, tracking the passage of the capsule through the alimentary tract using radio frequency telemetry and Check-Cap’s proprietary capsule position tracking system.  Capsule passage was safe and well tolerated, with an average transit time of 66 ±37 hours observed in 53 volunteers who completed the study (one asymptomatic volunteer withdrew prior to completion and the capsule was retrieved endoscopically from the colon), and the total radiation dose was found to be ultra-low (0.03±0.007 mSv, or the equivalent exposure of one dental or chest x-ray).  Three-dimensional image reconstructions of the colonic wall and lumen detected and located small and large pedunculated and sessile polyps, as validated by subsequent colonoscopy.

Isfiya’s Check-Cap is a clinical stage medical diagnostics company developing the first system for preparation-free scanning and imaging of the inner colon to identify precancerous polyps and cancers while being less invasive than traditional procedures.  The Company is developing an ingestible capsule that utilizes proprietary, ultra-low-dose X-ray technology to safely generate high-resolution, 3-dimensional imagery of the interior of the colon.  Without requiring bowel preparation or diet and activity modifications, Check-Cap’s system is designed to increase patient acceptance and adherence to colorectal cancer screening recommendations.  The Check-Cap system is currently not cleared for marketing in any jurisdiction.  (Check-Cap 25.05)

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8.10  Nano Dimension & Accellta Successfully BioPrint Stem Cell-Derived Tissues

Nano Dimension has successfully lab-tested a proof of concept 3D Bioprinter for stem cells.  The trial was conducted in collaboration with Accellta, a company that has developed proprietary technologies for the unique production of high quality media, stem cells, progenitors and differentiated cells for drug discovery, regenerative medicine and research.  The feasibility study confirmed that the combined technologies of the companies enabled printing of viable stem cells using an adapted 3D printer.  The companies will consider the formation of a new entity for these future solutions and do not intend to invest significant capital directly to expand this activity. Such funds would be raised by and for the use of the joint entity.

3D bioprinting enabled by the two companies’ technologies, means that Nano Dimension and Accellta have the potential to accelerate high fidelity and high viability manufacturing of living cellular products.  Accellta’s unique, robust and reproducible suspension-based cell culturing systems produce billions of high quality stem cells per batch and represent a transformative step in terms of stem cell production.  Accellta’s technology can deliver large quantities of high quality cells which can be an enabler for printing even large and complex tissues and organs.

Advanced 3D inkjet technology, the core competence of Nano Dimension, enables rapid printing of complex multi-material objects such as those needed for next generation bioprinting.  Nano Dimension’s novel capabilities, developed for its state-of-the-art 3D printed electronics technology for printed circuit boards (PCBs) may pave the way to other advanced multi-material printing domains such as 3D bioprinting.  This latest development is consistent with Nano Dimension’s strategy of offering commercial solutions to help companies and partners develop innovative products through advanced 3D printing and multi-material technology.

Ness Ziona’s Nano Dimension, founded in 2012, focuses on development of advanced 3D printed electronics systems and advanced additive manufacturing. Nano Dimension’s unique products combine three advanced technologies: 3D inkjet, 3D software and nanomaterials. The company’s primary products include the first 3D printer dedicated to printing multi-layer PCBs (printed circuit boards) and advanced nanotechnology-based conductive and dielectric inks.

Haifa’s Accellta specializes in innovative, high quality and cost-effective media and custom-made technologies for culturing and differentiation of human stem cells in unique 3D suspension culture systems, using bioreactors, with no animal products, no feeder cells or micro-carriers and serum-free.  (Nano Dimension 25.05)

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8.11  Steak Tzartzar Farms Insects To Fight World Hunger

An Israeli company is promoting edible insects that are high in protein and affordable to cultivate, with the aim of helping to curb world hunger and boost nutrition.  The Israeli startup Steak TzarTzar has developed strains of edible mealworms and grasshoppers grown in controlled environments without chemicals and free of pesticides, and says it conducts high scale farming of insects for human consumption.  The company also develops innovative protocols and technologies to enable growing commercial quantities of grasshoppers in climate controlled facilities as an alternative healthier and more sustainable protein ingredient for the food industry.  The firm aims to set up warehouses in East Africa and make grasshoppers — which are in season only six weeks out of the year — available to consumers all year round at lower costs than current market rates.  Grasshoppers multiply exponentially and can grow from 2,000 to over a million within two months.  The company also wants to penetrate the North American market.  But most Westerners do not find the notion of eating insects appealing, so overcoming the “yuck factor” will be a challenge.  (Various 29.05)

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8.12  Ultra Health Cannabis Forms Joint Venture With Panaxia

Albuquerque’s Ultra Health, the largest and leading medical cannabis operator in New Mexico, announced a joint venture with Panaxia, a pharmaceutical company based in Israel.  The firms concluded an agreement after a 14-month negotiation and due diligence process.  Panaxia will be providing smokeless proprietary cannabinoid dosage and treatment protocols not readily available in the U.S. in order to manufacture state-of-the-art products to treat a number of illnesses.  The two companies will be building a production facility that implements Panaxia’s technology including advanced validated analytical systems and Good Manufacturing Practices (GMP) production protocols.

The new smokeless designed cannabis products will provide better delivery systems for patients and physicians with regard to safety and dosage.  The products will be beneficial to current chronic conditions requiring ongoing dosing such as PTSD, chronic pain, cancers, neuropathy pain, epilepsy, anorexia and HIV/AIDS.  The U.S. legal cannabis market is expected to grow by 25% in 2016 to $6.7 billion. It is estimated that nearly one third of the market will likely be smokeless cannabis products.

Lod’s Panaxia is a research and development company as well as a manufacturer of medical devices and pharmaceuticals.  Panaxia has developed more than 30 formulations, most of them having already been registered as medical products and have reached the market.  These products include various indications and dosage forms, many of them are topical preparations (e.g. dermal, vaginal, nasal and otic). Panaxia handles all aspects of product expansion starting from formulation development, registration at the Israeli Ministry of Health and, if required, with the U.S. FDA, clinical trials and finally manufacturing of the licensed product on an industrial scale.  Panaxia has been developing and manufacturing in Israel smokeless cannabis dosage forms which include: extracts, tablets and inhalers since 2010.  (Ultra Health 30.03)

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8.13  NeuroRx Wins Startup Competition at IATI-Biomed 2016

NeuroRx won IATI-BIOMED’s startup completion and was chosen out of dozens of applicants as the most innovative life science company.  NeuroRx has successfully completed a Phase 2 for a newly-purposed class of drugs that have shown rapid efficacy in reducing symptoms of depression and risk of suicide.  The drug named Cuclurad targets the brain’s NMDA receptor rather than the traditional serotonin pathway.  It includes initial use of Ketamine, followed by D-cycloserine in combination with one of three FDA-approved mood stabilizers and achieves reduction of symptoms within two hours of treatment and maintains that clinical benefit over 8 weeks.  The Company is expected to receive FDA approval under a fast track, following completion of clinical trials expected by the end of 2017.

Haifa’s NeuroRx is a clinical stage, small molecule pharmaceutical company developing novel therapeutics for the treatment of central nervous system disorders.  The company is built upon 30 years of basic science and clinical expertise in understanding the role of the brain’s N-methyl-D-aspartate (NMDA) receptor in regulating human thought processes in general and in regulating depression and suicidality in specific.  The company’s lead drug candidate is Cyclurad, the first oral therapeutic for the treatment of acute suicidal crisis associated with bipolar disorder.  (IATI 28.05)

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8.14  Rosetta Genomics Confirms Validity of its Novel Thyroid Nodule Classification Assay

Rosetta Genomics announced that data from the analytical validation of the Company’s novel, microRNA-based assay for the classification of indeterminate thyroid nodules have been published online in the peer-reviewed journal, Cancer Cytopathology.  The article, “Analytical Validity of a microRNA-based Assay for Diagnosing Indeterminate Thyroid FNA Smears from Routinely Prepared Cytology Slides,” highlights the robustness of RosettaGX Reveal, a test that stratifies indeterminate thyroid lesions as “benign,” “suspicious for malignancy by microRNA” or “positive for medullary carcinoma” in preoperative Fine Needle Aspirate (FNA) by utilizing existing cytology smear samples. The article can be accessed here.

In addition to its excellent performance, RosettaGX Reveal has significant advantage to current assays on the market because it can work off the same cytology slides that were created to perform the initial diagnosis, thus eliminating the risks, added patient stress, and unnecessary pain associated with additional fine needle passes. Importantly, RosettaGX Reveal can evaluate the same cells that were already examined.  The published data add to the growing body of clinical evidence, including previously reported clinical validity data, that support the use of RosettaGX Reveal to help resolve ambiguity in an indeterminate thyroid cancer diagnosis and thus reduce unnecessary surgeries.

Rehovot’s Rosetta develops and commercializes a full range of microRNA-based and other molecular diagnostics.  Rosetta’s integrative research platform combining bioinformatics and state-of-the-art laboratory processes has led to the discovery of hundreds of biologically validated novel human microRNAs.  Building on its strong patent position and proprietary platform technologies, Rosetta is working on the application of these technologies in the development and commercialization of a full range of microRNA-based diagnostic tools.  (Rosetta Genomics 26.05)

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8.15  HIL Applied Medical Acquires Nanolabz

HIL Applied Medical announced the acquisition of Nanolabz, a Reno, Nevada company born out of University of Nevada, Reno research and focused on developing and fabricating smart targets for laser-based proton acceleration.  HIL Applied Medical is developing a new class of ultra-compact, high-performance Proton Beam Therapy systems, based on high-intensity lasers and nano-engineered smart targetry.

Jerusalem’s HIL Applied Medical is developing a new class of ultra-compact, high-performance proton therapy systems.  They apply a patented approach to particle acceleration and beam delivery, combining nano-technology with ultra-high-intensity lasers and ultra-fast magnets.  These technological breakthroughs enable meaningful reduction in the size, complexity and cost of proton therapy systems, without compromising clinical utility.  Thus HIL aims to enable, for the first time, a single-room add-on proton therapy solution that is truly cost-effective.  (HIL 26.05)

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8.16  CollPlant Receives OCS Authorization for a NIS 12 Million in R&D Projects

CollPlant has received authorization from the Chief Scientist of Israel’s Ministry of Economy, for funding approximately 50% of its NIS 12 million development project for 2016.  The Chief Scientist’s grant amounts to NIS 5.6 million, measurably higher than last year’s authorized grant, which totaled NIS 4.7 million.  The development programs for which the funding was authorized include human collagen-based medical products leveraging CollPlant’s technology.  Of note, the Chief Scientist authorized the support of development of collagen and cell-based formulations intended for use as BioInk for 3D printing of tissues and organs.  Also receiving Chief Scientist funding is a product to treat tears in tendons and ligaments, such as the Anterior Cruciate Ligament (ACL) in the knee joint.  The development plans authorized by the Chief Scientist also include support for the completion of the development process of VergenixSTR, a product to heal tendons inflammation, and other products.

Ness Ziona’s CollPlant is a clinical-stage regenerative medicine company leveraging its proprietary, plant-based rhCollagen technology for the development and commercialization of tissue repair products, initially for the orthobiologics and advanced wound care markets.  The Company’s cutting-edge technology is designed to generate and process proprietary recombinant human collagen (rhCollagen), among other patent-protected recombinant proteins.  Given that CollPlant’s rhCollagen is identical to the type I collagen produced by the human body, it offers significant advantages compared to currently marketed tissue-derived collagen, including improved biofunctionality, superior homogeneity and reduced risk of immune response.  (CollPlant 31.05)

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8.17  BioRap Technologies Collaborates with Pfizer for Novel Immunomodulators R&D

BioRap Technologies, the technology transfer company of the Rappaport Institute for Biomedical Research at the Technion – Israel Institute of Technology, has entered into a research collaboration, option and license agreement with Pfizer that aims to further develop a certain monoclonal antibody into potential new treatment options for a number of chronic autoimmune diseases.  The collaboration is based on a scientific breakthrough made at the Rappaport Institute.  The team developed a novel monoclonal antibody that – when bound with a certain immune checkpoint molecule – drives the activity of regulatory T-cells, a cell type that plays an important role in controlling autoimmunity.  Autoimmune diseases include Inflammatory Bowel Disease (Crohn’s Disease and Ulcerative Colitis), Diabetes and Multiple Sclerosis.  Under the terms of the agreement, Pfizer has an exclusive option to obtain a license to the monoclonal antibody program. If the option is exercised, Pfizer will be responsible for further development and potential commercialization of any resulting product.

Haifa’s BioRap is the Rappaport Institute’s technology transfer company led by Dr Orit Shaked and its liaison to industry, bringing promising scientific innovations generated at the Institute to collaboration with industry and commercialization.  The company provides the legal and commercial frameworks for the inventions and innovations of RI researchers, protecting discoveries and innovations with patents, and working jointly with industry to bring scientific discovery to the market.  (BioRap Technologies 31.05)

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8.18  Intec Pharma Receives Approval for $5.2 Million Grant

Intec Pharma announced that the Israeli National Authority for Technological Innovation (NATI), formerly known as the Israel Office of the Chief Scientist, approved a grant of up to NIS 20 million ($5.2 million) in connection with company’s 2016 research and development program.  The majority of this grant is allocated for the pivotal Phase III clinical trial for its lead product candidate, the Accordion Pill Carbidopa / Levodopa for the treatment of Parkinson’s disease symptoms in advanced Parkinson’s disease patients.

Jerusalem’s Intec Pharma is a clinical stage biopharmaceutical company focused on developing drugs based on its proprietary Accordion Pill platform technology.  The Company’s Accordion Pill is an oral drug delivery system that is designed to improve the efficacy and safety of existing drugs and drugs in development by utilizing an efficient gastric retention and specific release mechanism.  (Intec Pharma 31.05)

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9.1  Israel Successfully Tests Iron Dome Defense System at Sea

Israel has successfully tested its Iron Dome anti-rocket defense system aboard naval ships for the first time.  The Israel Navy announced on 18 May that the system shot down a volley of rockets during a drill recently.  The rockets were fired from the shore and all were detected by the radar system and then intercepted by the weapons system.  The Iron Dome protects against short-range rockets and intercepted hundreds of projectiles fired by Hamas and other Palestinian terrorists at Israeli towns during Operation Protective Edge in 2014.  (Various 18.05)

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9.2  New FDM 3D Printer Enhancements Make Stratasys Solutions Stronger

Stratasys introduced four new enhancements to Stratasys Fused Deposition Modelling (FDM)-based 3D printers, fully optimizing select models for creating functional product prototypes, production tools and end-use parts for the most demanding manufacturing applications.

Sacrificial tooling, a process in which 3D printed molds are wrapped in composite material and then removed after part curing, enables manufacturers to rapidly and cost-effectively create complex, hollow composite parts.  Stratasys is improving this process with a new sacrificial tooling solution, comprised of its new ST-130 material and new fill patterns.  Together, the new material and fill patterns provide faster dissolution, rapid build speed, better autoclave performance and greatly improved tool quality.

To reduce production time and cost for both parts and tooling, Stratasys is introducing the Fortus 900mc Acceleration Kit.  This new kit, designed for Stratasys’ most powerful FDM 3D printer, allows very large structures to be 3D printed up to three times faster.

Aerospace engineers and manufacturers require materials with precise specifications and traceability for prototypes and end-user parts.  Stratasys ULTEM 9085 Aerospace grade filaments are produced according to aerospace specification requirements. While there is no change from the standard ULTEM 9085 material, the new Aerospace designation allows for full production traceability in compliance with strict aerospace requirements.

With its high durability and smooth matte finish, PC-ABS is a natural choice for challenging applications, such as power-tool prototyping and industrial equipment manufacturing.  Owners of the Fortus 380mc and 450mc 3D Printers will now have the ability to leverage PC-ABS, reducing time-to-market and high tooling costs for low-volume and custom production builds.

For more than 25 years, Stratasys has been a defining force and dominant player in 3D printing and additive manufacturing – shaping the way things are made.  Headquartered in Minneapolis, Minnesota and Rehovot, Israel, the company empowers customers across a broad range of vertical markets by enabling new paradigms for design and manufacturing.  The company’s solutions provide customers with unmatched design freedom and manufacturing flexibility – reducing time-to-market and lowering development costs, while improving designs and communications.  (Stratasys 17.05)

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9.3  StoreDot Unveils World’s First MolecuLED TV

StoreDot unveiled the next evolution in display technology – a massive 55 inch display powered by StoreDot’s MolecuLED technology.  This groundbreaking metal-free approach to color conversion is the first and only fully organic solution that is positioned to replace traditional Quantum Dot technology.  The new display demonstrates the viability of this next generation technology to supplant current generation technologies such as LED, OLED, and AMOLED.  The new technology allows for displays that produce vivid colors, are more cost effective, and are environmentally friendly.  The MolecuLED is an organic color conversion layer that delivers very competitive wide color gamut.  It is completely heavy metals free – no use of Cadmium, Indium, or any type of metal.

StoreDot has developed the technology that allows creation of organic materials inspired by natural molecules.  The MolecuLED is a new generation of color conversion film.  It’s a combination of new organic compounds and processes that provide an alternative for any inorganic QD film.  The MolecuLED layer has much lower cost compared to QD film, and is environmentally-friendly.

Herzliya’s StoreDot is an innovation leader in materials and device applications, developing ground-breaking technologies based on a unique methodology for the design, synthesis, and tuning of organic compounds.  Designed to replace known technologies by means of enhanced chemical, electrical, and optical properties, StoreDot’s proprietary technology, inspired by nature, can be optimized for multiple industries including fast-charging batteries in mobile devices and electric vehicles and next generation displays.  (StoreDot 23.05)

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9.4  ECI Wins Leading Lights 2016 Award for Most Innovative Security Strategy

ECI, a global provider of ELASTIC Network solutions for service providers, utilities and data center operators, announced that its LightSEC security solution has won Light Reading’s, Leading Lights 2016 award for most innovative security strategy (vendor).  Developed to be comprehensive, flexible and centralized LightSEC ensures that customers cope well with current security challenges as well as retain the ability to add security functions which will protect against future threats.  The LightSEC solution is comprised of three major pillars:

*A Suite of Security Applications which delivers a flexible security mitigation solution. The solution leverages a set of security functions, understanding that protection cannot be achieved by protecting individual elements.
*LightSEC COMPASS – With the growing number of threats, every organization is likely implementing a variety of security engines and applications. The LightSEC COMPASS features an aggregated view of calculated threats from all security engines, whether ECI’s proprietary applications or those of a third party.
*The Mercury NFV solution – facilitates a consolidated security and connectivity solution. The solution is based on a commercial, off-the-shelf platform, which can be deployed as a plug-in blade (in ECI’s Neptune product line) or as a stand-alone appliance.

Petah Tikva’s ECI is a global provider of ELASTIC Network solutions to CSPs, utilities 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 24.05)

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9.5  Allot Demonstrates Security VNF & vCPE Interoperability

Allot Communications has successfully demonstrated that its security services virtual network functions (VNF) and virtual customer premises equipment (vCPE) solutions are interoperable with leading NFV Infrastructure (NFVI) and orchestration (NFVO) ecosystems.  Allot will showcase the readiness and agility of its solution by onboarding and orchestrating successfully with different NFV infrastructures in a live interoperability demonstration being held at the Big Communications Event 2016.  NIA’s Live Interoperability Demo addresses service function chaining and provides a realistic and neutral set of tests based on public standards, open-source community developments and market feedback.  The interoperability testing included an Allot VNF based on Allot Service Gateway – Virtual Edition, capable of delivering services such as Security-as-a-Service (SECaaS) with Allot’s WebSafe Personal and WebSafe Business.

Hod HaSharon’s Allot Communications is a leading provider of security and monetization solutions that enable service providers to protect and personalize the digital experience.  Allot’s flexible and highly scalable service delivery framework leverages the intelligence in data networks enabling service providers to get closer to their customers; to safeguard network assets and users; and to accelerate time-to-revenue for value-added services.  (Allot Communications 24.05)

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9.6 Announces Partnership with XMPie

New York’s, an API that incorporates digital handwriting technology into mobile apps, desktop applications and websites, announces a partnership with XMPie, the leading provider of software for cross-media, variable data, one-to-one marketing solutions.  This partnership enables XMPie to expand their offering to include authentic handwriting to help businesses add a personal touch to their direct marketing and cross-media campaigns.  As businesses work to put customers at the center of communications, they are leaning heavily on print and digital marketing agencies to deliver unique solutions to help them stand out.  These agencies count on XMPie’s innovative technology to help them rise to the challenge.  XMPie’s omni channel platform, coupled with’s patented technology brings a new level of personalization that delivers stunning results.

XMPie provides powerful, variable data publishing software that unites customer databases and creative content to help print service providers, marketing service firms, and small-to-medium sized businesses and enterprises, leverage customer data and create personalized, multiphase campaigns that use today’s communication vehicles including print, web, e-mail and mobile.  XMPie is headquartered in New York with an R&D center in Israel, and sales, support and professional service operations in the U.S., Europe and Asia Pacific.  ( 24.05)

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9.7  Faception Claims It Can Spot Terrorists

Israeli facial personality profiling startup Faception has made global headlines after claiming that it can predict deviant behavior with a high degree of accuracy.  Put simply the Tel Aviv based company says it has developed software that can spot terrorists, criminals, pederast and other deviants.  For example, Faception claims that just by letting its software scan the photographs of the 11 jihadist terrorist responsible for the Paris massacres last November, it could have identified nine of them as terrorists from their facial features.  Most of them did not have prior criminal records.  Faception argues that its software could provide a vital homeland security or police tool in identifying budding terrorists and criminals.

Faception demonstrated its technology recently at an amateur poker tournament where it predicted which four competitors would be the best by comparing their pictures with a database of professional players.  Ultimately, two of those four ended up among the event’s three finalists.

Tel Aviv’s Faception is a facial personality profiling company.  Their breakthrough computer-vision and machine learning technology analyzes facial images and automatically reveals personalities in real-time.  Backed by Social and Life Science research and proven results, their mission is to revolutionize how companies, organizations and even robots understand people to dramatically improve public safety, communications, decision-making, and experiences.  (Globes 25.05)

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9.8  Optimal+ Selected by Xilinx for Real-Time Analytics for Wafer Sort Operations

Optimal+ was selected by Xilinx to provide real-time visibility into their production test operations taking place in their global supply chain.  In a move intended to improve efficiency, quality and yield, Optimal+ and Xilinx collaborated to create an environment based on the Optimal+ Global Ops solution that would provide Xilinx with real-time visibility into all test operations occurring in their OSATs.

Through the use of the Optimal+ Big Data Infrastructure, Xilinx is able to monitor all aspects of their test operations being performed in their OSATs, including site-to-site test results, temperature monitoring and bin limits.  Additionally, Xilinx can create highly flexible and reconfigurable rules that can automatically check for issues that would otherwise be too difficult to track manually.  This creation of this tightly integrated environment was driven by Xilinx to enable even faster response times to their manufacturing issues.

Holon’s Optimal+ is a global provider of Manufacturing Intelligence software solutions, enabling any semiconductor company to seamlessly aggregate, organize and act upon the global manufacturing and test data they generate across their internal and external supply chains to measurably improve yield, quality and productivity.  The company’s real-time, big data analytics solutions are deployed in every major foundry and OSAT currently serving the semiconductor ecosystem, processing over 35 billion chips every year on behalf of its customers.  It is ushering in an era of unprecedented supply chain visibility that translates into strong and measurable ROI.  (Optimal+ 24.05)

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9.9  LightCyber Brings Behavioral Attack Detection to UK Organizations

LightCyber is making its unique solution for detecting active network attacks available to the UK market for the first time.  Early detection of network attackers gives organizations the ability to curtail data breaches and prevent other consequences.  LightCyber, with its dual headquarters in Israel and Silicon Valley, recently established its European headquarters in the Netherlands and inaugurated an EU-based cloud for its Magna Cloud Expert System to comply with the EU Data Protection Directive (Directive 95/46/EC).

To address escalating threats of cyberattacks, the LightCyber Magna platform uses behavioral profiling to learn what is normal on the network and endpoints, and thereby detect anomalous attacker behaviors that are by-necessity required to perpetrate a successful breach or conduct malicious goals, including command and control, reconnaissance, lateral movement and data exfiltration.  These behaviors can be identified early to reduce attacker dwell time and curtail the activity.  At the same time, Magna can identify harmful activity from insiders – rogue or unintentional actions from employees or contractors – that is either malicious or unknowingly dangerous.  Magna is differentiated by the accuracy and efficiency of the alerts produced, as well as the supporting contextual and investigative details that greatly enhance the efficiency of a security operations team in its detection and remediation operations.

Ramat Gan’s LightCyber is a leading provider of Behavioral Attack Detection solutions that provide accurate and efficient security visibility into attacks that have slipped through the cracks of traditional security controls.  The LightCyber Magna platform is the first security product to integrate user, network and endpoint context to provide security visibility into a range of attack activity.  (LightCyber 25.05)

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9.10  Anodot Named a 2016 ‘Cool Vendor’ in Analytics by Gartner

Anodot has been named a “Cool Vendor” in Analytics in the 2016 Gartner report.  Each year, Gartner, the world’s leading information technology research and advisory company, identifies new Cool Vendors in key technology areas and publishes a series of research reports about them.  Anodot is one of five companies identified in the report as “innovative vendors that are redefining the types of analysis that it is feasible for organizations to perform.  They are doing so by providing high levels of automation or extending analytics’ reach to new classes of user and new types of decision.”

Anodot’s automated business incident and anomaly detection platform enables business analysts to uncover outliers in vast amounts of streaming data without manually setting thresholds or prioritizing which metrics to track.  Identifying anomalies quickly can provide early notice of market shifts, niche use cases, or leaky revenue pipelines.  The SaaS solution is based on patented machine-learning algorithms that isolate issues and correlate them in real time to alert users to a need for action.

Based in Sunnyvale, Calif. and Ra’anana, Israel, Anodot is disrupting the static nature of the Business Intelligence (BI) market with a unique technology for real-time analytics and automated anomaly detection for big data.  Using patented machine learning algorithms, Anodot automates the discovery of outliers in vast amounts of data, isolates issues and correlates them across multiple parameters.  (Anodot 25.05)

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9.11  ElectRoad Can Turn Any Road Electric

The new ElectRoad wireless charging solution can be implemented in any roadway and will end dependence on expensive batteries.  ElectRoad has uses a specialized technology that supplies electricity to the car wirelessly from the road – thereby dispensing with the need for carrying expensive batteries and ending the limits on travel distances.  ElectRoad says the electric lines can be integrated into urban roads at a rate of one kilometer per day, with the supply coming directly from the power grid, and that a bus will be able to travel for up to 5 kilometers on a regular road after being charged on the electric road.

The company is initially targeting the public transit market.  ElectRoad hopes to enter the market using infrastructure contractors and bus companies which work on transportation projects with local authorities across Europe.  The company says there are as many as one million buses operating in Europe, with a stock replacement rate of 6%, or about 60,000 buses per year, meaning that the companies can pay back their investment within three years for the average electrified road, as new buses adapted to the technology are introduced.

Rosh HaAyin’s ElectRoad was founded in 2013 to revolutionize E- mobility with the ultimate goal of eliminating the dependency on oil.  ElectRoad aimed to be the enabler of large scale adoption of pure electric buses.  ElectRoad’s first product is a dynamic wireless electrification system for urban transportation.  (Globes 26.05)

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9.12  Demisto Introduces Industry’s First ChatBot to Improve Security

Demisto introduced Demisto Enterprise, the industry’s first Bot-powered security ChatOps platform to automate and streamline security operations and incident management processes.  With Demisto, security analysts can finally scale their time and effort during critical incident investigation stages while sharing knowledge and working collaboratively for faster resolution.

The company’s Security Operations Platform unveils two new technology applications never before seen in the security industry.  Demisto combines the industry’s first intelligent security bot for automating playbooks and response tasks, and for detecting duplicate incidents with the industry’s first security ChatOps-based platform for ticketing, collaboration and reporting.  The unique combination delivers automated investigation and response workflows, and auto documentation of evidence; while providing collaboration and transparency for IT teams and management.

Demisto Enterprise’s intelligent automation is provided by DBot, a first-of-its-kind security chatbot.  DBot automates actions across security products and correlates artifacts across incidents by using sophisticated patterns and powerful search capabilities.  DBot searches in past and ongoing forensic investigations, and proactively alerts the users when duplicate or related incidents are identified.  The playbooks were developed by security and incident response experts, while following NIST and other regulatory documents.  To help create best practices, new playbooks can be created to satisfy compliance and audit requirements, or for interactive modeling and training of analysts.

Tel Aviv’s Demisto helps Security Operations Centers scale their human resources, improve incident response times, and capture evidence while working to solve problems collaboratively.  Demisto Enterprise is the first comprehensive, Bot-powered Security ChatOps Platform to combine intelligent automation with collaboration.  Demisto’s intelligent automation is powered by DBot which works with teams to automate playbooks, correlate artifacts, enable information sharing and auto document the entire incident lifecycle.  (Demisto 25.05)

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9.13  Javelin Networks Named a Cool Vendor by Gartner

Javelin Networks, which neutralizes attackers invading the Enterprise by camouflaging the entire real network topology without business or IT Disruption, announced it has been included in the 6 May Cool Vendors in Digital Workplace Security, 2016 report by Gartner.  Attackers are already inside the network and Targeted attacks are the number one biggest security challenge today for Enterprises and in order for attacks to be successful, attackers need a very important key component – the knowledge of the Enterprise’s internal topology: the critical servers, key users and endpoints.  Once they’re in, they begin collecting the knowledge and planning their next move based on what they’ve discovered. It is impossible to prevent attackers from collecting this knowledge since it’s not considered a malicious act and therefore, can’t be discovered.  Javelin Networks takes a different approach than many solutions on the market – simply taking the knowledge away from attackers by masking the entire real network topology without agents, or additional network hardware.

With Javelin Network’s “Infinite Deception System,” the odds are flipped on the attacker because most of the assets are fake.  If the attacker uses any of the decoy entries created by Javelin, the system will automatically alert, thwarting the attack before any damage is done.

Tel Aviv’s Javelin Networks is the only company in the world that neutralizes attackers invading the Enterprise by camouflaging the entire real network topology without business or IT Disruption.  With its agentless flagship infinite deception system customers become attacker ready getting only high fidelity alerts and disruptive defense before the breach. Led by security and Computer Networking experts, veterans leading Israeli intelligence corps, Cisco and the Israeli Air Force. Javelin Networks is still in stealth mode and gearing up to launch in Q3/16.  (Javelin Networks 25.05)

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9.14  SodaStream Launches Homemade Beer System

SodaStream International released its new home beer system, the Beer Bar.  The brand is an exciting concept of making quality home-crafted beer using sparkling water and a unique beer concentrate brewed to perfection.  The Beer Bar is unveiled with a light beer called Blondie that has a smooth authentic taste, and a hop filled aroma.  The Beer Bar enables consumers to concoct crafted beer in seconds by adding Blondie concentrate to Sparkling Water. Blondie contains 4.5% alcohol by volume, the average level found in most global beer brands.  A one liter Blondie bottle yields approximately three liters of beer.  SodaStream chose to first launch the Beer Bar in some of Europe’s beer capitals. Other markets are expected to launch the Beer Bar in late 2016 and 2017.

Airport City’s SodaStream is the world’s leading manufacturer and distributor of Sparkling Water Makers, which enable consumers to easily transform ordinary tap water into sparkling water and flavored sparkling water in seconds.  By making ordinary water more exciting and fun 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.  (SodaStream 30.05)

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10.1  Unemployment in Israel Reaches Historic Low

According to the Central Bureau of Statistics, April’s unemployment rate fell to the historic low of 4.9% as compared with 5.3% in March.  Some 193,000 people were unemployed in April as compared with 208,700 in March.  The unemployment rate among the 25 – 64 age group stood at 4.4% in April and 4.5% in March.  The rate of people in the same age group who are participating in the labor force rose to 80.5% in April as compared with 79.8% in March.  The rate of men in the 25-64 age range participating in the labor force was 84.8%, marking no change since March, while the participation of women in the same age range rose from 75% in March to 76.3% in April.

Still, despite the seasonal influences of the Passover holiday in April, the drop in unemployment is noteworthy.  Its significance, along with the impact of temporary holiday employment, will be revealed when the May labor force data is released.  (CBS 24.05)

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10.2  WHO Finds Israeli Life Expectancy Among Highest in World

A World Health Organization report on global life expectancy has found that Israelis have one of the highest life expectancies in the world.  According to the report, Israel ranks sixth in the world, with an average life expectancy of 82.5 years.  The report found that life expectancy around the world has increased dramatically over the past 15 years, with the global average rising by about five years.  Such an increase has not been recorded since the 1960s.

Worldwide, the average life expectancy for a baby born in 2015 is now 71.4 years of age — 73.8 for women, and 69.1 for men.  Topping the list is Japan, with an average life expectancy of 83.7 years, followed by Switzerland, with 83.4.  Broken down by gender, Japan tops the list for women, with an average life expectancy of 86.8 years, while Switzerland has the highest life expectancy for men, 81.3 years.  Israel comes in sixth place overall.  When the results are split by gender, Israel has the fifth highest male life expectancy, with 80.6 years, and the ninth highest for women, 84.3 years.  (Various 22.05)

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10.3  Bankruptcies in Israel Increase by 55% in 3 Years

The 2015 report by the Administrator (Custodian) General and Official Receiver shows a 55% rise in bankruptcies requests in Israel over the past three years.  The report, which contains a general review of the Administrator General and Official Receiver’ activity (as the Custodian General, Official Receiver, and Registrar of Inheritances), accompanied by comprehensive statistics, shows a dismal portrait of a bankrupt country.  For example, the report shows that more private citizens are in economic trouble in recent years: 16,491 requests to open bankruptcy proceedings (receivership orders) were filed in 2015, 14% more than in 2014.  In addition, the Court issued 14,756 orders for opening bankruptcy proceedings (receivership orders), compared with 13,228 in 2014 and 11,256 in 2013, increases of 12% and 31%, respectively.  The increase was 43% over the past three years and 137% in five years.

The report also shows that the number of cases handled by the Official Receiver (following a receivership order) rose 69% in three years and 185% in five years.  According to the report, 50,269 cases were handled by the Official Receiver in 2015, 16% more than in the 43,185 cases in 2014 and 37% more than in 2013.  The figures also indicate some difference in the rate of increase in receivership orders between outlying areas and the central region.  In Jerusalem, for example, the number of receivership orders rose from 745 to 1,165 within a year, while the increase in Tel Aviv was relatively moderate from 4,636 to 4,931 orders.  (Globes 24.05)

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11.1  JORDAN:  Jordan in Negotiations With Potential Partners in Nuclear Project

Jordan is in talks with several international companies to be partners in the country’s first nuclear plant by providing necessary turbines and systems for the plant, according to Khaled Toukan, the chairman of the Jordan Atomic Energy Commission (JAEC).

Jordan is currently in discussions with Shanghai Electric, China National Nuclear Corporation, Alstom and other Japanese and Czech companies to provide the plant with necessary electric systems and turbines for the two reactors that will be built under the program, Toukan said in a recent interview with The Jordan Times.  “We are moving ahead at the same time with studies related to the project that entails building two reactors with 1,000 megawatts capacity each,” Toukan said.  Toukan added that the JAEC is also negotiating with several regional investors and funds on another project to build a factory for the production of mine.

The facility, which will cost around $300 million, will produce 400 metric tonnes of uranium per year by 2021, which will be enough to power the two reactors.  Production will later increase to 15,000 tonnes per year, said Toukan, adding that uranium is expected to be exported to several countries in the region that have plans for nuclear reactors including the UAE, Egypt, Turkey and Saudi Arabia.

According to Toukan, the first nuclear reactor is expected to be ready by 2023, while the second will go online by 2025.  Toukan added that by 2030, Jordan will need around 6,800 megawatts of electricity capacity, stressing that the nuclear plant is crucial for ensuring a sustainable, low-cost supply of power.

The two reactors, he said, will require around 50 million cubic meter of water per year for cooling, which will come from As-Samra Wastewater Treatment Plant that has a production capacity of 106 million cubic meter at present and will witness a further increase in the near future.

Jordan has recently reached a deal with Rosatom State Nuclear Energy Corporation under which Russia will provide enriched nuclear fuel for the reactors for the first 10 years after which Jordan has the option of buying nuclear fuel from Russia or any other market.  In March last year, Jordan signed an inter-governmental agreement with Russia to build and operate the nuclear power plant. Russia’s Rosatom will own 49% of the project.  (JT 23.05)

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11.2  IRAQ: IMF Deal Supports Iraq in Face of Multiple Challenges

The staff-level agreement between Iraq and the IMF for a three-year Stand-By Arrangement (SBA), under which Iraq could access $5.4 billion of financial assistance, is credit positive, Fitch Ratings said on 20 May.

The deal is likely to pave the way for further international support and may enable the government to issue international bonds.  This will provide some support to Iraq’s finances as the country faces sharply lower oil revenue, ongoing conflict with the Islamic State (IS) group and a political crisis that has paralyzed parliament and led to mass protests.

Engagement with the IMF could bring some improvements to economic policymaking and management.  Following on from the Staff-Monitored Program agreed in November, the SBA is likely to set benchmarks related to budget spending levels, non-accumulation of arrears and various fiscal reforms, as well as strengthening the government’s cash management.

The twin shocks of sharply lower oil prices and the conflict with IS have severely damaged Iraq’s financial position.  We project the budget deficit in 2016 to widen to 15% of GDP – around $22, assuming crude exports marketed by the central government remain around 3.3 million b/d and the government makes modest spending cuts.  The government has also built up arrears.

Lower oil revenue is also causing a balance-of-payments shock.  The central bank’s stock of foreign reserves (including gold) has fallen from $78 at end-2013 to around $50 currently.  This is still a robust level, at around nine months of current external payments, but is set to fall further this year and next.

Disbursements under the SBA and the further foreign assistance that is likely to follow will be a source of additional finance, but cannot mask the challenges Iraq faces.  Oil revenue accounts for more than 90% of budget revenue and current external receipts.  Government expenditure increased rapidly before the oil price collapse in 2014, creating a fiscal breakeven oil price above $100/barrel.

Full implementation of the SBA will prove challenging.  Wide-ranging fiscal reforms that would put Iraq’s finances back on a sustainable footing would require tackling a bloated civil service (the government accounts for 40% of total employment), a troubled banking sector, and serious weaknesses in governance.

Iraq’s political challenges have vividly played out in Baghdad in recent months.  In February, Prime Minister Haider al-Abadi announced his intention to appoint a new technocratic government, but has been unable to do so as various parties seek to protect their influence.  Meanwhile, large protests culminated in the storming of the previously unviolated Green Zone and parliament itself.  This situation remains unresolved and presents a risk of further political instability and violence.  Progress has been made in retaking territory from IS, but it still holds significant parts of the country, and continues to present a major threat.

We affirmed Iraq’s ‘B-‘ Long-Term Foreign-Currency Issuer Default Rating in March, and revised the Outlook to Negative from Stable as lower oil prices lead to a significant deterioration in Iraq’s financial position.  We said at the time of the Outlook revision that international support, including from the IMF, was likely.  (Fitch 20.05)

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11.3  IRAQ:  How Much Will the $15 Billion IMF Loan Really Cost Iraq?

On 19 May, Iraq signed an agreement with the International Monetary Fund (IMF) for a loan for as much as $15 billion over the next three years.  Observers are wondering how Iraq will be able to repay the loan and meet the conditions imposed by creditors, which include various countries and the World Bank.  One such condition is that Iraq must lift its oil and food subsidies.

Omar Sattar posted on 24 May in Al-Monitor that the International Monetary Fund’s loan to the Iraqi government may come with too many strings attached.

The Iraqi Ministry of Finance said the IMF Stand-By Arrangement (SBA) will help Iraq in its battle against the Islamic State (IS) to liberate Iraqi territory, while also helping cut the budget deficit, which is projected at $25 billion, a figure that could worsen because of lower oil prices.  The ministry said the loan will not affect government spending on social and health services, but rather it will bring about real financial and economic reform.

Iraq’s previous experience with the IMF doesn’t encourage optimism.  In 2004, the IMF imposed an economic reform package that required Iraq to privatize some sectors and raise fuel prices in exchange for reducing and rescheduling the country’s Paris Club debt, estimated at $50 billion.  Iraq failed to meet those conditions.

Sirhan Ahmed, a member of the parliamentary finance committee, told Al-Monitor the new IMF loan will only make things worse in the long run.  “Iraq does not need a loan from the IMF, as this loan will eventually turn into a set of conditions and dictations on the Iraqi economy.  Instead of borrowing, the government should have resorted to retrenchment and issuing bonds while earnestly fighting corruption to address the budget deficit.”

Majda al-Tamimi, another finance committee member, told Mawazin News on 17 May that the loan “will lead to corruption.”  “The Central Bank’s governor held meetings and negotiations concerning the IMF loan, knowing that he sells $126 – $140 million from the state’s treasury funds through currency auctions on a daily basis,” she said, referring to the fact that funds are available, yet the bank’s governor is using Iraqi money in buying and selling operations, not to support the budget deficit.”

Tamimi criticized some ministers for boycotting government meetings.  She called for the loan to be canceled, alleging that some political parties said they would only return to parliament in exchange for financial shares on behalf of their constituents.

The IMF loan is also causing new problems between Baghdad and the Kurds.  On 18 May, Samira al-Moussawi, a member of parliament for the ruling State of Law Coalition, accused Kurdish parliament members of agreeing to return to Baghdad only in return for their party receiving 17% of the loan.  However, the Kurdistan Alliance parliamentary bloc, which was boycotting the parliament after Sadrists stormed the parliament on 13 April, rejected the accusation.

“Moussawi is trying to create new problems between Baghdad and the Kurdistan region, and her accusation does not deserve a response, as she is not competent in the field of economy and does not know the details of the agreement that has been signed with the IMF,” Kurdish Alliance representative Ahmed Hama, a finance committee member, told Al-Monitor.  “She does not know that the loan is aimed at supporting the general budget and that the [Kurdistan] region has a share in the budget.”  Hama added, “The IMF conditions on Iraq in exchange for the loan favor the government, not the citizen, as these include the removal of subsidies on the ration card, fuel and social welfare in addition to tax increases.  Everyone knows this and the government cannot deny it.”

But the government does deny that the conditions IMF has imposed will be difficult to meet. Parliamentary parties, however, claim the opposite.  Economic expert Abdul Rahman al-Mashhadani told Al-Monitor that the SBA is similar to the 2004 agreement that Iraq signed but didn’t uphold.  “The IMF will help provide the loan to Iraq from several parties: The IMF will provide $830 million; the World Bank, about $5 billion with an interest of 1.5-3%; and the rest will come from other organizations and countries and will be guaranteed by the IMF at an interest rate of 7.5- 8%, provided that Iraq repays the loan and its interest in a very short period of seven years,” Mashhadani said.

“Among the conditions set by the IMF is that the government decrease subsidizing fuel prices and reformulate the budget terms and fund allocations to reduce government spending, especially in the operating budget.  A large number of parliamentary blocs have rejected this on the grounds that the budget is a law that should remain untouched,” he added.

The government is facing a predicament and it has failed to deal with the Iraqi public with transparency and clarity in a bid to end the controversy over the IMF conditions.  In 2004, Iraq refused to continue to abide by the IMF’s terms after 2007 because of a hike in oil prices and concerns over the public’s wrath.  Iraq consequently lost the confidence of the global market and economic organizations.  Now, the current drop in oil prices will force the country to defer to the will of the IMF and face the wrath of citizens, who will have to pay more for fuel, consumer goods and services as the subsidies are lifted.  (Al-Monitor 24.05)

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11.4  OMAN:  Ratings on Sultanate of Oman Affirmed At ‘BBB-/A-3’; Outlook Stable

On May 20, 2016, S&P Global Ratings affirmed its ‘BBB-/A-3’ long- and short-term foreign and local currency sovereign credit ratings on the Sultanate of Oman.  The outlook is stable.

The transfer and convertibility (T&C) assessment on Oman remains at ‘BBB’.


The ratings are supported by Oman’s external and fiscal stock positions, which we expect Oman will broadly maintain over 2016-2019.  They are constrained by the significant weakening of fiscal flows, the shift of the current account into a large deficit position, lower real economic growth prospects for Oman than for similarly rated sovereigns, and the Omani economy’s dependence on the cyclical hydrocarbons sector.

Policymakers’ past decision to save sizable oil receipts has helped maintain Oman’s strong external stock position.  Low oil prices lead us to forecast that the current account deficit will average about 14% of GDP in 2016-2019, based on our current Brent oil price assumptions of $40 per barrel (/bbl) on average in 2016 and $50/bbl by 2018.  Futures prices are currently trading at about a $2 premium for Omani crude.

Notwithstanding Oman’s related external borrowing and expected decline in foreign currency reserves, its external position – as measured by liquid external assets minus external debt – remains a rating strength.  We project that Oman will maintain a creditor position of about 6% of current account receipts (CARs) on average over 2016-2019.  This represents a significant weakening from about 53% in 2015, but, in our view, provides the economy (including the public sector) with a buffer to deal with the shock from low energy prices.  We expect the country’s gross external financing requirements will rise to 120% of CARs and usable reserves in 2019 from 115% in 2015.

The vulnerability of broader economic performance to energy prices remains a key credit weakness for Oman because the volume of oil production is likely to stagnate at around current levels.  This distinguishes Oman from some peers, for example, Saudi Arabia, which benefits from additional capacity.

In Oman, the hydrocarbon sector’s contribution to the economy fell to close to 35% of nominal GDP in 2015 following the pronounced decline in oil prices, compared with just under 50% of GDP in 2014.  Hydrocarbons accounted for 58% of goods exports and just over 80% of government revenues in 2015.  We estimate trend growth in real GDP per capita at negative 2%, which is well below that in most economies at similar levels of development.  Our GDP per capita estimate for 2016 is $15,400, which we expect will recover only slowly to about $17,000 in 2019, compared with $20,600 on average in 2011-2014, largely due to weak real and GDP deflator growth over that period.

We expect the contribution of domestic demand to real GDP growth to remain weak in 2016-2019, but for our assumed modest increase in oil prices to result in a more positive contribution from net exports.  We expect slow progress on the government’s Omanization program–a training program for Omani citizens aimed at easing dependence on foreign labor – due to a skills mismatch between many Omani workers in the private sector and the more attractive pay and conditions of Omanis working in the public sector.

We estimate Oman’s budget deficit at 13% of GDP in 2016, in line with the government’s own budget forecast.  This compares with a deficit of close to 16% of GDP in 2015.  Oman increased its oil output to a record high 358 million barrels of oil in 2015, a 4% increase on the previous year, with exports rising by 5.5% to 308 million barrels.  However, this increase failed to effectively mitigate the negative effect of lower oil prices, with the government’s oil revenues falling by about 40%.  Our general government balance forecasts include an estimate of the government’s investment returns.

In 2016, the government has reduced spending, raised corporate taxes to 16% from 12%, and increased fees for government services.  We expect spending to fall 11% compared with that in 2015, with the largest cuts likely to come from “other” expenditures, such as vehicle, travel, and hospitality expenses, followed by spending on civil ministries and investment.  We consider this to be an important effort to consolidate the country’s fiscal position.  We project, however, that partly offsetting these expenditure reductions, government revenues will fall by about 6%, largely due to a further oil price decline, which we assume for 2016.  We acknowledge that this projection is highly contingent on the prices of Oman’s key exports, over which domestic policymakers have no control.  We understand that the 2016 budget is based on an oil price assumption of about $45/bbl compared with $75/bbl in 2015.

Oman’s 2016-2020 five-year plan aims to increase the role of the private sector, and the government has suggested that it could privatize some entities in 2016.  A value-added tax to be imposed across the Gulf Cooperation Council (GCC) could be in place by 2018, which would further support Oman’s government revenues.  Our 2016-2019 general government deficit estimates are in line with those of the five-year plan.

We think that the government has relatively limited room for additional spending cuts, given that nearly 50% of spending relates to public-sector wages, subsidies and exemptions, which are typically difficult to reduce, although we note that some progress has been made with regard to subsidy reduction.  The Omani government has committed to increasing non-hydrocarbon-related tax revenues over the medium term.  As a result, we expect the general government deficit will average 11% of GDP in 2016-2019.

Our forecasts for the annual average increase in general government debt (which is our preferred fiscal metric because in most cases it is more comprehensive than the reported headline deficit) have increased to about 7% of GDP over 2016-2019.  We understand that the government will finance its deficits largely via the issuance of foreign currency debt.  When we last reviewed Oman, we assumed a more even split between debt issuance and drawings from assets.  We now estimate that the government’s net asset position will average about 26% of GDP in 2016-2019, much reduced from 53% of GDP in 2015.  We forecast general government liquid assets at about 64% of GDP in 2016, including government deposits at the central and commercial banks, alongside the government’s investment funds, the largest component of which is the externally invested State General Reserve Fund. We consider that the government could draw on these assets were it to face temporary external pressures.

We assess the Omani government’s contingent liabilities as limited, including those related to the banking system.  We classify Oman’s banking sector in group ‘5’ under our Banking Industry Country Risk Assessment methodology, with group ‘1’ indicating the lowest risk and ’10’ the highest.  We assess the Omani banking system as having high capital adequacy and relatively limited reliance on external funding.  Financial institutions’ total gross external liabilities accounted for 17% of total liabilities as of end-February 2016, up from 9% at year-end 2014.  Omani banks are largely funded by domestic customer deposits.  We see moderately high vulnerability to the substantial change in the competitive environment, triggered by the low oil price.  On the one hand, due to the decline in government revenues and the significance of public-sector deposits in the total bank deposit base (about one-third of total deposits), we expect banks’ cost of funds to prove sensitive to tightening liquidity in the system.  On the other hand, the corporate segment remains narrow, and lending to small and midsize enterprises is low.  As a result, we expect competition among banks in the retail segment will remain intense, which could create new pressure on asset quality.  The still immature domestic debt capital market remains a negative aspect of our assessment of bank funding options.

In our view, monetary policy flexibility is limited because the Omani rial is pegged to the U.S. dollar.  That said, the peg has provided a stable nominal anchor for the economy, particularly because contracts for oil, the main export, are typically priced in dollars.  Reflecting the strength of the U.S. dollar versus other key currencies, since April 2014, Oman’s real effective exchange rate has appreciated by about 12%.  In our view, this represents a deterioration in international competitiveness of the country’s modest tradables sector, which is likely to dampen non-oil GDP growth, absent any offsetting factors, such as improved efficiency or technological capacity.  The transmission of monetary policy is constrained by Oman’s underdeveloped capital market, although we expect to see some growth in local debt and sukuk issuance over the next four years.  Nevertheless, we expect the peg to be maintained over the medium term. We estimate reserve coverage (including government external liquid assets) at about 60% of the monetary base and seven months of current account payments in 2019.  Rules of thumb for the adequacy of reserve coverage in relation to these measures are 20% and three months, respectively. We also consider the more qualitative aspects of the GCC currency arrangements.  At a time of already significant change and regional geopolitical instability, politically conservative regimes such as the GCC are unlikely to decide to increase uncertainty about their economic stability by amending this fundamental macroeconomic policy.  We expect these concerns will outweigh the potential economic benefits of removing the currency peg.

Under the rule of Sultan Qaboos bin Said Al Said, the country has undergone steady improvement in human development.  Oman now ranks in the 70th percentile of countries in the United Nations Development Program’s Human Development Index.  Although this advancement stems largely from high hydrocarbon revenues during the sultan’s reign, we think it also results from effective policymaking. However, the sultan exercises absolute power in governance and decision-making, which poses risks to the effectiveness and predictability of policymaking, in our view.

We understand that the sultan remains popular, but the eventual process of succession remains untested because the country lacks recent experience in smooth transitions of power.  Although we expect that succession will be smooth, without any radical policy shifts, we cannot rule out the possibility that Oman could experience a disruptive period of uncertainty if the royal family does not quickly agree on a successor.  We do not anticipate that the conflict in neighboring Yemen will affect Oman’s creditworthiness, because it appears unlikely to spill over into Oman, which has remained neutral in the conflict.


The stable outlook reflects the balance between our expectation that Oman will largely maintain fiscal and external stock positions over 2016-2019, against risks from weakening economic income, fiscal, and external flows.

We could consider raising the ratings if the foundations of economic growth in Oman strengthened–raising per capita income levels – or if our forecasts for Oman’s fiscal and external positions improved substantially compared with our current projections.

We could consider lowering the ratings if risks to Oman’s external position materialized, through wider current account deficits in 2016-2019 than we currently expect.

We could also lower the ratings if Oman’s debt-financing risks were to significantly rise through a combination of substantially higher interest costs as a proportion of revenues and a sharp increase in the share of foreign currency and nonresident holdings of total government debt.  We could also lower the ratings if we were to see increasing signs of succession risks that are likely to disrupt governance standards or the functioning of institutions.  (S&P 20.05)

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11.5  EGYPT:  Fitch Affirms Egypt at ‘B’; Outlook Stable

On 30 May, Fitch Ratings affirmed Egypt’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at ‘B’ with a Stable Outlook.  The issue ratings on Egypt’s senior unsecured foreign- and local-currency bonds have also been affirmed at ‘B’.  The Country Ceiling has been affirmed at ‘B’ and the Short-Term Foreign-Currency IDR at ‘B’.

Key Rating Drivers

Egypt’s ratings balance a high fiscal deficit and general government debt/GDP ratio, low foreign-reserve coverage of imports and recent volatile political history, with low external debt and gradual progress in implementing an economic and fiscal reform program.

We estimate a budget sector deficit of 11.6% of GDP in FY16 (to end-June), broadly the same as in FY15.  This is larger than budgeted for a number of reasons.  These include the failure to introduce VAT as planned (estimated to raise revenue of about 1% of GDP), the devaluation in March and surging interest payments.  An important reason for the failure to introduce the VAT was the parliamentary elections in October-December 2015 and a decision to wait for parliament to be operational.  There has been some spending restraint, especially in regard to wages.

The draft budget for FY17, which is still subject to approval by parliament, aims to reduce the deficit to 9.8% of GDP, helped by the belated introduction of VAT and further reform of fuel and electricity subsidies.  We expect the budget sector deficit to remain larger than the draft target, owing to our weaker growth assumptions and implementation risk, but nevertheless to narrow to 11% of GDP.

General government debt increased to an estimated 90.3% of GDP in FY16, well above the peer median.  Government external debt is relatively low, although the devaluation of the Egypt pound in March has an upward effect on the debt stock.  We expect debt/GDP to edge up to 90.5% in FY17, given only modest deficit reduction and assuming some further exchange-rate weakness.  Thereafter, we forecast that deficit reduction and robust nominal GDP growth will put the debt/GDP ratio on a gentle downward trend.

Foreign-exchange reserve coverage remains low at around three months of current external payments.  Security incidents have dealt a blow to tourism inflows in 2015-16, while other lines of the current account have also struggled.  FDI increased in 2015, and is likely to rise this year; some further support is coming in, both multilateral and from the Gulf Cooperation Council (GCC).  The Central Bank of Egypt responded to the strain on the balance of payments by devaluing the currency in mid-March by 14% against the US dollar, and further exchange-rate weakness is likely.

Gross external debt has been rising, due largely to concessional support from the GCC, but it remains below peers.  We forecast it will rise to around 18% of GDP by end-2016. Net external debt will remain just below 7% of GDP, compared with a ‘B’ median of 26.3%.  The bulk of external debt is on a concessional basis, and while Egypt’s external liquidity ratio has been worsening it remains stronger than peers.  The rating is supported by the absence of a recent history of debt restructuring.

Real GDP growth has slowed in FY16 to an estimated 3.2%, owing to declines in tourism and shortages of foreign exchange.  This is after strengthening to 4.2% in FY15, from an annual average of around 2% since the Arab Spring in 2011.  However, energy shortages are being addressed, and public and private investment is rising. Fitch assumes growth will strengthen slightly to 3.6% in FY17 and further the following year.  Inflation is above peers, and we forecast that it will remain in double-digits in 2016-2017, with structural rigidities aggravated by the weaker exchange rate.

A new parliament started work in January 2016, following elections that formally completed the political transition.  While the existence of a functioning parliament should be a positive step for Egypt, some signs of rising public discontent together with a crackdown on dissent are areas to watch.  Serious security incidents have occurred, and remain a risk factor.  World Bank governance indicators have deteriorated in the last few years, and are below those of its peers.

Sovereign Rating Model & Qualitative Overlay

Fitch’s proprietary sovereign rating model (SRM) assigns Egypt a score equivalent to a rating of ‘B’ on the Long-Term Foreign-Currency IDR scale.

Fitch’s sovereign rating committee did not adjust the output from the SRM to arrive at the final Long-Term Foreign-Currency IDR.

Fitch’s SRM is the agency’s proprietary multiple regression rating model that employs 18 variables based on three-year centred averages, including one year of forecasts, to produce a score equivalent to a Long-Term Foreign-Currency IDR.  Fitch’s qualitative overlay (QO) is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within our criteria that are not fully quantifiable and/or not fully reflected in the SRM.

Rating Sensitivities

The Stable Outlook reflects Fitch’s assessment that upside and downside risks to the ratings are currently balanced.

The main factors that, individually or collectively, could lead to a negative rating action are:

*Failure to anchor the fiscal deficit on a downward trend towards levels closer to the peer median.
*Strains on the balance of payments, which prevent an improvement in the level of international reserves.
*Serious security incidents that undermine economic activity.

The main factors that, individually or collectively, could lead to a positive action are:

*A track record of progress on fiscal consolidation leading to a decline in debt/GDP.
*Sustained stronger economic growth supported by reforms to the business environment which lead to increased investment and employment.

Key Assumptions

Fitch assumes local banks remain willing and able to finance the deficit.

The political environment is assumed to be more stable than in 2011-2013, although sporadic and at times serious attacks on security forces are assumed to continue and underlying political tensions will remain.  (Fitch Ratings 30.05)

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11.6  EGYPT:  Will Sisi Squander His Chance To Fix Egypt’s Economy?

David Schenker posted in TWI on 17 May that the latest bailout from Saudi Arabia may be the last, so Cairo needs to focus on helping itself by implementing complex subsidy and tax reforms.

Ever since Saudi King Salman’s early April visit to Cairo, Egypt’s President Abdel Fattah el-Sisi has been in damage control mode, trying to contain a crisis sparked by two nearly simultaneous announcements: that Egypt would be transferring sovereignty of two Red Sea islands to Saudi Arabia, and that Riyadh would be providing an enormous economic aid package to Cairo.  This news – coupled with reports that King Salman had showered senior Egyptian officials and parliamentarians with Rolexes – led many to conclude that Sisi had “sold” the islands.

The visuals were awful and catalyzed Cairo’s largest demonstrations in years, with thousands once again calling to topple the regime.  Amidst the intense focus on the islands, however, the significance of the Saudi grant has largely been overlooked.  Absent the $22 billion in Saudi aid, Egypt was seemingly on a glide path to economic collapse.

Egypt has long faced economic challenges, but over the past two years – since Sisi took power in a military coup – the situation has markedly deteriorated, precipitated by declining tourism and Suez Canal revenues, as well as a persistent Islamist insurgency led by the Islamic State.  With foreign reserves dwindling to dangerous levels, a staggering 9% annual inflation rate, over 13% unemployment and an annual budget deficit of about 12%, Cairo’s finances, the Sisi administration’s durability and Egypt’s stability were all increasingly at risk.

While he has made concerted efforts to encourage foreign direct investment, Sisi has not tackled Egypt’s core structural economic problems, chief among them the military’s oversized role in the financial system – the army controls an estimated 30% of the economy – and food and energy subsidies, which account for nearly 20% of the annual budget.  These subsidies, along with salaries for the seven million employees in the state’s bloated bureaucracy and debt servicing, equate to 80% of annual government spending.

Complicating matters, a new baby is born about every nineteen seconds, constituting an annual growth rate of 2.6%, which means that Egypt’s population is poised to double to 180 million by 2050.  Already, nearly half of Egyptians subsist on less than $2 per day.

The situation is so bad that even in Egypt, where denial is a perennial hallmark of the government, this past March Prime Minister Sherif Ismail was compelled to issue a dour 205 page policy statement on the state of the economy.

Even as popular anger about the islands persists, Saudi Arabia’s latest largesse could enable Sisi’s Egypt to reverse the current trajectory.  The aid package consists of $20 billion to underwrite Egypt’s purchase of Saudi petroleum projects, as well as some funding to expand power generation capacity, and $1.5 billion to jumpstart some economic development in the Sinai Peninsula, where the Islamic State insurgency has taken root.

This funding, which covers the next five years, couldn’t have come at a better time.  In 2015, an Italian firm discovered an estimated three hundred trillion cubic feet of natural gas one hundred miles off Egyptian shores.  The find, which is worth as much as $100 billion and will come online in two or three years, represents a potential boon to Egypt’s economy.  Until this natural gas starts flowing, Riyadh’s grant will provide a critical cushion, helping Cairo to bridge its substantial and increasing funding gaps.

More important, this Saudi funding represents an opportunity for Sisi to finally undertake serious structural reforms, including increasing taxes on Egypt’s wealthiest, who currently pay a marginal rate of just 22.5%, phasing in value-added and capital-gains taxes, reducing public-sector wages and streamlining regulations to improve the business and investment environment.  The government says it will also better ration energy subsidies to the poor, cutting these expenditures by 43% next year.  The tax increases and energy-subsidy reductions, while onerous, will allow Cairo to raise food subsidies for the legions of impoverished suffering under high inflation, while at the same time lowering the crippling deficit.

Regrettably, it’s unclear that Egypt will capitalize on this opportunity. Implementing these measures will require political capital, which in the aftermath of the island-transfer scandal is in short supply for Sisi.  The last time when Sisi was flush with cash – Saudi Arabia, the UAE and Kuwait gave Egypt $20 billion in 2013 — instead of making difficult decisions, Cairo muddled through, squandering the windfall and the chance for real and enduring change.

Washington and the International Monetary Fund, which in the coming weeks is poised to loan billions to Egypt, shouldn’t let Sisi miss yet another opportunity.  Cairo has a history of deferring economic reforms, but the window may be closing.  At a minimum, Saudi Arabia’s increasingly precarious economic situation means that two years from now, Egypt cannot count on another mega-grant.

Despite Sisi’s currently diminished stature, the erstwhile general demonstrated – by improving the consistency and capacity of Egypt’s electricity grid in 2015 prior to the onset of the sweltering summer – that he is capable, when focused and committed, of implementing complex policies and delivering some positive change.  While the controversy over the islands may eventually dissipate, Egypt’s economic crisis will not subside unless and until Cairo embraces reform.

David Schenker is the Aufzien Fellow and director of the Program on Arab Politics at The Washington Institute.  (TWI  17.05)

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The Fortnightly newsletter is a free service of Atid, EDI. We are a team of economic and trade development consultants, headquartered in Jerusalem, but active throughout the region and beyond. EDI works with an international clientele interested in identifying and researching business opportunities in the region. We also serve as the regional representative offices for a number of U.S. states and bilateral Chambers of Commerce, as well as European clients.