Fortnightly, 23 January 2019

Fortnightly, 23 January 2019

January 23, 2019


23 January 2019
17 Shvat 5779
17 Jumada Al-Awal 1440




1.1  Israel & Ukraine Sign Bilateral Free Trade Agreement
1.2  Israel Inaugurates New International Airport to Boost Eilat Tourism


2.1  OurCrowd and Korea’s KEB Hana Bank Sign Investment and Partnership MOU
2.2  Cynerio Secures $7 Million Seed Round Funding to Drive US Market Development
2.3  Check Point Software Acquires ForceNock, a Web Application and API Protection startup
2.4  Foretellix Closes $14 Million Series-A Funding for Deployment of Autonomous Vehicles
2.5  Colu Raises $7 Million
2.6  Hainan Airlines to Launch Tel Aviv – Shenzhen Route
2.7  Japanese and Israeli Business Leaders Collaborate on AI-Powered Industry 4.0


3.1  NuScale and JAEC Agree to Explore SMR Deployment in Jordan
3.2  Hyatt House Debuts in Saudi Arabia with the Opening of Hyatt House Jeddah Sari Street
3.3  Egypt’s Very Own Zooba to Open Branch in NYC
3.4  Renault Manufactures over 400,000 ‘Made in Morocco’ Cars
3.5  Energean’s Israeli Fields Remain on Track for First Gas in 2021


4.1  Amman Enforces Regulations to Turn Itself Into a Smoke-Free City
4.2  UAE’s Masdar Plans First US Renewable Energy Investment
4.3  Renewables Accounted for 93% of Turkey’s Installed Power Last Year


5.1  Qatar to Invest $500 Million in Lebanese Government Bonds
5.2  Lebanese Inflation Stood at 6.07% by the End of 2018
5.3  Tourist Spending in Lebanon up by 10.46% in Annual Terms in 2018
5.4  Total Number of Registered New Cars in Lebanon Fell 11.46% in 2018
5.5  Jordan Sees 3.7% Average Increase of its Inflation Rate for December 2018
5.6  Jordan & Egypt Sign Gas Supply Agreement for 2019
5.7  Jordan’s Senate Approves 2019 Budget, Recommending Transparency Measures

♦♦Arabian Gulf

5.8  UAE Economy to Grow by an Average of 3.8% Annually to 2023
5.9  Some 73% of UAE Expats Earn More Than They Could in Their Home Country
5.10  IMF Lowers Growth Forecast for Saudi Arabia
5.11  Saudi Private Sector Growth Slows to 9 Year Low in 2018

♦♦North Africa

5.12  Egypt Reports Initial Budget Surplus of EGP 20.8 Billion in First Half of FY 2018/19
5.13  Egypt Ushering in E-Payments
5.14  Florida Companies Are ‘Well-Suited’ to Do Business in Morocco


6.1  Greece’s Public Debt on the Rise
6.2  Greek Households Have Lost 28% of Their Assets Over the Past Decade
6.3  Greek Supermarket Sales Increased 2.2% in 2018



7.1  PM Netanyahu Visits Chad as Ties with Israel are Renewed‎


7.2  Pope to Visit the UAE on 3 – 5 February
7.3  Greek PM Tsipras Wins Confidence Vote – Boosting Macedonia Accord


8.1  Olympic Committee of Israel and Technion Established Joint Research Center
8.2  NRGene & TOYOTA Collaborate on Strawberries for Better Local Production for Japan
8.3  NRGene and Macrogen Launch Ultra-High-Density SNP Genotyping Service
8.4  ChemomAb Clinical trial of CM-101 in Patients with Non-Alcoholic Fatty Liver Disease
8.5  Lumir Lab, a Cannabis Lab, Set up at Hadassit on Hebrew University’s Ein Kerem Campus
8.6  SeeTree Raises $11.5 Million
8.7  Tyto Care Adds $9 Million More to its Series C Round
8.8  Yofix Launches Clean-Label, Plant-Based Yogurt Alternative
8.9  Assuta to Raise $150 Million VC Health Fund
8.10  Kitov Announces Pricing of $6 Million Registered Direct Offering
8.11  Itamar Medical Announces Definitive Private Placement Agreement for $11.5 Million
8.12  Aidoc’s Artificial Intelligence Helps Antwerp University Hospital Radiologists Save Lives


9.1  mPrest Partners With SDG&E to Deliver Intelligent Underground Distribution Cable Analytics
9.2  Magal Awarded $2.5 Million for an Integrated Security Solution for the Spanish Port of Huelva
9.3  COTI Launches TestNet – Aimed at Streamlining Remittance Payments & Stablecoins
9.4  BigID & Ionic Security Enhance Data Governance & Privacy for Multi-Cloud Compliance
9.5  Syte Announces New Visual Search Navigation Tool for Retailers
9.6  Eyesight Bringing Advanced Driver Monitoring to Automotive World
9.7  Ethernity Networks Successfully Completes Delivery of Its ACE-NIC100 for Major Korean OEM
9.8  Brose & Vayyar Collaborate On Sensor Technology for New Door and Seat Functions
9.9  Kornit Digital Launches the Atlas, the Next-Generation Direct-To-Garment Printing Platform
9.10  ELTA Systems to Supply Compact Multi-Mission Radars to Finland
9.11  VDOO Releases Runtime Protection Agent for Connected Devices


10.1  Israel’s Inflation Falls by 0.3% in December, Housing Prices Still Falling
10.2  Israel’s Third Quarter Growth Figure Revised Upwards
10.3  Israel’s Unemployment Level Reaches Low of 4.1% in 2018
10.4  Israel Climbs to 5th Place in Bloomberg Innovation Index


11.1  ISRAEL: IVC–Meitar Exit Report 2018: Israeli Exits Reached $12.63 Billion in 103 Deals
11.2  GCC: Moody’s Says Stable Outlook But Reforms & Unemployment Pose Challenges
11.3  GREECE: S&P Affirms Greece’s ‘B+/B’ Ratings; Outlook Positive


1.1  Israel & Ukraine Sign Bilateral Free Trade Agreement

On 21 January, Prime Minister Netanyahu met with Ukrainian President Poroshenko in Jerusalem, when Economy and Industry Minister Cohen and Ukrainian Economic Development and Trade Minister Kubiv signed a bilateral free trade agreement expected to increase annual trade between the two countries from $800,000 to $1 billion a year.  Netanyahu said Poroshenko’s visit – his third to Israel since entering office in 2014 – was a testament to the strong ties between Ukraine and Israel, which Netanyahu said “have deep historical and cultural roots.”

Netanyahu thanked Cohen, First Vice Prime Minister of Ukraine Kubiv, and Jerusalem Affairs and Heritage Minister Elkin, who chairs the Israel side of the Joint Ukrainian-Israeli Intergovernmental Commission on Trade and Economic Cooperation, for their efforts in finalizing the free trade deal.  The prime minister said that during Poroshenko’s visit, the leaders would also discuss other ways of increasing cooperation in a variety of fields, including technology, health, aerospace and science.

In a meeting with President Reuven Rivlin earlier that day, Poroshenko said he could not imagine better relations than those Kiev has with Jerusalem.  Rivlin hailed the signing of the free trade deal, which he said would deepen bilateral ties.  (Various 22.01)

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1.2  Israel Inaugurates New International Airport to Boost Eilat Tourism

On 21 January, Prime Minister Netanyahu and Transportation and Road Safety Minister Katz inaugurated the Ramon International Airport in southern Israel.  The new airport will serve the southern resort city of Eilat, situated about 12 miles to its south.  The city’s old airport can handle only eight flights an hour and no wide-body aircraft.

The airport, constructed at a cost of some $500 million, has an annual capacity of 2.5 million passengers, with room for expansion.  It is able to handle 20 takeoffs and landings an hour and accommodate large aircraft, such as Boeing 747s.  Officials hope the new airport will help make Eilat a more attractive destination for tourism and a top pick for international conferences, in part because it serves as a transit point for tourists who want to cross from Israel into Egypt and Jordan.

Ramon International Airport is the first civilian airport to be built in Israel since 1948.  It is named in honor of the first Israeli astronaut, Ilan Ramon, who died in the 2003 Columbia space shuttle disaster, and Ramon’s son Assaf, an Israeli Air Force pilot who died in a training accident in 2009.  (Various 21.01)

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2.1  OurCrowd and Korea’s KEB Hana Bank Sign Investment and Partnership MOU

OurCrowd announced its latest institutional partner in Asia, with a portfolio investment from South Korea’s KEB Hana Bank, a subsidiary of the Hana Financial Group.  Hana Financial Group is one of the largest bank holding companies in South Korea and KEB Hana is the country’s most acclaimed Private Bank.  Along with an equity stake for the bank in a cross section of current and future OurCrowd portfolio investments, OurCrowd and KEB Hana have entered into an MOU agreement to pursue cooperation in support of Korea’s innovation ecosystem, aimed at creating key relationships for Korea’s major corporations seeking technology solutions for the future.

Last year, OurCrowd and its seed stage incubator Labs/02, signed a collaboration agreement with two of South Korea’s leading venture capital firms, DTNI and Yozma Group Korea.  These agreements, facilitated by the Korea-Israel Industrial R&D Foundation, aimed at strengthening bilateral strategic collaboration, supporting investment partnerships, and focusing on rapidly growing deep-tech startups in both countries.  OurCrowd plans to feature several innovative startups from South Korea as part of a special pavilion at the upcoming Global Investor Summit on 7 March 2019 in Jerusalem’s International Convention Center.

Jerusalem’s OurCrowd is a global investment platform, bringing venture capital opportunities to accredited investors worldwide.  A leader in equity crowdfunding, OurCrowd vets and selects companies, invests its own capital, and invites its accredited membership of investors and institutional partners to invest alongside in these opportunities.  OurCrowd provides support to its portfolio companies, assigns industry experts as mentors, and creates growth opportunities through its network of strategic multinational partnerships.  (OurCrowd 09.01)

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2.2  Cynerio Secures $7 Million Seed Round Funding to Drive US Market Development

Cynerio announced the completion of its $7 million funding round to fuel growth in North America for its 100% healthcare focused cyber security platform.  Investors include global VCs, Accelmed, a leading investment firm focused on value creation for medical device companies and technologies, RDC (a joint venture between Elron and Rafael), which invests in exceptional medical device and cybersecurity companies and MTIP, a leading venture capital firm who is an expert in digital health.

Hospitals require a security solution that will protect their systems without being intrusive or aggressive. Cynerio delivers complete visibility into a healthcare organization’s IoMT ecosystem, protecting it from cyber threats and helping the organization meet HIPAA regulatory requirements.

Tel Aviv’s Cynerio was founded to deliver a cybersecurity solution that is 100% designed for healthcare providers, based on the industry’s first technology that thoroughly analyzes the medical workflows in the IoMT ecosystem, to automatically discover all the entities on the network, provide an ongoing healthcare specific risk analysis, accurately detect anomalies and stop threats to prevent service disruption, data theft and compliance violations.  Rambam Hospital and Tel Aviv Medical Center (Ichilov) are two of the world’s top healthcare organizations using Cynerio’s technology to protect its sensitive data.  The company is now focused on US market development.  (Cynerio 09.01)

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2.3  Check Point Software Acquires ForceNock, a Web Application and API Protection startup

Check Point Software Technologies, a leading provider of cyber security solutions globally, has acquired ForceNock Security of Tel Aviv, Israel.  ForceNock developed a Web Application and API Protection (WAAP) technology which utilizes machine learning, behavioral and reputation-based security engines.  Check Point plans to integrate ForceNock’s technology into its Infinity total protection architecture.

ForceNock, founded in 2017 and based in Tel Aviv, Israel, developed a patent-pending, state-of-the-art machine learning, behavioral and reputation-based security engine for Web Application and API Protection (WAAP), that provides highly accurate protection, is simple to deploy and demands zero tuning.  The company’s technology frees security teams from managing endless configurations and rules while continuing to maintain the highest level of security.  (Check Point 14.01)

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2.4  Foretellix Closes $14 Million Series-A Funding for Deployment of Autonomous Vehicles

Foretellix closed $14 million of series-A funding. Led by 83North, Jump Capital, and Nextgear Ventures, the investment will accelerate Foretellix’s development, customer programs and deployment of its coverage driven verification solution.  The company has now raised over $16 million since it was founded.

Foretellix is providing leading developers of autonomous vehicles with the ability to realize and demonstrate the extremely high level of safety required to unleash the full potential of the autonomous revolution.  Foretellix develops coverage driven verification solutions to ensure that the autonomous vehicle behaves properly in the 100’s of millions of critical driving scenarios, and are therefore safe for broad deployment.  Foretellix also automates the extraction and analytics of the safety related coverage metrics, representing the percentage of scenarios proven to work in a wide range of possible situations and conditions.  These metrics are required by developers, consumers, suppliers, insurance companies and regulators.  This solution works with all required driving platforms, including simulators, X-in-the-loop configurations, test tracks and test vehicles.

Tel Aviv’s Foretellix develops a coverage driven verification framework, intelligent automation and analytics to realize the safety of autonomous vehicles, and to extract the metrics to prove it.  This is enabling the industry to transition from ‘quantity of miles’ to ‘quality of coverage’ and broad deployment.  Foretellix was founded by a very experienced team using proven coverage driven technologies and methods for the verification of complex semiconductor products.  (Foretellix 16.01)

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2.5  Colu Raises $7 Million

Colu has raised $7 million from US investor Patrick Byrne, CEO of online retailer  Colu aims to create a local currency using blockchain technology.  Colu refused to disclose the exact amount raised from Byrne and the company value for the round, saying only that the company did not lack cash and would conduct its next financing round in 2020.  The investment by Byrne, a strategic investor, comes in addition to just under $40 million raised by the company since it was founded in 2014.  Some $23 million of this was raised in Colu’s initial coin offering (ICO) in February 2018, compared with the company’s $50 million target in that offering, although the currency, CLN, subsequently lost over 90% of its value and was almost completely wiped out.

Colu intends to encourage use of its app with its own subsidies, or through subsidies from local authorities cooperating with it.  For example, in one of the cities that Colu cooperate with, economic activity by businesses in the town center was affected by a fire.  Instead of compensating the businesses that were damaged directly, the local authority wants to give people an incentive to make purchases from that area with the help of Colu, so that the subsidy will reach business owners indirectly through an expansion of economic activity, instead of going directly into their pockets.

Tel Aviv’s Colu enables people to exchange digital cash directly with one another, increasing social capital and economic participation.  Colu’s Economy in a Box, based on blockchain technology, includes a digital control panel and merchant tools software, through which users can monitor and manage their economies.  It also has a mobile app that enables users to send and receive assets in multiple currencies.  Colu enables people to exchange digital cash directly with one another, increasing social capital and economic participation.  Colu’s Economy in a Box, based on blockchain technology, includes a digital control panel and merchant tools software, through which users can monitor and manage their economies.  It also has a mobile app that enables users to send and receive assets in multiple currencies.  (Globes 21.01)

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2.6  Hainan Airlines to Launch Tel Aviv – Shenzhen Route

Hainan Airlines is launching a new route from Tel Aviv to Shenzhen in China.  The new route will replace the Chinese carrier’s flights between Tel Aviv and Guangzhou.

Shenzhen, which has 20 million residents, is a 30-minute ride from Guangzhou on the high-speed railway between the two cities.  Hainan will receive a substantial grant for the new route for moving the route from the Shenzhen local government, which wants to make the city an international hub.  Hainan operates flights from Shenzhen to a number of destinations, including Osaka, Japan; Auckland, New Zealand; and Brisbane, Australia, which creates the possibility of connection flights from Israel to these destinations. Hainan also operates direct flights from Tel Aviv to Beijing and Shanghai.

Due to Shenzhen’s proximity to Hong Kong, Hainan will not receive a grant from the Israeli Ministry of Tourism for opening the new route, but the grant it receives from the Shenzhen government will make up for this.  The large companies located in Shenzhen, including Huawei and Tencent, make the city primarily a business destination.  Termination of Hainan’s route from Guangzhou will enable another Chinese airline, China Eastern, to replace it with its own direct flights to Tel Aviv.  A third Chinese airline, Sichuan Airlines, launched a direct route from Tel Aviv to Chengdu, the capital of Sichuan Province, in 2018.  (Globes 16.01)

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2.7  Japanese and Israeli Business Leaders Collaborate on AI-Powered Industry 4.0

Musashi Seimitsu Corporation, partly owned by Honda Motor Co., and Poliakine Innovation, are partnering to develop artificial intelligence applications that will enable the future of Industry 4.0.  The international partnership was signed during the Economy summit held recently in Jerusalem with the presence of Japan and Israel Governmental ministers of Economy.

Earlier, the Japanese Minister of Commerce and the Israeli Minister of Economy and Industry shook hands on an agreement that will bring together innovators from both nations to develop Artificial Intelligence solutions to further the development of Industry 4.0.

Japan-based Musashi and the Israel based Innovation Center have declared a partnership to develop AI applications that will enable the future of Industry 4.0.  Musashi organization, a global leader in powertrain parts manufacturing with more than 30 global manufacturing plants including differential assemblies, transmission gears, camshafts as well as Linkage and suspension parts, has joined forces with Ran Poliakine, head of the Jerusalem-based Innovation Center, that brings together great technological minds in the area of Artificial Intelligence, SW engineering, HW engineering, mathematics and physics.

The partnership will engage in the mutual development of an Automated Guided Vehicle (AGV) for Industrial use.  The Innovation Center will develop solutions to disrupt manufacturing and production domains, therefore providing a safer and more efficient environment that will enhance the global value chain.  (Poliakine 15.01)

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3.1  NuScale and JAEC Agree to Explore SMR Deployment in Jordan

Portland, Oregon’s NuScale Power has signed a memorandum of understanding (MOU) with the Jordan Atomic Energy Commission (JAEC), to evaluate NuScale’s small module reactor (SMR) nuclear power plant for use in Jordan.  The agreement continues to showcase the immense international interest in NuScale’s innovative nuclear technology.

JAEC is the government entity leading the development and implementation of nuclear strategy and managing the nuclear program in Jordan.  Through this MOU, NuScale and JAEC will collaborate on conducting a joint feasibility evaluation of NuScale’s SMR, which will inform JAEC’s decision on moving forward with the project as part of Jordan’s planned deployment of nuclear power plants.

JAEC oversaw the implementation of several key and notable projects in Jordan including the Sub-Critical Assembly, the exploration of uranium in the Central Jordan area, and the Jordan Research and Training Reactor (JRTR) – Jordan’s first nuclear reactor.  Current projects for JAEC include the uranium mining in Jordan and the Nuclear Power Plant (NPP) development and implementation (including SMRs).  NuScale’s scalable multi-module plant design permits a high degree of flexibility for deployment in a wide range of conventional and unique electrical and thermal applications.  This includes economic energy production, making it a particularly attractive energy source for desalination processes at various scales.  NuScale has seen considerable interest in its SMR technology in regions of the world, like the Middle East, where fossil fuels are the source of heat and electricity for desalination.  (NuScale Power 15.01)

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3.2  Hyatt House Debuts in Saudi Arabia with the Opening of Hyatt House Jeddah Sari Street

Chicago’s Hyatt Hotels Corporation announced the entry of the Hyatt House brand into the Middle Eastern market with the opening of Hyatt House Jeddah Sari Street in the Kingdom of Saudi Arabia.  The opening of the Hyatt House hotel is a significant step towards increasing Hyatt’s brand footprint in the extended stay segment and growing Hyatt’s brand presence in the Middle East with innovative hospitality offerings in key locations and gateway cities.

Hyatt House Jeddah Sari Street is located in the Al Salamah District, in close proximity to Madinah and Thaliaya Streets, which connects to the Corniche, Jeddah’s coastal resort area.  The 102-residentially inspired upscale guestrooms, studio and one-bedroom kitchen suites, along with restaurant, fitness center and prayer rooms, provide the ideal home-away-from-home setting.  The Hyatt House brand launched in 2012 and offers more than 85 locations throughout the United States, China, Germany, Mexico, Turkey and Puerto Rico.  (Hyatt House 22.01)

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3.3  Egypt’s Very Own Zooba to Open Branch in NYC

According to an official press release, Egyptian food restaurant chain Zooba will be opening its very first US branch in Manhattan’s Nolita district.  The Egyptian chain, which describes its achievement as the first ever restaurant concept 100% homegrown in Egypt to launch in the US, was able to secure $ 4 million to fund the flagship outlet.  Nolita, its name deriving from ‘North of Little Italy’, is a charming and picturesque neighborhood in Manhattan, known for its boutiques and stores.

Zooba’s first branch opened in Zamalek in 2012 with a vision to have a Zooba in every major city in the world.  It has six branches in Maadi, Zamalek, Tagamou, Heliopolis, Sheikh Zayed and Nasr City.

In June 2018, Zooba announced that it had partnered with SADF Trading and Development, a company that operates and scales an F&B franchise, which would help them open in 20 different locations over the following seven years.  The first new international branches to open are to be in Saudi Arabia and Bahrain as the chain seeks to expand to neighboring countries in the MENA region where Egyptian food is well-reputed.  In 2016, Egypt represented by Zooba won first place at the London Falafel Festival in the Borough Market of London.  (ES 14.01)

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3.4  Renault Manufactures over 400,000 ‘Made in Morocco’ Cars

Renault Group positioned itself as a major industrial platform in Morocco by manufacturing 402,155 cars in 2018, including 318,600 units in Tangier and 83,550 in Casablanca.  The French car manufacturer exported almost 90% of the produced units to 74 countries.  Renault exported 358,779 “made in Morocco” cars last year, which is 7% more than the 301,336 cars it exported the previous year.  The French carmaker has evolved from making 10,000 cars and having 1,600 employees in 2005 in Morocco to 11,000 employees now.  Renault and its subsidiary Dacia remain among the most sold cars in the domestic market.

In 2018, Dacia sold a record 49,649 cars (28% market share) and Renault sold 25,769 cars (14.5% market share).  Six of Renault’s models rank among the top ten bestsellers in Morocco last year: Dacia Logan (13,280 sales), Renault Clio (12,470 sales), Dacia Dokker (12,434 sales), Sandero (11,918 sales), Duster (8,106 sales), and Renault Kangoo (5,544 sales).  Through an extension project of its SOMACA plant in Casablanca launched in October last year, Renault aims to double its production capacity by 2022 and achieve a production capacity of 1 million vehicles by 2025.  Moroccans bought 177,400 cars in 2018, compared to 168,136 vehicles in 2017, up by 5%.  In 2017, the North African country produced 345,000 passenger vehicles, compared to South Africa’s 331,000.  (MWN 18.01)

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3.5  Energean’s Israeli Fields Remain on Track for First Gas in 2021

Greece’s Energean Oil and Gas says its Israel fields Karish and Tanin remain on track to deliver first gas into the Israeli domestic market in Q1/21.  Energean also secured $12.9 billion of future revenues through 4.6 bcm/yr of contracted gas sales, firmly underpinning the project’s economics.  Energean added that there would be positive momentum in 2019, which will include the drilling of at least six new wells across their acreage in Israel and Greece, targeting significant increases in reserves, resources and production.

In Israel Energean continues to see increasing demand for gas and are aiming to fill the 3.4 bcm/yr of spare capacity in their FPSO in the medium term.  The next visible milestone will be mobilization of the Stena Drillship in February ahead of spudding of Karish North in March.  The Greek company’s 2019 drilling program will target up to 2.3 Tcf of gross prospective gas resources and is well aligned with its exploration strategy to target resources that can be quickly, economically and safely monetized.  During 2019, Energean expects to deliver average production of between 5,000 and 6,000 bopd.  (Various 16.01)

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4.1  Amman Enforces Regulations to Turn Itself Into a Smoke-Free City

The Greater Amman Municipality (GAM) carried out 1,242 measures last year in a crackdown on smoking in public places in line with laws and regulations, foremost of which is Public Health Law (47) of 2008.  GAM had issued warnings and fines for those found in breach of the law and, in cooperation with the concerned bodies from the private and public sectors, it had launched awareness programs.  The municipality will also fully enforce the law on unlicensed restaurants and coffee shops that serve shisha (water pipe) in disregard of health requirements.

GAM has launched the “Amman Healthy City” initiative in cooperation with the World Health Organization (WHO), the Bloomberg Philanthropies and the Vital Strategies, as the capital was designated among the top 50 cities in the world in combating smoking and seeking to become smoke-free cities.  On 21 January, in cooperation with GAM and Bloomberg Philanthropies, the WHO in Amman launched the campaign “The law protects your health… put it out,” to enforce the public health law and prevent smoking in public spaces and official institutions.  (Petra 22.01)

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4.2  UAE’s Masdar Plans First US Renewable Energy Investment

Abu Dhabi Future Energy Company, better known as Masdar, announced it is acquiring stakes in two wind farms in the United States.  It will buy John Laing Group’s stakes, its first North American renewable energy investment.  Masdar said it was buying stakes in the Rocksprings wind farm in Texas and the Sterling wind farm in New Mexico.  The deal is expected to close in H1/19, Masdar said, without disclosing the value of the deal and the size of the stakes purchased.  Following the transaction, Masdar will own interest in a partnership with French renewable power producer Akuo Energy, with whom Masdar already has an ongoing partnership – the 72 MW Krnovo Wind Farm, Montenegro’s first wind energy project.

The 149MW Rocksprings project was commissioned in 2017 and comprises 53 of General Electric’s 2.3MW wind turbines and 16 of its 1.72MW turbines at a site in Val Verde County, taking advantage of the exceptional wind conditions characteristic of the Texas region.  The Sterling project in Lea County, New Mexico has a total installed capacity of 29.9MW provided by 13 GE 2.3MW turbines and was also commissioned in 2017.  (AB 15.01)

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4.3  Renewables Accounted for 93% of Turkey’s Installed Power Last Year

In 2018, Turkey added some 4,025 megawatts (MW) to its installed power capacity, around 93% of which are in the form of renewables, according to Energy and Natural Resources Minister Donmez.  The minister wrote that the majority of Turkey’s newly installed power capacity – around 642.1 MW – was in the solar energy sector, followed by hydroelectric power with 889.9 MW.  Meanwhile, an installed capacity of 509.4 MW was put into use last year, of which 331 MW uses lignite and 271.3 MW uses natural gas.  Last year, 218.8 MW of installed power generated using geothermal energy was put into use. It was followed by 139 MW using biomass and 24 MW using imported coal.

The total new power generation in 2018 was 4,025 MW, of which 40.8% was provided by solar, 22.1% by hydroelectricity.  Another 12.7% of the capacity came from wind power while 8.2% was provided by lignite-fired thermal power.  These sources were followed by natural gas with 6.7%, geothermal with 5.4%, biomass with 3.5%, and imported coal with 0.6%.  Thus, along with the other items that came into power generation, domestic and renewable energy sources constituted 93% of the total installed capacity last year.  (Daily Sabah / AA 14.01)

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5.1  Qatar to Invest $500 Million in Lebanese Government Bonds

Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman Al-Thani announced that Qatar it will invest $500 million in Lebanese government bonds to support the country’s struggling economy.

Lebanon’s dollar-denominated bonds rose across the curve on the news, with the 2025 issue up almost 1 cent and the paper due in 2037 adding 1.2 cents in early trade.  The announcement came a day after Qatar’s ruler, Sheikh Tamim bin Hamad Al-Thani, made a short rare visit to Lebanon where he met President Michel Aoun and took part in an Arab economic summit.  Lebanon’s economy has been struggling from massive debt, little growth and high unemployment.  (IH 21.01)

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5.2  Lebanese Inflation Stood at 6.07% by the End of 2018

According to the Central Administration of Statistics (CAS), the Lebanese economy’s average inflation rate stood at 6.07% year-on-year (y-o-y) by the end of 2018 since the average Consumer Price Index (CPI) reached 106.65 by December 2018 compared to 100.55 during the same period last year.  In reality, consumer prices went up across all sub-categories.  In details, the average price of Housing and utilities (Housing water, electricity, gas and other fuels) constituting a combined 28.4 % of the CPI, witnessed a yearly rise of 6.81%, on the back of increases in its components.  Owner-occupied rental costs (grasping 13.6% of this category) and Water, electricity, gas and other fuels (grasping 11.8% of this category) rose by 3.83% y-o-y and 1.78% y-o-y, respectively.  Also, the average costs of Food and non-alcoholic beverages (20% of CPI) rose by a yearly 5.16% by Q4/18.  As for the average prices for Transportation (13.10 % of CPI), they increased by 7.93% y-o-y, noting that the average price of 2018 was $71.69 per barrel up by 28.34% compared to the same period last year.  In addition, the average price for Health (7.7% of CPI), Education (4.33% of CPI), and Clothing and footwear recorded a yearly upticks of 5.01%, 4.42% and 15.25%, respectively.  The rise in the Clothing and footwear can be linked to the yearly increase in the average EUR/USD rate by 4.50%.  (CAS 22.01)

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5.3  Tourist Spending in Lebanon up by 10.46% in Annual Terms in 2018

According to Global Blue, tourist spending in Lebanon rose by 10.46% YTD, affecting positively the YTD- year-to-date growth rate that reached 6.45% by December 2017.  The number of refund transactions rose by 5.53% year-on-year by December 2018. In details, Q4/18 witnessed a yearly growth of 16.75% and the highest increase in this quarter was executed during the month of November that recorded a rise of 31.49% in the number of refund transactions while the lowest growth rate was recorded during December and reached 22.09%.  Tourists from the Arab countries remained the largest spenders in Lebanon, with Saudis, Emiratis, Syrians and Kuwaitis, in particular, grasping shares of 12%, 11%, 10% and 7% of total spending, respectively.  On a yearly basis; tourist spending by Syrians, Qatari and Egyptians rose by 64.71%, 60.47% and 25.93%, respectively.  Meanwhile, spending by Canadians and Saudi Arabian visitors fell by 20.59% and 15.05% respectively.  In 2018, tourists expended 67% of their total spending on Fashion and clothing, followed by 18% on Watches and jewelry, noting that spending on Fashion and clothing grew 2.86% in 2018 and spending on watches and jewelry grew by 21.4% in 2018.  (Blom 15.01)

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5.4  Total Number of Registered New Cars in Lebanon Fell 11.46% in 2018

According to the Association of Lebanese Car Importers (AIA), the total number of newly registered commercial and passenger cars deteriorated by an annual 11.46% to stand at  35,301 by the end of 2018.  This decrease was driven by the 11.31% yearly drop in the number of newly registered passenger cars to 33,012 and the 13.49% drop in the newly registered commercial vehicles to 2,289 by December 2018.  In terms of car brands, Kia maintained its top rank, with the largest share of 15.18% of newly registered passenger cars, followed by Hyundai and Toyota with shares of 13.08% and 12.59 % respectively and Nissan with a 12.10% of the total.  In terms of sales per importer, RYMCO acquired the biggest bulk of the total newly registered cars with 15.52%, followed by NATCO (14.25%), BUMC (12.89%) and Century Motor Co (12.52%).  (AIA 14.01)

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5.5  Jordan Sees 3.7% Average Increase of its Inflation Rate for December 2018

The monthly report on inflation in Jordan issued by the Department of Statistics indicates that the Consumer Price Average (Inflation) reached 125.3 in December 2018 against 120.8 during the same month of 2017, recording an increase of 3.7%.  The main commodities groups, which contributed to this increase, were Cereals and its products by 1.25%, Transport by 0.60%, Tobacco and cigarettes by 0.59%, Vegetables, Dried and Canned Legumes 0.48% and Dairy and its products and eggs 0.31%.  Meanwhile, the main commodities groups which witnessed a decrease in their prices were Meat & poultry by 0.50%, clothes by 0.04%, Fruits & nuts by 0.02% and sugar and its by-products by 0.01%.  The Consumer Price Average for December 2018 has decreased by 0.7% compared with the previous month (November) 2018.

The report also shows that the Consumer Price Average for 2018 has increased by 4.5% compared with the same period of 2017.  As for the core inflation of the consumer Price index for December 2018 (which is calculated after excluding the most fluctuating commodities’ prices of food, fuel , lighting and transport group) it has reached 129.4 against 127.3 recording an increase of 1.7% during the same month of 2017.  On the annual level the consumer price index of 2018 reached 128.6 against 125.7 compared with 2017 representing a growth by 2.3%.  (DoS 14.01)

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5.6  Jordan & Egypt Sign Gas Supply Agreement for 2019

Jordan and Egypt signed an agreement to supply the Hashemite Kingdom with about half of the electricity grid’s needs of the natural gas for 2019.  The agreement, which includes amendments to the sale and purchase of natural gas agreements between the two countries, provides quantities of Egyptian gas exported to Jordan in 2019.  This equates to half the electricity grid’s needs in the Kingdom.  The rest of the needs will be met through Shell International, which supplies Jordan with liquefied gas through the port of Aqaba, and from local energy sources.  These agreements are important in enhancing the stability of the Kingdom’s electricity grid and ensuring the security of supplying electricity at prices below the price of liquefied gas.  (Petra 13.01)

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5.7  Jordan’s Senate Approves 2019 Budget, Recommending Transparency Measures

On 20 January, the Jordanian Senate endorsed the 2019 state budget bill and the draft law governing the budgets of independent public institutions, as referred by the Lower House.  The state budget draft law forecasts the GDP for the current year to increase by 2.3%, 2.5% next year and 2.7% in 2021.  The budget statement referred by the Lower House to the Senate estimated the volume of local revenue in 2019 to reach JOD8 billion, citing a 14.8% increase from 2018 that is primarily attributed to the rise in tax and non-tax revenues by 15.9% and 12.9%, respectively.

The Senate’s Financial and Economic Committee said the committee’s report included 29 recommendations, the most significant of which include the need to address distortions in sales tax, following up on the merging of independent government institutions and implementing the economic reform program supported by the International Monetary Fund.  The recommendations also included commitment on the government’s part to securing sufficient allocations, especially for the operational expenses of security bodies, as well as slashing public expenditures.  To ensure transparency and accountability in case the allocations are insufficient, the report said, the government must issue a budget supplement ahead of any spending which is not stipulated in the budget.  (JT 20.01)

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►►Arabian Gulf

5.8  UAE Economy to Grow by an Average of 3.8% Annually to 2023

The UAE economy is forecast to grow at an average 3.8% annually in the next five years, supported by an increase in investment flows and a rise in private consumption.  The average real gross domestic product – an inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year – of the UAE between 2019 and 2023, will also be boosted by the expansionary fiscal policies of the Government, the Dubai Chamber of Commerce said in its UAE Macroeconomic Model report.  A growing number of infrastructure and construction investments in the run up to Expo 2020, will also bode well for the overall GDP growth of the second-biggest Arabian Gulf economy.  A recovery in private consumption and sales of highly cyclical consumer products is expected, extending to products such as vehicles, furniture, household appliances and medical equipment.

The non-oil economy of the UAE, is projected to grow by an average of 4.1% annually between 2019-23, compared to the 2.8% recorded in the 2014-18 period.  The non-oil sector’s growth will be driven by other sectors including transport and communications, which are set to grow by 7.9% over the five year period, followed by construction, expected to expand by 4.2%, and real estate and business services that are expected to record a growth of 3.8% until 2023, according to the chamber.  Recent measures to reduce the cost of doing business in the UAE are also expected to support growth within the country’s small and medium-sized enterprises and private sector businesses.

The UAE’s overall economy, which grew only by 0.8% in 2017, mainly on the back of Opec-led oil output cuts and crude price declines, is set to accelerate this year amid a slew of Government measures aimed at propelling the non-oil sector, which accounts for more than 70% of the country’s GDP.  The Central Bank of the UAE forecasts the economy to grow 4.2% in 2019 as the Government reforms and stimulus measures start yielding results.  (The National 14.01)

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5.9  Some 73% of UAE Expats Earn More Than They Could in Their Home Country

Nearly three-quarters of expats working in the UAE earn more than they could in their home country, according to HSBC’s Expat Explorer survey.  The UAE has been ranked the fourth best place to work in the world, marking its third consecutive year in the top five, and behind only Germany, Bahrain and the UK.  The survey of more than 22,000 expatriates from the international bank reveals that career ambition is the number one reason why people take the plunge and settle abroad.

Among the primary reasons expats highlighted the UAE as one of the top career destinations was for the benefits packages offered by employers (ranked first) and its earnings prospects (ranked third).  Some 75% of expats in the UAE receive an annual airfare allowance to their home country and 85% receive health and medical allowances compared to global average of 17% and 43% respectively.  Nearly three quarters of expats in the country (73%) said that they earn more than in their home country.  (AB 15.01)

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5.10  IMF Lowers Growth Forecast for Saudi Arabia

In its World Economic Outlook update for January, the global lender lowered its projection for Saudi Arabia’s gross domestic product growth this year to 1.8%, based on low oil prices and crude output along with rising geopolitical tensions.  This is down from 2.4% in its October report.  However it raised its forecast for next year by 0.2%, to 2.1%.  Riyadh has projected 2.6% GDP growth for 2019.

The world’s top crude exporter, the kingdom has been hit hard by tumbling oil prices and saw its economy shrink by 0.9% in 2017.  It has since rebounded, with healthy 2.3% growth in 2018, mainly thanks to higher oil prices and output.

Major Gulf oil exporters, including Saudi Arabia, have posted budget deficits since the crash of the global oil market in 2014.  Riyadh has posted an accumulated budget shortfall of $313 billion over the past five years and projects a $32 billion deficit for 2019.  Brent crude had hit $85 a barrel in early October, but prices plunged more than 40% over the following two months on oversupply and fears a trade war between the United States and China could slash demand.  They partially rebounded to just above $60 a barrel since a new deal came into effect, under which OPEC and non-OPEC oil producers agreed to trim output by 1.2 million bpd.  Oil prices have remained volatile in recent months, hitting $55 a barrel in early January.  (AB 21.01)

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5.11  Saudi Private Sector Growth Slows to 9 Year Low in 2018

Saudi Arabia’s non-oil private sector grew at its slowest rate in nine years during 2018, according to the Emirates NBD Purchasing Managers’ Index (PMI) for the Gulf kingdom.  The headline PMI, which collects data from a monthly poll of business conditions in the private sector, averaged 53.8 during last year compared to an annual average of 58.0 over the previous eight years.  In December, the PMI fell to 54.5 from a year-high of 55.2 in November, with the rate of job creation slipping to a 20-month low.

While output dipped from its recent peak in November, it remained comfortably above the 2018 average of 57.6, coming in at 58.2.  New orders followed a similar trend, falling from November but at 58.4 still stronger than seen earlier in the year.  However, new export orders remained weak implying that the bulk of new orders are being driven by domestic demand, achieved through continued price discounting.  Output prices decreased at a marginally faster pace in December, as firms continued to cite strong domestic competition.”

Despite easing since November, output growth in December remained quicker than the average over 2018 as a whole.  The survey indicated that business activity had risen in part due to stronger demand, with companies noting a further – albeit slightly slower – increase in inflows of new business.  New export orders were up for a third straight month but only fractionally, indicating that the pick-up in demand was centered on the domestic market.  While underlying market conditions were reported to have improved, the survey continued to point to strong competitive pressures across the private sector and, on average, firms reduced selling prices in order to help support sales.  (AB 12.01)

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►►North Africa

5.12  Egypt Reports Initial Budget Surplus of EGP 20.8 Billion in First Half of FY 2018/19

Egypt achieved an initial budget surplus of EGP 20.8 billion during the first half of the 2018/19 fiscal year, Finance Minister Mohamed Maait said on 21 January.  The 2018/19 budget’s expenditures total EGP 1.41 trillion and projected revenues are targeted at EGP 990 billion.  The minister described these figures as good results, saying that this initial surplus represents 0.4% of the GDP, compared to an initial deficit of 0.3% of the GDP in the same period of the previous fiscal year.  Maait explained that the positive figures are partly due the government’s policy of encouraging investments in infrastructure in order to attract private sector business activity to all vital economic sectors.

The 2018/19 budget aims to reduce the debt rate of state bodies to 93% of the GDP, while achieving a real growth rate of 5.8%, he added.  In 2017/18 fiscal year, Egypt’s budget deficit recorded 9.8% of GDP down from 10.9% in the previous fiscal year, the lowest level below the 10% benchmark for six years.  It was also the first time in 15 years for the final state budget account to record a primary surplus of EGP 4.4 billion.  The 2017/2018 primary balance figures do not take into consideration interest payments on outstanding government debts for the fiscal year, which stood at EGP 438 billion.  (Ahram Online 21.01)

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5.13  Egypt Ushering in E-Payments

The new Egyptian national e-payment card Meeza (meaning “merit” in Arabic) is being released onto the market through the National Bank of Egypt (NBE) and Banque Misr and will soon be rolled out at other banks such as Banque du Caire.  Meeza is the latest financial inclusion initiative by the Central Bank of Egypt (CBE) to push towards more cashless payments in Egypt.  The prepaid card can be recharged through the banks or ATMs as many times as its holder desires before it expires.  Only an ID is required to issue the card — people 16 years or older can access Meeza cards — and it is exempted from administrative fees for the first month.

An NBE statement explained that Meeza would be available at all its branches in the second half of January to serve the needs of a wide stratum of people.  Fees after the first month are set at LE25, according to the NBE.  People can also use the Meeza card without the need to open a bank account.  Shopping online, making transfers and paying for different government and private-sector services are some of the merits granted to Meeza holders, who can also withdraw cash from ATMs, pay government bills, and buy from a wide network of merchants who have point-of-sale terminals.  Meeza provides the same services offered by Visa and MasterCard, but it can only be used locally.  Its holder should also have a valid balance on the card, since it is prepaid.  The card is issued by the Egyptian Banks Company in cooperation with the Ministry of Communications and Information Technology, the CBE, and a number of banks in the domestic market.  The CBE aims to issue 20 million Meeza cards in the next three years.

The Ministry of Finance announced in September that Meeza cards would be able to handle all government payments, such as pensions and subsidies, within the framework of amendments to the public accounting system that dictates that all government payments should be electronically settled in 2019.  (DNE 19.01)

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5.14  Florida Companies Are ‘Well-Suited’ to Do Business in Morocco

Enterprise Florida (EFI), the state’s principal economic development organization, is planning a business delegation of small and mid-sized Florida manufacturers and services providers on an export sales mission to Casablanca.  The trade mission is scheduled for 14 – 18 April with the aim to facilitate business cooperation between the Florida delegates and their counterparts in Morocco.  EFI also noted the Free Trade Agreement (FTA) signed between Morocco and the US in 2006, the only U.S. FTA with an African nation.  The FTA eliminated a 95% tariff on traded consumer and industrial goods exported to Morocco.

As part of the export sales mission, EFI will set up “pre-screened, one-on-one Gold Key meetings” with interested Moroccan companies, in coordination with the US Commercial Service.  Based on a first-come, first-served rule, the organization will select only 12 small and mid-sized Florida companies for the Gold Key package.  (MWN 16.01)

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6.1  Greece’s Public Debt on the Rise

Greece’s public debt reached €334.988 billion in the third quarter of 2018, an increase of €21.493 billion over that of the same quarter in 2017, the Greek National Statistical Authority (ELSTAT) said.  The Greek statistical authority noted that Greek public debt in the third quarter of 2017 was €313.495 billion.  At the same time, the European Union’s Statistic Authority, Eurostat, announced on Monday that the Eurozone’s public debt represented 86.1% of the E.U.’s GDP for the third quarter of 2018.  The Eurozone’s debt fell by 2.1% compared to the same quarter of 2017.  Greece continues to hold the Eurozone’s highest ratio of public debt compared to its GDP, with 182.2%, followed by Italy at 133% and Portugal at 125%.

According to the figures published by ELSTAT, Greece’s revenues from income and property taxes during the third quarter of 2018 increased by €446 million, totaling 23.7% of total tax revenues for the quarter.  Several sources of revenue recorded a slight increase compared to the third quarter of 2017 as well.  The total amount of money brought in by the Greek government in July, August and September of 2018 was €23.260 billion, an increase of €302 million compared to 2017.  Public spending in Greece for the same period was higher by an amount of €441 million, reaching €20.892 billion.  The spending included social benefits, public sector salaries and many other types of expenditures.  (ELSTAT 21.01)

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6.2  Greek Households Have Lost 28% of Their Assets Over the Past Decade

Greek households lost 27.9% of their assets in the decade from 2008 to 2018, Alpha Bank noted in its weekly financial bulletin.  The lender’s analysts say that this drop was the biggest in the Eurozone, followed by those recorded in Spain, Italy and Cyprus, while Germany recorded significant gains during the same period.  Households in Greece have recorded the biggest decline in the Eurozone’s non-financial wealth after their counterparts in Spain, a development that mainly results from the slide in the Greek property market in previous years.  Nevertheless, realty is currently showing signs of recovery in terms of both residential and commercial properties, with the house price index climbing 1.3% in January-September 2018 on an annual basis, while the price indexes for offices and retail spaces have climbed 7.4% and 3.1% respectively.  The Alpha bulletin notes that household expectations regarding their spending capacity, employment conditions and the general economic situation are on the rise.  (GR 21.01)

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6.3  Greek Supermarket Sales Increased 2.2% in 2018

Greek supermarket sales recorded a rise in sales in 2018 for the second year in a row, as the sector appears to be entering a period of relative normality after its dramatic developments and radical restructuring.  Last year also saw significant merger and acquisition activity, though not of the scale of previous years and without any bankruptcies, while the smooth course is also set to continue this year.

Data research company Nielsen reported that supermarket sales grew 2.2% last year compared to 2017 (a figure concerning stores of 100 square meters or larger on mainland Greece and the island of Crete).  That means turnover amounted to about €9.36 billion in 2018, from about €9.16 billion in 2017 and €9.02 billion in 2016.  Still, so-called fast-moving consumer goods (FMCG) – everyday products bought on a frequent basis – underperformed and only posted a year-on-year increase of 1.8% in 2018.  Nielsen argued that the overall positive picture of the sector is due to an increase in demand and marginal inflationary trends, and has led to the restructuring of the retail chain branches.  (eKathimerini 16.01)

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7.1  PM Netanyahu Visits Chad as Ties with Israel are Renewed

On 20 January, Prime Minister Benjamin Netanyahu and Chad President Idriss Deby announced at the Presidential Palace in Ndjamena, the capital of Chad, the resumption of diplomatic relations between Chad and Israel.  The two sides signed an official memorandum on the resumption of relations between the two countries.  Other agreements for agricultural systems, military equipment and weapons were also signed.  (MFA 20.01)

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7.2  Pope to Visit the UAE on 3 – 5 February

The UAE will be welcoming Pope Francis from 3 -5 February on his first visit to the Arabian Gulf region.  His visit is ostensibly to participate in the Global Interfaith Conference on Human Fraternity.  The Pope’s visit coincides with the visit of the Grand Imam of Al Azhar Dr Ahmad Al Tayeb, where the two prominent religious figures will hold a historic meeting to launch a global humanitarian message.  The program will include the inauguration of the region’s first historic mass to be marked by Pope Francis in the presence of 135,000 followers of the Catholic Church.

A Roman Catholic Bishop has been seated in the UAE since 1974.  St. Joseph’s Cathedral is the seat of the Apostolic Vicar of Southern Arabia, Bishop Paul Hinder.  St. Joseph’s was established nine years earlier, six years before the late Shaikh Zayed Bin Sultan Al Nahyan united the UAE as a nation in 1971.

Over one million Christians (about one-ninth of the current UAE population) live and work in the country.  While many different Christian faiths worship in churches throughout the UAE, most of the Christian population is Roman Catholic.  An estimated 135,000 Catholics from the UAE and abroad are expected to attend the mass to be marked by Pope Francis, which will be held at Zayed Sports City.  Today, there are 76 churches and places of worship in the UAE for people of different faiths.  (GN 21.01)

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7.3  Greek PM Tsipras Wins Confidence Vote – Boosting Macedonia Accord

Greek Prime Minister Alexis Tsipras won a confidence vote in parliament on 16 January, clearing a major hurdle for Greece’s approval of an accord to end a dispute over Macedonia’s name and averting the prospect of a snap election.  Tsipras called the confidence motion after his right-wing coalition partner Panos Kammenos quit the government on 13 January in protest over the name deal signed between Athens and Skopje last year.  Parliament gave Tsipras 151 votes, meeting the threshold he required in the 300-member assembly.  His leftist Syriza party has 145 seats in parliament while additional support was gleaned by defectors of Kammenos’s ANEL party and independents.

Greek opponents of the agreement say Macedonia’s new name – the Republic of North Macedonia, reached after decades of dispute between Athens and Skopje, represents an attempt to appropriate Greek identity.  Macedonia is the name of Greece’s biggest northern region.  The deal was signed between the two countries in mid-2018, contingent on ratification of parliaments in both countries and a necessary step for the tiny Balkan state to be considered for European Union and NATO membership.  The Macedonian parliament recently ratified the pact.  It has yet to be brought to a vote by Greece, though that is expected this month.  (Various 16.01)

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8.1  Olympic Committee of Israel and Technion Established Joint Research Center

The Olympic Committee of Israel and Technion have established a joint research center to advance Olympic Sports in Israel.  The Israeli Olympic Sports Research Center aims to encourage studies that will enhance Olympic sports in Israel in line with US and European models.  The (joint) establishment of the center will position Israel in an advantageous position over its competitors in world sports with regards to scientific knowledge and technology.  The fields of biomechanics, motion analysis, and technological development are areas of application that will now receive special attention so the performance of Israeli athletes can be improved.

The joint research activity has already begun.  The center’s first research goal is related to windsurfing – to research surfer/ surfboard compatibility in order to provide the athlete with best performance ability.  It was found that a certain surfboard model can have various types of fins and this can make a difference in the athlete’s performance.  This difference requires each surfer to examine and test the selected fin over time, but this takes much effort and sometimes even causes the fins to break.

The new agreement was signed by the Olympic Committee in Israel, the Technion and the Technion Institute for Research and Development.  The strategic agreement for the establishment of the new Israeli Olympic Sports Research Center was initiated following a seminar held at the Technion for Olympic sports coaches and in recognition of the need for extensive and in-depth research on various aspects of sports.  (Technion 30.12)

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8.2  NRGene & TOYOTA Collaborate on Strawberries for Better Local Production for Japan

NRGene and Japan’s Toyota announced the decoding of a leading commercial strawberry genome, a key milestone in the development of high-quality, locally-produced fruits for the Japanese market.  The combination of NRGene’s assembly of the strawberry genome and Toyota’s GRAS-Di DNA analysis technology will enhance the development of natural strawberry varieties better suited to the Japanese market.  NRGene’s DeNovoMAGIC 3.0 genomic big-data artificial intelligence (AI) tool is being used to develop the first high-quality, comprehensive genome assemblies of complicated food genomes, including wheat, potato and shrimp.  Strawberries have one of the most complex genomes ever assembled, as they encompass eight copies of every gene (by comparison, humans have just two copies).  Assembling the strawberry genome could increase natural breeding efficiency and lead to the development of more productive varieties.

In addition to its core business of making ever-better cars, Toyota has been working since 1999 to enrich communities through a range of business initiatives that positively impact the environment.  Prominent examples include plant improvement techniques to identify disease-resistant sugar cane genes and analysis of the strawberry genome.  With the world now facing an aging farming population and declining food self-sufficiency, Toyota is pursuing projects with NRGene to further support and encourage the development of the agricultural industry.

Ness Tziona’s NRGene is a Genomics company that provides turn-key solutions to leading breeding companies.  Using advanced algorithmics & extensive proprietary databases, we empower breeders to reach their full potential by achieving stronger and more productive yields in record time.  NRGene’s tools have already been implemented by some of the leading agribiotech companies worldwide, as well as the most influential research teams in academia.  (NRGene 13.01)

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8.3  NRGene and Macrogen Launch Ultra-High-Density SNP Genotyping Service

NRGene and Rockville, Maryland’s Macrogen Corp launched a joint sequencing-based genotyping service, ArrayMAGIC, at the Plant and Animal Genome (PAG) conference in San Diego.  The new offering provides ultra-high-density single nucleotide polymorphism (SNP) genotyping at a low cost per data-point, making this valuable technology more accessible for a wide range of agricultural applications.

The new service is designed to make high-quality SNP genotyping affordable and available as needed. ArrayMAGIC customers will benefit from a simple, yet comprehensive “tissue to knowledge” experience, tapping into the expertise of all three participating companies.  To streamline the process, a dedicated website will be launched to advise customers on how to send samples to Macrogen Corp.  A novel, cost-effective sequencing library prep method, provided by iGenomX, is employed to create an ultra-low coverage sequence dataset for each sample.  NRGene then leverages its extensive proprietary database and analytical tools to impute a high-resolution SNP set from this data.

Rehovot’s NRGene is a genomics company that provides turn-key solutions to leading breeding companies.  Using advanced algorithmics & extensive proprietary databases, we empower breeders to reach their full potential by achieving stronger and more productive yields in record time.  (NRGene 12.01)

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8.4  ChemomAb Clinical trial of CM-101 in Patients with Non-Alcoholic Fatty Liver Disease

ChemomAb, a clinical-stage biopharmaceutical company focused on the development of novel therapies for fibrotic-inflammatory diseases, announced dosing of the first patient in a Phase 1b repeated dose clinical trial with CM-101 in non-alcoholic fatty liver disease (NAFLD) patients.  The company’s lead investigational drug candidate, CM-101, is targeting the chemokine CCL24, an important driver of fibrotic processes.  The Phase 1b clinical trial is a randomized, double-blind, placebo-controlled study designed to evaluate the safety, tolerability, pharmacokinetics and pharmacodynamics in people with nonalcoholic fatty liver disease.  Patients will be randomized to receive doses of CM-101 or placebo for 12 weeks followed by a recovery phase.

Ramat HaChayal’s ChemomAb is a clinical-stage biopharmaceutical company that specializes in the development of proprietary monoclonal antibodies directed towards novel targets for the treatment of fibrotic-inflammatory disorders including NASH as well as orphan indications.  The antibodies are designed to treat patients with fibrotic and inflammatory diseases through a novel dual mechanism of action that interferes with fibrosis processes directly as well as attenuates the inflammatory process that supports the fibrotic milieu and disease progression.  The leading compound, CM-101, was selected after meticulous testing in a series of pre-clinical animal models simulating human disorders and has shown promising safety and efficacy as well as a novel mechanism of action.  (ChemomAb 10.01)

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8.5  Lumir Lab, a Cannabis Lab, Set up at Hadassit on Hebrew University’s Ein Kerem Campus

Tel Aviv’s Asana Bio Group, now taking its first steps towards growing cannabis in Malta, has invested $2.3 million in founding Lumir Lab, a company that will run a laboratory for research on cannabinoids, the active ingredients in the cannabis plant.  The laboratory is designed to provide analysis services for the composition of active ingredients in the cannabis plant and adaptation of its strains to specific diseases.  The laboratory will be based on the abilities of Hebrew University Prof. Lumir Hanus, a cannabis researcher who has worked for decades with the biggest authority on medical cannabis, Prof. Raphael Mechoulam.  During his 50 years of research, Hanus has directed and isolated over 1,000 active ingredients in the plant, according to the company.

The laboratory company will be located on the Hebrew University of Jerusalem’s biotech campus, but will be a private company not owned by the university.  Lumir Lab’s first cooperative effort will be with Gynica, a research and development company for treatment of endometriosis, a painful disease in which the layer of tissue that normally covers the inside of the uterus grows outside of it.  Lumir Lab will help Gynica detect the best composition of active ingredients in cannabis for treating endometriosis and which strains of cannabis contain this composition.  The laboratory does research only on plants and cells, but it can mediate between Gynica and Hadassah Medical Center in carrying out research on animals and people, if the product reaches this stage.  (Hadasit 14.01)

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8.6  SeeTree Raises $11.5 Million

SeeTree has come out of stealth and announced that it has closed a $11.5 million Series A financing round led by Hanaco Ventures, and with the participation of investors from its seed round, including Canaan Partners Israel and Uri Levine and his investors group, as well as iAngels and Mindset.  The company has raised $15 million to date including this latest financing round.

SeeTree also announced that it is launching a new agritech service for permanent crop growers who are looking to gain deeper insight into the health and productivity of their trees.  The end-to-end service provides growers with intelligence on individual trees and tree clusters from the air, ground, and underground.  Data extraction is performed using high-resolution, multi-dimensional sensing imagery obtained from drones, paired with ground sensors and rangers with boots-on-the-ground who acquire samples for further analysis.

Tel Aviv’s SeeTree offers complete transparency into the health and production of each of a grower’s trees by leveraging the most powerful innovations available.  An end-to-end Intelligence Network provides visibility, monitoring and actionable analytics to optimize farming.  SeeTree uses the power of machine-learning algorithms to get smarter and offer the most precise window into the strength of trees.  (Various 16.01)

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8.7  Tyto Care Adds $9 Million More to its Series C Round

Netanya, Israel Tyto Care brought in $9 million in additional strategic funding from Sanford Health, Itochu and Shenzhen Capital Group.  The new backing extends a nearly $25 million Series C round led by Ping An Global Voyager Fund that was announced last year and brings the round’s total to $33.5 million.  The new funding will allow Tyto Care to continue pursuing plans for growing its telehealth business, which include expansion into Asian and European markets.

Since the earlier part of Tyto Care’s Series C funding round last year, the company has made its interest in international markets clear.  The service launched in Canada last summer after receiving approval from its government, and scored a CE Mark during the fall.  But while Tyto Care’s approach of pairing virtual care with purpose-built connected monitoring tools helps it stand apart from the crowd, it still has to contend with the larger and more established names in telehealth. American Well, Doctor on Demand, Teladoc, MDLive and HealthTap are all in higher demand.

Tyto Care offers a remote consultation service, which it supports with a number of devices that are designed to better enable these virtual visits.  Housed within the remote care kits sold to providers, insurers and consumers alike are a camera, a basal thermometer, an otoscope, a stethoscope and tongue depressor, all of which transmit a user’s specific biometrics to the physician.  The calls themselves are handled through an app, and can yield a diagnosis, treatment plan and prescription if necessary.  (Tyto Care 17.01)

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8.8  Yofix Launches Clean-label, Plant-based Yogurt Alternative

Ashdod’s Yofix Probiotics, the winner of PepsiCo’s European Nutrition Greenhouse Programme 2018, launched its first dairy-free, soy-free yogurt alternative line with three fruit flavors.  The products are based on a unique, clean-label formula made from just a few natural ingredients.  It is traditionally fermented and contains live probiotic cultures plus the prebiotic fibers that feed them.  The new product line is environmentally friendly and vegan, and leaves a low carbon footprint since there is no use of cow milk and, unlike almond or cashew, does not require a great amount of water.  Most importantly, the production process is carefully designed to ensure zero waste.  All raw materials utilized in production remain in the final product.

Increasingly important to health-minded consumers is the health of the environment, driving them toward sustainable products that leave a minimum footprint. Unfortunately, most of the yogurt alternatives on the market can’t meet dairy yogurt when it comes to taste, texture, and nutrition. Or, to be a good source of protein, calcium and fiber, they compromise organoleptic characteristics. Yofix offers a new-generation yogurt alternative that hits all the marks for flavor, texture, nutrition, and eco-friendliness. It has no added sugars, flavors, colors, or preservatives.

The company launched the plant-based yogurt line with Strauss Dairies in Israel in December under the ONLY brand in three flavors to target the rapidly expanding demand for vegan, flexitarian and lactose-intolerance populations.  The start-up was the first company to join The Kitchen, the leading food-tech incubator and seed investor in Israel, and part of the Strauss Group, the main investor in Yofix.  (Yofix Probiotics 15.01)

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8.9  Assuta to Raise $150 Million VC Health Fund

The Assuta chain of medical clinics and private hospitals, controlled by Maccabi Health Services with a 95% stake, has founded a venture capital fund for investing in medical devices in the later stages of development (before or just after regulatory approval) and digital medicine.  The fund will be called Assuta Life Sciences Ventures – Alive.  Some $37 million of the initial $50 million to be raised by the fund in the first stage has already been raised, with the rest of the initial sum slated for completion in the first quarter.  The fund plans to reach $150 million by mid-year.

Assuta operates private hospitals in Tel Aviv, Rishon LeZion, Haifa and Beer Sheva; a public hospital in Ashdod; and a number of private clinics that are not full hospitals in Tel Aviv, Ashdod and Ra’anana.

As reported last July by Globes, Assuta’s 2016 revenue totaled NIS 1.5 billion, 40% of which came from treatment of Maccabi Health Services members and the rest from private revenue.  The chain has grown rapidly in recent years, and its private activity has more than doubled.  The chain was profitable as of 2016, when its profit was $400 million.  The profits are not given to Maccabi Health Services; they are retained by Assuta for development purposes.  The chain bought, brought to Israel, or developed its own unique technologies in recent years.  Assuta operates a unit for clinical research that for several years has provided it with a direct connection to the life sciences industry in Israel and overseas.  The Assuta group also offers stipends for research by its staff and by external concerns.  (Globes 21.01)

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8.10  Kitov Announces Pricing of $6 Million Registered Direct Offering

Kitov Pharma has entered into definitive agreements with institutional investors providing for the issuance of 3,428,572 American Depositary Shares (ADS) at a purchase price of $1.75 per ADS in a registered direct offering.  Kitov will also issue unregistered warrants to purchase up to 2,571,430 ADSs. The warrants will have a term of 5.5 years, be exercisable immediately following the issuance date and have an exercise price of $2.00 per ADS.  The offering is expected to result in gross proceeds of approximately $6 million.  H.C. Wainwright & Co. is acting as the exclusive placement agent in connection with this offering.

Tel Aviv’s Kitov Pharma is an innovative pharmaceutical drug development company.  Leveraging deep regulatory and clinical-trial expertise, Kitov’s veteran team of healthcare and business professionals maintains a proven track record in streamlined end-to-end drug development and approval.  Kitov’s flagship combination drug, Consensi, treating osteoarthritis pain and hypertension simultaneously, was approved by the FDA for marketing in the U.S and is partnered in the U.S., China and South Korea.  In addition, Kitov’s NT219, a novel patented small molecule designed to overcome cancer drug resistance, is currently in pre-clinical development.  (Kitov Pharma 16.01)

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8.11  Itamar Medical Announces Definitive Private Placement Agreement for $11.5 Million

Itamar Medical has raised $11.5 million in a private bridging placement.  US investors led the round, including a fund managed by Deerfield Management, a large veteran investment company specializing in the life sciences, and funds Triple Gate Capital, West Elk Partners, and Alpha Capital.  The Israeli investor in the round is More Investment House.  Itamar Medical was advised by Cybele Investments, which handles capital market affairs for the company, including financing rounds.

The share price for the round was NIS 1.17, a 16% discount on the market price.  A bridging round at such a discount is often used to recruit strong investors before a public offering and to make sure that the company embarks on the offering with a full treasury.  The addition of more investors before a public offering is possible.

Completion of the bridging round requires approval from the US Securities and Exchange Commission (SEC), because the US investors received ADS (American Depositary Shares), a US security that tracks a share on a foreign stock exchange, and the ADS will be registered in the US.  The SEC is currently paralyzed by the US governmental shutdown, but the Israeli part of the round can be completed.

Itamar Medical has developed a system for home diagnosis of breathing disorders during sleep.  The system is marketed mainly through cardiologists, because of the close connection between heart failure during sleep and metabolic syndrome (heart disease, obesity, and diabetes).

Caesarea’s Itamar Medical is a medical device company focused on leading the integration of Sleep Apnea management into the cardiac patient care pathway.  Their core strategies include (i) the development, manufacturing and sales of the WatchPAT™ diagnostic product line based on the proprietary PAT® signal that was proven as a simple, comprehensive, reliable and scalable alternative to airflow and it enables point-of-deployment versatility; and (ii) Total Sleep Solution – a product that includes a field support organization, partnerships, as well as core and supporting technologies that enable all physicians in general and Cardiologists in particular to provide a seamless and full continuum of care to Sleep Apnea patients as part of their care pathway.  In addition, the company has developed and is currently marketing the EndoPAT™ system – an endothelial function assessment tool for risk classification used by clinicians, researchers and pharma companies to easily and reliably quantify and track arterial health.  (Itamar 17.01)

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8.12  Aidoc’s Artificial Intelligence Helps Antwerp University Hospital Radiologists Save Lives

Tel Aviv’s Aidoc announced that Antwerp University Hospital has purchased Aidoc’s neuro solution.  Aidoc identifies time-sensitive and life-threatening conditions in CT scans, flagging them to ensure that the images are seen immediately by a radiologist.  This results in faster diagnoses and higher quality patient care. Antwerp University Hospital was among the first institutions in Europe to incorporate Aidoc’s cutting-edge technology.  Earlier last year, the university hospital was the first facility in Europe to incorporate Aidoc’s solution into their clinical workflow in order to better detect two life-threatening conditions: cervical spine (C-spine) fractures and intracranial hyperdensities (ICH).

Radiology is one of Antwerp University Hospital’s focal points, performing 160,000 procedures per year, offering high-quality patient care, and embracing ground-breaking research.  The hospital prides itself in its forward-thinking radiology department, which is constantly taking steps to increase efficiency through the incorporation of innovative technologies.  The ability of the hospital to apply Aidoc’s solution into their already existing GE PACS without making any changes to their workflow is revolutionary for both the patients and the radiologists.  The adoption by Antwerp University Hospital is expected to be quickly followed by other top hospitals in the region.  (Aidoc 21.01)

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9.1  mPrest Partners With SDG&E to Deliver Intelligent Underground Distribution Cable Analytics

mPrest has delivered to San Diego Gas & Electric (SDG&E) its URD Cable Fleet Maintenance Optimization application, an AI enhanced tool that predicts impending cable failures and enables SDG&E to optimize URD cable fleet maintenance operations.  mPrest and SDG&E will be jointly delivering a paper that presents their breakthrough data-driven approach to URD cable maintenance at the upcoming DistribuTECH 2019 conference.

Utilities’ limited visibility into the condition of their cable fleets makes it difficult to prioritize maintenance and replacement activities, predict impending failures, and prevent them before they happen.  Using AI and a combination of system information, and the utility’s operations and engineering insights, mPrest is able to provide an application that provides superior operational and financial results.  mPrest’s interactive budget optimization tool allows SDG&E’s technical teams to import and analyze historical data regarding failures and current fleet performance.  They can then obtain a breakdown of the most relevant features affecting cable lifespan, as well as a detailed and prioritized list of cable segments to be replaced given a specified budget.

By gaining better insight into cable failure probability, at a segment level, SDG&E is now able to implement intelligent predictive maintenance, thus reducing the need for costly reactive cable replacement.  By combining financial and analytical tools, SDG&E’s financial team can build a proactive budget, based on the cable replacement prices for the reactive and proactive cases, broken down into both CapEx and OpEx costs.

Tel Aviv’s mPrest is a global provider of mission-critical monitoring, control and big data analytics software.  Leveraging the power of the Industrial IoT, mPrest’s integrative “system of systems” is a proven catalyst for digital business transformation.  Their innovative management solutions have been deployed in next-gen applications for carrier service providers, system integrators, smart cities as well as IoE (Internet of Energy) applications for power utilities, defense and HLS.  (mPrest 14.01)

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9.2  Magal Awarded $2.5 Million for an Integrated Security Solution for the Spanish Port of Huelva

Magal Security Systems has won a $2.5 million contract to deliver technology and services to the Port of Huelva in Spain.  This new project is an extension of the overall security solution which was delivered by Magal to the port in prior years.  The solution includes the coverage of the port’s perimeter with anti-climb smart fences, combined day/night and thermal cameras using dual thermal and CCD technologies.

Yehud’s Magal is a leading international provider of solutions and products for physical and cyber security, as well as safety and site management.  Over the past 45 years, Magal has delivered tailor-made security solutions and turnkey projects to hundreds of satisfied customers in over 80 countries – under some of the most challenging conditions.  (Magal Security Systems 14.01)

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9.3  COTI Launches TestNet – Aimed at Streamlining Remittance Payments & Stablecoins

COTI has just launched its TestNet.  The move will bring enterprises, merchants, governments, decentralized payment networks and stable coin issuers that much closer to making digital currencies viable for everyday mainstream use.  A number of companies will soon begin using COTI’s technology, including payment processors like, top remittance companies such as Millenning, stable coins like Ormeus Cash (OMC), and countless others.  Orme’s Trustchain integration will enable OMC to be accepted by merchants all around the world as payment for goods and services while bypassing the roadblocks experienced by traditional blockchain-based payment networks.

As for Millening, it will be utilizing COTI’s Trustchain technology to supply users with optimized remittance solutions from Singapore to European countries and other locations around the world.  With COTI’s extreme scalability, near zero fees and price stability mechanisms, cross-border remittances will become instantaneous, low cost and highly secure.  The TestNet release features a number of key innovations from the COTI R&D team, including the Trust Score Update Algorithm (TSUA), Arbitration Service, one-click payment requests, DSP consensus, node managers and more.

COTI’s TSUA has been designed to efficiently collect data on user behavior and to relay the information to decentralized Trust Score Nodes. Trust Scores are then updated and used by the Trustchain Algorithm to validate and confirm transactions faster at a rate of tens of thousands of transactions per second (TPS).  COTI has also developed an Arbitration Service that offers dispute resolution through a decentralized collective of highly trusted network participants.  This is a major development in the cryptocurrency sphere, which currently does not safeguard users against errors, fraud and counterparty abuse.  (COTI 14.01)

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9.4  BigID & Ionic Security Enhance Data Governance & Privacy for Multi-Cloud Compliance

BigID and Atlanta’s Ionic Security, a pioneer of high-assurance data trust, announced a partnership to enable organizations to automate policy enforcement and auditability driven by data intelligence.  The partnership removes barriers to cloud adoption for organizations struggling with compliance, allowing them to take a consolidated and granular approach to protecting sensitive data by integrating BigID discovery and classification with the Ionic Data Trust Platform’s real-time policy management.  Together, BigID and Ionic provide an automated, accurate, and scalable solution that identifies, classifies, and enforces data control policies over sensitive personal information and other critical data.  This reduces the risk of unauthorized access and ensures compliance with the growing body of data privacy and protection laws and regulations.

Enterprises can limit risks, along with the potential exposure from manual control misconfiguration, cloud environment policy silos and cloud lock-in, through the programmatic integration of BigID’s data intelligence with the persistent and real-time policy enforcement capabilities of Ionic’s Data Trust Platform.  This integration allows organizations to gain the cost, operational, and functional benefits of cloud services while balancing security, privacy, and compliance risks.  The current integration will be available to new and existing customers immediately.  BigID and Ionic plan to extend the scope of the partnership through support for additional use cases and leverage BigID’s technology advances in unstructured data discovery over the course of 2019.

Based in New York and Tel Aviv, BigID uses advanced machine learning and identity intelligence to help enterprises better protect their customer and employee data at petabyte scale.  Using BigID, enterprises can better safeguard and assure the privacy of their most sensitive data, reducing breach risk and enabling compliance with emerging data protection regulations like the EU General Data Protection Regulation.  (BigID 16.01)

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9.5  Syte Announces New Visual Search Navigation Tool for Retailers

Syte is releasing a new Visual Search Navigation tool for retailers which will allow their shoppers to navigate, filter, and search for products entirely through visuals.  With Syte’s Visual Search Navigation (VSN) implemented on a retailer’s site, shoppers can filter and browse using visual icons. VSN allows shoppers to show, instead of explain, what they are looking for.  With Syte’s Visual Search Navigation (VSN) implemented on a retailer’s site, shoppers can filter and browse using visual icons. VSN allows shoppers to show, instead of explain, what they are looking for.

Powered by their pre-existing Deep Tagging solution which uses visual AI to assign detailed textual tags to a retailer’s inventory using only the product image, Visual Search Navigation will allow shoppers to use animated icons to guide their product navigation.  Users can narrow down their search until they are left with a batch of products that match exactly what they were searching for.

Tel Aviv’s Syte is a visual AI technology provider that improves retailer’s site navigation, product discovery and user experience by powering solutions that engage and convert shoppers.  With Syte, retailers can leverage shoppers’ inspiration and existing product interest to ensure they present the right products at the right time.  Partnerships with technology innovators such as Microsoft, SAP, Naver and Oracle have established Syte as a leader in the market.  Powering the visual search within Samsung and other leading phone manufacturers allows Syte to increase the reach of their retail clients.  Brands currently using Syte’s technology include Farfetch, Nike, Marks & Spencer and Bonprix.  (Syte 16.01)

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9.6  Eyesight Bringing Advanced Driver Monitoring to Automotive World

Herzliya Pituah’s Eyesight, the leading AI computer vision company, demonstrated its cutting-edge “Driver Sense” Driver Monitoring System (DMS) at Automotive World in Tokyo.  The announcement comes after Eyesight was given an Excellence Award for promoting trade relations between Israel and Japan.

Eyesight’s Driver Sense, Driver Monitoring System, monitors a driver’s gaze direction, pupil dilation, eye openness, blink rate and head position.  Using ultra-efficient algorithms, it detects levels of drowsiness and distraction quickly, even on low-power embedded systems.  The system also recognizes the identity of the driver, allowing for automatic customization of the seat, mirrors and entertainment.  Eyesight is also celebrating the announcement that the company has won a special award for excellence in promoting trade relations between Israel and Japan in the field of computer vision and AI.  The award, from the Israel-Japan Friendship Society and Chamber of Commerce, recognizes Eyesight’s leading position in the computer vision sector and its relationships with Japanese technology companies.

Eyesight’s Driver Sense DMS has won design awards with leading “Tier-1” companies in the industry, who will integrate the technology into their new vehicles.  Eyesight recently announced that it had teamed up with Samsung to provide a bundled hardware and software solution that will offer advanced capabilities and quick time to market for the carmakers and Tier-1 manufacturers.  Additionally, Eyesight’s is now offering “Fleet Sense” an aftermarket DMS solution to be used to monitor and protect drivers and other road users in the fleet industry, where drowsiness can be a particular problem.  (Eyesight 16.01)

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9.7  Ethernity Networks Successfully Completes Delivery of Its ACE-NIC100 for Major Korean OEM

Ethernity Networks has successfully completed delivery of its 100Gbps ACE-NIC100 FPGA SmartNIC to a major Korean OEM.  The ACE-NIC100 will be incorporated into commercial off-the-shelf (COTS) servers that come with fewer CPU cores compared to regular data center servers, resulting in significant power and cost reduction.  The combination of the powerful ACE-NIC100 with edge-optimized COTS servers deliver a high-performance yet affordable and energy efficient platform, ideal for network edge virtualization.  The contract between Ethernity and the Korean OEM specified the final delivery of a customized solution on FPGA, embedding Ethernity’s rich networking features including hierarchical QoS, flow classification, protocol offloading, and routing, with scheduled end-of-year acceptance by the customer.

Lod’s Ethernity Networks provides innovative software-defined networking and security solutions on programmable hardware for accelerating telco/cloud networks.  Ported onto any FPGA, Ethernity’s software offers complete data layer processing with a rich set of networking features, robust security, and a wide range of virtual functions to optimize your network.  Their ACE-NIC smart network adapters, ENET SoCs, and turnkey network appliances offer best-in-class all-programmable platforms for the telecom, cloud service provider, and enterprise markets.  (Ethernity Networks 16.01)

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9.8  Brose & Vayyar Collaborate On Sensor Technology for New Door and Seat Functions

German automotive supplier Brose is now working together with sensor specialist Vayyar on the realization of autonomous vehicles by integrating innovative sensor systems in power adjustment systems and drives in interior and exterior applications.

Electronics play a key role in this endeavor. Brose is a world market leader in mechatronic systems for doors and lift gates, as well as a leading supplier of power seat structures.  The company also has more than 30 years of experience in the field of electronics where it has around 600 employees and supplies over 75 million electronic systems and sensors annually.  Brose doors, equipped with Vayyar’s sensors, enable a full protection of the door without compromising design and at a minimal footprint in a single location.  Precise interior monitoring in 3D adds functions such as anti-theft protection, gesture control and recognition of vital signs such as breathing rates.  Precise sensing of occupancy and the position of seats also makes it possible to eliminate previously required components.  Customers value this approach to doors and interior monitoring: there have been several development requests and the companies have already equipped the first test vehicles with prototypes.

Yehud’s Vayyar Imaging is changing global markets with its cutting-edge 3D imaging sensor technology. Its elite, proprietary sensors quickly and easily look into objects or any defined volume and detect even the slightest anomalies and movements to bring highly sophisticated imaging capabilities to users’ fingertips.  Utilizing a state-of-the-art embedded chip and advanced imaging algorithms, Vayyar’s mission is to help people worldwide improve their health, safety and quality of life using mobile, low-cost, and safe 3D imaging sensors.  (Brose North America 15.01)

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9.9  Kornit Digital Launches the Atlas, the Next-Generation Direct-To-Garment Printing Platform

Kornit Digital announced the introduction of the Kornit Atlas.  Following the success of Kornit’s Storm HD6 and Avalanche HD6 / HDK, the Atlas is the first instance of the company’s next-generation direct-to-garment printing platform, providing garment decorators and screen printers a unique tool for mastering the current and future challenges of the textile supply chain.

The Kornit Atlas is a heavy-duty system created for super-industrial garment decoration businesses.  It was designed to deliver a typical annual production capacity of up to 350,000 impressions, optimizing production efficiency and cost of ownership.  The Kornit Atlas is aimed at highly productive garment decorators, mid to large size screen printers and innovative businesses looking to combine state-of-the art technology with lowest cost of ownership.  The system is equipped with new recirculating print heads and comes with a newly developed ink, NeoPigment Eco-Rapid.  The Kornit Atlas is equipped with a unique printing engine, featuring an enhanced version of Kornit’s HD technology, complemented by a professional RIP (raster image processing) software solution, and produces prints that meet the highest standards of retail quality and durability.  The all-new Atlas comes ready for Kornit’s future releases of its cloud-based business intelligence, productivity analytics and optimization software platforms, scheduled to be released in the second half of 2019.  It will allow for easy future network connectivity required to support fleet management and optimization of global multi-systems and multi-site enterprises.

Rosh HaAyin’s Kornit Digital develops, manufactures and markets industrial digital printing technologies for the garment, apparel and textile industries.  Kornit delivers complete solutions, including digital printing systems, inks, consumables, software and after-sales support.  Leading the digital direct-to-garment printing market with its exclusive eco-friendly NeoPigment printing process, Kornit caters directly to the changing needs of the textile printing value chain.  Kornit’s technology enables innovative business models based on web-to-print, on-demand and mass customization concepts.  With its immense experience in the direct-to-garment market, Kornit also offers a revolutionary approach to the roll-to-roll textile printing industry: Digitally printing with a single ink set onto multiple types of fabric with no additional finishing processes.  (Kornit Digital 15.01)

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9.10  ELTA Systems to Supply Compact Multi-Mission Radars to Finland

ELTA Systems, a subsidiary of Israel Aerospace Industries (IAI), was awarded a “significant” contract to supply Compact Multi-Mission Radars (C-MMR) ELM-2311 to the Finnish Defense Forces.  Operationally proven, the radars will provide the Finnish Army with the capability of locating and tracking incoming Rockets, Artillery shells, and Mortars (RAM), and shall provide an interface for alerting the Army’s counter weapons systems.  Supporting multi-mission capabilities, the radar can simultaneously operate as Artillery Weapon Location and Air Surveillance radar, thereby seriously inhibiting an opponent’s use of aerial threats.  The radar was tested in Finland in spring 2018 to the customer’s satisfaction.  The systems are scheduled to be delivered in 2021.

The ELM-2311 is a compact mobile C-band radar system.  The radar implements advanced 3D Active Electronically Steered Array (AESA) antenna technology and is transportable on a single vehicle for maneuvering forces.  The radar locates hostile weapon locations and calculates Point of Impact (POI) and Point of Origin (POO) in real time while simultaneously providing friendly-fire ranging.

ELTA has sold over 100 MMR systems worldwide.  They have been deployed and are fully operational and combat-proven.  The MMR family has grown and evolved throughout the years to offer capabilities for air surveillance, air defense, Artillery Hostile Weapon Location and Friendly Fire Ranging.

Ashdod’s ELTA Systems (, a group and subsidiary of Israel Aerospace Industries, is one of Israel’s leading defense electronics companies and a global leader in its area of expertise.  ELTA operates as a Defense Systems House, focused on electromagnetic sensors (Radar, Electronic Warfare and Communication) and integrated solutions.  ELTA Systems’ products are designed for Intelligence, Surveillance, Target Acquisition and Reconnaissance (ISTAR), Early Warning and Control, Homeland Security (HLS), Self-Protection and Self-Defense, and Fire Control applications.  ELTA Systems’ products include systems, subsystems and critical technological sub-assemblies and components, designed and produced in-house.  (IAI 21.01)

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9.11  VDOO Releases Runtime Protection Agent for Connected Devices

VDOO announced the availability of its ERA – Embedded Runtime Agent for ongoing connected device security.  The VDOO agent is automatically tailored for each device based on an analysis of its firmware binary by Vision – VDOO’s analysis platform, focusing on the device’s threat landscape and resources, while avoiding any significant performance or functionality impact to the device.

VDOO’s end-to-end platform facilitates security and trust for IoT devices throughout the entire device lifecycle in a cost and effort efficient manner — from security analysis to implementation, certification and post-deployment security enablement.  The VDOO Vision Analysis Platform is a web-based service that performs automated analysis of a device’s firmware and determines its security gaps and requirements.  Following the device’s analysis, the VDOO platform offers detailed guidance for vendors to efficiently and properly implement the identified requirements.  Once security features have been implemented, the platform validates this, and provides a physical and digital certification to communicate the device’s security standing to the world.

Completing the end-to-end solution are the VDOO Embedded Runtime Agent (ERA) and Honeypot (Quicksand).  The agent just released provides post-deployment detection, prevention, and mitigation capabilities against zero-days, known attack methods, and embedded devices’ malware. VDOO’s IoT honeypot works on a physical device or via emulation, providing intelligence to prepare mitigations, predict future attacks, and reveal new vulnerabilities.

Herzliya’s VDOO was established in 2017 to pioneer the space of embedded systems, with an end-to-end solution of security automation, certification, and protection. The VDOO founders’ backgrounds include an endpoint cybersecurity startup acquired by Palo Alto Networks, as well as notable experience serving in the Israeli Intelligence Elite Unit.  (VDOO 21.01)

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10.1  Israel’s Inflation Falls by 0.3% in December, Housing Prices Still Falling

Israel’s Consumer Price Index (CPI) fell by 0.3% in December, the Central Bureau of Statistics reported on 15 January, in the lower range of analysts’ predictions.  The CPI rose 0.8% in 2018, below the Bank of Israel’s annual target range for inflation between 1% and 3%.  This was the second successive month that the CPI fell 0.3%, largely due to the fall in oil prices on world markets.  Notable price falls in December included fuel for vehicles (7.1%), accommodation and travel (9.9%) and fresh vegetables (1.2%). Notable price rises included clothing (4.3%) and fresh chickens (1%).

The Central Bureau of Statistics also published the Housing Price Index today for October – November.  The index showed that the price of the average deal falling 0.4% in October-November compared with September-October.  Housing prices have fallen 2.3% over the past 12 months.  (CBS 15.01)

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10.2  Israel’s Third Quarter Growth Figure Revised Upwards

The Central Bureau of Statistics announced on 16 January that Israel’s GDP grew by an annualized 2.3% in Q3/18.  The figure was upwardly revised from the previous 2.1% estimate and is now the same as the initial estimate from November 2018.  The economy grew by 0.6% in the second quarter and 4.4% in the first quarter.  Business product grew by an annualized 2.0% in the third quarter, following increases of 1.4% in the second quarter and 4.6% in the first quarter.

Imports of goods and services rose by an annualized 5.3% in the third quarter, after rising only 0.1% in the preceding quarter.  Spending on private consumption was up by an annualized 2.3% in the third quarter, and per capital spending on private consumption rose by 0.3%.  Per capita spending on private consumption in annualized figures fell 4.2% in the second quarter and jumped 7.3% in the first quarter.  Investment in fixed assets plummeted by an annualized 10.4% in the third quarter of 2018, following a 5.7% drop in the preceding quarter.  (CBS 16.01)

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10.3  Israel’s Unemployment Level Reaches Low of 4.1% in 2018

Unemployment in 2018 dropped to an all-time low of 4.1% of the population, according to figures published by the Israeli Employment Service.  The number of claims for guaranteed minimal income from the government dipped by 11%, and over the past five years, the total number of people filing that claim has dropped by 39%.  Over the course of 2018, the monthly average of people who were fired or quit their jobs stood at 20,300 – compared to a monthly average of 19,600 in 2017.  In total, 402,730 people filed unemployment claims in 2018, a 4.4% drop compared to the previous year.  (Various 14.01)

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10.4  Israel Climbs to 5th Place in Bloomberg Innovation Index

Bloomberg ranked Israel in fifth place in its innovation index for 2019, ahead of the US (eighth place), Singapore (sixth place) and Japan (ninth place).  The annual index is being published for the seventh time.  Israel was rated 10th place last year, with better patent registration being responsible for a large part of the improvement in ranking.  Bloomberg put South Korea in first place on the index for the sixth time, due to new investments in key technologies and a regulatory plan for encouraging startups. Germany advanced into second place due to investment in production and research by many of its industrial giants, such as Volkswagen, Daimler, and Bosch.  Third and fourth places were taken by Finland and Switzerland, respectively.  (Globes 22.01)

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11.1  ISRAEL:  IVC–Meitar Exit Report 2018: Israeli Exits Reached $12.63 Billion in 103 Deals

In 2018, exits activity reached $12.63 billion in 103 deals, including four large deals, each over $1 billion:

-Orbotech – acquired by KLA-Tencor for $3.4 billion (Subject to closing)

-Imperva – acquired by Thoma Bravo for $2.1 billion

-Mazor Robotics – acquired by Medtronic for $1.6 billion (Subject to closing)

-SynaMedia (formerly NDS) – acquired by Permira for $1 billion

The total number of exit deals slightly decreased to 103 compared to 133 in 2017. According to IVC–Meitar Exit Report, the decrease is due to a decrease of M&A deals of $20 million and below.

Shira Azran, Partner at Meitar Liquornik Geva Leshem Tal & Co.: “The aggregate value of the exits in 2018 was significant, approx. $12.63 billion.  A closer look at the data reveals mixed trends. On the one hand, four exits exceeded $1 billion and these deals have become part of the industry.  On the other hand, during 2018 we saw a decrease in the number of exits of private companies between $250 million and $ 1 billion.”  According to Azran: “An examination of the investment data indicates an increase in 2018 in general, and in particular, the number of large-scale investments in growth companies increased significantly.  For example, the number of companies raising amounts of more than $30 million, rose to a peak of 62 transactions in 2018.  This combination of a significant increase in the volume of investments in growth companies and a relative stagnation in exits value, highlights the fact that Israel is building a strong and significant infrastructure of companies that in the coming years will examine their ability to reach an exit that reflects a significant return to investors”. Azran adds that “examining worldwide trends, shows a trend of decrease in the number of transactions compared to an increase in overall value.  This trend, in addition to consolidation of buyers, leads us to believe that in order to realize significant exit value buyers will be looking mainly for companies whose acquisition will lead to a significant impact on their activity.  For certain companies this may mean that their right course of action will be to consolidate resources, thereby enabling a more significant fingerprint that will appeal to international buyers. ”

Exits by Type and Deal Size

While VC-backed deals remained at stable levels in 2018, a significant drop of 58% was noted in the non-VC-backed exits.

2018 IPO and Buyout numbers retained their historical ranges.  Five Israeli life science companies completed their IPO in the US, raising an aggregate of $246 million.  Three Israeli companies completed an IPO in Australia, raising a modest $12 million.

M&A values in 2018 totaled $11.1 billion compared to $6.3 billion in 2017.  M&A numbers dropped 20% from 111 to 89 transactions in 2018.  The four large exits above $1 billion counterbalanced a decline in the number of exits in the range of $250 million to $1 billion, from five in 2016 and eight in 2017 to just three in 2018*.

* Excluding exits over $5 billion, public companies and divestitures.

Benzi Segev, CEO of IVC Research Center: “The Israeli start-up landscape in 2018 took another step in the global direction of more money funneled into less deals.  This pattern was noted on both sides of the tech deal activity – M&A and funding. Looking 12 to 18 months ahead, the fundamentals for long term growth already exist – amounts and numbers of large investments are on the rise, but it remains to be seen if the local scene could use these resources to grow.”

Exits Ratio and Time to Exit

Analysis of exit value versus amount invested showed the average ratio continuing to decline mostly in non-VC-backed companies, from 5.19 in 2017 to 4.79 in 2018.  The VC-backed ratio declined to 2.61 compared to 2.92 in 2017.

According to the IVC-Meitar Exit Report, in 2018 there were 34 VC-backed companies reaching an exit after more than five years of activity, similar to the level in the last 5 years for VC-backed exits. However, the number of non-VC-backed companies that reached an exit in less than 5 years since establishment decreased nearly 60% in 2018, to only 15, compared to 34 and 36 in 2016 and 2017, respectively.

Exits by Sector and Technology Clusters

In 2018, the number of life sciences companies with exit activity continued to grow (24 deals including 7 IPOs). Exit values kept to the same level as 2017, reaching $2.98 billion.

While the number of deals in the IT & software sector remains stable, the value of 2018 exits increased to $4.49 billion from $3.31 billion in 2017.

AI (Artificial Intelligence) exit values soared in 2018 mostly due to the Datorama deal ($850m), reaching $1.15 billion, almost four-times higher compared to $307 million in 2017.  This increase positively affected the AI exit ratio, 7.02 in 2018 compared to 2.11 in 2017.  The number of AI exits remains in historical figures.

Cyber security exit values in 2018 set a record – $2.81 billion in 12 deals compared to $1.35 billion in 14 deals in 2017.  The cyber exit ratio dramatically increased to 14.91 compared to 3.89 in 2017.

IVC Research Center is the leading online provider of data and analyses on Israel’s high-tech & venture capital industries. Its information is used by all key decision-makers, strategic and financial investors, government agencies, and academic and research institutions in Israel.  IVC-Online Database  showcases over 8,300 Israeli high-tech startups, and includes information on private companies, investors, venture capital and private equity funds, angel groups, incubators, accelerators, investment firms, professional service providers, investments, financings, exits, acquisitions, founders, key executives and multinational companies.

Meitar Liquornik Geva Leshem Tal is Israel’s leading international law firm and undisputed leader in the technology sector.  The firm’s Technology Group numbers over 100 seasoned professionals who specialize in representing technology companies, cooperating with attorneys from complementary practice areas, such as taxation, intellectual property, and labor law and dozens of attorneys from other practice areas.  (IVC-Meitar 15.01)

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11.2  GCC:  Moody’s Says Stable Outlook But Reforms & Unemployment Pose Challenges

On 16 January, Moody’s Investors Service says that its outlook for sovereign creditworthiness in 2019 in the Gulf Cooperation Council (GCC) is stable overall, reflecting its expectations for the fundamental credit conditions that will drive sovereign credit over the next 12-18 months.  Stronger oil prices during most of 2018 reduced fiscal and external pressures for GCC countries in the short term.  But periods of higher oil prices tend to undermine the impetus for governments to diversify their fiscal bases and rein in spending, leaving their credit profiles exposed to future phases of lower oil prices.

In 2019, geopolitical tensions will also remain a key source of risk, as well as a catalyst for rising military-related fiscal spending.  Longer term, climbing unemployment if nationalization policies do not increase job availability to match demand from nationals will pose political and social risks.

Five of the six GCC governments that Moody’s rates currently have a stable outlook, while one, Oman (Baa3 negative), has a negative outlook.  At the start of 2018, by contrast, three of the six carried a negative outlook.  While the likelihood of downgrades has diminished, it is partly from lower rating levels, following actions on Bahrain (B2 stable) in 2018.

GDP growth in the GCC will be broadly unchanged this year, as the cuts in oil production agreed by OPEC+ nations lead to stable or slightly decelerating oil GDP growth, while non-oil GDP growth picks up only modestly.  Against that backdrop, Moody’s expects unemployment to be broadly unchanged or rise slightly further across the region.  Over the longer term, demographic trends will cause joblessness to climb, unless the participation of nationals in the private sector increases significantly.

With most fiscal reforms now likely behind the GCC, oil prices and production will be the major drivers of fiscal balances over the coming year.  Under Moody’s current assumptions of oil prices averaging $75 per barrel (bbl) in 2019, fiscal balances will strengthen modestly compared to 2018.

However, the sharp drop in oil prices in the fourth quarter of 2018 highlights the vulnerability of GCC governments’ credit profiles to future oil price declines.  Should prices stay near $60/bbl, budget deficits would be materially wider and debt likely higher than we currently project.

Geopolitical tensions will also continue to simmer and could escalate in 2019 if the re-imposition of economic sanctions on Iran prompts it to embark on a more interventionist foreign policy stance in the Middle East.  Military spending in many GCC states is already elevated, and a pickup in tensions prompting increased defense expenditure could put additional pressure on fiscal balances.  A closure of the Strait of Hormuz by Iran would have a sizeable impact on GCC sovereigns’ credit profiles, but remains relatively unlikely.  (Moody’s 16.01)

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11.3  GREECE:  S&P Affirms Greece’s ‘B+/B’ Ratings; Outlook Positive

On Jan. 18, 2019, S&P Global Ratings affirmed its ‘B+/B’ foreign and local currency long- and short-term sovereign credit ratings on Greece. The outlook is positive.


The positive outlook signifies that we could raise our ratings on Greece within the next 12 months if the economic recovery strengthens.  This could result from further economic reforms implemented by the government.  Another potential trigger for an upgrade would be a marked reduction in nonperforming assets in Greece’s impaired banking system, as well as the elimination of all remaining capital controls.  Mitigation of fiscal risks related to the pending court decisions regarding the past pension system reforms could also trigger a rating upgrade.

We could revise the outlook to stable if, contrary to our expectations, there are reversals of previously implemented reforms, or if growth outcomes are significantly weaker than we expect, restricting Greece’s ability to continue fiscal consolidation, debt reduction, and financial sector restructuring.


Our ratings on Greece reflect the stabilizing economic outlook, accompanied by solid budgetary performance and a very favorable government debt structure, balanced against the country’s high external and public debt burdens as well as a difficult situation in the banking system, characterized by a large stock of nonperforming loans, a challenged monetary transmission mechanism, and capital controls.

In terms of maturity and average interest costs, Greece has one of the most advantageous debt profiles of all our rated sovereigns.  Our rating pertains to the commercial portion of Greece’s central government debt, which is less than 20% of total Greek debt, or less than 40% of GDP.  The final disbursement from the European Stability Mechanism (ESM) program provided Greece with a sizable cash buffer, which we estimate will meet central government debt servicing into 2022.  We project that Greece’s debt-to-GDP ratio will decline from 2019, aided by a recovery in nominal GDP growth.

Institutional and Economic Profile: Following the ESM program exit, Greece’s economic recovery prospects are promising

-Greece graduated from its ESM program in August 2018, having secured further debt relief and a sizable cash buffer.

-We project that the economy will grow by 2.4% on average over 2019-2022 as domestic demand strengthens and solid export performance continues.

-The pace of further economic reforms may be negatively affected by potential political maneuvering during 2019, an election year.

Following real GDP growth that we estimate at about 2.1% in 2018, we expect the economy will expand by about 2.4% in 2019, before the pace gradually strengthens over 2020-2022.  Employment growth continues to be solid: We forecast above 2% growth annually through 2022, although the economy would benefit from a higher share of permanent jobs, given that in 2018 slightly more than half of new employees were hired on temporary contracts.

Over the next three years, we expect Greece’s economic growth will surpass the Eurozone average, including in real GDP per capita terms, reflecting a steady recovery following a deep and protracted economic and financial crisis.  We also expect economic performance to remain balanced, with domestic demand and exports continuing as the key drivers of growth.  In this context, we expect slowly rising private consumption on the back of improved employment prospects.  A key constraint on the economic outlook remains authorities’ decision to subordinate public investment spending (including on education) to current expenditure, particularly on social transfers.  The outlook for private investment is also still subdued, given the challenges to the banking sector, and only modest net foreign direct investment (FDI) inflows compared with peers.

Absent the materialization of external risks, such as from mounting global protectionism and a faster-than-forecast slowdown in Eurozone economic growth, Greece’s export sector is well positioned to benefit from its reinforced competitiveness.  In this context, Greece’s labor cost competitiveness has improved to its level before 2000 and, together with the reorientation of domestic businesses from domestic to external demand, has resulted in almost a doubling of the share of exports of goods and services (excluding shipping services) in GDP terms, from 19% in 2009.  Greece’s market shares in global trade have increased correspondingly and we expect further gains over the forecast period through 2022.

Since 2015, policy uncertainty has receded, and in August 2018, the Syriza-led government exited the country’s third consecutive lending program, having overseen large fiscal and external adjustments.  Nevertheless, we believe that a faster economic recovery could result from additional reforms to the product and services markets as well as improvements in the banking sector with respect to its capacity to fund the economy.

Although Greece’s labor cost competitiveness has been restored, we believe that its competitiveness in other areas remains weak.  While its labor market is arguably highly flexible, Greece compares poorly with its peers due to its many impediments to competition in its product and professional services markets, alongside relatively weak property rights, complex bankruptcy procedures, an inefficient judiciary and the low predictability of the enforcement of contracts.  As a consequence, while net FDI inflows have recently improved, they may not be sufficient to fund a more powerful economic recovery.  At the same time, a possible reversal of labor reform, which could reintroduce collective wage negotiations at the national level, might weaken the ongoing recovery in the job market by reducing companies’ flexibility to navigate a tough economic situation.  Over the long term, however, in the absence of reforms to the business environment, we think that GDP growth is unlikely to exceed 3% on a sustained basis, constrained by administrative burdens and anti-competitive behavior across the economy – particularly concentrated in the services sector.

The inability of Greece’s banks to finance the economy is also weighing on the strength of the recovery.  Without access to working capital, the broader small and midsize enterprise sector–the economy’s largest employer–remains in varying degrees of distress.  Private sector default is widespread, including on tax debt, and the process of declaring bankruptcy is particularly convoluted relative to EU norms.  Moreover, the economy’s ability to attract foreign investment to finance growth remains weak.  Complacency in addressing structural problems may not adversely affect macroeconomic outcomes or sovereign debt servicing ability in the medium term, but would likely cap Greece’s growth prospects in the long run.

Following the successful termination of the ESM program, Greece is subject to quarterly reviews by the European Commission under the “enhanced surveillance framework.”  Ongoing debt relief and the return of profits on Greek bonds held by the European Central Bank (ECB) and the Eurozone’s national central banks will be subject to ongoing compliance with the program’s objectives.  The use of the cash buffer for purposes other than debt servicing will have to be agreed with the European institutions.  We therefore believe that the Greek authorities will be strongly incentivized to avoid backtracking markedly on most previously legislated reforms.

The next general election is scheduled for October 2019, although early elections cannot be excluded given the recent departure of the government’s junior coalition partner.  Given that 2019 will also see local and European elections, it is very likely that the polarization of the political landscape will escalate in the coming months.  In our view, this represents a risk that areas such as privatization, increasing the efficiency of the judicial system, and further improvements in the business environment will face delays.  Moreover, a more resolute approach toward the reduction of nonperforming exposures (NPEs) in the banking sector may see little further progress before the electoral challenges play out.  However, we expect Greece’s economic and budgetary policies to broadly comply with its commitments made at the time of the termination of the ESM program.

Flexibility and Performance Profile: Greece’s government debt is finally declining

-We project general government debt will decline during 2019-2022.

-The creation of cash buffers via the final ESM program disbursement limits risks to debt repayments over our forecast horizon.

-Although improved, the banking sector faces multiple challenges.

Following a large budgetary adjustment since the start of the economic and financial crisis, Greece has established a track record of exceeding budgetary targets via rigid expenditure controls and improved revenue performance.  In 2018, we estimate that the primary balance was about 3.7% of GDP, outperforming the target agreed with the creditors of 3.5% of GDP, although slightly below the government’s own target of 4.0% of GDP.  The underperformance against the government’s own target is mainly a result of a delayed payment to the government for the concession of Athens International Airport, now scheduled for January 2019.  As a result of the better-than-planned budgetary performance, contingent deficit reducing measures, such as pension spending cuts, did not need to be implemented.  The 2018 performance was characterized by higher government revenues, in particular from higher indirect taxes, which appears to have nevertheless been lower than the government’s own plans.  In addition, primary expenditure was lower than budgeted (government expenditure without interest payments), reflecting compliance with the spending restraints in place, including in health care and the public sector wage bill.  While headline consolidation progress has been dramatic, it is notable that key components of spending on human capital, particularly on education and health, have been cut sharply to below European averages since the beginning of the crisis.

The 2019 budget includes a series of measures aimed at improving hiring incentives, including focusing on reducing the temporary character of the current employment structure.  For example, in the education sector, 4,500 teachers and specialized staff will be hired on a permanent basis for positions currently occupied by temporary teachers, without an impact on the overall headcount in the public sector.  The budget also includes a reduction of social security contributions for independent professionals, the self-employed, and farmers, as well as a subsidy to social security contributions for the young.  Finally, the government aims at reducing the tax burden on the economy by reducing tax rates on corporate income, dividends and basic property.

The execution of the 2019 budget could be negatively affected by pending court rulings on a past government decision on public sector wages, as well as on the 2012, 2015, and 2016 pension system reforms.  In our view, this would make compliance with the 2019 primary balance target more difficult.  Moreover, given the upcoming elections, political maneuvering of the government could lead to lower compliance with its expenditure ceiling.

If these risks do not materialize, we project that in 2019-2022 Greece will report general government primary surpluses above the 3.5% of GDP target agreed with official creditors, which should see gross general government debt decrease to about 150% of GDP in 2022 from an estimated 181% in 2018.  Net of cash buffers, we project that net general government debt will decline below 140% of GDP in 2022.  Even in nominal terms, we forecast gross general government debt to decline from 2019, in line with the central government amortization schedule and our expectation of headline fiscal surpluses.

Despite the size of its debt, the average cost of servicing this debt, at 1.7% at the end of 2018, is significantly lower than the average cost of refinancing for the majority of sovereigns rated in the ‘B’ category.  We anticipate that, even with increasing commercial debt issuance, the proportion of commercial debt will remain less than 20% of total general government debt through year-end 2021.  We therefore expect a gradual reduction in interest costs relative to government revenues. We estimate the average remaining term of Greece’s debt at 18.5 years in September 2018, although this is set to increase further with the implementation of the debt relief measures granted in June.

In 2018, Greek banks made further progress in reducing their NPE stocks, which at the end of June stood at €88.6 billion (excluding off-balance-sheet items) from the peak in March 2016 when they reached €107.2 billion.  Despite the improvement in reducing the stock of NPEs, about one-third of banks’ loan books are likely to remain impaired until 2021 even if their ambitious plans to tackle NPEs succeed.  Initiatives to tackle the high stock of NPEs are underway, including the implementation of out-of-court restructuring, the development of a secondary market, and electronic auctions.  However, we think that write-offs will remain one of the most important means of reducing these exposures over the next few years.  The large stock of NPEs constrains the effective transmission of ECB monetary policy into the Greek economy, in our opinion. Based on experience in other peers, like Spain, Ireland, Slovenia and Cyprus, we believe that a faster decline in NPEs may not be possible without a more resolute approach and involvement of additional government support.  We therefore consider the banking sector as a moderate contingent liability for the government’s balance sheet.  Besides constraints on effectiveness of monetary policy transmission emanating from the abovementioned large NPEs in the banking sector, the Greek economy’s unsynchronized character with respect to the rest of the monetary union in terms of price trends and capital controls weigh on our monetary assessment.

At the same time, the liquidity of the banking system has significantly improved.  The banks continued to reduce their reliance on official ECB financing, including on the more costly emergency liquidity assistance, which we expect to be fully repaid in early 2019.  An uptick in deposits has helped, as have repurchase transactions with international banks.  While deposits into the banking system have been growing–household and corporate deposits grew by about 6% in 2018 – confidence has not returned to the extent that would enable a full dismantling of capital controls, although these have been eased, most recently in October 2018.  Over the past year, Greece’s systemically important banks have issued covered bonds – like the sovereign, this was their first market foray since 2014.  With Greece having graduated from the ESM program, its banks lost the waiver that allowed them to access regular ECB financing using Greek government bonds as collateral.  However, despite the loss of the waiver, the banks’ funding was not disrupted.

Greece has had a significant adjustment in its external deficit.  The current account deficit fell from nearly 14.5% of GDP in 2008 to the record low of 0.8% of GDP in 2015, mainly via significant import compression, before widening somewhat as the economy started to recover.  In 2018, the solid export performance, including the substantial growth in the services surplus was more than offset by a higher oil deficit and import growth.  We project the current account deficit will decline slightly over our forecast period with further improvement in export performance, but expansion of imports on the heels of consumption and investment recovery as well as a slowdown in global economic trade could lead to a wider current account deficit.  (S&P 18.01)

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