Fortnightly, 26 July 2017

Fortnightly, 26 July 2017

July 26, 2017


26 July 2017
3 Av 5777
3 Dhul Qadah 1438




1.1  Northwell and Israel Collaborate to Advance Patient Care
1.2  Israel Touts Growing Cooperation With China Upon Advent Of New Air Route


2.1  Israeli Startups Raise $215 Million in July to Date
2.2  BIRD Foundation to Invest $2.75 Million in 3 New First Responder Projects
2.3  Intuition Robotics Raises $14 Million Series A Investment Led by Toyota Research Institute
2.4  OwnBackup Secures $7.5 Million Series B Investment
2.5  AppsVillage Raises $1 Million
2.6  Applitools Raises $8 Million Led by Sierra Ventures
2.7  Deep Instinct Raises $32 Million in Venture Funding
2.8  Spotinst Raises a $15 Million A Round Led by Intel Capital and Vertex Ventures
2.9  Andersen Tax Announces Debut in Israel
2.10  TAT Announces a Five Year Program With Thales UK
2.11  Dynamic Yield Adds $9 Million to its Series C Round, Bringing it to $31 Million
2.12  Camtek Announces Definitive Agreement to Sell its PCB Business for Up to $35 Million
2.13  Qumra Capital Announces First Closing of 2nd Growth Fund
2.14  DataRails Raises $6 Million to Make Excel Smarter
2.15  Magal Awarded $9.8 Million in Contracts for Integrated Security Solutions for Seaports
2.16  EL AL Israel Airlines Announces 16 Aircraft Deal with Panasonic Avionics
2.17  Mavenir Announces R & D Center of Excellence Focused on 5G Network & Services
2.18  Eltek Receives $3 Million Order from a Governmental Authority
2.19  Zion Oil & Gas Drilling Operations Exceed One Mile Depth in Israel
2.20  Nyotron Completes $21 Million Funding Round
2.21  AudioCodes Teams Up With Sumitomo Shoji Machinex Japan
2.22  Iguazio Raises $33 Million in Series B Funds
2.23  Perimeterx Raises $23 Million to Expand Ai-Driven Behavioral Threat Protection Platform


3.1  BDL’s Circular 331 Extends Lifeline of Tech Startups and Puts Lebanon on the Map
3.2  Accela Expands International Operations, Opens Center of Excellence in Amman, Jordan
3.3  Jeppesen & Wataniya Airways of Kuwait Sign Service Agreement
3.4  Andersen Global Initiates Expansion in Turkey
3.5  Turkey’s FNSS Delivers First Batch of PARS III AFV to Oman
3.6  Andersen Global Announces Collaboration in Greece and Cyprus


4.1  Egypt to Launch Bike Sharing System in Cairo
4.2  Four Companies Compete to Establish Wind Farm at the Gulf of Suez


5.1  Lebanese Average Inflation Rate at a 4-Year High in First Half of 2017
5.2  Tourist Spending in Lebanon Rose by a Yearly 6% in 2017’s First Half
5.3  Lebanese Car Market in First Quarter has Commercial Vehicles Outperforming Passenger Cars
5.4  Jordan’s Inflation Rises by 3.7% in First Half of 2017
5.5  Jordan’s Exports to North America and Asia are Rising
5.6  Jordanian Expat Remittances Amount to $1.5 Billion by the End of May
5.7  Jordan Identifies Approximately 11,000 Alleged Electricity Thefts in First Half of 2017

♦♦Arabian Gulf

5.8  UAE Benefits From Rebound in Global Trade & Tourism
5.9  Abu Dhabi Inflation Touches 2.1% During First Half of 2017
5.10  Building Projects Worth $228 Billion Underway in UAE

♦♦North Africa

5.11  Egypt Selling Off State-Owned Companies for First Time in 12 Years
5.12  IMF Approves Second Tranche of Egypt Loan
5.13  Egypt Receives Final $1.25 Billion in First Tranche of IMF Loan
5.14  Egypt’s Foreign Direct Investment Rises 12% in 2016/17
5.15  Egypt Agricultural Exports Up 12.1% in First Half of 2017
5.16  Morocco’s Consumer Price Index Rises by 0.3% in June
5.17  Morocco Will Continue to Increase Public Investment and Decrease Deficit
5.18  Morocco’s Trade Balance Wavers, Deficit Increases by 8% in 2017’s First Half


6.1  Turkey Chooses Russia Over NATO for Missile Defense



7.1  Tisha B’Av to Be Observed on 31 July/1 August


7.2  UAE Named Among Laziest Countries in the World
7.3  Cairo Has the Cheapest Taxis in the World
7.4  Morocco Gets 19th Most Spam Calls in World


8.1  EarlySense’s Sensor Accurately Detects Sleep Apnea and Disordered Breathing in Children
8.2  Cannabics Pharmaceuticals Executed a Final Collaboration Agreement with SIMFO
8.3  Rapid Medical Raises $9 Million
8.4  Hope for Patients with Heart Failure Using New Implantable Hemodynamic Monitor
8.5  Gamida Cell Announces $3.5 Million Grant from the Israeli Government
8.6  Christiana Care’s Gene Editing Institute & NovellusDx Progress Toward Personalized Cancer Medicine
8.7  NICE Recommends CINQAERO for the Treatment of Severe Eosinophilic Asthma
8.8  Medic Vision Granted US Patent for its XR-29 Solution
8.9  Intec Pharma Granted Patent in Hong Kong for Accordion Pill Carbidopa / Levodopa
8.10  Mitsubishi Tanabe Pharma Buys NeuroDerm For $1.1 billion
8.11  Brainstorm Awarded $16 Million Grant from CIRM in Support of Clinical Trial of NurOwn in ALS
8.12  BioLight Reports Successful Results in Phase 1/2a Clinical Trial for Glaucoma Insert
8.13  FemTech Startup EZbra Presented at youngStartup’s Venture Summit in New York
8.14  Cannabics Pharmaceuticals Establishes a Human-Cannabis-Cancer Genetics Lab
8.15  Prospera Raises $15 Million to Transform Farms with Data


9.1  Elbit Systems Demonstrates Remote Simulation Through Cloud Services
9.2  Vayyar’s 3D Imaging Sensors Unlock New Abilities for Automotive Market
9.3  Safe-T and Stratoscale Create the New Software-Defined Perimeter
9.4  ECI Lights up Europe’s 400G Market With Multiple Deployments Across the Continent
9.5  Momentum Partners Names illusive networks to its 2017 Watch List
9.6  Minerva Delivers Comprehensive Anti-Evasion Platform to Protect Against Attacks
9.7  DB Schenker Reduces Onboarding Time for eCommerce with Magic Software’s Integration Platform
9.8  Waterfall Security and FireEye Partner to Secure Industrial Control Systems (ICS)
9.9  Roojoom’s New Platform Management of the Customer Journey
9.10  MySize Launches White Label RealSize Apparel Measurement App at the Apple App Store
9.11  Rail Vision Achieves Real-Time Capabilities of its Railway Safety System


10.1  Israel’s CPI Drops More Than Expected
10.2  Israel’s First Quarter Growth Revised Upwards
10.3  International Poll Names Ben Gurion Airport 8th Best in the World


11.1  ISRAEL: Israeli Startups Raised $1.3 Billion in Second Quarter
11.2  JORDAN: IMF Executive Board Concludes 2017 Article IV Consultation
11.3  UAE: IMF Executive Board Concludes 2017 Article IV Consultation
11.4  SAUDI ARABIA: IMF Executive Board Concludes 2017 Article IV Consultation
11.5  SAUDI ARABIA: Saudi Arabia Tripping Over its Own Feet
11.6  EGYPT: IMF Executive Board Completes First Review under the Extended Fund Facility
11.7  EGYPT: Fitch: Egypt’s Budget, Energy Price Rises Show Fiscal Commitment
11.8  TURKEY: Fitch Affirms Turkey at ‘BB+’; Outlook Stable
11.9  GREECE: IMF Executive Board Approves in Principle €1.6 Billion Stand-By Arrangement


1.1  Northwell and Israel Collaborate to Advance Patient Care

New Hyde Park, NY’s Northwell Health has signed an agreement with the Israel Innovation Authority (IIA) to collaborate on the development, validation and implementation of medical innovations that advance patient care.  The joint agreement was brokered in part by Northwell Ventures and the Government of Israel Economic Mission, which promotes collaboration between Israeli and American companies in a variety of sectors.

Northwell Health is New York State’s largest health care provider and private employer, with 22 hospitals and over 550 outpatient facilities.  They care for more than two million people annually in the metro New York area and beyond, thanks to philanthropic support from their communities.  Their 62,000 employees – 15,000+ nurses and about 3,900 physicians, including more than 2,800 members of Northwell Health Physician Partners – are working to change health care for the better.

The Israel Innovation Authority, which is responsible for the country’s innovation policy, is an independent and impartial public entity that operates for the benefit of the Israeli innovation ecosystem and Israeli economy as a whole.  Its role is to nurture and develop Israeli innovation resources, while creating and strengthening the infrastructure and framework needed to support the entire knowledge industry.  As such, the Israel Innovation Authority advises the government and Parliament (Knesset) committees regarding innovation policy in Israel and furthermore monitors and analyzes the dynamic changes taking place throughout the innovation environments in Israel and abroad.  The Authority creates cooperation with counterpart agencies to promote technological innovation in the Israeli industry and economy.  (Northwell Health 24.07)

Back to Table of Contents

1.2  Israel Touts Growing Cooperation With China Upon Advent Of New Air Route

Israel’s Ministry of Transportation announced on 25 July that China’s Hainan Airlines has submitted a request to the Civil Aviation Authority to operate a new route between Guangzhou in southern China and Tel Aviv.  This is the third air route that Hainan Airlines, China’s fourth-largest air carrier, would operate to Israel.  It already operates four to five direct weekly flights between Beijing and Tel Aviv, in addition to ELAL flights between those destinations.  Beginning in September, it will operate three weekly flights between Shanghai and Tel Aviv.

Minister of Transportation and Intelligence Katz said that increasing the Chinese locations connected by direct flights to Israel is expected to provide help realize the enormous potential of inbound tourism from China and to increase Israel’s exposure as a desirable tourist destination.  The Ministry noted that in the first half of 2017, the number of tourists from China increased by 75% in comparison with the same period in 2016.  In the first six months of 2017, it recorded 61,000 visits to Israel by Chinese tourists.  The expansion of flights to the Far East in part of the Open Sky Reform.  (JP 25.07)

Back to Table of Contents


2.1  Israeli Startups Raise $215 Million in July to Date

Globes reported that since the beginning of July, fifteen Israeli startups have raised an aggregate $215 million, which is in line with the current monthly rate of over $300 million.  In monitoring capital raised by startups, Globes looked only at Israeli companies, meaning companies with a fairly clear connection to Israel expressed in the identity of the founders, the number of people employed in Israel, etc.  Of the fifteen companies that have raised money in July, eight carried out a B round and five an A round.  Companies carrying out A and B rounds generally fall within the category of “Early Stage”.

Venture capital funding for Israeli startups in the first quarter of this year, as monitored by Globes, totaled $960 million, which is in line with the quarterly rate in recent years.

The fund-raising round announced most recently was that of Spotinst, which raised $15 million in an A round led by Intel Capital and Vertex Ventures.  Spotinst’s claims that its platform enables its customers to save 50-80% of the cost of cloud computing.  The platform is based on an algorithm that provides long-term use of the company’s servers with 100% availability.  Companies that have raised capital so far in July include:

-Venus Concept, cosmetic medicine equipment, $37.5 million
-Deep Instinct, cybersecurity, $32 million
-io, software for converting calls to sales, $20 million
-CellSavers, home service for mobile telephones, $20 million
-Spotinst, cloud computing, $15 million
-Intuition Robotics, robotic assistance for the aged, $14 million
-Dune Medical, cancer diagnostics, $12.3 million
-Curve, credit card consolidation, $10 million
-Rapid Medical, neurovascular medical devices, $9 million
-Applitools, app monitoring, $8 million
-OwnBackup, SaaS backup and storage, $7.5 million
-Genoox, genome analysis, $6 million
-Dbmaestro, DevSecOps solutions, $4.5 million
-UVeye, warning of explosive in vehicles, $4.5 million (Globes 17.07)

Back to Table of Contents

2.2  BIRD Foundation to Invest $2.75 Million in 3 New First Responder Projects

During its meeting on 14 June 2017 in Washington, D.C., the Board of Governors of the Israel-U.S. Binational Industrial Research and Development (BIRD) Foundation awarded funding to three homeland security projects, selected by DHS and MOPS, between U.S. and Israeli companies to advance technologies for first responders.  In addition to the grants from BIRD, the projects will access private sector funding, boosting the total value of the three projects to approximately $7 million.

The program funds technology collaborations between U.S. and Israeli partners that have significant commercial potential to meet the most pressing requirements of first responders.  This joint research effort supports the development of Next Generation First Responder (NGFR) technology capabilities that will increase the safety and efficiency of all first responders (law enforcement, firefighters and emergency medical services).  These research and development efforts will lead to new technologies that ensure first responders are better protected, connected and fully aware.

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

The joint projects that received approval include:

-Beeper Communications Israel (Ramat Gan, Israel) and Mantaro Networks (Germantown, Maryland) will develop an unmanned search and rescue system.
-Elbit Systems Land and C4I (Netanya, Israel) and M87 (Bellevue, Washington) will develop public safety off-network broadband communications using multi-hop WiFi/LTE/D2D communications (ProSE) technology.
-Simlat (Petah Tikva, Israel) and Sinclair Community College (Dayton, Ohio) will develop an autonomous drone-based search & rescue solution.

The BIRD (Binational Industrial Research and Development) Foundation works to encourage and facilitate cooperation between U.S. and Israeli companies in a wide range of technology sectors and offers funding to selected projects.  BIRD has approved over 900 projects over its 40-year history.  (BIRD 24.07)

Back to Table of Contents

2.3  Intuition Robotics Raises $14 Million Series A Investment Led by Toyota Research Institute

Intuition Robotics announced a $14 million A-round investment led by the Toyota Research Institute (TRI).  TRI joins early A-round investors OurCrowd and iRobot as well as existing seed investors Maniv Mobility, Terra Venture Partners, Bloomberg Beta and additional private investors who participated in the round.  The investment in Intuition Robotics marks TRI’s first outside investment in robotic technology specifically for older adults.  Toyota is regarded as one of the leading companies in home/human-assist robotics research, and the move underscores the shared vision between the two companies.

Intuition Robotics’ active aging companion, ElliQ, is currently being tested and developed to proactively promote an active and engaged lifestyle, with the goal of helping older adults benefit from technology that’s intuitive and easy to use.

Ramat Gan’s Intuition Robotics is developing social companion technology to positively impact the lives of millions of older adults by connecting them seamlessly with family and friends, making technology accessible and intuitive, and proactively promoting an active lifestyle.  The company was founded by former corporate executives and entrepreneurs who previously founded and managed CloudBand, a disruptive cloud telecom venture within Alcatel-Lucent.  The founders created Intuition Robotics to pursue their passion for creating technology and products to improve people’s quality of life.  (Intuition Robotics 11.07)

Back to Table of Contents

2.4  OwnBackup Secures $7.5 Million Series B Investment

OwnBackup announced the close of a $7.5 million Series B round led by Insight Venture Partners, a New York-based private equity and venture capital firm and one of the world’s largest investors in high-growth software companies.  Existing investors Innovation Endeavors, Oryzn Capital, and Salesforce Ventures also participated in the round, which constitutes a minority equity stake.  The round comes on the heels of an explosive year for OwnBackup, with 330% year-over-year revenue growth in 2016.  Users of SaaS applications are increasingly turning to OwnBackup for data protection, archiving, compliance and development enablement.  These organizations are fueling a burgeoning market for cloud-to-cloud private backup, recovery and replication services.  The new capital will fuel the company’s continued expansion and speed product innovation, including backup and recovery services for additional SaaS applications and the simplification of test data environments for developers working with SaaS applications.

Tel Aviv’s OwnBackup, a leading cloud-to-cloud backup and restore vendor, provides secure, automated, daily backups of SaaS and PaaS data, as well as sophisticated data compare and restore tools for disaster recovery.  OwnBackup covers data loss and corruption caused by human errors, malicious intent, integration errors and rogue applications.  (OwnBackup 13.07)

Back to Table of Contents

2.5  AppsVillage Raises $1 Million

Israeli apps creation platform AppsVillage has raised $1 million in a seed financing round.  Tel Aviv’s AppsVillage is a mobile App creation platform that enables small, medium and large businesses to create engaging professional Apps in a snap.  The company is expanding its platform to US-based businesses and hiring new employees.  Using AppsVillage, businesses can now effortlessly transform their Facebook pages into powerful and engaging Apps in seconds, with AppsVillage handling all the back end development both for Android and iPhone mobile devices.

Apps built on the AppsVillage website include powerful features such as push notifications, in-app purchases, coupons, appointment setting, cashback, FB ads and live chat to allow businesses to interact with their customers on a more engaged social level that will increase loyalty and revenues.

AppsVillage jumpstarts a business’ App with all the necessary information and content from the business’ Facebook page, so each App has all the right branding and content already built-in.  Business owners can easily manage their App without extensive coding, software, technical knowledge, or having to hire consultants and designers.  (Various 18.07)

Back to Table of Contents

2.6  Applitools Raises $8 Million Led by Sierra Ventures

Applitools has raised an $8 Million round led by Sierra Ventures, with participation by Bessemer Venture Partners and existing investors Magma Venture Partners, iAngels, and La Maison.  With this current round, Applitools’ funding reaches $15 Million.  Applitools launched its SaaS offering in January 2015 and since then, usage has constantly grown 25% quarter-over-quarter.  In 2016, MRR multiplied 3X over 2015 and similar growth is expected in 2017.  Today, millions of visual tests are performed with Applitools each week.  Applitools is trusted by companies of all sizes, including Fortune-100 customers in a variety of verticals: Banking, Software, Online Retail, Insurance, Pharmaceuticals, and more.  Applitools’ 200+ customers include household names such as American Express, Intuit, MasterCard, Bose, Sony, Salesforce, Slack, ServiceNow, Twilio, Wix, and Siemens.

Applitools allows Test Automation, DevOps and Development teams to release software flawlessly and automatically through its SaaS Visual Testing and Monitoring product.  Based on sophisticated image processing algorithms that mimic the human eye and brain, Applitools ensures that an app appears correctly and functions properly on all mobile devices, browsers, operating systems and screen sizes.

Tel Aviv’s Applitools is on a mission to help Test Automation, DevOps and Development teams to release and monitor flawless mobile, web, and native apps in a fully automated way that enables Continuous Deployment.  Founded in 2013, Applitools uses sophisticated AI-powered image processing technology to ensure that an app appears correctly and functions properly on all mobile devices, browsers, operating systems and screen sizes.  Applitools has more than 200+ customers from a range of verticals, including Fortune-100 companies.  (Applitools 12.07)

Back to Table of Contents

2.7  Deep Instinct Raises $32 Million in Venture Funding

Deep Instinct announced on 12 July that it has raised $32 million in Series B financing.  The company said the round was led by CNTP, and joined by strategic investors, including NVIDIA, Coatue Management and existing investors.  According to Deep Instinct, its deep learning offering can detect malicious behavior across multiple vectors and provides adaptive defenses against the most advanced cyberattacks.  Deep Instinct says it is the only company providing end-point protection platform (EPP), mobile and remediation capabilities.  As a result, threats are rapidly eliminated with fully-automated and integrated response capabilities.

Tel Aviv’s Deep Instinct is the first company to apply deep learning to cybersecurity.  Leveraging deep learning’s predictive capabilities, Deep Instinct’s on-device, proactive solution protects against zero-day threats and APT attacks with unmatched accuracy.  Deep Instinct provides comprehensive defense that is designed to protect against the most evasive unknown malware in real-time, across an organization’s endpoints, servers and mobile devices.  Deep learning’s capabilities of identifying malware from any data source results in comprehensive protection on any device and operating system.  (Deep Instinct 13.07)

Back to Table of Contents

2.8  Spotinst Raises a $15 Million A Round Led by Intel Capital and Vertex Ventures

Spotinst, a leading cloud workload management company, announced today a $15M Series A financing round, led by Intel Capital and Vertex Ventures with participation from Springtide Ventures.  Spotinst makes it easy to tap unused cloud computing capacity and power.  Since launching 18 months ago, the company has proven the concept by selling millions of spot Instances per week.  Over the last year, Spotinst grew 30% month over month, and now manages hundreds of millions of computing hours for its customers.

Tel Aviv’s Spotinst‘s machine learning-based virtual IaaS platform allows enterprises and startups to gain unprecedented cloud workload management capabilities.  Spotinst’s core technology is based on a unique predictive algorithm that delivers the most effective cloud option, ensuring reliability and stability, while saving customers up to 80% on cloud computing costs.  Spotinst works with Amazon Web Services and recently introduced support for Google Cloud Platform and Microsoft Azure.  (Spotinst 13.07)

Back to Table of Contents

2.9  Andersen Tax Announces Debut in Israel

The Andersen name will debut in Israel as Beneli Tax formally adopts the Andersen name as a member firm of Andersen Global.  The tax firm, based in Tel Aviv, entered a Collaboration Agreement with Andersen Global in January 2017 and is now a full-fledged member firm operating under the name Andersen Tax.  Under the name Andersen Tax, the firm will continue to assist U.S. and Israeli multinationals, start-ups and high net-worth individuals with their international tax matters including mergers and acquisitions, tax due diligence, transaction tax services, equity compensation, transfer pricing, tax accounting and tax efficient corporate structuring.  Andersen Global is an international association of member firms with over 2,000 professionals and a presence in more than 68 locations worldwide.  (Andersen 18.07)

Back to Table of Contents

2.10  TAT Announces a Five Year Program With Thales UK

TAT Technologies was selected by Thales UK, a division of the Thales Group, to design, develop, supply and maintain a thermal management cooling system for a Thales’s Radar System for an Intelligence Surveillance Reconnaissance (ISR) Helicopter.  The program is for the delivery of cooling systems in the next five years, with a potential growth for additional systems in the future.

Gedera’s TAT Technologies is a leading provider of services and products to the commercial and military aerospace and ground defense industries.  TAT operates under four segments: 1. Original equipment manufacturing (OEM) of heat transfer solutions and aviation accessories, 2. MRO services for heat transfer components and OEM of heat transfer solutions through its Limco subsidiary, 3. MRO services for aviation components through its Piedmont subsidiary and 4. Overhaul and coating of jet engine components through its Turbochrome subsidiary.  (TAT Technologies 18.07)

Back to Table of Contents

2.11  Dynamic Yield Adds $9 Million to its Series C Round, Bringing it to $31 Million

Dynamic Yield has added $9 million to its Series C Round, bringing it to a new total of $31 million.  Its new investors are DTCP (Deutsche Telekom Capital Partners) and La Maison.  The round was first announced in December, with participation from ClalTech, Baidu, Vertex and Bessemer Venture Partners.  CEO Agmon said DTCP and La Maison will help Dynamic Yield expand in Europe, just as the addition of search giant Baidu gave it a strategic partner in China.

Dynamic Yield’s tools gather data from multiple sources, including websites, mobile apps, email and online ads, that are usually siloed, and uses it to automatically tailor the content that each customer sees based on information about their past purchases, browsing history and geographical location.  The company will launch new features by the end of this year.  While the company would not reveal specific details, they will further automate some of the manual work marketers need to do when analyzing data for insights that will help them increase revenue.

Tel Aviv’s Dynamic Yield’s advanced machine learning engine builds actionable customer segments in real time, enabling marketers to increase revenue via personalization, recommendations, automatic optimization & 1:1 messaging.  Dynamic Yield has now raised a total of $45 million to date.  (Dynamic Yield 20.07)

Back to Table of Contents

2.12  Camtek Announces Definitive Agreement to Sell its PCB Business for Up to $35 Million

Camtek has signed a definitive agreement with an affiliate of Principle Capital, a Shanghai-based private-equity fund, to sell its PCB business for $35 million, of which $32 million will be paid in cash upon closing and an additional amount of up to $3 million conditioned upon the PCB business’ financial performance in 2018.  The worldwide PCB organization is expected to remain intact, including the R&D operations which are planned to continue operating from Israel with its Israeli personnel.  The definitive agreement contains customary representations, warranties, covenants and indemnity obligations.  Subject to customary closing conditions, including regulatory and third-party approvals, the closing is expected during the third quarter of 2017.  Following the closing Camtek will cease to report the results of its PCB business.  The PCB business will be included as discontinued operations in Camtek’s financial statements for the second quarter 2017 results and until the date of closing.  Results for the second quarter of 2017 are expected to be released on August 3, 2017.

Migdal HaEmek’s Camtek provides automated and technologically advanced solutions dedicated to enhancing production processes, increasing products yield and reliability, enabling and supporting customer’s latest technologies in the Semiconductors, Printed Circuit Boards (PCB) and IC Substrates industries.  Camtek addresses the specific needs of these interconnected industries with dedicated solutions based on a wide and advanced platform of technologies including intelligent imaging, image processing and functional inkjet printing.  (Camtek 20.07)

Back to Table of Contents

2.13  Qumra Capital Announces First Closing of 2nd Growth Fund

Tel Aviv’s Qumra Capital, Israel’s leading late stage capital provider, announced the first closing of Qumra Capital II.  With commitments of $115 million, mainly from existing investors of Qumra I, Qumra intends to cap the fund at $150 million.  With this new late stage fund, Qumra will continue to provide growth capital to promising late stage companies that have moved beyond their research and development efforts, product development and market validation, and are looking to boost sales and marketing activities of their products and services.  The Qumra I portfolio includes successful market leading companies such as Fiverr, JFrog, Appsflyer, Riskified, Signals Analytics, Minute Media Eyeview and Sweet Inn.  (Qumra Capital 20.07)

Back to Table of Contents

2.14  DataRails Raises $6 Million to Make Excel Smarter

DataRails announced it has raised a $6 million series A funding round led by Vertex Ventures, with the participation of existing investors Cyrus Angel Fund, Oryzn Capital and Joey Low.  The new round brings DataRails’ total funding to date to $7 million.  DataRails will use the money to open offices in New York, strengthen product development and build its worldwide customer portfolio.

DataRails solves a common frustration experienced by organizations around the globe: the cumbersome nature of working with Excel spreadsheets.  Despite a thriving market for enterprise software in recent years, many companies still rely on Excel, not only as an electronic spreadsheet, but also as a complex system for managing business-critical processes across the organization-particularly in the areas of finance, human resources and inventory.  Employees and managers create Excel spreadsheets, share them with one another, copy and paste tables manually from one version to another, implement changes and resend updated sheets.  The process then repeats itself, making it very difficult to consolidate information from different Excel files and track versions, resulting in inefficiency and error-prone work.

DataRails’ solution is based on a first-of-its-kind algorithm, capable of extracting and analyzing complex and unstructured data (including formulas) found in Excel files, and converting the data into structured information that can be entered into a database in the cloud.  This also allows the DataRails system to be easily integrated with other enterprise systems.

Bnei Darom’s DataRails was founded in 2015 with the mission of transforming Microsoft Excel into a smarter, more nimble, organizational tool.  The Company is a graduate of the Microsoft Accelerator and currently has a headcount of twenty.  (DataRails 19.07)

Back to Table of Contents

2.15  Magal Awarded $9.8 Million in Contracts for Integrated Security Solutions for Seaports

Magal Security Systems has recently received a total of $9.8 million in orders to provide integrated security solutions and maintenance for three major seaports in the EMEA region.  One of the orders is for the Port of Huelva in Spain, the largest in the Spanish Seaport System, involving intrusion detection smart fences and advanced CCTV cameras.

Yehud’s Magal is a leading international provider of solutions and products for physical and video security solutions, as well as site management.  Over the past 45 years, Magal has delivered its products as well as tailor-made security solutions and turnkey projects to hundreds of satisfied customers in over 80 countries – under some of the most challenging conditions.  Magal offers comprehensive integrated solutions for critical sites, managed by Fortis4G – our 4th generation, cutting-edge PSIM (Physical Security Information Management system).  (Magal 19.07)

Back to Table of Contents

2.16  EL AL Israel Airlines Announces 16 Aircraft Deal with Panasonic Avionics

EL AL Israel Airlines has selected Lake Forest, California’s Panasonic Avionics Corporation’s (Panasonic) industry-leading eX3 inflight entertainment (IFE) system for its new fleet of 16 Boeing 787 Dreamliners.  Under terms of its agreement with Panasonic, EL AL will install eX3 across nine Boeing 787-9s and seven B787-8s, with the first aircraft being delivered in August 2017.  The agreement also includes a 15-year contract for the provision of system maintenance by Panasonic Technical Services, including spares, repairs and logistics, at an optimized maintenance cost.

EL AL’s eX3 system features an elegant industrial design across all cabin classes.  Passengers will be able to view 12, 13 and 16-inch high definition monitors that deliver superior viewing angles and capacitive touch.  They also feature proprietary Panasonic technology that functions like the human eye, making dark scenes more visible by improving brightness in dark areas while simultaneously eliminating white saturation.  The result is superior picture performance across all media formats including movies, TV shows, games, maps and more.  (Panasonic Avionics 18.07)

Back to Table of Contents

2.17  Mavenir Announces R & D Center of Excellence Focused on 5G Network & Services

Richardson, Texas’ Mavenir, the leader in accelerating and redefining network transformation for Service Providers, announced a new R&D and 5G Innovation center of excellence in Ra’anana, Israel focused on 5G Network and Services solutions.  The next generation of the network infrastructure will be based on a common flexible infrastructure that supports applications with stringent quality of experience (QoE) (e.g. Virtual Reality), seamless mobility across Heterogeneous networks (HetNet), ultra-low latency (e.g., Tactile Internet), high reliability (e.g., Autonomous vehicles) and provides new insights from billions of Internet of Things (IoT) devices.  5G will provide the wireless services that are critical to the next evolution of the data economy.  Mavenir is committed to cloud-centric NFV infrastructure (NFVi) across its end-to-end 5G portfolio (NGCN, Cloud RAN, end to end Security and Orchestration), using open development techniques and programming tools to deliver the networks of the future.  The Ra’anana center will also be working on Mavenir’s Voice/Video and Advanced Messaging Solutions.  (Mavenir 24.07)

Back to Table of Contents

2.18  Eltek Receives $3 Million Order from a Governmental Authority

Eltek received an order from a governmental authority for a project that includes, among other things, manufacturing and procurement in an amount of up to approximately $3 million.  The execution of the project will extend over a period of two years, during which Eltek will be required to meet quarterly milestones.  The customer has an option to extend the project for an additional twelve month period, during which Eltek will be required to meet additional quarterly milestones.  Payments to Eltek shall be made on a quarterly basis, subject to the fulfillment of each milestone.  The project is expected to generate total aggregate revenues of approximately $2.1 million (approximately $3 million if the option is exercised).  In addition, to enable the execution of the project, the costumer shall lend the Company, for no consideration, equipment in a total aggregate amount of approximately $1.8 million (approximately $2 million if the option is exercised).

Petah Tikva’s Eltek is a global manufacturer and supplier of technologically advanced solutions in the field of printed circuit boards (PCBs), and is the Israeli leader in this industry.  PCBs are the core circuitry of most electronic devices.  Eltek specializes in the manufacture and supply of complex and high quality PCBs, HDI, multilayered and flex-rigid boards for the high-end market.  (Eltek 24.07)

Back to Table of Contents

2.19  Zion Oil & Gas Drilling Operations Exceed One Mile Depth in Israel

Zion Oil & Gas continues active drilling operations at its Megiddo-Jezreel #1 well in Israel.  As of today, Zion has reached a depth of approximately 5,345 feet (~1,629 meters) toward a proposed total depth of up to ~15,000 feet.  Zion’s recent $250 Unit Program under its Dividend Reinvestment and Common Stock Purchase Plan (DSPP), ended successfully on 12 July 2017.  The company raised sufficient funds to drill and test the current well to its proposed total depth, with the ability to also pay for unanticipated financial contingencies.  Zion Oil & Gas explores for oil and gas onshore in Israel and its operations are focused on the Megiddo-Jezreel License (approximately 99,000 acres) south and west of the Sea of Galilee.  (Zion Oil & Gas 20.07)

Back to Table of Contents

2.20  Nyotron Completes $21 Million Funding Round

Herzliya’s Nyotron closed a new $21 million financing round led by US-based investors and including all existing investors.  The financing was significantly oversubscribed and positions the company to dramatically increase worldwide sales and marketing activities and to expand its current offerings of Nyotron’s innovative endpoint cyber security solution.  Nyotron provides a revolutionary new cyber defense for endpoints using technology never before implemented in the industry.  Nyotron stops all attacks, whether known before or never before experienced, including ransomware, advanced persistent threats and other malicious attacks.  Nyotron is now installed at some of the world’s most sophisticated technology operations, including a major US law enforcement agency, El Al Airlines and the Israeli military.

This announcement is further proof of the growing momentum that Nyotron is enjoying in the market.  Nyotron recently earned a top overall score of 5 stars from SC Magazine in its group product review for Endpoint Security Platforms, won GOLD in the 2017 IT World Awards for Endpoint Security and Nyotron was designated as the 2017 HOT COMPANY in Endpoint Security by Cyber Defense Magazine.

Nyotron‘s PARANOID is a game-changing data protection solution that provides you a radically different approach to thwart attacks.  Acting as the last line of defense – after threats bypass all perimeter and endpoint security layers – PARANOID protects your data regardless of the type of threat or attack vector, and does not require any prior knowledge about the threat to be effective.  Delivering the first-ever Threat-Agnostic Defense technology, PARANOID distinguishes between legitimate activities carried out by a program or user and threatening activities being carried out by attacks.  (Nyotron 24.07)

Back to Table of Contents

2.21  AudioCodes Teams Up With Sumitomo Shoji Machinex Japan

AudioCodes announced that it has entered into a distribution agreement with Sumitomo Shoji Machinex (SMX), one of Japan’s largest and leading distributors in the communications field.  SMX will promote AudioCodes’ products and solutions throughout the region with a particular focus on the enterprise unified communications space, including Microsoft’s Skype for Business.

Lod’s AudioCodes designs, develops and sells advanced Voice-over-IP (VoIP) and converged VoIP and Data networking products and applications to Service Providers and Enterprises.  AudioCodes is a VoIP technology market leader, focused on converged VoIP and data communications, and its products are deployed globally in Broadband, Mobile, Enterprise networks and Cable.  AudioCodes’ underlying technology, VoIPerfectHD, relies on AudioCodes’ leadership in DSP, voice coding and voice processing technologies.  AudioCodes’ High Definition (HD) VoIP technologies and products provide enhanced intelligibility and a better end user communication experience in Voice communications.  (AudioCodes 24.07)

Back to Table of Contents

2.22  Iguazio Raises $33 Million in Series B Funds

Iguazio announced a Series B investment of $33 million led by Pitango Venture Capital, with additional funds from Verizon Ventures, Robert Bosch Venture Capital GmbH (RBVC), CME Ventures and the company’s existing investors, Magma Venture Partners, Jerusalem Venture Partners and Dell Technologies Capital.  This new financing brings the company’s total investment to $48 million.

iguazio was recently recognized as one of Gartner’s Cool Vendors in Data Management for 2017.  Early deployment customers include large-scale automotive and media companies, financial institutions and consumer IoT deployments.

Herzliya’s iguazio was founded in 2014 with a fresh approach to the data management challenges faced by today’s enterprises.  The iguazio Continuous Analytics Data Platform has fundamentally redesigned the entire data stack to bridge the enterprise skill gap and accelerate performance of real-time and analytics processing in big data, the Internet of Things (IoT) and cloud-native applications.  iguazio provides a single, secure, high-performance source of data.  It enables the digital transformation of enterprise companies and simplifies real-time analytics at the edge, on-premises and in hybrid environments, complementing the offering of leading cloud providers.  (iguazio 25.07)

Back to Table of Contents

2.23  Perimeterx Raises $23 Million to Expand Ai-Driven Behavioral Threat Protection Platform

PerimeterX, a provider of behavior-based threat protection technology for cloud, web and mobile, has secured $23 million in Series B funding to accelerate the development of its bot attack prevention technology.  Canaan Partners led the round, with participation from existing investors Vertex Ventures and Data Collective (DCVC).  With the funding, PerimeterX will expand in the U.S. and internationally, and broaden its platform into new areas.  Today, PerimeterX’s web-based Bot Defender product is the market leader, analyzing billions of events daily and blocking hundreds of millions of bot attacks every day.

To separate the actions of bots from those of normal users, PerimeterX uses artificial intelligence and machine learning to identify behaviors that are unlikely to represent human actions – for example, landing a mouse directly on a button rather than scrolling towards it up or down the screen.  As PerimeterX gathers more information about how people interact with a site, it builds more accurate models of what constitutes human versus bot behavior.  This behavior-based technology allows PerimeterX to detect the most sophisticated new forms of bot attacks.  PerimeterX’s API integrates seamlessly with nearly any component of a company’s technology infrastructure.  As a result, DevOps teams can quickly incorporate real-time behavioral analytics into their work, giving them maximum flexibility.

Tel Aviv’s PerimeterX prevents automated attacks by detecting and protecting against malicious web behavior across e-commerce, enterprise SaaS and media.  By analyzing the behavior of humans, applications and networks, PerimeterX catches real-time automated attacks with unparalleled accuracy.  Its proprietary technology protects your business and web infrastructure by preventing a full range of attacks from earlier generation bots to hijacked browsers, to new and emerging fourth generation attacks that do not trigger security mechanisms.  With PerimeterX, businesses deploy seamless integration within minutes into their DevOps process.  (PerimeterX 25.07)

Back to Table of Contents


3.1  BDL’s Circular 331 Extends Lifeline of Tech Startups and Puts Lebanon on the Map

The rise of the digital economy in the past few years revitalized markets in the MENA region, particularly markets of the UAE, Jordan, Lebanon, Egypt and KSA.  In addition, Banque du Liban’s Circular 331 nurtured the startup ecosystem, inviting venture capital funds, entrepreneurs and banks, to be major players.  According to ‘State of Digital Investments in MENA’, a report recently published by ArabNet in collaboration with Dubai SME, Lebanon ranked second after the UAE in total number of deals and value of investments in 2016.  The country attracted the largest base of growth-capital investors who typically invest in mature companies in need of funding to expand.  Lebanon was particularly highlighted in the report as a very “small market” compared to regional markets like Egypt, but with a “very high number of funds”.  Accordingly, the number of investments in Lebanon alone rose by 15% from 2013 to 2015 and the value of investments climbed from $6 million in 2013 to $31 million in 2015.  The surge in start-up capital is mainly attributed to BDL’s Circular 331, which also enabled two banks: Al Mawarid and Societe Generale de Banque au Liban (SGBL), to join the investor base and fund such projects.  (ArabNet 19.07)

Back to Table of Contents

3.2  Accela Expands International Operations, Opens Center of Excellence in Amman, Jordan

San Ramon, California’s Accela, the leading provider of cloud-based productivity and civic engagement solutions for government, announced the launch of its first international Center of Excellence in Amman, Jordan, demonstrating the company’s commitment to its strategic partnerships with both the World Bank and the Kingdom of Jordan.  The site was selected for its advanced digital infrastructure and the caliber of its highly qualified workforce and opened with 25 trained employees.

In the last few years, Accela’s operations in the Middle East have increased significantly, fostering a number of strategic partnerships with government entities to help improve services to citizens and residents across the region.  The Company recently announced that Abu Dhabi Department of Municipal Affairs and Transport (DMAT) went live with the Municipal Electronic Permitting System (MePS) on the Accela Civic Platform to manage all building permits processes across 98 different services for building permits within three municipalities and connected to 25 governmental entities.  (Accela 12.07)

Back to Table of Contents

3.3  Jeppesen & Wataniya Airways of Kuwait Sign Service Agreement

Englewood, Colorado’s Jeppesen, a Boeing Company, has agreed to a service contract with Wataniya Airways, a new Middle Eastern carrier based in Kuwait.  As the airline is working to begin air service in the near future, Jeppesen has agreed to provide multiple services to assist the airline with several operations.  Wataniya Airways will receive paper charts for navigation and International Trip Planning services from Jeppesen in the near term.  After air service is established, the airline also will use Jeppesen electronic flight bag (EFB) services to increase operational efficiency.  For the short term at the point of beginning operations, Wataniya Airways also will use Jeppesen trip planning and flight dispatch services.  Jeppesen’s renowned International Trip Planning organization will provide support for ad-hoc flights and additional operational areas.  Jeppesen paper charts will provide essential navigation information, updated through a regular revision process, to help the airline initiate its regional air service in the Middle East, Asia, Africa and Europe.  Plans for Wataniya Airways service initially includes 16 destinations in the first year, including the Gulf Cooperation Council area, the Middle East, the South Asia and Indian subcontinent and North Africa.  (Jeppesen 18.07)

Back to Table of Contents

3.4  Andersen Global Initiates Expansion in Turkey

San Francisco’s Andersen Global announced a presence in Turkey by way of a Collaboration Agreement with NAZALI Tax & Legal, a leading tax and legal consultancy firm with locations in Istanbul, Ankara, Izmir and Bursa.  The addition of NAZALI Tax & Legal as a collaborating firm of Andersen Global is part of Andersen’s current strategy of building out a larger platform in the region.

NAZALI Tax & Legal has become one of the leading law firms in the field of taxation and legal matters in Turkey since its establishment in 2015.  The professionals at NAZALI Tax & Legal offer legal and tax consultancy services in a wide range of industries to many national and international clients including corporate and commercial law, corporate restructuring, tax law, social security and employment law, customs and foreign trade law, intellectual property law, and litigation-enforcement and bankruptcy law.

Nazali joins Andersen Global with over 60 tax and legal professionals and expects to double in size over the next twelve months.  Andersen Global now has more than 2,000 professionals worldwide and a presence in 68 locations through its member firms and collaborating firms.  (Andersen Global 12.07)

Back to Table of Contents

3.5  Turkey’s FNSS Delivers First Batch of PARS III AFV to Oman

The Turkish armored vehicle manufacturer FNSS Savunma recently announced that it delivered the first batch of PARS III 8ª8 armored fighting vehicles (AFV) to Oman.  According to FNSS Savunma, , Oman has 172 PARS III AFV on order.  In its recent announcement, FNSS did not disclose when it intends to complete the delivery to Oman.

The FNSS PARS is available in 6ª6 and 8ª8 configurations.  The PARS III 8ª8 has a combat weight of 30,000 kg and can ferry a crew of nine dismountable passengers and three crew members (i.e. 12 persons).  It has a maximum road speed of 100 km/h and range of over 800 km.  According to FNSS, the PARS III 8ª8’s hull form, underbelly structure, base plates and seats are designed to protect personnel against high-level mine threats.  The PARS III was primarily designed for the export market.  The launch customer was Malaysia, which has 247 AFVs on order from FNSS, which is co-producing the PARS III with the Malaysian company DRB-Hicom Defence Technologies (Deftech).  The PARS III 8ª8 sold to Oman is also equipped with a FNSS Saber-25 power-operated turret, which offers “the latest technologies in turret drives, fire control, protection and lethality.”

FNSS Savunma Sistemleri is a joint venture between Nurol Holding (51%) and BAE Systems (49%).  Nurol Holding also owns the auto-manufacturer Nurol Makina, which is a provider of light-armored utility and mine-resistant ambush-protected (MRAP) vehicles.  (FNSS 12.07)

Back to Table of Contents

3.6  Andersen Global Announces Collaboration in Greece and Cyprus

San Francisco’s Andersen Global announced a new presence in Greece and Cyprus via a Collaboration Agreement with UnityFour and Pistiolis-Triantafyllos & Associates.  Together, these firms provide legal, tax and accounting services in Greece; and tax, accounting and fiduciary services in Cyprus.  The addition of these groups as collaborating firms of Andersen Global is the initial step towards a more formal relationship and is a part of a larger expansion strategy in the Mediterranean.

UnityFour and Pistiolis-Triantafyllos & Associates join Andersen Global with two offices and a combined group of about 55 professionals.  With UnityFour as the tax arm and Pistiolis-Triantafyllos & Associates providing legal service, these firms have worked collectively for years to provide outstanding solutions for both corporations and individuals, including corporate and M&A legal services, regulatory compliance services, corporate tax compliance services, indirect tax compliance, tax advisory services, VAT services and international tax services.  Including the locations in Greece and Cyprus, Andersen Global has m more than 2,000 professionals worldwide and a presence in 70 locations through its member firms and collaborating firms.  (Andersen Global 25.07)

Back to Table of Contents


4.1  Egypt to Launch Bike Sharing System in Cairo

Egypt has signed a protocol with the UN Human Settlement Programme introducing for the first time bike sharing system to connect cyclers, through bike lanes, all over Cairo.  Governor of Cairo Abdel Hamid has stressed that such a step develops Egypt’s transport system.  Abdel Hamid further added that the first phase of the project constitutes of constructing bike-sharing stations in Downtown Cairo.  A total of 300 bikes will be provided across the stations; the selection of the locations will be determined to allow easy access to the metro and bus stations.  The lanes to be set across the main squares in Cairo such as Al Alfy, Al Azbakeya as well as Manial.  He further stressed that the project is primarily targeting Egypt’s youth, further asserting on making the bike-sharing service available for affordable prices.

The first phase of the project will cost $1.5 million, which is entirely funded by the Zurich-based Drosos Foundation.  The Drosos Foundation is a non-profit organization promoting cooperation between local partners, authorities and the private sector.  (Egyptian Streets 25.07)

Back to Table of Contents

4.2  Four Companies Compete to Establish Wind Farm at the Gulf of Suez

Four international companies are set to compete to establish a wind farm in the Gulf of Suez.  The farm will output 250 MW.  Egypt’s New and Renewable Energy Authority (NREA) said that the companies include Vestas and Siemens, as well as Enercon and Ray Power.  The consortium comprised of Power China and Goldenwind has been excluded, as their bid did not include European certificates.  The new bids will be received from companies by the middle of August.  Some 21 companies have bought the tender prospectus, including Orascom, General Electric, Lekela Power and Nordic Power.  NREA had also signed a loan with the European Investment Bank worth €115 million to finance the farm.

The funding institutions support the Egyptian government’s goal to generate 20% of electricity from renewable sources by 2020.  A feasibility study has been completed and a consultancy office has been contracted to provide consultancy services during the implementation stages.  The project is expected to start next year.  NREA aims to contribute to securing electricity supply in terms of increasing installed capacity and contributing to mitigation of climate change through the development of wind energy.  (DNE  25.07)

Back to Table of Contents


5.1  Lebanese Average Inflation Rate at a 4-Year High in First Half of 2017

According to the Central Administration of Statistics (CAS), Lebanon’s average inflation rate rose by a yearly 4.42% in H1/17 as compared to an average deflation rate of 2.51% in H1/16.  The average costs of “Housing” and “utilities (including: water, electricity, gas and other fuels)”, which grasped a combined 28.4% of the Consumer Price Index (CPI), rose by 6.35% year-on-year (y-o-y) by June 2017.  “Owner-occupied” rental costs constituted 13.6% of this category and increased by an annual 3.89%, while the average costs of “utilities” (11.8% of the Housing & utilities component), gained an annual 13.31% over the same period.

The average price indices for “Food and non-alcoholic beverages” (constituting 20% of the CPI) and “Education” costs (6.6% of CPI) registered yearly upticks of 3% and 2.68% in H1 2017.  As for the average price for “Transportation” (grasping 13.1% of the CPI), it gained an annual 6.27% which can be attributed to the rise in the average international price of oil to $52.68/barrel in H1/17 compared to $41.21/barrel in H1/16.  Nonetheless, average “Health” costs (7.7% of the CPI) slipped by 1.48% y-o-y over the same period.

In June 2017, the CPI grew by 3.48% compared to June last year.  The increase was driven by the annual rise of 3.34% and 5.24% in the two largest CPI components “Housing and utilities” and “Food and non-alcoholic beverages”, but also by the revitalized tourism sector in June 2017 following Eid el Adha holiday.  This last boosted the “Clothing and Footwear” component of the CPI by 12.25% y-o-y.  (CAS 21.07)

Back to Table of Contents

5.2  Tourist Spending in Lebanon Rose by a Yearly 6% in 2017’s First Half

According to Global Blue, tourist spending in Lebanon rose by a yearly 6% in H1/17, compared to the same period last year.  The rise is mainly attributed to an increasing tourist spending by GCC nationals fueled by the recovering tourism sector in Lebanon.  With the GCC governments (except the UAE) lifting the travel bans against Lebanon, the number of incomers from Saudi Arabia and Kuwait doubled to stand at 23,515 and 15,246 by May 2017 compared to 12,446 and 7,884, respectively, by May 2016.  As such, the largest bulk of tourist spending corresponded to Saudi visitors with a share of 15% of the total, followed by 12% for Emirati nationals, and 7% for Kuwaiti tourists.  Tourist spending by Saudi and Kuwaiti visitors rose by 19% and 47%, respectively, by June 2017 compared to the same period of 2016, while spending by Emirati tourists fell by 7% over the same period.

In terms of spending categories, fashion and clothing captured the bulk of tourist spending with a share of 70% of the total, followed by 16% for watches and jewelry.  It is worthy to mention that spending on fashion and clothing, as well as watches and jewelry improved by 5% and 1% year-on-year (y-o-y), respectively, by June 2017.  Spending on souvenirs and gifts and in Department stores significantly rose by a yearly 47% and 23% by June 2017.  Some 81% of total tourists’ spending was concentrated in Beirut, while Metn captured 13% of total expenditures.  While tourist spending increased by an annual 7% in Beirut, it slipped by a yearly 1% in Metn by June 2017.  (Global Blue 20.07)

Back to Table of Contents

5.3  Lebanese Car Market in First Quarter has Commercial Vehicles Outperforming Passenger Cars

The Association of Lebanese Car Importers (AIA) maintains its negative market outlook despite the advertising efforts led by car importers.  The importers attribute the market’s slump to the difficult general economic conditions and explain the preference for low-cost cars (less than $15,000) by the “absence of an adapted and structured public transport system”.  The registration of new commercial cars appears to be performing better than that of passenger cars.  However, the bulk of registrations is still concentrated in the passengers’ segment.  (BLOM 14.07)

Back to Table of Contents

5.4  Jordan’s Inflation Rises by 3.7% in First Half of 2017

According to the Jordanian Department of Statistics (DoS), inflation, measured through consumer prices, rose by 3.7% in the first half of 2017 compared to the figure recorded during the same period of 2016.  The report said that the main item groups that led the increase were transportation (14.3%), vegetables, dried and canned legumes (14.2%), tobacco and cigarettes (9.2%), culture and entertainment (9.6%) and rents (2%).  The Jordan Times attributed the rise to a government decision last December to increase or add taxes to commodities.  The hike started at the beginning of this year, just after the endorsement of the public budget, which included levying new taxes and removing subsidies.

In addition to the taxes and subsidies, some legislation has led to increasing prices.  The Landlords and Tenants Law gives landlords more power, allowing them to end contracts with tenants and rent their houses as many times as they want, which gives some the opportunity to exaggerate prices.

The growth indicator is the lowest in 15 years, said the columnist, adding that it is currently 2.2%.  As part of economic reforms under the International Monetary Fund’s Extended Fund Facility, the government has taken a series of measures that “would have not affect the limited- and middle-income brackets of society”, the government previously stated.  The reforms included standardizing the sales tax at 16%, adding new taxes and removing subsidies for several commodities.  (JT 12.07)

Back to Table of Contents

5.5  Jordan’s Exports to North America and Asia are Rising

National exports to the counties of North America Free Trade Agreement (NAFTA) increased by 6.9% in the first quarter of 2017, the Department of Statistics (DoS) said 16 July.  The US accounted for the biggest share of these exports, standing at 7%.  The DoS report also showed that national exports to non-Arab Asian countries, rose by 24%, including India by 4.6%, while exports to the Grand Arab Free Trade Zone dropped by 8%.  The biggest share of decline in export accounted for Saudi Arabia, which fell by 20%, followed by EU countries by 10%.  Imports from the Grand Arab Free Trade Zone and the NAFTA countries rose by 13 and 71% respectively.  Other figures revealed that imports from non- Arab Asian countries regressed by 6% , including South Korea which dropped by 17% and EU countries by 15%, including Germany which fell by 8%.  (Petra 08.07)

Back to Table of Contents

5.6  Jordanian Expat Remittances Amount to $1.5 Billion by the End of May

Remittances of Jordanian expatriates rose by 1.5% at the end of May this year standing at $1.5 billion, according to the Central Bank of Jordan (CBJ).  CBJ figures showed that remittances of Jordanians abroad rose by $17 million at the end of May 2017 compared to the same period of 2016.  (CBJ 18.07)

Back to Table of Contents

5.7  Jordan Identified Approximately  11,000 Alleged Electricity Thefts in First Half of 2017

Jordan’s Energy and Minerals Regulatory Commission (EMRC) detected 5,316 alleged electricity thefts during the first half of this year.  When added to cases reportedly caught by police, the Gendarmerie and electricity distribution companies, the number rises to 10, 923.  The EMRC Chief Commissioner said that the cases were detected after the commission’s judicial police, in cooperation with electricity distribution companies, conducted 142,675 visits to houses and facilities.  The EMRC detected 48.6% of the cases, the Public Security Department and the Gendarmerie 9.8%, and the electricity companies 41.6%.  Lawsuits filed with the courts reached 2,174 lawsuits, of which 1,099 have been settled.  The number of violations dropped by 16% compared with the same period last year, the commissioner said, attributing the drop to “intensified campaigns against the illegal behavior’’.  The commission is also working on activating the role of judicial police to monitor the performance of the electricity distributers and users.  (JT 16.07)

Back to Table of Contents

►►Arabian Gulf

5.8  UAE Benefits From Rebound in Global Trade & Tourism

The UAE economy is benefiting more from the rebound in world trade flows and growth in global tourism than other GCC economies, according ‘The ICAEW Economic Insight’ a report produced by Oxford Economics.  According to ICAEW the UAE has a more favorable economic outlook because it is the most diversified economy in the GCC.  Fuel generates just 22% of the country’s export revenues.

UAE’s GDP growth is projected to reach 1.7% in 2017.  Although the growth rate is almost half as fast as in 2016, it is represented by a greater contribution from the non-oil sector, which means GDP growth could accelerate to 3.3% in 2018.  The UAE’s infrastructure investments have helped unlock this growth potential.  Dubai International Airport is ranked the world’s third-busiest airport and DP World is the ninth-busiest container port globally.

Passenger traffic through Dubai International Airport increased 7.4% in the first quarter of the year, and this improvement is mirrored in the wider non-oil sector.  Several key infrastructure projects are forging ahead, partly in support of Expo 2020.  Overall, the number of construction projects awarded in first quarter of 2017 was up 26% compared to the corresponding period of 2016.

The stabilization in oil prices, the easing pace of austerity and sovereign debt issuance have all helped ease liquidity pressures in the banking system over the course of the past year or so.  Privately-held bank deposits were up by almost 9% in the year to March, enabling lending to grow by 7% over the same period.

Despite the improving economic conditions, UAE consumers are expected to feel several drags on their spending power in the coming year or two.  The introduction of value added tax (VAT) is expected to add 2%age points to inflation in 2018, pushing inflation to 4% overall.  Further pressure will be felt by consumers as a result of recent government legislation to enable excise duties on soft drinks and tobacco of up to 100% of the product value.  Additionally, new regulations requiring all expats and dependents to hold health insurance in order to renew visas, will take a further chunk out of households’ spending power.  (Gulf News 25.07)

Back to Table of Contents

5.9  Abu Dhabi Inflation Touches 2.1% During First Half of 2017

The Statistics Centre-Abu Dhabi (SCAD) has issued its most recent statistical report on the Consumer Price Index.  The center said the relative rate of change in consumer prices was 1.8% in June 2017, compared to June 2016, while the CPI rose by 0.4% in June 2017, compared to May 2017.  It also noted that inflation reached 2.1% in the first half of 2017, compared to the same period in 2016.  The housing, water, electricity, gas, and other fuel category contributed 51.3% of the total increase during the first part of 2017, due to a price increase of 3.2% in this category.  The transport category contributed 34.2% to the overall increase.

The center stressed that the consumer prices of products purchased by households in the “lower income” category rose by 2.4% during the first part of 2017, compared to the same period of 2016, while the prices in the “middle income” category increased by 2.5%, and 1.9% in the ‘upper income’ category.  (SCAD 25.07)

Back to Table of Contents

5.10  Building Projects Worth $228 Billion Underway in UAE

According to the report from BNC (Business News for Construction) Intelligence, a total of $228 billion in building projects are currently underway in the UAE.  The research calculated the combined value of 7,488 “active” commercial and residential building projects in the emirates that are in the concept, planning, design, construction or on-hold stages.  It did not include education, healthcare, hospitality and retail schemes.

The projects analyzed constitute 82% of all active projects in the UAE’s construction sector and 44% of the total estimated value.  It said that of the 7,488 projects, 1,059 projects fall in the high-rise category rising above 15 floors, and have a combined project value in excess of $100 billion.  There were 2,483 mid-rise projects with between four and 14 floors, with a value of $66 billion, while the number of low-rise projects stood at 3,946 with a value of $61.9 billion.  Of the total, 5,276 projects worth a combined $99.4 billion were under construction or in the tendering phase.  It added that 1,378 buildings, worth $89.9 billion) were on hold at the time of conducting the research.  (BNC 25.07)

Back to Table of Contents

►►North Africa

5.11  Egypt Selling Off State-Owned Companies for First Time in 12 Years

Egyptian Prime Minister Sherif Ismail announced on 3 July that the government is discussing the necessary procedures for the sale of shares of some state-owned companies on the stock exchange, with Engineering for the Petroleum and Process Industries company (ENPPI) being the first, to be followed by several public sector companies and banks within the next two months.  This is Egypt’s first initial public offering (IPO) of a state-owned company in 12 years.  In 2005, Egypt sold shares in Telecom Egypt, Alexandria Mineral Oils Company and Sidi Kerir Petrochemicals Company.

The Egyptian government’s recent IPO falls within the scope of the requirements of the International Monetary Fund (IMF) on a $12 billion loan signed with Egypt on 11 November to support the Egyptian government’s economic reform program, which called for IPOs of state-owned companies in the first quarter of 2017.  This measure is also part of a plan of action submitted by former Minister of Investment and International Cooperation Khurshid to the government on 19 August 2016.  The ministry had drawn up a plan to attract indirect investment through a five-year program in which several state-owned companies and banks would be listed on the stock exchange.  The government’s target is to receive $5 billion to $10 billion in three years as a result of the IPOs of dozens of public sector companies.

Egypt expects to raise between $100 million and $150 million from the ENPPI offering during the fourth quarter of 2017.  The government’s planned IPOs come as Egypt’s economy continues to face serious problems.  The budget deficit for fiscal year 2016-17 stands at around 10.9%.  The Egyptian currency remains down against the US dollar following the devaluation of the pound last fall, and the country has suffered from a sharp rise in the prices of goods and services provided to citizens.  While economic experts disagree on the feasibility of the government’s IPOs of state-owned companies, they all agree that this step was expected and comes as part of the government negotiations with the IMF.  (Al-Monitor 20.07)

Back to Table of Contents

5.12  IMF Approves Second Tranche of Egypt Loan

The International Monetary Fund (IMF) has approved a second tranche of a $12 billion loan to Egypt, praising the country’s tough economic reforms that have fueled inflation.  IMF Managing Director Lagarde said the approval of the roughly $1.25 billion tranche showed “the IMF’s strong support for Egypt in these efforts”.  The IMF and Egypt had agreed the loan last November, as the North African country devalued the pound and after it introduced a value-added tax in a bid to boost government finances and its foreign reserves.  Egypt has also slashed fuel subsidies, most recently last month.

Concerns remained about inflation, which hit 32.9% in April before declining slightly in May.  The government in June announced an increase in fuel prices of up to 55%, the second since November when it also floated the currency.  Analysts believe the fuel price rises will further increase inflation.  The pound has also continued to trade at a rate that is lower than was expected before the flotation.  The pound trades at about 18 to the dollar, compared with 8.9 before November.  (IMF 15.07)

Back to Table of Contents

5.13  Egypt Receives Final $1.25 Billion in First Tranche of IMF Loan

The Central Bank of Egypt (CBE) has received the final installment of the first $4 billion tranche of a $12 billion loan from the International Monetary Fund (IMF).  The deposit follows the IMF executive board’s approval of the first review of the loan.  On 14 July, the IMF’s executive board approved the first review of a $12 billion loan to Egypt and has disbursed $1.25 billion, the final instalment of the first $4 billion tranche of the loan.  The IMF’s review included an assessment of the implementation of Egypt’s reform program since 2014, which includes cutting subsidies and government expenditure while implementing new taxes.

In mid-August 2016, Egypt reached a staff-level agreement with the IMF over a three-year $12 billion loan to endorse the country’s fiscal reform program, which the government embarked on in 2014 in an attempt to curb the growing state budget deficit.  In November, Egypt received the first funding instalment – an initial dispersal of $2.75 billion – of the first tranche following the floating of the Egyptian pound.  Egypt is expected to receive a third loan instalment worth $2 billion from the IMF between December and January following the next review between November and December, Finance Minister Amr El-Garhy told the press.  (Ahram Online 18.07)

Back to Table of Contents

5.14  Egypt’s Foreign Direct Investment Rises 12% in 2016/17

Foreign direct investments in Egypt have risen 12% to reach $6.6 billion in the fiscal year 2016/17, compared to $5.9 billion in the same period last year, Egypt’s investment and international cooperation ministry said.  The $6.6 billion figure was for the period from July 2016 to March 2017.  The country’s fiscal year begins on 1 July and ends on 30 June.  The ministry also said that 1,120 companies were newly established or expanded with a capital of EGP 4.2 billion.  Out of the 1,120 companies, 960 were in June 2017 with a capital of EGP 2.2 billion, compared to 913 companies with a capital of EGP 2.4 billion in June 2016.  The newly established companies are set to offer 4,800 job opportunities, compared to around 8,100 opportunities in May 2017 and 6,300 in June 2016.

The ministry also shed light on its international cooperation efforts, pointing to a tranche received from the World Bank to develop Upper Egypt.  In June, Egypt received $125 million from the World Bank to support the Upper Egypt Development Programme.  The money is the first tranche of a World Bank fund worth $500 million to be pumped into growing investment and industrial development in the governorates of Sohag and Qena.

In June, Egypt also signed three economic agreements with Germany worth €203 million, covering renewable energy, education, irrigation and small and medium-sized enterprises.  The first agreement, worth €141.5 million, prioritizes four areas of investment in Egypt, including the development of renewable energy in the Gulf of Suez.  The second is the Economic and Developmental Cooperation Agreement, worth €50 million, to fund solar-energy installations in Egypt and a technical and professional education project.  A third agreement, worth €12 million, aims to “support different development sectors,” including investment in Egypt’s education sector and reform of Egypt’s governmental bodies.  (Ahram Online 15.07)

Back to Table of Contents

5.15  Egypt Agricultural Exports Up 12.1% in First Half of 2017

Egypt’s agricultural exports rose 12.1% during the first half of 2017, reaching 3.5 million tonnes compared to 3.1 million last year, the Agriculture Ministry 19 July.  Egypt’s agricultural exporters have seen a surge in demand since the country floated its currency last November, allowing it to roughly halve in value as part of reforms tied to a three-year $12 billion International Monetary Fund loan agreement.  Exports increased in citrus, potatoes, grapes and strawberries, and fell only for onions.  The export growth comes after a turbulent year for Egyptian produce, with a Hepatitis A scare in North America linked to Egyptian strawberries and a temporary ban of Egyptian fruits and vegetables in Russia, one of Cairo’s major buyers.  (Reuters 19.07)

Back to Table of Contents

5.16  Morocco’s Consumer Price Index Rises by 0.3% in June

Morocco’s consumer price index (CPI) increased by 0.3% during June 2017, compared with the previous month, with the biggest increases in food products recorded in Casablanca and Al Hoceima, according to a report by the High Commission for Planning (HCP).  The consumer price index rose by 0.3% in June compared with the previous month due to a 0.6% increase in the food index and stagnation of the non-food index.  The rise in food products observed between May and June 2017 mainly concerned fish and seafood products, which increased by 7.8%, vegetables with a rise of 2.4%, meats with a 1percent increase, and oils and fats with 0.6% rise.  On the other hand, prices of fruits fell by 3.5%, while prices of coffee, tea, and cocoa dropped by 0.6%, according to HCP.

Compared to June 2016, the consumer price index rose by 0.3%in June 2017.  The HCP said this was due to a 1% increase in the non-food items index, with variations ranging from a decrease of 0.2% in “communication” to a 3.2% increase in “restaurants and hotels,” while food products recorded a decrease of 0.7%, concluded the report.  (HCP 20.07)

Back to Table of Contents

5.17  Morocco Will Continue to Increase Public Investment and Decrease Deficit

BMI Research, a Fitch Group company, is predicting that Morocco will move toward increased public investment and a gradual decrease in budget deficits.  The report reiterates BMI’s belief that the delayed formation of a government in Morocco in the first months of 2017 will have virtually no impact on the country’s fiscal trajectory.  According to BMI, Saad Eddine El Othmani’s coalition government is on track to continue the kingdom’s plans to shrink budget deficits and maintain its focus on public investment. The two-strategy plan is part of Morocco’s goal to become a manufacturing and exporting hub connecting Europe and Africa.

BMI’s data reveals that Morocco’s real GDP growth will be lower than was forecasted in the 2017 budget, arriving at 4.3% instead of the anticipated 4.5%.  In consequence, BMI predicts that the deficit will be higher than the government’s objective of 3% of GDP for the year.  The report predicts the budget deficit will diminish gradually over the next two years; 3.4% for 2017, followed by 3.1% by the end of 2018.  The deficit stood at 3.7% at the end of 2016.  The predicted rise in Morocco’s economic activity also bodes well for government revenues, 80% of which comes from direct and indirect taxes.  However, it is important to note that this revenue growth will be tempered by tax exemptions offered by the government to encourage growth in the manufacturing sector.

BMI estimates that current efforts to limit expenditures will continue over the coming years, as evidenced by the 2017 budget hold on the public salary bill.  Coupled with 2016’s pension reform in the public sector, which increased contributions and raised the retirement age, current spending will continue to be controlled.  BMI further maintains their view that sovereign risk in Morocco will remain low.  (BMI 19.07)

Back to Table of Contents

5.18  Morocco’s Trade Balance Wavers, Deficit Increases by 8% in 2017’s First Half

Morocco’s trade deficit stood at MAD 93.74 billion in 2017’s first semester, compared to 86.82 billion in 2016’s, showing a worrying rise of 8%.  In the first quarter of 2017, imports registered a jump of 7.3%, an increase of MAD 14.8 billion compared the same period in 2016.  They reached MAD 217.64 billion compared to 202.8 billion a year earlier.  Imports were mainly driven by increases in energy products imports with a 36% growth rate, including gas-oils and fuel oil which recorded increases ranging between 28% and 46% due to the rise of international prices.  Thus, this “worrying evolution” resulted in a deepening of the trade deficit by MAD 7.15 billion.

Meanwhile, exports, which also rose by 6.6%, drained only half of the increase in the value of purchases, states the office in its foreign exchange monthly indicators’ note.  Standing at MAD 123.66 billion instead of 115.974 billion in 2016, exports from all sectors, except pharmaceutical industry which remained stable, recorded increases, including sales in the agriculture and agri-food sector with MAD 2.14 billion, phosphates and derivatives with MAD 1.74 billion and automotive and aeronautics sector with 1.34 billion.

While the level of sales and their content remain far below the level of acquisitions, the trend in recent years shows that one point in export growth equals one point and a half of imports growth.  These results are evidenced in intermediate goods that predominate imports, showing in some cases double-digit growth, as well as a significant share of imports in temporary admission with 22% in 2016.  More positively, the flow of foreign direct investment (FDI) increased by 20.1%, standing at MAD 14.9 billion compared to 12.42 billion at the end of June 2016.  This development is due to a 0.7% increase in revenues with MAD 125 million, accompanied by a 46.3% decrease in expenditure.  (MWN 24.07)

Back to Table of Contents


6.1  Turkey Chooses Russia Over NATO for Missile Defense

Turkey has agreed to pay $2.5 billion to acquire Russia’s most advanced missile defense system, in a deal that signals a turn away from the NATO military alliance that has anchored Turkey to the West for more than six decades.  The preliminary agreement sees Turkey receiving two S-400 missile batteries from Russia within the next year, and then producing another two inside Turkey.  Turkey has reached the point of an agreement on a missile defense system before, only to scupper the deal later amid protests and condemnation from NATO.  Under pressure from the U.S., Turkey gave up an earlier plan to buy a similar missile-defense system from a state-run Chinese company, which had been sanctioned by the U.S. for alleged missile sales to Iran.

Turkey has been in NATO since the early years of the Cold War, playing a key role as a frontline state bordering the Soviet Union.  But ties with fellow members have been strained in recent years, with Turkish President Erdogan pursuing a more assertive and independent foreign policy as conflict engulfed neighboring Iraq and Syria.

Tensions with Washington mounted over U.S. support for Kurdish militants in Syria that Turkey considers terrorists, and the relationship with the European Union soured as the bloc pushed back against what it sees as Turkey’s increasingly autocratic turn.  Last month, Germany decided to withdraw from the main NATO base in Turkey, Incirlik, after Turkey refused to allow German lawmakers to visit troops there.  For Turkey, the key aspect of any deal is transfer of technology or know-how.  Turkey wants to be able to produce its own advanced defense systems, and the Russian agreement to allow two of the S-400 batteries to be produced in Turkey would serve that aim, the official said.

U.S. and European rivals have also bid to co-produce missile defense systems with Turkey, as it seeks partnerships allowing it to enhance its domestic arms production amid a military buildup in the region.  Disagreements between Turkey, which has the second-largest army by personnel numbers in NATO, and the U.S., the bloc’s biggest military, have also impacted business.  No U.S. companies bid for a Turkish attack helicopter contract in 2006 after Turkey insisted on full access to specific software codes, which the U.S. refused to share, considering it a security risk.  Turkey partnered with Italy instead in a $3 billion project to co-produce 50 attack helicopters for its army.  (Bloomberg 14.07)

Back to Table of Contents



7.1  Tisha B’Av to Be Observed on 31 July/1 August

 Tisha B’Av will be observed this year from evening on 31 July until the nightfall on 1 August.  Tisha B’Av (or the Ninth of Av) is an annual fast day in Judaism, named for the ninth day (tisha) of the month of Av in the Hebrew calendar.  Tisha B’Av is the culmination of a three week period of increasing mourning, beginning with the fast of the 17th of Tammuz.  The fast commemorates the destruction of both the First Temple and Second Temple in Judaism’s holiest site, Jerusalem, which occurred about 656 years apart, but on the same Hebrew calendar date.   Accordingly, the day has been called the “saddest day in Jewish history”.  While the day recalls general tragedies which have befallen the Jewish people over the ages, the day focuses on commemoration of five events: the destruction of the two ancient Temples in Jerusalem, the sin of the ten spies sent by Moses, who spoke disparagingly about the Land of Israel, the razing of Jerusalem following the siege of Jerusalem in 70 CE and the failure of Bar Kokhba’s revolt against the Roman Empire.

The fast lasts about 25 hours, beginning at sunset on the eve of Tisha B’Av and ending at nightfall the next day.  In addition to the prohibitions against eating or drinking, observant Jews also observe prohibitions against washing or bathing, applying creams or oils, wearing leather shoes, or having marital relations.  In addition, mourning customs similar to those applicable to the shiva period immediately following the death of a close relative are traditionally followed for at least part of the day, including sitting on low stools, refraining from work and not greeting others.  The Book of Lamentations (Eicha) is traditionally read, followed by the kinnot, a series of liturgical lamentations.

Back to Table of Contents


7.2  UAE Named Among Laziest Countries in the World

The study, published in international science journal Nature, found that the UAE was among the laziest countries in the world.  UAE residents scored below the international average when it came to the number of daily steps taken, according to a study by scientists at US-based Stanford University, who analyzed 68 million days’ worth of minute-by-minute data from 700,000 smartphones.  The average number of daily steps taken by residents in the UAE is 4,516 as opposed to the global average of 4,961.  The UAE came in just before Brazil, which scored 4,289, and the UK, which scored an average of 5,444.  Hong Kong recorded a high of 6,880 while China and Japan came thereafter with averages of 6,189 and 6,010.  Spain followed suit with an average of 5,936 daily steps.  Indonesia, which recorded an average of just 3,513, came at the bottom of the rankings.

The study also linked the findings to obesity, revealing that the average number of steps in a country was not as important as “activity inequality,” which is the gap between the fittest and laziest people, similar to the gap between the rich and the poor in “wealth inequality.”  Hence, the bigger the activity inequality, the higher the rates of obesity.  Furthermore, the research found that activity inequality was largely driven by gender inequality, especially in countries such as the US and Saudi Arabia, where women spent much less time being active than men.  The low rates of activities were also linked to cities designed mainly for driving rather than walking, such as Houston and Memphis in the US.  (AB 12.07)

Back to Table of Contents

7.3  Cairo Has the Cheapest Taxis in the World

Cairo has the cheapest taxi service in the world, a study by online used car dealership Carspring revealed.  The Egyptian capital came in first out of 80 cities for the cheapest taxis, which cost $0.55 per 3 km. for an inner city ride.  The website provided a breakdown of fares for journeys between the airport and the city center, as well as the cost of waiting time per hour.  Cairo was followed by Mumbai, Jakarta, Bucharest and Mexico City.  Carspring used data provided by the official website of each city, as well as official airport sites and tourist information webpages.

In 2009, Egypt introduced the white taxi service, which had an updated fare meter.  Prior to the introduction of the new taxi, customers would often have to negotiate the price of rides with drivers.  However, some drivers have resorted to rigging their meters or claiming that they do not function.  (Ahram Online 18.07)

Back to Table of Contents

7.4  Morocco Gets 19th Most Spam Calls in World

Morocco receives the 19th most unsolicited calls in the world, an investigation by caller ID service Truecaller has revealed.  According to the study, which analyzed calls between January 1 and May 31 this year, the average user in Morocco received 7.7 spam calls a month.  India received the most spam calls, with the average user receiving 22.6 spam calls a month, while USA and Brazil were second, with their residents receiving 20.7 spam calls a month on average.  The report said the most prominent reasons for spammers were nuisance, telemarketing, financial services, debt collection and political.  (MWN 18.07)

Back to Table of Contents


8.1  EarlySense’s Sensor Accurately Detects Sleep Apnea and Disordered Breathing in Children

EarlySense announced new research indicating that its EarlySense Live home-based sensor accurately detects sleep apnea and sleep disordered breathing (SDB) in children, when compared to polysomnography (PSG), the testing process used in clinics around the world to detect sleeping disorders.  The contact-free system showed nearly 90% accuracy compared to the gold standard and calculated the Apnea/hypopnea index with a 0.9 correlation to sleep lab results.  The new research comes on the heels of EarlySense’s receipt of U.S. patent # 9,681,838 for a monitoring system that identifies individuals undergoing an apnea episode and for predicting an apnea episode, to enable immediate intervention.  It also follows a previous study that evaluated contact-free continuous monitoring for measuring obstructive sleep apnea in adults, published earlier this year in the ATS Journal.

The new study, at Soroka Medical Center, evaluated children that were referred to a sleep study with suspected SDB.  The children underwent full overnight PSG in a sleep laboratory, and were simultaneously measured with EarlySense’s piezo-electric (PE) sensor.  The PE system measured both sleep/wake and apnea/hypopnea events to enable an accurate Apnea-Hypopnea-Index estimation.  The sleep scoring and Apnea-Hypopnea-Index (AHI) detections of the PE contact-free system were compared to PSG based manual scoring of an expert sleep technologist, according to American Academy of Sleep Medicine (AASM) guidelines.

Launched in early 2017, EarlySense Live provides users, their families and caregivers with accurate information regarding heart rate, breathing cycles, stress and sleep indicators.  The at-home solution leverages EarlySense’s core medical monitoring technology which has been successfully implemented globally in hospitals, rehab and skilled nursing facilities.

Ramat Gan’s EarlySense provides contact-free, continuous monitoring solutions for the medical and consumer digital health markets.  EarlySense’s integrated sensor utilizes Artificial Intelligence (AI) and big data analytics to provide actionable health insights and improve clinical outcomes.  Used worldwide in hospitals, rehab and skilled nursing facilities, EarlySense assists clinicians in early detection of patient deterioration, helping to prevent adverse events, including code blues  which are a result of cardiac or respiratory arrest, preventable ICU transfers, patient falls and pressure ulcers.  (EarlySense 12.07)

Back to Table of Contents

8.2  Cannabics Pharmaceuticals Executed a Final Collaboration Agreement with SIMFO

Cannabics Pharmaceuticals has executed a Collaboration Agreement with SIMFO GmbH, a world leader in cancer diagnostics and liquid biopsies located in Germany.  Under the Agreement, Cannabics Pharmaceuticals shall be the exclusive global provider of SIMFO’s CTC diagnostics to cancer patients treated with natural cannabinoids.  The diagnostics include a count of circulating tumor cells (CTC) and drug sensitivity tests of different cannabinoids (e.g. THC, THCA, CBD and CBDA).  These tests are available to cancer patients who send blood samples and receive supportive data for their physicians to optimize and personally tailor their cannabinoid treatment.  SIMFO has already commenced preclinical studies on cannabinoid antitumor activity and drug development utilizing Cannabics Pharmaceuticals’ proprietary cannabinoid formulations.

Cannabics Pharmaceuticals is dedicated to the development of Personalized Anti-Cancer and Palliative treatments.  The Company’s R&D is based in Israel, where it is licensed by the Ministry of Health for its work in both scientific and clinical research.  The Company’s focus is on harnessing the therapeutic properties of natural Cannabinoid formulations and diagnostics.  Cannabics engages in developing individually tailored natural therapies for cancer patients, utilizing advanced screening systems and personalized bioinformatics tools.  (Cannabics Pharmaceuticals 12.07)

Back to Table of Contents

8.3  Rapid Medical Raises $9 Million

Yokneam’s Rapid Medical, which develops neurovascular interventional devices, raised $9 million in a Series B financing round.  Founded in 2008, Rapid Medical is seeking to further commercialize TIGERTRIEVER Revascularization Device and the COMANECI Adjustable Remodeling Mesh, products that provide prevention and minimally invasive stroke treatment.  Israel’s BRM and China’s Shanghai-Israel Investment Fund led the round, while Winnovation and Gefen Capital participated.  (NoCamels 17.07)

Back to Table of Contents

8.4  Hope for Patients with Heart Failure Using New Implantable Hemodynamic Monitor

A review appearing in the 18 July issue of the Journal of the American College of Cardiology (JACC) highlights Vectorious Medical Technologies, an Israeli company developing the world’s first digital wireless sensory implant for measuring LAP (currently available CardioMEMS technology is analog and measures pressure in the pulmonary artery or PAP).  Patients with CHF suffer from repeated admissions to the hospital due to fluid overload, typically presenting with edema of the legs and congestion of the lungs.  The conventional approach of monitoring symptoms and measuring daily weights, and a “wait and see” attitude, is the basis for the huge unmet need of recurrent hospital admissions, because these methods appear late and are unreliable signs of disease progression.

The Vectorious V-LAP measures the heart’s LAP which is the earliest and most specific indication for a CHF patient’s exacerbation.  The system is the most robust wireless implantable platform to date, and can enable optimal treatment for patients.  It provides a high-resolution waveform morphology of LAP, allowing for the detection of additional cardiac comorbidities such as atrial fibrillation and mitral valve regurgitation.  In the JACC review, CHF outcomes with CardioMEMS PAP technology have been encouraging.  As well, more technologically-advanced, implantable hemodynamic monitoring systems are in development, and newer approaches to the use of this data (such as a physician-directed, patient self-management approach) may yet again revolutionize the management of patients with HF.

Vectorious Medical Technologies is a privately-held company, founded in 2011 and is headquartered in Tel Aviv, Israel.  With goal of saving millions of lives by enabling optimal treatment of CHF patients, Vectorious has developed the first digital, leadless, battery-free sensory implant providing daily “push-button” readings of LAP, a platform that will enable a significant improvement in the management of CHF.  The system implements a novel approach to long-term, implant-based hemodynamic monitoring that leverages state-of-the-art technologies in the areas of miniature sensing and wireless communications.  (Vectorious Medical Technologies 13.07)

Back to Table of Contents

8.5  Gamida Cell Announces $3.5 Million Grant from the Israeli Government

Gamida Cell has been awarded a grant of $3.5 million from the Israel Innovation Authority (IIA) of the Israeli Ministry of Economy and Industry.  The mission of the IIA is to encourage innovation and entrepreneurship in various industries, including science and technology, while stimulating economic growth.  The grant follows the recent closing of a $40 million financing round by the Company and its recent establishment of an executive presence in the U.S.  The non-dilutive funding, combined with the $40 million financing round, will support Gamida Cell’s ongoing research and development efforts, including its Phase 3 registration study of NiCord for hematological malignancies, such as leukemia and lymphoma, its clinical trials of CordIn for sickle cell disease and thalassemia, and its NK cell therapy for blood and solid cancers.

Jerusalem’s Gamida Cell is a world leader in cellular and immune therapies for the treatment of cancer and orphan genetic diseases.  The company’s pipeline of products are in development to treat a wide range of conditions including cancer, genetic hematological diseases such as sickle cell disease and thalassemia, bone marrow failure syndromes such as aplastic anemia, genetic metabolic diseases and refractory autoimmune diseases.  Gamida Cell’s shareholders include Novartis, Clal Biotechnology Industries, Elbit Imaging, Israel Healthcare Ventures, Shavit Capital Fund, VMS Investment Group, Denali Ventures, Auriga Ventures and Israel Biotech Fund.  (Gamida Cell 20.07)

Back to Table of Contents

8.6  Christiana Care’s Gene Editing Institute & NovellusDx Progress Toward Personalized Cancer Medicine

Personalized cancer therapies are on the horizon thanks to a new genomic cancer research partnership between the Gene Editing Institute of Christiana Care Health System’s Helen F. Graham Cancer Center & Research Institute in Delaware and NovellusDx.

The Gene Editing Institute has licensed its innovative gene editing technology to Jerusalem-based NovellusDx to improve the efficiency and speed of NovellusDx’s cancer diagnostic screening tools.  With the use of advanced gene editing technology, NovellusDx will be able to identify the genetic mechanism responsible for both the onset and progression of many types of cancer and determine the most effective cancer therapy.  NovellusDx will pay royalties to Christiana Care for ten years for the use of its innovative gene editing technology.

Today, genomic sequencing plays an ever-increasing role in cancer treatment, but the functional significance of most mutations found in a patient’s DNA is unknown and so is the effect drugs have on them.  NovellusDx will use the gene editing tools to help determine which drug is best for individual patients by recreating the mutations in a test system and then screening a series of known cancer drugs against those mutations to determine their efficacy.

A $900,000 grant from the U.S.-Israel Binational Industrial Research and Development (BIRD) Foundation in December 2016 facilitated the Gene Editing Institute-NovellusDx partnership.  The BIRD Foundation promotes collaboration between U.S. and Israeli companies in a wide range of technological fields for the purpose of joint product development.

Jerusalem’s NovellusDx’s mission is to provide functional information about mutations and their responses to drugs so that oncologists can treat patients with precision therapies and bio-pharmaceutical companies can develop drugs more effectively.  The NovellusDx approach is to monitor the functional effects of mutations and observe the effects of drugs, drug combinations and drug candidates on the activity level caused by the mutations.  (NovellusDx 20.07)

Back to Table of Contents

8.7  NICE Recommends CINQAERO for the Treatment of Severe Eosinophilic Asthma

Teva Pharmaceutical Industries announced that the National Institute for Health and Care Excellence (NICE) in England has recommended CINQAERO (reslizumab) in its Final Appraisal Determination (FAD).  CINQAERO is a humanized interleukin-5 (IL-5) antagonist monoclonal antibody for add-on therapy in adult patients with severe eosinophilic asthma inadequately controlled despite high-dose inhaled corticosteroids plus another medicinal product for maintenance treatment.  This decision is based on a dossier submitted to NICE for a Single Technology Appraisal (STA).

CINQAERO is a humanized interleukin-5 (IL-5) antagonist monoclonal antibody (IgG4 kappa).  IL-5 is the most selective eosinophil-active cytokine and plays a major role in the maturation, activation and survival of eosinophils.  In asthma patients, the eosinophilic phenotype is associated with compromised lung function, more frequent symptoms and increased risk of exacerbations.  CINQAERO binds to human IL-5 and prevents it from binding to the IL-5 receptor, thereby reducing eosinophilic inflammation.

Teva Pharmaceutical Industries is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions used by approximately 200 million patients in 100 markets every day.  Headquartered in Israel, Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,800 molecules to produce a wide range of generic products in nearly every therapeutic area.  In specialty medicines, Teva has the world-leading innovative treatment for multiple sclerosis as well as late-stage development programs for other disorders of the central nervous system, including movement disorders, migraine, pain and neurodegenerative conditions, as well as a broad portfolio of respiratory products.  (Teva 20.07)

Back to Table of Contents

8.8  Medic Vision Granted US Patent for its XR-29 Solution

Medic Vision was granted a patent by the US Patent and Trademark Office on its XR-29 Dose-Check system (Patent No. 9693747), which is an integral part of the notable market-leading SafeCT-29 product suite.  The SafeCT-29 product suite, which includes the XR-29 Dose Check component, was the first and only third-party solution to receive FDA clearance, and remains the only third-party solution that has been endorsed by the OEMs.  Since being officially launched, SafeCT-29 has been installed in hundreds of medical care centers throughout the US, making Medic Vision the leading NEMA XR-29 third-party compliance solution provider.  Medic Vision’s market position is now likely to be significantly enhanced by virtue of the issuance of its latest patent and the company stated that it fully expects providers of medical imaging services and solutions to respect Medic Vision’s patent rights.

Tirat HaCarmel’s Medic Vision Imaging Solutions is a leading provider of cost-effective, vendor-independent image enhancement and dose management solutions for CT exams.  Medic Vision’s SafeCT products are in routine clinical use at major hospitals and imaging centers nationwide, supporting scanners of all vendors.  The company’s SafeCT product suite provides compliance with the latest regulatory requirements and initiatives related to CT radiation.  (Medic Vision 19.07)

Back to Table of Contents

8.9  Intec Pharma Granted Patent in Hong Kong for Accordion Pill Carbidopa / Levodopa

Intec Pharma announced that the Patent Registry Intellectual Property Department of Hong Kong has issued a Certificate of Grant of a Hong Kong patent for an Accordion Pill containing certain drugs, including the combination of Carbidopa and Levodopa.  The patent, granted under No. HK1158545, is titled “Carbidopa/Levodopa Gastroretentive Drug Delivery” and is currently scheduled to remain in force until April 2029.

Jerusalem’s Intec Pharma is a clinical-stage biopharmaceutical company focused on developing drugs based on its proprietary Accordion Pill platform technology.  The Company’s Accordion Pill is an oral drug delivery system that is designed to improve the efficacy and safety of existing drugs and drugs in development by utilizing an efficient gastric retention and specific release mechanism.  The Company’s product pipeline includes two product candidates in clinical trial stages: Accordion Pill Carbidopa/Levodopa, or AP-CD/LD, which is being developed for the treatment of Parkinson’s disease symptoms in advanced Parkinson’s disease patients and AP-CBD/THC, an Accordion Pill with the two primary cannabinoids contained in Cannabis sativa, cannabidiol (CBD) and tetrahydrocannabinol (THC), which is being developed for various indications including low back neuropathic pain and fibromyalgia.  (Intec Pharma 19.07)

Back to Table of Contents

8.10  Mitsubishi Tanabe Pharma Buys NeuroDerm For $1.1 billion

NeuroDerm has been purchased by Japanese pharmaceutical company Mitsubishi Tanabe Pharma in a deal worth $1.1 billion.  Assuming both regulatory approval and that of shareholders, a timetable for the acquisition will be finalized in the near future.  NeuroDerm expects the deal to be completed in Q4/17.  NeuroDerm is currently developing a new drug delivery method and concentrating on treatments for Parkinson’s disease.  The company is hoping to launch two new products in the coming two years, one low-dose drug aimed at replacing an oral delivery method and another high-dose drug aimed at replacing a surgical procedure for an implanted drug release device in patients.  The company is currently at the end of two phase 3 trials in the United States for a moderate and severe drug for Parkinson’s disease, the results of which could be accepted this year.  Additionally, NeuroDerm is also in a Phase 3 trial in Europe, which is expected in the second half of 2018.

Rehovot’s NeuroDerm is a clinical-stage pharmaceutical company developing next-generation treatments for central nervous system (CNS) disorders that will make a clinically meaningful difference in patients’ lives.  NeuroDerm’s technology enables new routes of administration for existing drugs that overcome their current deficiencies and achieve enhanced clinical efficacy.  (Mitsubishi Tanabe Pharma 24.07)

Back to Table of Contents

8.11  Brainstorm Awarded $16 Million Grant from CIRM in Support of Clinical Trial of NurOwn in ALS

Brainstorm Cell Therapeutics announced that the California Institute for Regenerative Medicine (CIRM) has awarded Brainstorm a grant of $16 million to support the pivotal Phase 3 study of NurOwn, for the treatment of amyotrophic lateral sclerosis (ALS).  The grant from CIRM is a significant endorsement of the potential for Brainstorm’s novel approach to treat ALS using adult stem cells.  CIRM is the World’s Largest Institution Dedicated to Cell Therapies.

Brainstorm is in the advanced stages of planning a Phase 3 clinical trial investigating NurOwn in ALS.  The trial is expected to enroll approximately 200 patients and will be conducted at 6 top ALS clinical sites in the U.S.  The primary outcome measure will be the ALSFR-S score responder analysis. The patient population will be optimized to include faster-progressing patients who demonstrated superior outcomes in the NurOwn Phase 2 ALS trial.

Petah Tikva’s Brainstorm Cell Therapeutics is a biotechnology company engaged in the development of first-of-its-kind adult stem cell therapies derived from autologous bone marrow cells for the treatment of neurodegenerative diseases.  The Company holds the rights to develop and commercialize its NurOwn technology through an exclusive, worldwide licensing agreement with Ramot, the technology transfer company of Tel Aviv University.  NurOwn has been administered to approximately 75 patients with ALS in clinical trials conducted in the United States and Israel.  (Brainstorm 21.07)

Back to Table of Contents

8.12  BioLight Reports Successful Results in Phase 1/2a Clinical Trial for Glaucoma Insert

BioLight Life Sciences announced successful results from its glaucoma insert VS101 (Eye-D latanoprost insert) Phase 1/2a clinical trial, which demonstrated its ability to lower intraocular pressure (IOP) for a 12-week period, with a favorable safety profile.  The Eye-D latanoprost insert is designed to provide sustained IOP-lowering for patients who have difficulty taking their prescribed eye drops for the treatment of glaucoma on a continuous daily basis.  BioLight’s first-in-human study, this randomized, controlled, exploratory Phase 1/2a clinical trial was designed to compare three doses of its Eye-D latanoprost inserts to once-daily latanoprost eye drops.  Following a simple, in-office procedure, the sustained release Eye-D latanoprost inserts were tested for 12 weeks and compared to once-daily latanoprost eye drops for the same period.

Tel Aviv’s BioLight addresses a number of significant unmet medical needs with a pipeline of ophthalmic products and product candidates, which are in various commercial and clinical stages, including: IOPtiMate, a laser-based non-invasive surgical treatment for glaucoma; TeaRx, a diagnostic solution that provides a multi-assay analysis of tear film constituents in order to identify one or more underlying causes of dry eye syndrome, or DES; Eye-D, an in-office insertable platform that provides for controlled release of ophthalmic medications over time; OphRx’s lyotropic liquid crystals, or LLC, a non-invasive drug delivery technology administered through eye drops as an alternative to current ocular delivery modalities; and  LIPITEAR, a microemulsion consisting of Phospholipidis and Triglycerides, which forms a tear-like elastic lipid shield which is indicated for use in DES, post-operative ocular surgery.  BioLight has also invested, through Micromedic, in innovations in cancer diagnostics.  (BioLight 24.07)

Back to Table of Contents

8.13  FemTech Startup EZbra Presented at youngStartup’s Venture Summit in New York

EZbra announced the company’s founder and CEO, presented the company’s story and flagship product to VCs and angel investors in the life-sciences track of the 17th Annual NY Venture Summit, which was organized by youngStartUp Ventures, in New York earlier in July.  The company’s flagship product, EZbra, is a medical device, all in one advanced breast dressing, proprietary sterile and disposable bra, offering a state of the art solution, for the discomfort and inefficiencies post-op patients experience with current breast wound dressings.  EZbra is designed for patient’s maximum independency while replacing dressings, it will fit itself perfectly to any breast formation it covers, absorb wound exudates, apply various amounts of compression, anchor implants and stabilize drains, while allowing patients to recover with dignity.  EZbra is part of the emerging FemTech sector that focuses on women’s healthcare and wellness.

Tel Aviv’s EZbra aspires to create a uniformly accepted high-quality breast dressing for the over 13 million women who undergo various types of breast procedures and surgeries annually.  The company’s flagship product is an innovative and patented disposable post-surgical breast dressing that provides soft absorbent protection and compression.  To date the company has raised $2 million.  (EZbra 24.07)

Back to Table of Contents

8.14  Cannabics Pharmaceuticals Establishes a Human-Cannabis-Cancer Genetics Lab

Cannabics Pharmaceuticals has established a Genetic lab that will develop diagnostic tools based on human genome, tumor genetics and cannabinoids.  The company recruited Dr. Moran Grinberg to serve as its VP of R&D and to lead the Genetic research.  Moran has a PhD in Virology and MSc in clinical pharmacology with vast experience in conceptualizing and executing pharmacological research.

Cannabics Pharmaceuticals, a U.S based public company, is dedicated to the development of Personalized Anti-Cancer and Palliative treatments.  The Company’s R&D is based in Israel, where it is licensed by the Ministry of Health for its work in both scientific and clinical research.  The Company’s focus is on harnessing the therapeutic properties of natural Cannabinoid formulations and diagnostics.  Cannabics engages in developing individually tailored natural therapies for cancer patients, utilizing advanced screening systems and personalized bioinformatics tools.  (Cannabics Pharmaceuticals 24.07)

Back to Table of Contents

8.15  Prospera Raises $15 Million to Transform Farms with Data

Prospera announced a $15 Million Series B funding round.  Qualcomm Ventures, the investment arm of Qualcomm Incorporated, has led the round, which was joined by Cisco Investments, ICV, and existing investor Bessemer Venture Partners.  It brings the total investment in the company to $22 million.  Prospera transforms farm production with end to end digitalization – from agronomy to operations.  Powered by advanced data analytics, computer vision and artificial intelligence, Prospera’s system provides growers easy-to- use digital tools to achieve better yields, healthier crops and higher profits.  Prospera builds long-term partnerships with leading growers worldwide, based on delivering tangible value quickly, and at every stage of the growing cycle.  Already working with some of the most recognized growers around the world, Prospera will use the new funds to accelerate its global expansion and broaden its services to different crops in both indoor and outdoor environments.

Agriculture is immersed in data.  From the health profile of individual plants to epidemiological trends; from micro weather conditions to regional conditions; from soil nutrient percentages to operations performance – the relevant parameters for optimal growing are endless.  Yet, existing systems lack the capability to handle all this valuable farm data effectively, so most of it remains either uncollected or underutilized.  The industry continues to rely on approximations, which too often results in substantial variability in output and quality.  Prospera solves this challenge.  Its digital farming system collects, digitizes, and analyzes vast amounts of farm data and optimizes all aspects of production, from agronomy to labor management.  It allows agro-businesses to turn their farms into fully digital plants, with tighter control, higher productivity, and more predictable output.

Founded in Tel Aviv in 2014 by computer scientists who realized they could provide pragmatic and innovative solutions to farmers, Prospera transforms farm production with end to end digitalization – from agronomy to operations.  Powered by advanced data analytics, computer vision and artificial intelligence, Prospera’s system gives growers easy-to- use digital tools to achieve better yields, healthier crops and higher profits.  Prospera was recently recognized as one of CB Insights’ top 100 most promising AI companies, and named one of the winners in AgFunder’s 2016 Innovation Awards.  (Prospera 25.07)

Back to Table of Contents


9.1  Elbit Systems Demonstrates Remote Simulation Through Cloud Services

Elbit Systems announced on 12 July that it completed the first phase of a next generation development by linking two air training simulators, in remote locations, via a cloud-based simulation environment by providing a common Synthetic Natural Environment (SNE).  The company revealed it developed the ability to connect simulators through a secure simulation cloud, using standard protocols, to provide simulation and information services.  The air training solution was developed leveraging on the success of a customer-funded R&D project, where two different types of simulators were linked using cloud-based services.  The project demonstrated the ability to link different training devices within the same synthetic environment and highlighted the utility of next generation cloud-based simulation.

The current capability allows a ‘commonality of services’ where connected trainers use common services and standard protocols to consume services from the secure cloud by designing the simulation federation environment.  It currently allows two devices (in this instance more than 50 km apart) to interact within the private cloud based synthetic environment in real time, in addition to a role player station that enables a man in the loop.  Elbit Systems explained that the networked simulation devices flew simultaneously to perform the components of air missions that would take place within their SkyBreaker Mission Training Centre.  The next phase of the development program is planned to incorporate current platform cockpits at Mission Training Centre (MTC), supplied by Elbit Systems.

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

Back to Table of Contents

9.2  Vayyar’s 3D Imaging Sensors Unlock New Abilities for Automotive Market

Vayyar Imaging announced the launch of its award-winning sensor technology within the automotive and autonomous driving markets.  The 3D sensors enable groundbreaking safety advancements, new efficiencies in cargo management and enhance the security of self-driving and autonomous vehicles.  Vayyar’s 3D sensors are unique in their versatility.  A single sensor can deliver vast sensing capabilities that previously required the combination of multiple technologies and sensors.  Vayyar’s sensors are also safe, low cost, mobile and work in any lighting and environmental condition.  They do not capture an optical image and thus, respect privacy.

Vayyar’s embedded 3D sensors scan the interior of a car and give a real-time picture of everything happening within the vehicle.  By monitoring vital signs from a distance, the sensors can alert a driver who is dozing off or send an alert to a parent if an infant or pet has been left in the car.  Post-accident, 3D sensors can identify the state of survivors inside the vehicle and relay information to emergency responders.  In the autonomous driving sector, Vayyar’s sensors create a 3D image that enables autonomous cars to identify the number of people inside the car and in case of an accident, optimize airbags to deploy and inflate based on the seating location and size of the vehicle’s passengers.

Yehud’s Vayyar Imaging is changing the imaging and sensing market with its breakthrough 3D imaging technology.  Vayyar’s exclusive 3D sensors quickly and easily look into objects, analyze the makeup of materials & track changes and movements – bringing highly sophisticated imaging capabilities to your fingertips.  (Vayyar Imaging 13.07)

Back to Table of Contents

9.3  Safe-T and Stratoscale Create the New Software-Defined Perimeter

Safe-T Data and Stratoscale announced a joint partnership designed to allow Stratoscale’s customers to enhance their existing on-prem software-defined and AWS-compatible cloud region with a software-defined perimeter (SDP).  The cloud paradigm enables enterprises to accelerate and boost application innovation, while meeting business and technical goals.  IaaS and PaaS have proven to offer enterprises elasticity, flexibility, scale-out capabilities and short time-to-market.  With the joint solution, Stratoscale customers using Symphony can enhance their existing on-prem software-defined cloud region with software-defined perimeter (SDP) capabilities.  Customers can seamlessly deploy Safe-T’s Secure Data Access (SDA) solution as an integral part of the Symphony-governed environment, adding an SDP layer to their SDDC.  This allow Symphony users to essentially hide cloud hosted services from the Internet until it is absolutely necessary to allow someone to access them.

Herzliya’s Stratoscale is the cloud infrastructure company, allowing anyone to deploy an AWS-compatible region in any data center.  Stratoscale Symphony can be deployed in minutes on commodity x86 servers, creating an Amazon Web Services (AWS) compatible region and offering AWS-compatible services including EC2, S3, EBS, RDS, ELB and Kubernetes.

Herzliya Pituah’s Safe-T Data is the provider of solutions designed to mitigate attacks on business-critical services and data for a wide range of industries, including: financial, healthcare, government, etc.  Safe-T’s High-risk Data Security (HDS) Solution mitigates data threats: un-authorized access to data, services, networks, or APIs; as well as data related threats, including data exfiltration, leakage, malware, ransomware, and fraud.  Companies and Governments around the world trust Safe-T to secure their data, services, and networks from insider and external data threats.  (Safe-T Data 12.07)

Back to Table of Contents

9.4  ECI Lights up Europe’s 400G Market With Multiple Deployments Across the Continent

ECI announced the continued deployment of its 400G solution, enabling customers to provide faster connectivity and meet growing market demand.  Within the last few months, key customers across Europe have upgraded their networks with ECI’s Apollo family of optical products with integrated 400G flex-grid blade.  Optical networks continue to evolve, and are playing an essential role in providing the necessary infrastructure to handle the growing demand that businesses and consumers are placing on global networks.  The emergence of ultra-high capacity wavelengths (200Gb/s and higher) compatible with existing networks is necessary to keep ahead of the curve as essential functions move rapidly to the cloud and into mega data centers.  The new ECI deployments are not only proof of market demand, but also that the ECI solution is a strong contender in this space.

Petah Tikva’s ECI is a global provider of ELASTIC network solutions to CSPs, critical infrastructures as well as data center operators.  Along with its long-standing, industry-proven packet-optical transport, ECI offers a variety of SDN/NFV applications, end-to-end network management, a comprehensive cybersecurity solution, and a range of professional services.  ECI’s ELASTIC solutions ensure open, future-proof, and secure communications.  With ECI, customers have the luxury of choosing a network that can be tailor-made to their needs today while being flexible enough to evolve with the changing needs of tomorrow.  (ECI 12.07)

Back to Table of Contents

9.5  Momentum Partners Names illusive networks to its 2017 Watch List

illusive networks was recognized by Momentum Partners as one of ten cybersecurity firms on their Watch List: Q2 2017.  Drawn from more than 1,700 cybersecurity companies that the firm tracks globally, the decision was reached by a network of cybersecurity professionals, investors, and corporate dealmakers.  They chose illusive networks as one of the top ten cyber security companies this quarter displaying outstanding growth and innovation.

illusive networks’ award-winning Deceptions Everywhere technology blankets a company’s entire network —across every endpoint and server, alongside the network, application and data layers – with information that deceives attackers.  Automatically generated and AI-driven, illusive’s deceptions are tailor-made to the customer to appear realistic and authentic to attackers.  As soon as attackers attempt to use the deceptive data, illusive detects and alerts enterprise security teams, providing real-time contextual forensics from the source host that enable informed, targeted and timely incident response operations.  illusive’s technology is deployed across dozens of leading financial institutions, healthcare and insurance providers, retailers, energy and telecommunications companies in the United States, EMEA and APAC.

Tel Aviv’s illusive networks is pioneering deception-based cybersecurity with its Deceptions Everywhere technology that neutralizes targeted attacks and Advanced Persistent Threats (APT) by creating a deceptive layer across the entire network.  By providing an endless source of false information, illusive disrupts and detects attacks with real-time forensics and without disruption to business.  (illusive networks 18.07)

Back to Table of Contents

9.6  Minerva Delivers Comprehensive Anti-Evasion Platform to Protect Against Attacks

Minerva has added significant new capabilities to its Anti-Evasion Platform, which strengthens endpoint security to prevent unknown threats that get past existing defenses.  The latest release is designed to fight previously-unseen malware across multiple categories of evasion techniques, spanning not only situation-aware malware, but also threats that bypass detection by employing a variety of memory injection methods and hiding within document files.  The Minerva Anti-Evasion Platform can be installed on both physical and virtual environments.  With the lightweight nature of the Minerva agent, the Anti-Evasion Platform enhances Virtual Desktop Infrastructure (VDI) security for end-to-end, fully-enabled anti-malware protection, without adding any performance overhead.  The platform is both VMware Ready and Citrix Ready certified.

Petah Tikva’s Minerva is an innovative endpoint security solution provider that protects enterprises from today’s stealthiest attacks without the need to detect threats first, all before any damage has been done.  Minerva Anti-Evasion Platform blocks unknown threats which evade existing defenses through deception and trickery that controls how malware perceives its environment.  Without relying on signatures, models or behavioral patterns, Minerva’s solution deceives the malware and causes it to disarm itself, thwarting it before the need to engage costly security resources.  (Minerva 18.07)

Back to Table of Contents

9.7  DB Schenker Reduces Onboarding Time for eCommerce with Magic Software’s Integration Platform

Magic Software Enterprises announced that DB Schenker, the world’s leading global logistics provider, has implemented the leading-edge Magic xpi Integration Platform as the backbone of its integrated sales and logistics solution.  The solution provides digital services supporting all stages of online businesses including distribution, order and payment administration, accounting, goods shipment, returns management, repair and customer service to small-to-medium sized organizations.

To streamline business processes, Magic xpi seamlessly connected webshop, ERP, warehouse, transport and return management software using SOAP technology and several databases.  DB Schenker can now quickly get its customers up and running, including logistics and supply chain services within only four weeks, providing an important competitive advantage.  Time-consuming administrative tasks in the back office were significantly reduced, full visibility into purchase decision-making process was made possible, while providing a machine learning method and offering omni-channel marketing to enhance customer engagement.

Or Yehuda’s Magic Software Enterprises empowers customers and partners around the globe with smarter technology that provides a multichannel user experience of enterprise logic and data.  (Magic 20.07)

Back to Table of Contents

9.8  Waterfall Security and FireEye Partner to Secure Industrial Control Systems (ICS)

Waterfall Security Solutions announced a global partnership with Milpitas, California’s FireEye, the intelligence-led security company, to integrate the FireEye cloud-based Threat Analytics Platform (TAP) with industrial networks using Waterfall’s Unidirectional CloudConnect.  This joint solution enables FireEye customers to monitor and protect their ICS networks using the market-leading, cloud-based Helix service, while eliminating the threat of remote cyberattacks entering the monitored ICS environment.  Industrial businesses who previously refrained from using any cloud or IIoT services due to security concerns, can now remain confident that their ICS networks are safe from external cyber risks.  The Unidirectional CloudConnect product is based on Waterfall’s patented unidirectional gateway technology, which physically prevents cyberattacks from entering into an industrial network.  Waterfall Security technology is recognized by, and is essential to many industrial control system standards and regulations, including NERC CIP, ANSSI, NEI, NRC, and IEC standards.

Rosh HaAyin’s Waterfall Security Solutions is the global leader in industrial cybersecurity technology. Waterfall products, based on its innovative unidirectional security gateway technology, represent an evolutionary alternative to firewalls.  The company’s growing list of customers includes national infrastructures, power plants, nuclear plants, off and on shore oil and gas facilities, refineries, manufacturing plants, utility companies, and many more.  (Waterfall 20.07)

Back to Table of Contents

9.9  Roojoom’s New Platform Management of the Customer Journey

An innovator in Personal Journey Hubs, Roojoom is reinventing the way businesses manage complex customer maps and journeys and increase customer value.  To solve for this equation, Roojoom is introducing a major breakthrough in large enterprise mindset and management with its Customer Journey Management (CJM) platform.  Roojoom’s CJM eliminates the need for multiple platforms by fully automating both the execution and experience generation in one shot.  The platform sets goals for each customer journey stage and maps out content, interactions, and channels for each customer based on personal information and what stage of the journey they are in.  This new methodology eliminates conflict, clunk, and cost, creating an endless value-cycle where increased engagement with customers leads to understanding them better—which in turn leads to higher engagement.  The CJM platform, currently being piloted by select clients, will be released to the public later this year.

Tel Aviv’s Roojoom is an innovative Customer Journey Management Platform that is used by enterprises to increase customer lifetime value and increase engagement across the customer lifecycle. Roojoom’s Customer Journey Management Platform matches every customer with their own Personal Journey Hub that adapts in real-time to guide them through their customer journey. Personal Journey Hubs proactively engage with each customer using immersive personalization technologies that include personalized content, data and interface, to help them meet the business’s goals of whatever journey stage they may be at.  (Roojoom 19.07)

Back to Table of Contents

9.10  MySize Launches White Label RealSize Apparel Measurement App at the Apple App Store

MySize announced the launch of RealSize at the Apple app store.  The RealSize application will make its debut on the Trucco website in the very near future and will be available immediately thereafter to Trucco’s customers in Spain.  RealSize is a white label, apparel measurement application developed by MySize based on the Company’s customizable TrueSize technology.  With the formal launch of RealSize, TrueSize is now available to any retailer interested in personalizing their customer service, reducing online sales returns and increasing user conversion.

RealSize recommends the appropriate size of the garment of choice on the Trucco website based on the measurements calculated by analyzing an article of clothing from the customer’s own wardrobe.  For example: you just love a shirt you saw on the Trucco website.  You want to buy one in the size that will match, as closely as possible, with your favorite and best fitting shirt.  To achieve this, customers first download the RealSize app on their mobile phone.  Then, they follow the instructions and use the app to measure their favorite shirt from their closet.  The calculations are then processed and the customer is sent the recommended size of the new shirt to choose.

Airport City’s MySize has developed a unique measurement technology based on sophisticated algorithms and cutting edge technology with broad applications including the apparel, e-commerce DIY, shipping and parcel delivery industries.  This proprietary technology is driven by several patent-pending algorithms which are able to calculate and record measurements in a variety of novel ways.  (MySize 19.07)

Back to Table of Contents

9.11  Rail Vision Achieves Real-Time Capabilities of its Railway Safety System

Foresight Autonomous Holdings, a leading developer of Advanced Driver Assistance Systems, announced that Rail Vision, which is 32% owned by Foresight, has achieved a major milestone in its development of products for advanced safety, asset and fleet management in the rail industry.  Rail Vision demonstrated its system’s real-time capabilities with its unique algorithm implementation.  The prototype demonstration validated the system’s ability to detect and classify railway obstacles and alert the driver and control center in real time.

In the context of Rail Vision’s solution, real-time is defined as the ability to acquire video imagery from multiple sensors, and process those video streams with sufficient throughput and minimal delay to provide timely video display and alerts to a locomotive driver.  This technology incorporates breakthrough image analysis and deep learning algorithms, all implemented in software and hardware with advanced day and night imaging sensors.  This is a key and strategic step towards a fully operative obstacle detection solution for railway safety applications.

Ness Ziona’s Rail Vision was founded in January 2015 and focuses on the development of a unique, first-of-its-kind cognitive vision system based on image processing technologies.  Rail Vision’s system is designed to alert engine drivers to obstacles on the railway tracks in a timely fashion, in any weather and any lighting conditions, by using designated cameras for object identification.  Since the average stopping distance of a train traveling at a high speed is around 800 – 1,200 meters, long-distance obstacle identification is a key to railway safety.  Rail Vision’s high-resolution cameras use advanced image processing algorithms to enable the system to locate obstructions from a distance of over 1,500 meters, thus being able to reduce collisions and fatalities, severe damage to locomotives and the environment.  (Rail Vision 24.07)

Back to Table of Contents


10.1  Israel’s CPI Drops More Than Expected

Israel’s Central Bureau of Statistics announced that the Consumer Price Index fell by a surprising 0.7% in June.  The Bank of Israel did forecast a drop in the index but not such a sharp one.  Overall, th epundits’ expectation was for a fall of 0.2%.

In recent months, Israel’s inflation rate has again turned negative, and figure for the twelve months to June is minus 0.2%.  Prices of fresh fruit and produce fell 8.7% last month, clothing and footwear prices fell 5.4% and the home maintenance item fell 1.1%, following a 14.5% cut in the basic price of water.  Comparing home prices in April-May 2017 with prices in March-April 2017, the index of home prices rose slightly, by 0.1%.  In comparison with the April-May period in 2016, prices rose 4.5%.  The Central Bureau of Statistics stresses that these are not final figures, as there are presumed to be transactions in the April-May period this year that have not yet been reported.  During May, the CPI rose by 0.4%, and home price index rose by 0.5%.  (CBS 14.07)

Back to Table of Contents

10.2  Israel’s First Quarter Growth Revised Upwards

The Central Bureau of Statistics announced that the Israeli economy grew at an annual rate of 1.4% in the first quarter of 2017, according to the third revised estimate.  The original estimate for the quarter, published in May was also 1.4%, on an annualized basis, but last month this figure was revised down to 1.2%.  The revised growth figures for the third and fourth quarters of 2016, which were 4.1% and 4.7%, respectively.  Growth in Q1/17 was affected by a steep annualized fall in vehicle purchases.  The Central Bureau of Statistics said today that excluding the effect of vehicle imports, GDP grew 3.3% at an annualized rate in the first quarter.

The Bank of Israel also raised its growth forecast for 2017 from 2.8% to 3.4% following data that indicated that growth had speeded up in the second quarter of 2017.  An encouraging statistic regarding the first quarter was a 9.7% rise in exports of goods and services, while on the negative side private consumption fell by 1.1% and investments in fixed assets fell by 3.4% – both due to the sharp fall in car imports.  (CBS 16.07)

Back to Table of Contents

10.3  International Poll Names Ben Gurion Airport 8th Best in the World

Ben-Gurion International Airport is the eighth best airport in the world according to Travel and Leisure’s 2017 readers’ survey on the top 10 international airports.  In 2016, the Ben-Gurion Airport was ranked sixth best among readers.  In first place, per its custom in recent years, is Singapore Changi Airport, followed by Qatar’s Hamad International Airport, while Dubai International Airport was ranked third.

On the list of “Best Cities in Africa and the Middle East,” Jerusalem finished in second place, after Cape Town in South Africa.  On the list of “10 Best City Hotels in North Africa and the Middle East,” the Waldorf Astoria in Jerusalem came in second place while The Norman hotel in Tel Aviv was ranked seventh.  Neither hotel appears on the list of 100 best hotels in the world.  (Various 13.07)

Back to Table of Contents


11.1  ISRAEL:  Israeli Startups Raised $1.3 Billion in Second Quarter

According to the latest report by IVC Research Center – Zysman Aharoni Gayer & Co. (ZAG – S&W) law firm, 157 Israeli startups raised $1.26 billion in the second quarter of 2017.  Although this was down from the $1.7 billion raised by 194 startups in the second quarter of 2016, it was still the second highest quarterly amount in the past five years.  The number of deals, even though slightly above the 155 deals reported for the previous quarter, remained 4% below the two-year average of 164 transactions.

The average financing round grew significantly in the second quarter of 2017, reaching $8 million, compared with the $6.8 million average of the previous quarter, and second only to the exceptional $8.8 million average in the corresponding quarter of 2016.

The first half of 2017 was the second highest in terms of capital raising, as 312 Israeli high-tech companies raised $2.3 billion, below the first half of 2016, the strongest-ever, when $2.8 billion was raised in 368 deals.  The first half of 2017 saw a slight drop in terms of the number of deals, 8% below the corresponding past four years average.

IVC-ZAG found a 12% increase in capital raised in VC-backed deals in the second quarter of 2017, compared with the $919 million three-year average in deals involving venture capital funds.

IVC Research Center CEO Koby Simana said, “Our data indicate that local investments by venture capital funds have increased in the second quarter, following a series of declines in previous quarters.  This growth in the volume of activity by the VC funds reinforces two parallel trends we saw in the last quarter.  On the one hand, the number of large deals, of over $20 million each, increased significantly, leading to a rise in the total capital raised in large rounds, although the average amount raised in such deals during the second quarter was no more than $33 million.  We also see that the average small financing rounds (under $5 million) was up substantially in the second quarter, despite the fact that the number of such deals declined.  Mid-range deals saw a minor increase both in terms of deal number and the average financing round.”

Simana added, “The increase in capital raised in the second quarter is not biased due to a number of large deals that distort the average upwards, as was the case in the record quarter last year.  Rather, the figures indicate a real change in the way capital is raised in the local market – investors, especially venture capital funds, choose to make fewer investments but are prepared to invest larger amounts per round, at almost any stage.”

Capital Raising by Stage

While mid-stage companies kept their leading position in the second quarter of 2017 for the fourth quarter in a row, raising $462 million (37% of total), 19 late stage companies represented a noticeable improvement this quarter, contributing to the total quarterly increase, according to IVC-ZAG analysis, attracting $428 million (34%), compared to the previous three weak quarters.  The amount was still under the exceptional $726 million raised in a remarkable number of 25 late stage deals in the second quarter of 2016, when the stage led Israeli high-tech capital raising with 42% of total capital.

Zysman Aharoni Gayer & Co. (ZAG/S&W) managing partner Adv. Shmuel Zysman said, “Besides the overall increase in capital raising, the most encouraging figure in the present report is the volume of capital that seed companies succeeded to raise, which has doubled compared both to the previous quarter and even to the same quarter last year.  These data indicate that our previous forecast – according to which the Mobileye deal will impact the following quarters, driving up capital raising proceeds as an indication and reaffirmation of Israeli companies’ quality – has materialized.  The Israeli high-tech industry continues to grow and receive a vote of confidence from foreign investors and VC funds.  At the end of the day – despite the high risk they embody, there is no way to ensure the strength and future of the Israeli economy and the high-tech industry other than early stage investments, which offer exceptional returns to those willing to take risks.”

In the second quarter of 2017, 38 seed companies raised $65 million, a noticeable increase in comparison to the preceding quarter ($35 million) and the corresponding quarter of 2016 ($41 million).

Capital Raising by Sector

Software was the leading sector, with $482 million (38%) in the second quarter of 2017, as in the past four quarters.  Life sciences was second, with $387 million, 31% of capital in the second quarter of 2017.  2017 shows signs of being a record year for life science capital raising, with the highest capital amounts raised in both the second quarter and the first half of 2017, when a record amount of $622 million (27%) was attracted by life sciences, 32% up from the $473 million raised in the first half of 2016.

Adv. Zysman said, “This reflects the high level of the life science industry in Israel, as well as the great trust investors place in Israeli companies in this field.  I expect investments in this field will continue to grow, as will the average capital financing per company.  In addition, if institutional investors were to roll up their sleeves and invest in high-tech through the new dedicated funds currently proposed by the Ministry of Finance, this could lead to a significant increase in funding rounds and real growth for the entire Israeli high-tech industry.”

IVC Research Center is the leading online provider of data and analyses on Israel’s high-tech, venture capital and private equity industries.  Its information is used by all key decision makers, strategic and financial investors, government agencies and academic and research institutions in Israel.  (IVC-ZAG 19.07)

Back to Table of Contents

11.2  JORDAN: IMF Executive Board Concludes 2017 Article IV Consultation

On 21 June 2017, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Jordan.

Jordan has made significant progress since the 2014 Article IV Consultation but pressing challenges remain.  The gradual pick-up in growth from 2010 to 2014 ended in 2015, with real GDP growth decelerating from 2.4% in 2015 to 2% in 2016.  The slowdown in 2016 was broad-based, with activity slowing in agriculture, construction, and mining.  Inflation accelerated since mid-2016 to reach 4.6% (year-on-year) in February 2017, due to the recovery in global oil and food prices, as well increased fuel excises and the removal of general sales tax exemptions.  Inflation has since eased, to 3.7% (year-on-year) in May.  Labor market conditions have remained challenging, particularly for youth and women, with the unemployment rate increasing to 15.8% in the second half of 2016 and to 18.2% in the first quarter of 2017, reflecting some methodological changes.  The current account deficit (excluding grants) was 12.6% of GDP in 2016, slightly higher than in 2015, reflecting the challenging regional conditions, the Syrian refugee crisis and the slowdown in the Gulf Cooperation Council (GCC), which have affected exports, remittances, and other flows.  The Central Bank of Jordan (CBJ) has gradually increased its policy rates since late 2016 amid increasing dollarization, which has stabilized more recently, and higher U.S. policy rates, helping to maintain reserves at close to eight months of imports.

Despite considerable progress and recent improvements, the outlook remains challenging.  Indicators for the first few months of 2017 show an important recovery in exports, tourism receipts and remittances relative to 2016.  Real GDP growth is projected to reach 2.3% in 2017, while inflation is expected to stabilize at around 2.5% by year-end.  The current account deficit is expected to decline gradually, supported by structural reforms and fiscal consolidation.

Executive Board Assessment

Executive Directors agreed with the thrust of the staff appraisal.  They commended the authorities for preserving macroeconomic stability and external viability, reducing the fiscal deficit, maintaining prudent monetary policy, and ensuring a sound financial system.  Directors acknowledged the challenging environment facing the Jordanian economy, including below potential economic growth, high unemployment and difficult social conditions.  They stressed the importance of implementing policies and reforms to bring public debt toward more sustainable levels, boost investment and productivity, and enhance inclusive growth.

Directors supported the continued gradual and steady fiscal consolidation.  They were encouraged by the authorities’ commitment to continue to remove exemptions on the general sales tax and customs duties.  They underscored the need to support these efforts with reforms to tackle tax evasion and increase compliance, rationalize expenditures while strengthening social safety nets, contain contingent liabilities and enhance oversight of PPPs, sustain reforms in the energy and water sectors, and improve debt management.  They stressed that these reforms are crucial to preserve macroeconomic and external stability, place public finances on a sounder foundation and lessen risks to debt sustainability.

Directors generally considered the monetary policy stance to be appropriate and that the exchange rate peg continues to be an important anchor for the economy, and urged the authorities to stand ready to increase interest rates in the event of persistent pressures on international reserves.  A number of Directors considered that there might be a need to consider recalibrating policies to facilitate the external adjustment over the medium term, if the challenging external environment persists.

Directors welcomed ongoing reforms to preserve the financial sector’s resilience, notably the gradual adoption of Basel III and the decision to complement it with an additional capital buffer.  These steps, along with the high levels of capitalization of banks, will provide buffers to deal with a broad range of shocks.  Directors emphasized the need to continue to monitor interest rate risk and the rapid increase in household credit, and took positive note of ongoing plans to strengthen the supervision of insurance companies and microfinance institutions.  Directors also encouraged the authorities to continue to strengthen implementation of the AML/CFT framework.

Directors stressed the need for reforms to enhance competitiveness and inclusive growth.  The development of a financial inclusion strategy, along with greater facilities to support credit and enactment of the secured transactions law, would help enhance access to finance and support investment.  Simplifying regulatory processes and enacting the inspection law would also improve the business environment.  Directors called for advancing reforms to lower the formal cost of labor to promote greater employment opportunities, particularly for young people and women.

Directors called for greater donor assistance to help Jordan cope with the refugee crisis and support the program’s debt reduction and inclusive growth objectives.  (IMF 24.07)

Back to Table of Contents

11.3  UAE:  IMF Executive Board Concludes 2017 Article IV Consultation

On 7 July 2017, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with the United Arab Emirates and considered and endorsed the staff appraisal without a meeting.

Economic performance was subdued during most of 2016.  Together with weaker oil prices and slower oil output growth, the postponement of some public infrastructure projects and a slowdown in global trade caused growth to moderate to 3% from 3.8% in 2015.  Inflation eased to 1.8% from 4.1% in 2015, reflecting softer domestic demand and declining rents.  Despite continued fiscal consolidation, lower oil revenues widened the overall deficit to 4.3% of GDP from 3.4% of GDP in 2015.  Likewise, the current account surplus shrank to 2.4% of GDP from 4.7% of GDP in 2015.  Although impairment charges rose amid the economic slowdown, banks remained well capitalized and liquid.

Economic activity is expected to strengthen gradually in the coming years with firming oil prices and other global indicators, and an easing pace of fiscal consolidation.  Nonoil growth is projected to rise to 3.3% in 2017 from 2.7% in 2016, reflecting increased domestic public investment and a pickup in global trade.  Over the medium term, nonoil growth is expected to remain above 3%, supported by accelerating investment in the run up to the Expo 2020.  The planned VAT introduction in 2018 is not expected to have a significant adverse impact on growth.

Executive Board Assessment

The economy is weathering the post-2014 oil shock well.  With lower oil revenues, fiscal and external positions weakened, financial conditions tightened, and growth slowed.  The weaker economy elevated risks of bank loan delinquency, requiring higher provisioning.  Yet the UAE’s financial buffers, safe-haven status, sound banks and diversified and business-friendly economy are helping it cope with the shock.  Growth is projected to recover over the next few years, as the pace of the necessary fiscal consolidation eases, global trade regains momentum, and investment, including for Expo 2020, accelerates.  This outlook is subject to downside risks, stemming mainly from a further sustained decline in oil prices, tighter financial conditions, a rise in protectionism and an intensification of regional conflicts.

The key policy goal is to foster economic adjustment to the new oil market realities.  Although the fiscal position remains sustainable, an improvement in the budget balance is needed to ensure that an equitable share of the oil income is saved for future generations.  Ample fiscal space allows deficits to decline gradually while mitigating the adverse impact on the economy and the financial sector.  Following the rapid pace of fiscal adjustment in 2015/16, the projected pause in consolidation this year is appropriate as it would reduce spare capacity.  It needs to be followed by a gradual but steady tightening over the medium term as growth strengthens.  The long-standing peg to the U.S. dollar remains appropriate.  A moderate current account gap is expected to close over time as fiscal savings rise to the level consistent with intergenerational equity.  The authorities’ efforts to make the economy more productive are key to alleviating the impact of the oil shock on medium-term growth prospects.

To foster the adjustment, especially given downside risks, the momentum in fiscal reforms needs to be sustained and coordinated with structural reforms.  Complementing recent significant subsidy reforms, a timely introduction of the VAT and excises would be another major achievement, to diversify revenues away from oil.  In tandem, continual efforts to contain growth of public spending and improve its efficiency are needed to generate the necessary fiscal savings while continuing to use public investment to diversify the economy and expand its productive capacity, consistent with the Vision 2021 National Agenda.  Importantly, improving the efficiency of public education spending, in conjunction with education reforms, and gradually raising healthcare spending would help nurture talent and foster a more productive and inclusive economy.  Controlling the size and wages of the civil service while promoting entrepreneurship and female participation would improve private sector employment, including for women.

To ensure credibility, fiscal adjustment should be accompanied by strengthening the medium-term policy framework and improving transparency.  Adopting and publishing multi-year plans and integrating them with the annual budget process would clarify the direction for fiscal policy.  Fiscal anchors and targets can be strengthened further to anchor fiscal sustainability and intergenerational equity.  These efforts need to be supported by enhanced coordination between governments and GREs regarding their investment and borrowing plans.  Strengthened control of contingent liabilities arising from GRE and PPP investment could prevent a buildup of fiscal risks.  Close coordination between governments, GREs, SWFs and the CBU is necessary to facilitate cash management and liquidity forecasting.  Looking ahead, stepped up efforts to develop the domestic debt market, together with more active liquidity management by the CBU, would expand financing options while promoting healthy credit conditions.

Ongoing initiatives to upgrade the supervisory and regulatory framework for the financial sector are welcome and need to continue.  The CBU’s introducing and implementing the Basel III capital and liquidity standards, risk management regulations, corporate governance standards, and new financial products and services are key to strengthen financial resilience while addressing market development needs.  Close monitoring of financial vulnerabilities, including currency mismatches, foreign exchange and concentration risk, and prompt undertaking of the necessary supervisory actions are essential, especially since the macro-financial impact of the oil shock is still unfolding amid downside risks.  The authorities need to sustain welcome progress in strengthening the AML/CFT regime, especially in light of risks related to money transfer operators, which facilitate remittance flows from the large expatriate community in the UAE to other countries.

Focused, multi-pronged initiatives to raise productivity and diversify the economy would improve medium-term economic prospects.  The authorities have set clear goals for fostering diversified, knowledge-based growth.  Achieving them requires focused policy measures that could encourage synergies in investment between emirates, promote foreign investment outside free zones and foster competition, including for GREs.  Following the adoption of the new bankruptcy law, its effective implementation, along with steps to ease access of SMEs to finance, could boost private sector growth.  Building on recent energy subsidy reforms, ongoing initiatives to increase energy efficiency are key for raising productivity.

Amid ongoing economic adjustment, continued improvements in statistics are critical for enhancing policy analysis and decision-making.  Multifarious efforts by local and federal statistical agencies to improve the availability, quality and timeliness of economic statistics are welcome.  Improved coordination among these agencies as well as continued technical assistance would be needed to address the remaining wide-ranging gaps.  The Fund’s e/GDDS standard could provide a useful roadmap for such efforts.  Compiling quarterly GDP and IIP for the government are immediate priorities in this regard.  (IMF 14.07)

Back to Table of Contents

11.4  SAUDI ARABIA:  IMF Executive Board Concludes 2017 Article IV Consultation

On 17 July 2017, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV Consultation with Saudi Arabia.

Non-oil growth is projected to pick up to 1.7% in 2017, but overall real GDP growth is expected to be close to zero as oil GDP declines in line with Saudi Arabia’s commitments under the OPEC+ agreement.  Growth is expected to strengthen over the medium-term as structural reforms are implemented.  Risks mainly come from uncertainties about future oil prices, as well as questions about how the ongoing reforms will affect the economy.  Employment growth has weakened, and the unemployment rate among Saudi nationals has increased to 12.3%.

After increasing in early 2016 due to higher energy and water prices, CPI inflation has turned negative in recent months.  It is expected to increase over the next year due to the recently introduced excises taxes, further energy price reforms, and the introduction of the VAT at the beginning of 2018.

The fiscal deficit is projected to narrow substantially in the coming years.  It is forecast to decline from 17.2% of GDP in 2016 to 9.3% of GDP in 2017 and to just under 1% of GDP by 2022.  This assumes that the major non-oil revenue reforms and energy price increases outlined in the Fiscal Balance Program are introduced on schedule and that operational and expenditure savings identified so far by the Bureau of Spending Rationalizations are realized.  The deficit is expected to continue to be financed by a combination of asset drawdowns and domestic and international borrowing.

The current account balance is expected to move into a small surplus in 2017 as oil export revenues increase and import growth and remittance outflows remain relatively subdued.  Net financial outflows are expected to continue, and SAMA’s NFA is projected to continue to decline, although it will remain at a comfortable level.

Credit and deposit growth are weak and are only expected to recover gradually.  Interbank interest rates, which spiked higher during 2016, have fallen, and liquidity in the banking system is at adequate levels.  Non-performing loans (NPLs) increased slightly to 1.4%, but remain low.

Saudi Arabia has embarked on a bold reform program under Vision 2030 that was announced in 2016.  The authorities have made considerable progress in initiating the implementation of their ambitious reform agenda.  Fiscal consolidation efforts are beginning to bear fruit, progress with reforms to improve the business environment are gaining momentum, and a framework to increase the transparency and accountability of government is largely in place.  Effective prioritization, sequencing and coordination of the reforms is essential, and they need to be well-communicated and equitable to gain social buy-in and ensure their success.

Executive Board Assessment

Executive Directors noted that the Saudi economy is adjusting to the effects of lower oil prices and fiscal consolidation, but that non-oil growth is expected to pick up this year and overall growth is expected to strengthen over the medium term as structural reforms are implemented.  Directors commended the authorities’ progress in implementing their ambitious reform agenda.  They emphasized that proper calibration and sequencing of reforms will be crucial to their success.

Directors welcomed the direction of the authorities’ fiscal reforms.  They agreed that a large, sustained and well-paced fiscal adjustment is needed over the medium term.  Most Directors noted that Saudi Arabia has the fiscal space to allow a more gradual consolidation than envisaged in the Fiscal Balance Program.  A few Directors cautioned, however, that back loading adjustment could incur risks.  In this regard, Directors welcomed the authorities’ intention to carefully monitor the impact of consolidation and reform and make corrections if needed.

Directors commended the authorities’ efforts to enhance non-oil revenue.  In this context, they emphasized the importance of establishing an effective and efficient tax system.  They noted the recent implementation of excises on tobacco and carbonated/energy drinks and welcomed the authorities’ commitment to introduce the VAT at the beginning of 2018, although a few noted that the timetable could be challenging.  Directors recommended keeping exemptions and zero-rated items to a minimum.

Directors welcomed the authorities’ plan for further energy price reforms.  They emphasized the importance of ensuring that the reforms are equitable, and supported the planned household allowance to cushion the impact of the price increases on low and middle income households.  A number of Directors saw scope for a more gradual phasing of the price increases to allow households and businesses more time to adjust.

Directors welcomed recent improvements in the fiscal framework and fiscal transparency, and encouraged further progress in these areas.  They supported the planned public expenditure review, and emphasized the importance of gradually reducing the wage bill, strengthening social safety nets and continuing to improve the efficiency of capital spending.

Directors noted the good progress being made in identifying and removing obstacles to private sector growth, and welcomed the intensive consultation with the business community.  Directors welcomed the authorities’ privatization and public/private partnership plans, and cautioned them to guard against fiscal risks.

Directors agreed that increasing the employment of Saudi nationals in the private sector is essential.  They highlighted the importance of strengthening education and training.  They also noted that clear communication of the limited prospects for future public sector employment would incentivize nationals to look for private sector work.  Directors called for further steps to boost female labor force participation and employment.

Directors welcomed the findings of the Financial System Stability Assessment report that banks are well regulated and supervised.  They welcomed the steps taken by SAMA to strengthen its regulatory and supervisory frameworks and to develop the macroprudential framework and the financial safety net.  They saw scope for SAMA to strengthen its liquidity management framework.  Directors welcomed the authorities’ efforts to further strengthen their AML/CFT framework, and looked forward to the finalization of their risk assessments.

Directors agreed that the exchange rate peg to the U.S. dollar remains appropriate given the structure of the Saudi economy, and emphasized that continued fiscal adjustment is crucial to support the peg.  They saw merit in reviewing the peg periodically to ensure it remains appropriate.

Directors encouraged the authorities to continue to address data gaps and subscribe to the Special Data Dissemination Standard.  (IMF 21.07)

Back to Table of Contents

11.5  SAUDI ARABIA:  Saudi Arabia Tripping Over its Own Feet

Mohamed Elmeshad published in Sada on 13 July that Saudi Arabia has recently attempted to rebrand itself as the sole powerbroker in the region.  The kingdom has also struggled to convince investors it has an enterprising and sustainable economy worth investing in, efforts embodied by Vision 2030, an economic plan launched in 2016 to increase local economic participation, diversify sources of income, and establish a stable domestic and foreign context to realize these goals.  Meanwhile, Riyadh’s foreign policy moves and internal shifts of power highlight that its new, youthful leadership will aggressively pursue dominance in the region.  Yet the manner in which the leadership is pursuing these goals could possibly obstruct its domestic economic plans.

One of the more consequential of these shifts was the removal of Crown Prince Mohammed Bin Nayef from the line of succession and his replacement with Deputy Crown Prince Mohammed Bin Salman on 21 June.  This was also the most pronounced change within the ruling establishment since King Salman Bin Abdulaziz came to power.  Putting the young prince at the helm to lead during major transition makes sense, as he is already heading major economic and foreign policy initiatives.  Notably, he is the architect of Vision 2030.  However, rumors of discord within the house of Saud raise questions on whether this move was politically sound.  In order to ensure popular support for his son’s promotion, King Salman issued royal decrees increasing employment opportunities in the public sector and reinstating many of the allowances and benefits for existing public sector employees that had been cut or suspended in September to decrease the budget deficit.  These decisions undo many of the more conservative and ostensibly unpopular changes in fiscal policy and contradict Vision 2030’s key focus on decreasing government spending.

Saudi Arabia’s political stability and strong position in the region have been the basis for its new economic policy direction.  However, news reports that former Crown Prince Mohammed Bin Nayef is under house arrest undermine the monarchy’s narrative of a smooth transition and domestic stability.  Heavy spending to limit internal turbulence would cast doubt on whether the government could expand the private sector.  Vision 2030 relies in part on attracting diverse foreign and local investment, based on the belief that a stable government can help the private sector flourish by creating policies and providing security for private capital.  Investors are unlikely to trust their money in a country where the transfer of power is uncertain because the former crown prince under house arrest, as if he would be able to trigger some degree of unrest.

U.S. President Donald Trump’s visit in May during the Arab–Islamic–American summit involved much symbolic pageantry of placing Saudi Arabia as the region’s outright leader and reiterating that U.S.–Saudi relations are based on weapons, oil and close strategic cooperation on regional political issues.  Riyadh used this appearance of a united front to isolate and blockade Qatar, accusing it of funding terrorism.  The bigger reason behind the blockade was likely Saudi Arabia’s impatience with Qatari (or Qatari-funded) efforts to undermine Saudi policies.  Yet far from asserting Saudi power in the region – and stabilizing the country domestically, as MBS might have hoped – these moves cast doubt on the Gulf’s future stability, especially as oil production decreases.  The Qatar blockade betrays the region’s palpable sense of discord and, more significantly, raises Saudi tensions with Qatari allies Iran and Turkey.  It may also run Saudi Arabia into similar challenges to those it faces in its costly and damaging war in Yemen.

The moves to ostracize Qatar and consolidate control in the hands of Mohammed Bin Salman suggest a certain degree of deliberation on his part, due to Riyadh’s very detailed list of demands and quickly executed blockade.  Yet while he controls both the Council for Economic and Development Affairs and the Ministry of Defense (not to mention holds the positions of first deputy prime minister and chief of the royal court), the timing of Qatar’s isolation suggests that perhaps Saudis have not assessed its probable impact on its own economy.  For instance, over the past year Saudi Arabia has been considering an initial public offering (IPO) for 5% of Saudi ARAMCO, the country’s oil producer and perhaps the largest company in the world.  ARAMCO’s valuation (estimated at about $1.5 to $2 trillion) could fluctuate if potential investors and political actors believe that Saudi Arabia must strain its budget to confront enemies on two borders.  Although Saudi Arabia’s recent move to cut oil production in order to increase prices could ensure ARAMCO a higher valuation (as a reduced fiscal deficit and higher oil prices will both be a factor) has been relatively successful, it can only work for a short period given the uncertainty of the markets.  Moreover, the overreliance on oil revenues to carry out the domestic and foreign agenda is very much against the spirit of Vision 2030.

Unless Riyadh can contain the negative impact of its succession and regional crises, Vision 2030 will have to take a backseat.  If Saudi Arabia wants to forge ahead with Vision 2030, few options remain at its disposal.  To cover the $72 billion needed for Vision 2030, it could consider a further increase – more than the tenfold increase already planned – to the Public Investment Fund (PIF), its sovereign wealth fund headed by the crown prince.  With declining oil reserves, fluctuating prices and a possible overall decrease in demands, Vision 2030 provides the inevitable change in course Saudi needs.  Putting it on the backburner would in the long term undermine the essence of what drives Saudi Arabia – being a regional superpower.

Mohamed Elmeshad is an Egyptian journalist, researcher and PhD candidate at the School of Oriental and African Studies (SOAS) in London.  (Sada 13.07)

Back to Table of Contents

11.6  EGYPT:  IMF Executive Board Completes First Review under the Extended Fund Facility

On 13 July 2017, the Executive Board of the International Monetary Fund (IMF) completed the first review of Egypt’s economic reform program supported by an arrangement under the Extended Fund Facility (EFF).  The completion of the review allows the authorities to draw the equivalent of SDR 895.48 million (about $1.25 billion), bringing total disbursements to SDR 2,865.53 million about $4 billion.

The three-year EFF arrangement in the amount equivalent to SDR 8.597 billion (about $12 billion at the time of approval, or 422% of quota) was approved by the Executive Board on 11 November 2016 to support the authorities’ economic reform program.

The authorities’ reform program supported by the EFF will help Egypt restore macroeconomic stability and promote inclusive growth.  Policies supported by the program aim to correct external imbalances and restore competitiveness, reduce the budget deficit and place public debt on a declining path, boost growth and create jobs while protecting vulnerable groups.  In completing the review, the Executive Board approved the authorities’ request for waivers of the June performance criteria for the primary fiscal balance and the fuel subsidy bill.  These were missed due to higher costs of imported food and fuel products caused by large depreciation of the pound.  The waiver was approved in view of the important measures taken in June to contain fuel subsidies and the planned stronger fiscal adjustment in the next two years, which will keep the program objectives on track.

Following the Executive Board discussion on Egypt, Mr. David Lipton, First Deputy Managing Director and Acting Chair, said:

* Egypt’s reform program is off to a good start.  The transition to a flexible exchange rate went smoothly.  The parallel market has virtually disappeared and central bank reserves have increased significantly.  The energy subsidy reform, wage restraint, and the new VAT have all contributed to reducing the fiscal deficit and helped free up space for social spending to support the poor.  Market confidence is returning and capital flows are increasing.  These augur well for future growth.

* The authorities’ immediate priority is to reduce inflation, which poses a risk to macroeconomic stability and hurts the poor.  The Central Bank of Egypt has taken significant steps to reduce inflation by raising policy interest rates and absorbing excess liquidity.  It has also developed a monetary framework with a clearly defined policy anchor and is stepping up its communication with markets and with the public to manage inflation expectations.  The CBE has also committed to maintain the flexible exchange rate, which is critical to cushion shocks, preserve competitiveness and accumulate reserves.

* The continued fiscal consolidation aims to place public debt on a declining path.  Consistent with this objective, the 2017/18 budget targets a primary surplus for the first time in a decade.  The main deficit-reducing measures are the increase of the VAT rate, continued reforms of energy subsidies and wage restraint.  At the same time, the budget includes a strong social component to ease the burden of adjustment on the poor and the vulnerable.

* Significant progress has been made on structural reforms.  An industrial licensing law and a new investment law have been passed, and a new insolvency law is in the Parliament.  These are critical pieces of legislation necessary to strengthen the business climate, attract investments and promote growth.  The government’s reform agenda is now directed at improving public finance management, promoting competition, encouraging female participation in the labor force and strengthening the financial sector.  These reforms will further improve the business environment and support private sector development.

* Macroeconomic stability is still fragile and the reform agenda is difficult, but the authorities have demonstrated a strong resolve to contain the risks.  A flexible exchange rate regime, a strong monetary policy framework and a commitment to a continued fiscal adjustment will help rebuild policy buffers.  Strong ownership of the program will support implementation of the reform agenda.  (IMF 13.07)

Back to Table of Contents

11.7  EGYPT:  Fitch: Egypt’s Budget, Energy Price Rises Show Fiscal Commitment

Fitch Ratings said on 12 July 2017 that Egypt’s new budget and lower electricity and fuel subsidies demonstrate a continued commitment to fiscal consolidation and economic reform, backed by the country’s IMF program.  Narrowing the fiscal deficit supports Egypt’s sovereign credit profile, but significantly reducing the public debt ratio is a multi-year task.

In early July, Egypt’s parliament passed the state budget for the 2017-18 fiscal year (FY18, starting 1 July).  The government had earlier cut fuel subsidies in a move that will save around EGP35 billion ($2 billion) compared with FY17, when subsidy spending increased owing to sharp currency depreciation. Fuel subsidy reform is a key element of Egypt’s $12 billion IMF program.

The government has also followed through on its plan for a fourth round of electricity subsidy reform, lowering the electricity subsidy bill to EGP30 billion, although it has extended the deadline for phasing out electricity subsidies to 2021 from 2019.

Cutting energy subsidies at the beginning of the fiscal year gives us greater confidence in the authorities’ willingness to control expenditure and hence in the credibility of fiscal targets.  The FY18 budget aims to reduce the budget sector fiscal deficit to 9.1% of GDP (with a primary surplus of 0.3% of GDP), from an estimated 10.9% of GDP in FY17.

Fitch’s forecast of 9.3% (and a primary deficit of 0.3%) implies modest slippage against the target while maintaining deficit reduction.  We think there is scope for stronger-than-budgeted revenues given high inflation and following the introduction of VAT last October.  VAT should be a significant source of FY18 revenue due to an increase in the rate to 14%, the full-year effect, and improved administration of VAT on services.

Our slightly wider forecast reflects the prospect of higher-than-budgeted spending.  The government is increasing social spending, for example on food subsidies and pensions and a partial cost of living adjustment for government employees.  Nevertheless, the wage bill is still only budgeted to increase by around 8% in FY18, which even with attrition from retirements would be significantly below the rate of inflation.  We think there is some scope to offset higher spending by reducing capex, depending on how revenue performs.

Public finances are a key weakness in Egypt’s sovereign credit profile.  We estimate that the general government debt/GDP ratio exceeded 100% at end-FY17 following the flotation of the Egyptian pound.  We forecast a decline to 87.9% in FY19, but this is highly dependent on securing a small primary surplus and increasing economic growth.

The FY/18 budget projects GDP growth of 4.6%, broadly in line with Fitch’s forecast.  We think politics presents the key risk to consolidation, which stalled in FY16 around parliamentary elections.  There may be a similar risk ahead of the presidential elections due by May 2018.  Measures already legislated for (including civil service reform and the introduction of VAT), together with the IMF program, provide a stronger policy anchor.  But political sensitivity to the social impact of spending cuts and high inflation still presents implementation risk.  Headline inflation was 29.8% y-o-y in June and is set to rise back above 30% following the energy price hikes.  The central bank raised interest rates by 200bp for the second consecutive policy meeting on 6 July, with the aim of controlling inflation expectations.

We affirmed Egypt’s ‘B’/Stable sovereign rating on 22 June.  Egypt’s sovereign credit profile was among the topics discussed at our Fitch on the Middle East and North Africa event in London on 6 July.  (Fitch 12.07)

Back to Table of Contents

11.8  TURKEY:  Fitch Affirms Turkey at ‘BB+’; Outlook Stable

On 21 July 2017, Fitch Ratings has affirmed Turkey’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BB+’.  The issue ratings on Turkey’s senior unsecured foreign-currency bonds have also been affirmed at ‘BB+’.  Turkey’s Long-Term Local-Currency IDR has been affirmed at ‘BBB-‘ and the issue ratings on Turkey’s senior unsecured local-currency bonds have also affirmed at ‘BBB-‘.  The Outlooks on the Long-Term IDRs are Stable.  The Country Ceiling has been affirmed at ‘BBB-‘ and the Short-Term Foreign-Currency IDR at ‘B’.  The Short-Term Local-Currency IDR has been affirmed at ‘F3’ and the issue ratings on Turkey’s senior unsecured short-term local-currency bonds have also been affirmed at ‘F3’.

The issue ratings on Turkey’s Hazine Mustesarligi Varlik Kiralama Anonim Sirketi’s foreign-currency and local-currency global certificates (sukuk) have been affirmed at ‘BB+’ and ‘BBB-‘, respectively.

Key Rating Drivers

Turkey’s IDRs reflect the following key rating drivers:

Turkey’s ratings balance high external financing vulnerabilities, pronounced political and geopolitical risks and high levels of inflation and macroeconomic volatility against low public debt ratios backed by a long commitment to fiscal stability and strong growth performance.  Structural indicators are generally superior to peers.

Constitutional changes that enhance the power of the presidency were narrowly approved at a referendum in April.  The implementation of the full provisions of the new constitution will be completed by new elections, which need to be held by November 2019.  In Fitch’s opinion, constitutional reform has entrenched a system in which checks and balances have been eroded and has somewhat polarized the country.  Fitch expects strengthening the economy to have moved up the government’s policy agenda in the realization that stronger performance will be necessary to bolster political support.  Temporary stimulus measures have boosted growth so far in 2017.  There has been little progress on structural reform.

Political and geopolitical risks weigh on Turkey’s ratings.  The purge of the followers of the group that the government considers responsible for the coup attempt in July 2016 continues and a state of emergency remains in place.  The pace of the purge has slowed, but its scope continues to unnerve some economic actors.  Security incidents have been confined to the unresolved conflict in the south east so far in 2017.

Stimulus measures will weaken fiscal performance in 2017.  Fitch forecasts a widening of the general government deficit to 3.1% of GDP, the largest since 2010, but in line with the ‘BB’ median.  Temporary fiscal measures include tax exemptions for consumer durables and an employment scheme under which the government absorbs some costs for new private sector employees.  Financial support facilitating a jump in lending backed by the Credit Guarantee Fund (CGF) could also impact the sovereign balance sheet.  Continuation of stimulus measures once the recovery becomes entrenched could raise questions over the commitment to fiscal discipline.

The space for countercyclical fiscal policy is underpinned by government debt metrics that are much stronger than peer medians.  Debt/GDP in both gross and net terms and debt/revenues are all well below the ‘BB’ and ‘BBB’ medians.  The rise in debt/GDP in 2016 was due primarily to exchange rate effects, which have subsided, and Fitch expects debt/GDP to remain around the current level of 28.3% over our forecast period to end-2019.  Contingent liabilities are rising, but from a low base and are unlikely to have a material impact on government finances over the forecast period.

Economic growth has rebounded and is expected to remain above the peer median.  Growth was 5% y-o-y in Q1/17, with momentum supported by government incentives and an improved external environment, with tailwinds that continued into Q2/17.  Fitch assumes the pace of growth will ease in H2/17, as tax incentives and CGF lending may have brought forward demand.  Nonetheless, a potentially smoother political environment, early signs of a recovery in the tourism sector and a stronger external environment should support solid performance over the forecast period.  Fitch’s growth projections, which average 4.3% between 2017 and 2019, compare favorably with the ‘BB’ median of 3.5%, but are well below Turkey’s 2011-2015 average of 7.1%.

The current account deficit is large relative to peers and persistent.  Higher commodity prices have caused a renewed widening of the deficit, although exchange rate-induced import compression and an improvement in export conditions will limit the deterioration of the current account deficit in 2017.  Ongoing security concerns mean that tourism revenues will be well down on 2013-2015 levels over the forecast period.  Financing of current account deficits will keep net external debt on an upward trend.  Fitch’s end-2017 forecast of 32.1% of GDP compares with a ‘BB’ median of 19.3%.

External vulnerabilities are a key credit weakness.  The gross external financing requirement is very large, at an estimated $193 billion in 2017, and the international liquidity ratio is 84.4, against a ‘BB’ median of 151.5, despite some lengthening of external maturities.  Turkey’s strained international liquidity position makes it vulnerable to shifts in investor sentiment.  Evolving domestic and external conditions have raised external financing costs and could further test Turkey’s ongoing resilience in external financing.  Net international reserves are around one-third of the gross end-December level of $107.2 billion (5.6 months of CXP), and gross reserves are on a slow but sustained downward path.

Central bank actions, combined with global investor sentiment, have allowed the lira to recover from a sharp fall around the turn of the year.  The average funding rate has been increased by 365 basis points so far this year through adjustments to some central bank rates and to the proportion of funding allocated at each rate.  The move has been effective, but it reversed a move towards policy simplification that began in 2016.  Exchange rate pass-through has pushed inflation into double digits.  Fitch’s annual average forecast of 10.7% for 2017 would be the highest since 2003.  Two-year inflation expectations have been more stable, but at 7.9% compared unfavorably to the CBRT’s 5% target.  Inflation has persistently overshot targets and is well in excess of peers.

Banks have been hit by the weaker economy and rising financing costs, but are proving resilient.  Headline non-performing loans are low and stable at around 3% of total loans.  However, the volume of at-risk restructured and watch-list loans has increased.  Sector capitalization, supported by adequate NPL reserve coverage, is sufficient to absorb moderate shocks, but is sensitive to further lira depreciation given the high level of foreign currency loans on banks’ balance sheets, and further asset quality weakening as loans season.  Credit growth has been temporarily boosted by CGF-backed lending, but at the cost of a squeeze of local currency liquidity.  Banks have been active in tapping the international capital markets so far in 2017.  Sector foreign currency liquidity is broadly adequate to cover banks’ maturing wholesale funding liabilities due within a year, although it could come under pressure in the case of a prolonged market closure.

Turkey is a large and diversified economy with a vibrant private sector.  Human Development and Doing Business indicators, as measured by the World Bank, are in excess of the ‘BB’ median.  GDP per capita is double the peer median, though the volatility of economic growth is well in excess of peers reflecting a vulnerability to regular domestic and external shocks.

Rating Sensitivities

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

– Heightened stresses stemming from external financing vulnerabilities.

– Weaker public finances reflected by a deterioration in the government debt/GDP ratio to a level closer to the peer median.

– A deterioration in the political or security situation.

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

– Implementation of reforms that address structural deficiencies and reduce external vulnerabilities.

– A political and security environment that supports a pronounced improvement in key macroeconomic data.

Key Assumptions

 – Economic relations with key trading partners will not deteriorate seriously.

– Fitch forecasts Brent Crude to average $52.5/b in 2017, $55/b in 2018 and $60/b in 2019.  (Fitch Ratings 21.07)

Back to Table of Contents

11.9  GREECE:  IMF Executive Board Approves in Principle €1.6 Billion Stand-By Arrangement

On 20 July, the Executive Board of the International Monetary Fund (IMF) approved in principle an SDR 1.3 billion (about €1.6 billion, or $1.8 billion, 55% of quota) precautionary Stand-By Arrangement (SBA) for Greece.

The arrangement, which supports the authorities’ economic adjustment program, has been approved in principle, which means it will become effective only after the Fund receives specific and credible assurances from Greece’s European partners to ensure debt sustainability, and provided that Greece’s economic program remains on track.  A second Executive Board decision is needed to make the arrangement effective.  The arrangement will expire on 31 August 2018, shortly after the expiration of the European Stability Mechanism program.

Following the Executive Board’s discussion, IMF Managing Director and Chair of the Executive Board, Christine Lagarde said in a statement:

“I strongly welcome Greece’s new economic adjustment program, which focuses on policies that will help restore medium-term macroeconomic stability and growth, and supports the authorities’ efforts to return to market financing on a sustainable basis.  The program provides both breathing space to mobilize support for the deeper structural reforms that Greece needs to prosper within the euro area, and a framework for Greece’s European partners to deliver further debt relief to restore Greece’s debt sustainability.

“The newly-legislated measures broadening the income-tax base and reforming pension spending are critical to rebalancing the budget toward more growth-friendly policies.  In the medium run, they will help achieve an ambitious primary surplus target of 3.5% of GDP.  However, this target should be reduced to a more sustainable level of 1.5% of GDP as soon as possible, to create fiscal space for better targeting social assistance, stimulating public investment and lowering tax rates to support growth.  Protecting vulnerable groups, while maintaining fiscal soundness, is key to preserving the sustainability and fairness of Greece’s adjustment effort.

“Rehabilitating the financial sector is essential to restoring credit and fostering growth.  The new program will support efforts to reduce Greece’s exceptionally high non-performing loans by strengthening the debt restructuring legal framework.  Moreover, to safeguard the banking sector’s soundness and facilitate the rapid relaxation of capital controls, the supervisory authorities should take additional steps, including undertaking an updated asset quality review and stress test, to ensure that banks are adequately capitalized before the end of the program.

“Despite progress on the structural front, Greece’s overarching challenge remains the liberalization of restrictions that impair its investment climate.  Thus, the authorities should reconsider their plans to reverse cornerstone collective-bargaining reforms after the end of the program, and should instead focus on redoubling efforts to open up still protected product and service markets, so as to facilitate investment and create new jobs.  They should also redouble efforts to protect the credibility of the statistical agency and guarantee its independence.

“As we have said many times, even with full program implementation, Greece will not be able to restore debt sustainability and needs further debt relief from its European partners.  A debt strategy anchored in more realistic assumptions needs to be agreed.  I expect a plan to restore debt sustainability to be agreed soon between Greece and its European partners.  Effectiveness of the new Stand-By Arrangement is contingent on this agreement on debt relief, as well as implementation of the program.”

ANNEX – Recent Economic Developments

GDP was flat in the last three years.  The economy has stabilized after a crisis of confidence in 2015, but economic uncertainty, limited access to financing, record-high non-performing loans, and remaining capital controls are holding back investment.

Growth resumed modestly in the first quarter of 2017, on the back of resilient consumption and an inventory buildup.  The labor market has recovered gradually, although mainly due to an increase in part-time employment.  Poverty and inequality remain among the highest in the euro area.

The primary fiscal balance was in surplus in the last two years, supported by ongoing fiscal consolidation.  Last year, the surplus exceeded the authorities’ fiscal target by a large margin, owing to additional spending compression relative to budget, better-than-expected wage and profit outturns, and also large one-off factors.  This year, the cumulative primary balance outturn through May 2017 is lower than a year ago, due to lower tax revenues and EU investment-related transfers.

Program Summary

The Greek authorities’ economic program is narrowly focused on policies that can help restore macroeconomic stability in the medium run and facilitate market access.  It seeks thereby to provide breathing space to mobilize broad political support for the deeper structural reforms needed for Greece to liberalize its economy and prosper within the euro area in the long run.  The program will also provide a framework for Greece’s European partners to deliver debt relief to restore Greece’s debt sustainability.

Fiscal Policy: The program focuses on rebalancing the budget toward more growth-friendly and socially-inclusive policies in the long run.  A package of income tax and pension reforms – aimed at reducing exceptionally generous tax exemptions for the middle classes and unaffordably high pension spending – has been legislated upfront and will be implemented once the output gap narrows.  These measures help support the authorities’ ambitious medium-term primary surplus target of 3.5% of GDP agreed with the European partners for 2019-22.  After 2022, the surplus target is expected to be lowered – the level remains to be agreed in the context of debt discussions – and the resultant fiscal space be used to bolster Greece’s social safety net, boost public investment, and lower taxes to support jobs and growth.

Financial Sector Reforms: The financial sector strategy is narrowly focused on creating the conditions for addressing high non-performing loans by strengthening and implementing the legal framework for debt restructuring.  The authorities are committed to relaxing capital controls rapidly but prudently, while safeguarding financial stability.

Structural Reforms: In addition to preserving the cornerstone labor market reforms during the program period, the program supports a reform of collective dismissals and implementation steps for ongoing reforms fostering competition, liberalizing Sunday trade and select closed professions, and facilitating investment.

Debt Relief: Greece’s debt remains unsustainable.  Further discussions are needed to converge on a strategy based on realistic assumptions and on a broadened scope for debt relief to restore Greece’s debt sustainability.

Growth Expectations

Predicated on full implementation of the reforms above, output is projected to rebound strongly over the medium term.  It is projected to grow by 2.1% this year and 2.6% next year, on the back of continued resilient private consumption and a recovery of investment from low levels, supported by EU funds and improved confidence.  Over the long run, growth is expected to converge to its potential steady-state rate of 1%, driven by the effects of continued structural reforms required to overcome the negative impact of population aging.  (IMF 20.07)

Back to Table of Contents


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

EDI’s other services include development of feasibility studies and tailored research reports, as well as identification of potential joint ventures for commercial clients.  For more information on how we may better assist you, please visit our Web site at:  http://