Fortnightly, 28 November 2018

Fortnightly, 28 November 2018

November 28, 2018


28 November 2018
20 Kislev 5779
20 Rabi Al Awwal 1440




1.1  Knesset Committee Approves Cannabis Export Bill
1.2  Cabinet Approves Amir Yaron as Bank of Israel Governor
1.3  PM Netanyahu Meets with Mississippi Governor Phil Bryant
1.4  President of Muslim-Majority Chad Arrives to Reestablish Ties with Israel
1.5  Agreement Reached on Israel-Europe Gas Pipeline


2.1  Tel Aviv University and Northwestern University Launch Joint Nanoscience Program
2.2  Habana Labs Secures $75M in Series B Financing Led by Intel Capital
2.3  Velox Completes $32 Million Investment Round
2.4  Votiro Secures an $8 Million Investment
2.5  Franklin Templeton Opens Israel office
2.6  AdaSky Adds $20 Million from Lead Investor, South Korea’s Sungwoo Hitech
2.7  Israeli App Developer Smart Media Racks Up 100 Million Downloads
2.8  Tamar Partners Sign Additional $200 Million Jordanian Gas Deal
2.9  Lightricks Secures $60 Million to Change How the World Creates Content
2.10  Quantum Machines Raises $5.5 Million to Develop Next Generation for Quantum Computers


3.1  Bahrain’s Mumtalakat Signs Deal to Acquire US Office Buildings
3.2  UAE-Based Startups Dominate the MENA Fintech Sector
3.3  Dubai’s dnata Expands US Services with Los Angeles Launch
3.4  Urban Outfitters to Make Arabian Gulf Debut in 2019
3.5  Lockheed Martin to Build Multi-Mission Surface Combatant Ships for Saudi Arabia
3.6  Volt Lines Raises $1.28 Million Pre-Series A from Dubai Angel Investors


4.1  Construction Starts on Saudi Arabia’s First Solar Energy Project


5.1  Lebanon’s Average Inflation Up by 6.31% in October 2018
5.2  Lebanon’s Trade Deficit Widened by 3.93% to $12.96 Billion in September 2018
5.3  Jordan’s PM Razzaz Launches Amman’s 2019 – 2020 Priorities Plan
5.4  Jordan’s Income Tax Law Passed With Amended Taxability Threshold
5.5  IMF’s Lowered Growth Projections for Jordan Realistic
5.6  Libya Agrees to Pay Medical Dues to Jordanian Hospitals for Treating Injured Libyans
5.7  Jordan’s New Labor Draft Law May Increase Women’s Economic Participation

♦♦Arabian Gulf

5.8  Bahrain Signs $912 Million Deal for Attack Helicopters
5.9  RTA Unveils $160 Million Plan to Expand Dubai Smart Traffic Systems
5.10  Oman Announces Merger to Create New Oil Giant
5.11  Saudi Oil Output Said to Surge to Record High Amounts in November

♦♦North Africa

5.12  Egyptian Exports Decline by 12.2% in August
5.13  Remittances from Egyptians Abroad Increase 20.4% on Annual Basis in September
5.14  Egypt’s Employment Rate Increases to 10% in Third Quarter
5.15  King Mohammed VI Inaugurates New Large-Scale Railway Projects


6.1  Turkish Jobless Rate Rises to 11.1% in August, Highest Since Early 2017
6.2  Turkey’s Health Spending Exceeds $38.5 Billion in 2017
6.3  Cyprus’ Utilities & Housing Costs Lift Inflation by 1.9%
6.4  Tourist Arrivals to Cyprus Stand at an All Time High
6.5  Greece Grants Country’s First Medical Cannabis Licenses
6.6  Greek Current Account Surplus Shrinks in September While Tourism Revenues Stay Steady



7.1  Chanukah Celebrated in Israel & the World Over


7.2  Tunisia Appoints First Jewish Minister in Decades
7.3  Greek Population May Shrink by 1.4 Million by 2035
7.4  Athens Technical University to Offer Joint Degrees with Columbia University


8.1  Aurum Ventures and Direct Insurance Join Investment in KidneyCure
8.2  Salt of the Earth Expands Global Availability
8.3  Evogene Establishes Ag-Chemicals Subsidiary – AgPlenuss
8.4  BioLineRx Receives FDA Designation for Novel Cancer Immunotherapy Candidate AGI-134
8.5  E-Motion Receives CE Mark for Its Stimulation Therapy for Patients With Acute Digestive Dysmotility
8.6  Mazor Robotics Shareholders Approve Merger Agreement With Medtronic
8.7  Aidoc and SaferMD Team Up to Close the Loop of AI Radiology Medicare Payments
8.8  BrainStorm Cell Therapeutics Submits IND for NurOwn for Treatment of Progressive Multiple Sclerosis
8.9  BGU Shows that Heating Raw Human Excrement Could Provide a Reusable Energy Source
8.10  Ireland’s Medtronic to Acquire Nutrino Health
8.11  CytoReason Model Overcomes Cross-Species Drug Development Barriers
8.12  Merchavia Signs MoU for First Investment in the Medical Cannabis Sector
8.13  CannaLean Develops New Cannabidiol Formulation to Safely Lower Cholesterol Levels


9.1  Darillium Emerges from Stealth to Help Multi-Platform & Multi-Cloud Management
9.2  Transmit Security Wins Javelin’s 2018 Mobile Biometrics Platform Leader Award
9.3  Abellio London Reduces Collisions & Injuries Via Mobileye Safety Trial
9.4  CyberArk Named a Leader in Privileged Identity Management by Independent Research Firm
9.5  Pioneering a New Era in 3D Printed Production Metal Parts
9.6  AppNexus Mobilizes Anodot’s Autonomous Analytics to Improve Customer Service
9.7  Techniplas’ Illuminated Steering Wheel Designed Using Nano Dimension’s DragonFly Platform
9.8  Maytronics Dolphin iO Wins 2018 Piscine Global Innovations Trophy for Smart Pool Products
9.9  OptimalPlus’ “Test Data Analysis as a Service” Complements Internal Semiconductor Teams
9.10  Wi-Charge Unveils Wireless Power Kit for Amazon Echo Dot and Google Home Speakers
9.11  Safe-T Recognized by Gartner as One of Seven Representative SDP Vendors
9.12  vHive Releases Autonomous Drone Solution for Complex Cell Tower Inspection
9.13  Team8 Launches Portshift, a New Breed of Automated Application Security
9.14  ELTA Unveils Next Generation Drone Guard to Counter Unmanned Aircraft System (C-UAS)
9.15  Phone Calendar Launches Timeet, a Free Mobile App That Makes Your Calendar Social
9.16  Altair Semiconductor and JIG-SAW Partner on LTE-Enabled Sensors for Industrial IoT
9.17  Finscend’s AI Technology is Revolutionizing the Way Banks Process Credit Card Disputes
9.18  BigID Achieves Certification in the Amazon Web Services Partner Network
9.19  MazeBolt Launches Definitive DDoS Knowledge Base
9.20  GetSAT Selected as SatCom Component for U.S. Coast Guard Airborne Missions


10.1  Israel’s CPI Rises by 0.3% in October
10.2  Israel’s Economy Grew By 2.3% in Third Quarter
10.3  Israel’s Composite State of the Economy Index for October 2018 Increased by 0.3%
10.4  CreditEase Israel Innovation Fund Second Most Active Chinese Investment Institution in Israel


11.1  ISRAEL: The State of Medical Cannabis
11.2  IRAQ: For the Iraqi Prime Minister, a Slew of Economic Challenges
11.3  QATAR: IMF Staff Completes Visit to Qatar
11.4  SAUDI ARABIA: Fitch Affirms Saudi Arabia at ‘A+’; Outlook Stable
11.5  ALGERIA: Breaking Algeria’s Economic Paralysis
11.6  MOROCCO: Moody’s Changes Outlook on Morocco’s Rating to Stable, Affirms Ba1 Rating
11.7  TURKEY: Turkey & Russia Finish New Gas Pipeline


1.1  Knesset Committee Approves Cannabis Export Bill

On 15 November, the Knesset Internal Affairs and Environment Committee approved a bill to allow medical cannabis exports from Israel for its first reading in the Knesset plenum.  The bill is designed to give Israel Police the supervisory authority needed to open the medical cannabis market for export without jeopardizing public security.  Minister of Public Security Erdan and Internal Affairs and Environment Committee chairperson Kisch (Likud) agreed to promote the bill, which will allow exports of medical cannabis and give the police the necessary tools for supervising the medical cannabis industry and preventing dangerous drugs from getting outside Israeli territory.

In August 2017, an inter-ministerial committee recommended legalizing cannabis exports from Israel.  Some 280 farmers and 100 companies obtained preliminary permits from the state to establish farms for growing medical cannabis designated for export.  Prime Minister Netanyahu, however, recently suspended this decision, thereby increasing pressure on the cannabis sector on the TASE.  While the Israeli cannabis industry spent recent months hoping that the Prime Minister would approve the beginning of exports, it now appears that the situation is more complicated.  (Globes 15.11)

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1.2  Cabinet Approves Amir Yaron as Bank of Israel Governor

On 18 November, the Netanyahu government approved the appointment of Prof. Amir Yaron as Governor of the Bank of Israel.  The cabinet also approved his request to continue to serve as a member without payment of three economic research institutes in the field of financing.  The appointment will come into effect some time in December when Yaron is sworn in as Governor by President Rivlin.  Until then Dr. Nadine Baudot-Trajtenberg will serve as Acting Governor.  Baudot-Trajtenberg was deputy governor until Dr. Karnit Flug ended her five year term of office earlier this month.  (Globes 18.11)

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1.3  PM Netanyahu Meets with Mississippi Governor Phil Bryant

On 20 November, Prime Minister Netanyahu met with Mississippi Governor Phil Bryant at the Prime Minister’s Office in Jerusalem.  The governor is on his fourth trip to Israel and arrived shortly after winning his second term.  On 19 November, he spoke at a defense conference in Tel Aviv, discussing his state’s role in researching and building unmanned aerial vehicles.  Joining Bryant on the trip to Israel are his wife, Deborah; Secretary of State Delbert Hosemann; and Mississippi Development Authority director Glenn McCullough and two employees of his agency’s trade division.  Representatives of the Mississippi State Port Authority and the State Workforce Investment Board are also on the trip, as are Mississippi Manufacturers Association president and CEO Jay Moon and executives from Airbus Helicopters, which has a plant in Columbus, and Huntington Ingalls Industries, which has a Pascagoula shipyard that is one of Mississippi’s largest private employers.  (MFA 25.11)

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1.4  President of Muslim-Majority Chad Arrives to Reestablish Ties with Israel

On 25 November, Chad President Idriss Déby met Prime Minister Benjamin Netanyahu in Jerusalem on the first-ever visit of the president of that Muslim-majority African country with whom Israel has no relations.  The visit was kept carefully under wraps for days, with Netanyahu’s office only announcing it right before it took place.  The two men gave statements to the press, announcing the establishment of formal diplomatic ties.  On26 November, Déby visited the Yad Vashem Holocaust memorial and museum.

Since becoming the first Israeli prime minister in July 2016 to visit Africa in some three decades, Netanyahu has place improved ties with Africa high on the country’s diplomatic agenda.  Since that visit he has made two other trips to Africa.  Chad – which has found itself on the front lines in the battle against Islamic extremists – severed ties with Israel in 1972 after coming under intense pressure from its Arab neighbors, Libya and Sudan.  Chad is a member of the 57-nation Organization of Islamic Cooperation.

In 2016, then-Foreign Ministry Director General Dore Gold ‎visited ‎Chad and met with Déby to discuss restoring ‎diplomatic ‎ties with Israel. ‎ At the time, Gold declined to comment on the visit, saying only that it was in line with Netanyahu’s diplomatic efforts ‎in Africa. ‎  Chad, with which Israel had previously maintained close relations, wields considerable regional power and currently holds ‎the presidency of the African Union, in which Israel seeks to obtain ‎observer status. ‎ (Various 26.11)

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1.5  Agreement Reached on Israel-Europe Gas Pipeline

After two years of intensive discussions, Israel, Cyprus, Greece and Italy, with the backing of the EU, have reached an agreement on laying the world’s longest underwater pipeline for the export of gas from the Eastern Mediterranean to Europe.  Israel, Cyprus, Greece and Italy first signed a Memorandum of Understanding on the matter in December 2017.  Over the past year, the countries have worked out details about the pipeline, which will be brought for approval by the EU soon.  The agreement should be signed in February 2019.  Estimates are that it will take one year to arrange the financing for the project and five years to lay the pipeline, so that if all goes according to plan, the pipeline could be in place by 2025.

The project, which will cost an estimated NIS 25 billion, was initiated by Minister of National Infrastructures, Energy and Water Resources Steinitz, who first presented it at a conference in Abu Dhabi two years ago.  The project entails the most complex engineering with the pipeline laid at a depth of 3-3.5 kilometers beneath the sea over a distance of 2,100 kilometers.  The EU has spent $100 million to date in feasibility tests and so far, according to the Ministry of National Infrastructures, Energy and Water Resources, the results have been positive.

Under the terms of the agreement, exports of gas to the European market from Israel and Cyprus will be given preferential status. Other countries can be allowed to link up to the pipeline with the agreement of the founding countries.  The pipeline, which will have a capacity of 10-20 billion cubic meters of gas, will be laid from Israel’s economic water to Cypriot waters and across Cyprus and via sea onto Greece, Crete and Italy.

The agreement will enable Israel to become an energy supplier to Europe, and that has both economic and political importance.  This will be the first time ever that Israel has joined with the EU on any major infrastructure project.  (Globes 25.11)

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2.1  Tel Aviv University and Northwestern University Launch Joint Nanoscience Program

A new collaborative venture between Northwestern University and Tel Aviv University brings together researchers and students in the field of nanotechnology through joint research and development projects, student exchange programs and research grants.  Under the new partnership, two researchers from each university will receive post-doctoral fellowships supporting two years of research at the partner institution. The fellowships, which cover approximately 75% of the total cost of the research, were paid for with funding provided by philanthropist and businessman Roman Abramovich.  The respective hosting laboratories will provide for remaining expenses.

The new joint Northwestern-TAU venture also includes a student exchange program, which will allow three graduate students from each institution to study at the partner university and attend an annual nanotechnology workshop and international conference on cutting-edge breakthroughs in the field.  The new nanotech collaboration is slated to offer up to two research grants a year to support pilot projects that bear unique commercial potential.  TAU’s Center for Nanoscience and Nanotechnology and Northwestern’s International Institute for Nanotechnology will together select the winning projects, which will receive funding to cover the costs involved with completing proof of concept.

In 2020, TAU and Northwestern exchange students will all have the opportunity to study at TAU’s new Center for Nanoscience and Nanotechnology building.  The ambitious center is expected to be the leading facility of its kind in the Middle East.  The new building will span over 75,300 square feet (7,000 square meters) and house core research labs, quantum effects labs, medical nanosystems labs and smart biotechnology labs, as well as a prominent visitors center, which will be open to the general public.

American Friends of Tel Aviv University supports Israel’s most influential, comprehensive and sought-after center of higher learning, Tel Aviv University (TAU).  TAU is recognized and celebrated internationally for creating an innovative, entrepreneurial culture on campus that generates inventions, startups and economic development in Israel.  TAU is ranked ninth in the world, and first in Israel, for producing start-up founders of billion-dollar companies, an achievement that surpassed several Ivy League universities. To date, 2,500 US patents have been filed by Tel Aviv University researchers — ranking TAU #1 in Israel, #10 outside of the US and #43 in the world.  (AFTAU 13.11)

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2.2  Habana Labs Secures $75M in Series B Financing Led by Intel Capital

Habana Labs has secured $75 million in an oversubscribed series B funding, led by Intel Capital, to fuel its continued growth.  The round is joined by WRV Capital, Bessemer Venture Partners, Battery Ventures and others, including existing investors.  Since inception, the company has raised a total of $120 million.

Habana Labs has already started production of its first Goya inference processor PCIE card and delivered it to customers in multiple geographies and market segments.  The Goya processor silicon has been tested since June of 2018 and is production-qualified by now.  The Gaudi training processor solution is slated to sample in the second quarter of 2019.  Goya has set two industry records, by delivering 15,012 images/second throughput with 1.3msec latency on the ResNet-50 benchmark, and by attaining an unmatched power efficiency record of 150 images/second/watt, which are approximately one to three orders of magnitude better performance than solutions commonly deployed in data centers today.

The Goya inference solution is ideally suited for the most demanding AI applications in the industry, including private and cloud data centers, autonomous vehicles, factory and warehouse automation robots, high end drones, and others.  The Goya solution consists of a complete hardware and software stack, including a high-performance graph compiler, hundreds of kernel libraries, and tools necessary to integrate with the software frameworks that customers use to optimize the deployment of AI inferencing.

Tel Aviv’s Habana Labs was founded in 2016 to unlock the true potential of AI by providing an order of magnitude improvements in processing performance, cost and power consumption.  The company set out to develop AI processors from the ground up, optimized for the specific needs of training deep neural networks and for inference deployment in production environments.  Habana Labs is a fabless semiconductor company, employing over 120 people worldwide. It is led by top technologists and entrepreneurs that built multiple successful semiconductor companies and is backed by premier venture capitalists.  (Habana Labs 15.11)

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2.3  Velox Completes $32 Million Investment Round

Velox completed a $32 million funding round.  The round was co-led by JAL Ventures and O.R.T. Technologies, and joined by strategic investors ALTANA, Evonik, as well as existing investors Michael Ilan Management & Investments Ltd. (MILMI), Dr. Shlomo Shamir, and additional private investors.  With equipment commercially deployed, and multiple high-value strategic global accounts secured, Velox is seen as an industry standout.  Velox’s uniquely formulated inks and proprietary printing process enables it to take digital printing from the domain of special-editions-only into the mass packaging decoration mega market.

Velox’s industrial digital decoration solution offers an end-to-end replacement to existing decoration technologies in terms of quality, production speed, and total cost-of-ownership in addition to utmost agility and efficiency.

Rosh HaAyin’s Velox develops and manufactures industrial-grade direct-to shape digital decoration solutions for the rigid container industry. Its proprietary DTS-Inkjet technology, based on uniquely formulated inks and dedicated deposition architecture, introduces an entirely new approach to digital printing that is disrupting the packaging decoration market.  Velox’s industrial-grade digital decorator delivers, at full production speed, superior decoration quality and capabilities that outstrip the benefits of analog printing solutions, while allowing a more efficient and flexible production process and a low total cost-of-ownership (TCO).  (Velox 13.11)

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2.4  Votiro Secures an $8 Million Investment

Votiro Cybersec Global Limited announced a $8 million investment by Senetas Corporation Limited, an Australian public listed company and a leading developer of network and data encryption solutions.

Votiro’s File Disarmer automatically scans and sanitizes each and every file sent or shared with the organization, and reconstructs a fully functional, threat free file in less than a second.  Votiro is recognized as a leading solution to protect organizations against undisclosed, zero-day exploits and other ongoing cyber threats. Available for web, email, content collaboration platforms, removable devices and file transfers, the Votiro File Disarmer ensures you can safely store, share, and use files via any platform, no matter their type or where they came from.  Votiro’s worldwide customers include government, finance, healthcare, and insurance organizations. Senetas’ strategic investment will fund Votiro’s growth in sales and marketing activities as the business scales.

Tel Aviv’s Votiro is an award-winning cybersecurity company with a mission of securing organizations throughout their digital transformation journey. Its proprietary next-generation CDR technology allows users to safely open email attachments, download and transfer files, share content, and use removable media, while keeping performance and functionality intact.  (Votiro 14.11)

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2.5  Franklin Templeton Opens Israel office

Franklin Templeton Investments entered the $67 billion Israeli retail market on 13 November after the government allowed foreign firms to offer offshore products directly to investors.  Previously, such investments had to be distributed in Israel through a local manager or bank, which increased fees and made them more expensive for Israeli investors.

Although assets under management of domestic funds investing in foreign securities have more than doubled in the past three years to $7.7 billion, a lack of choice means they still account for only 12% of total assets,.  Franklin Templeton, which has $724 billion in assets under management, appointed Uzi Yitzhak to head its business in Israel.  The firm also announced the registration of two mutual funds in Israel: Franklin US Opportunities Fund and Templeton Global Total Return Fund.

Franklin Templeton executives also gave prospective Israeli investors their views on a number of markets during the opening.  (Franklin Templeton 13.11)

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2.6  AdaSky Adds $20 Million from Lead Investor, South Korea’s Sungwoo Hitech

AdaSky has secured $20 million from lead investor, Sungwoo Hitech Co., a leading global automotive supplier.  The investment is part of a larger round of funding, signifying industry endorsement of AdaSky’s technology and will enable the company to expand globally.  AdaSky’s solution, Viper, is an all-in-one, complete solution for autonomous vehicles, combining FIR camera technology with fusion-ready, deep-learning computer vision algorithms.

The FIR market has seen incredible growth over the past five years.  AdaSky plans to continue to work on R&D projects and trials with OEMs and will expand its product feature roadmap, including new features and integrations to be introduced at CES 2019.  Sungwoo Hitech is the lead investor, and the initial closing of this $20 million is the first part of a larger investment round.

Yokneam’s AdaSky leads the FIR revolution by bringing a high-resolution thermal sensor to the automotive market, enabling autonomous vehicles to see better and understand more.  AdaSky’s founding team is made up of veterans from the semiconductor, thermal sensor, image-processing, and computer vision markets.  They have been developing state-of-the-art FIR sensing solutions for the last decade. Now, the company’s multidisciplinary team of experienced engineers has adapted the solution to the specific needs of self-driving cars, making AdaSky’s solution a critical addition to cars to eliminate vision and perception weaknesses for fully-autonomous vehicles.  (AdaSky 15.11)

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2.7  Israeli App Developer Smart Media Racks Up 100 Million Downloads

Smart Media, Israeli app developer, announced today that its games and apps have crossed 100 million downloads on Google Play and iOS.  Smart Media operates as a mobile internet company worldwide.  The company provides app utilities and free-to-play casual gaming apps.  The company’s products include TapVPN, a free VPN and privacy protection tool for mobile devices; Tap Scanner, a document scanning and managing app; Yoob, a unique casual gaming app containing over 200 games in a single app, which provides personalized gaming experience.

Beer Sheva’s Smart Media is the premier provider of over 50 games and innovative mobile applications for intelligent business Delivering simple yet effective applications for use across Android and iOS.  They have more than 10 million monthly active users regularly downloading and returning to engage in Smart Media’s offerings.  (Smart Media 16.11)

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2.8  Tamar Partners Sign Additional $200 Million Jordanian Gas Deal

The quantity of natural gas that Israel will export to Jordan is likely to rise substantially, starting next year, according to the reports published by Tamar Petroleum.  In October, the Tamar partners signed another agreement to supply gas to Jordanian customers Jordan Bromine Company and Arab Potash Company.  The interruptible agreement is for up to 1 BCM, meaning that the Jordanians are not obligated to buy the entire amount.  The deal, whose value is likely to reach $200 million, will go into effect in Q1/19 and continue until the supply termination date in the 15 year agreement signed by the companies in 2017 (i.e. until the end of 2032).  The agreement can become a binding agreement.  Jordan has no energy resources itself; it currently buys liquefied gas from Qatar at high prices, so Israeli gas can be a worthwhile alternative for the country.

Delek Group and Noble Energy founded Tamar Petroleum as a special purpose vehicle (SPV) in 2017 for buying 9.25% of the rights in the Tamar reservoir.  After this deal was completed in March, Tamar Petroleum bought 7.5% more of the rights, giving it a current holding of 16.75% in the reservoir.  (Globes 19.11)

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2.9  Lightricks Secures $60 Million to Change How the World Creates Content

Jerusalem hi-tech company, Lightricks, known for its content creation mobile apps, has announced a $60 million funding round led by Insight Venture Partners, with participation from Claltech.  Part of the funding will be used to acquire shares from founders, employees, and investors in a secondary transaction. Lightricks is growing profitably and will use the funding to build more products and to double in size, recruiting a total of 300 employees for its Jerusalem and London offices.

Lightricks is set on bringing creativity to everyone.  The company designs and develops fun & powerful content creation tools, including global hit portrait editing brand Facetune and the Enlight Creativity Suite.  Together, Lightricks apps have about 100 million downloads worldwide and nearly 1 million subscribers and have won prestigious awards including Apple’s 2015 App of the Year, Apple’s Best of 2017 and the 2017 Apple Design Award.  Lightricks’ most recent app, Enlight Pixaloop, released in mid-September, became an instant hit with over 6 million users and nearly 200,000 paying subscribers in just two months.

This is Lightricks’ second investment round, following its initial $10 million funding round from Viola Ventures.  Since the first investment in 2015, Lightricks has expanded its team from 30 employees to 150. Lightricks’ revenue is growing 270% year over year and the company is profitable.  In 2016, the company released Facetune2 with a revamped business model, moving from one-time paid apps to a more lucrative subscription model.  Lightricks is projecting revenue to exceed $100 million in 2019.  (Lightricks 19.11)

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2.10  Quantum Machines Raises $5.5 Million to Develop Next Generation for Quantum Computers

Quantum Machines has raised $5.5 million in seed financing from venture-capital firms TLV Partners and Battery Ventures. TLV led the round.  The firm was founded three physics Ph.D.’s with long track records in the fields of quantum computing and quantum electronics.  QM was founded in order to build the classical hardware and software that will allow organizations across industries to realize the potential of quantum processors.  Quantum computers hold a great promise to deliver immense computational power, as they will enable organizations to solve computing problems far more quickly than traditional technology.  This computational power stems from the exotic behavior of the fundamental building blocks of the quantum processors – the quantum bits (qubits).  Ultimately, QM envisions selling its technology to companies now developing quantum processors – including the world’s largest Internet companies – as well as academic organizations.

The three founders bring together the experience of working on an incredible range of quantum technologies, including superconducting qubits, nano-wires, quantum optics, atomic clocks, etc.  They have spent many years in top universities working on the cutting-edge of quantum computing, including Yale University, University of Washington, Oxford University and the Ecole Normale Superieure.  The funding will allow QM to develop its first system, OPERATOR-X.  The company is already working with leading quantum-computing groups worldwide.

Quantum Machines is a Tel Aviv-based startup working on the frontiers of quantum computing. The company was founded by three Ph.Ds. with extensive backgrounds in quantum computing and quantum electronics, including two who previously founded and managed the entrepreneurship center of the Weizmann Institute, one of the most prestigious research institutes in Israel. Quantum Machines is backed by TLV Partners and Battery Ventures.  (Quantum Machines 21.11)

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3.1  Bahrain’s Mumtalakat Signs Deal to Acquire US Office Buildings

Bahrain Mumtalakat Holding Company, the sovereign wealth fund of the kingdom, has announced the acquisition of office buildings in Charlotte, North Carolina.  The transaction marks Mumtalakat’s second investment in the US commercial real estate market this year in partnership with Sentinel Real Estate Investment Corporation.  This follows the acquisition alongside other strategic investors of Lenovo global headquarters in Raleigh-Durham, North Carolina in February.  Mumtalakat has adopted a real estate strategy for the acquisition of high quality, well occupied, long-term yielding properties in growing cities with solid economic and market fundamentals in the United States.  The 421,863 square foot property consists of two newly-constructed buildings, which are occupied by The Lash Group, a pharmaceutical and healthcare service provider.  (AB 20.11)

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3.2  UAE-Based Startups Dominate the MENA Fintech Sector

Excluding Israel, the MENA Fintech sector has been witnessing major growth in the number of startups founded yearly.  In 2017 alone, 20 Fintech startups were founded in the MENA region – the highest number of startups founded in a year over the period covered by a recent study (2001 until 2017) by ArabNet.

Up until the end of 2017, over 100 Fintech startups were founded in the MENA region.  Those Fintech startups are concentrated in four main countries (UAE, Egypt, Lebanon and Jordan) that contribute to 83% of the total number of startups.  The UAE hosts the largest ratio of all Fintech startups (38%), while Egypt, Lebanon, and Jordan together add up to another 45%.

With the introduction of UAE’s 2020 Vision, the UAE has been increasing the number of Fintech startups founded each year to achieve their vision of being coming cashless by the year 2020.  Fintech startups in the UAE have been creating innovative alternatives, especially for payments, to reach the country’s goal.  Not only are digital payment services the most founded Fintech startups in the UAE, but they also dominate the Jordanian and Egyptian markets as these countries are shifting from being cash-dependent to becoming cashless.  Lebanon, on the other hand, exhibits the highest number of digital banking startups as people are resorting to the use of digital banking transactions.  (ArabNet 14.11)

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3.3  Dubai’s dnata Expands US Services with Los Angeles Launch

Dubai-based air services provider dnata has launched operations at Los Angeles International Airport as it continues to expand in the United States.  The company said it now provides ground handling and cargo services at 20 airports in the country.  To establish operations in Los Angeles, dnata said it has invested $8 million in infrastructure and resources, creating more than 350 local jobs.  Serving six airlines, including Austrian Airlines, Iberia, Japan Airlines, Lufthansa, Swiss International Air Lines and Qantas, dnata will initially handle 4,600 flights a year.

dnata commenced ground handling and cargo operations in the United States by the acquisition of industry players in 2016.  Since then, the company has invested more than $35 million in facilities, equipment, training and technology.  Earlier in 2018, dnata has opened a cool-chain perishable cargo facility at Dallas Fort Worth International Airport, established operations at Nashville International Airport, diversified its service portfolio by launching passenger handling services at New York JFK Airport, and most recently commenced services at Concourse G at San Francisco International Airport.  Including Los Angeles International Airport, dnata’s global ground handling and cargo network now consist of 87 airports in 13 countries.  (AB 24.11)

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3.4  Urban Outfitters to Make Arabian Gulf Debut in 2019

Multi-national retail brand Urban Outfitters will make its debut in the Arabian Gulf next year under an agreement with Azadea Group.  The company will manage the brand’s regional expansion program, with the first store scheduled to open in Dubai in 2019.  The latest addition to Azadea’s portfolio, Urban Outfitters is dedicated to inspiring customers through a unique combination of product, creativity and cultural understanding.  The Urban Outfitters brand operates more than 240 stores globally with an online channel offering a well-curated mix of on-trend women’s and men’s apparel and accessories, as well as beauty, intimates and a collection of handpicked vintage clothing.  (AB 16.11)

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3.5  Lockheed Martin to Build Multi-Mission Surface Combatant Ships for Saudi Arabia

Lockheed Martin Corp. of Baltimore, Maryland was awarded a $282,085,646 not-to-exceed un-definitized contract action modification to previously-awarded contract N00024-18-C-2301 for long-lead-time material and detail design in support of the construction of four Multi-Mission Surface Combatant ships (MMSC).  The MMSC is a lethal and highly maneuverable surface combatant capable of littoral and open-ocean operation.  This contract involves foreign military sales to the Kingdom of Saudi Arabia. Work will be performed in Marinette, Wisconsin (55%); Baltimore, Maryland (23%); Herndon, Virginia (11%); Moorestown, New Jersey (6%); Manassas, Virginia (1%); San Diego, California (1%); and various places below 1% (3%), and is expected to be completed by October 2025.  Foreign military sales funding to Saudi Arabia worth $124,201,733 will be obligated at the time of award and will not expire at the end of the current fiscal year.  This contract was not competitively procured, in accordance with 10 U.S. Code 2304(c)(4) (international agreement).  The Naval Sea Systems Command, Washington, District of Columbia, is the contracting activity.  (DoD 20.11)

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3.6  Volt Lines Raises $1.28 Million Pre-Series A from Dubai Angel Investors

Volt Lines, Turkey’s leading subscription-based transportation service, raised $1.28m pre-Series A round led by Dubai Angel Investors with follow-on from MEVP and Hedef Filo.  The round was led by DAI and its members with $780K, while the rest came as follow-on from MEVP, Hedef Filo, and Wassim Matar.  Volt Lines plans to use the funding to more than double its engineering team, accelerate its growth in Istanbul and finalize plans for a MENA expansion.  Together with this round, the startup has raised a total of $1.65M since incorporation exactly a year ago.

Founded by Lebanese transportation tech entrepreneur Ali Halabi, and backed by a mix of Turkish and MENA investors, Volt Lines went into operations in April 2018, and now operates 150+ lines in the city, crossing $1.1m of annual recurring revenue in less than 6 months of market entry.  The startup covers the commute of employees from their homes to the office and back by providing transportation along express lines operated by 16-seater mini-buses.  The Volt Lines network can be imagined as a smart public transportation network of buses that dynamically change depending on demand and a population’s commute patterns.  (ArabNet 14.11)

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4.1  Construction Starts on Saudi Arabia’s First Solar Energy Project

The ground-breaking ceremony for the 300MW Sakaka PV IPP, the first renewable energy project under King Salman Renewable Energy Initiative, was recently held.  The SR1.2 billion ($320 million) solar plant is expected to start commercial operations next year and upon completion, will supply 45,000 households with power in Al Jouf, while offsetting over 430,000 tonnes of carbon dioxide a year.  The project will also create new employment opportunities in fields including construction and operations, said ACWA Power, the company behind the project.  The event took place following an announcement of the successful financial closure of the project.  (AB 21.11)

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5.1  Lebanon’s Average Inflation Up by 6.31% in October 2018

According to the Central Administration of Statistics (CAS), consumer prices in Lebanon grew by 6.31% in the first 10 months of 2018 since the average Consumer Price Index (CPI) reached 106.28 by October 2018.  In reality, consumer prices went up across all sub-categories.  The average costs of Housing and utilities (water, electricity, gas and other fuels) constituting a combined 28.4% of the CPI, rose by 7.08% year-on-year (y-o-y) by October 2018.  Owner-occupied rental costs rose by 4.05% y-o-y.  As for the average prices of water, electricity, gas and other fuels (11.8% of the total CPI), they increased by an annual 11.10% by October 2018.  This rise can be linked to the jump in average oil prices from $53.03/barrel by October 2017 to $73.49/barrel over the same period this year.  In turn, the average prices for Food and non-alcoholic beverages (constituting 20% of the CPI), Transportation (grasping 13.1% of the CPI), and Health costs (7.7% of CPI) registered yearly rises of 4.90%, 8.81%, and 5.52% by October 2018.  (CAS 22.11)

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5.2  Lebanon’s Trade Deficit Widened by 3.93% to $12.96 Billion in September 2018

Lebanon’s trade deficit widened by 3.93% year-on-year (y-o-y) to reach $12.96B by September 2018.  Total imports increased by a yearly 4.86% to $15.16B by September 2018 and exports recorded a yearly rise of 4.14% to $2.20B over the same period.  Specifically, the value of imported mineral products (grasping 21.14% of total imported goods) stood at $3.20B by September 2018, recording a yearly rise of 0.87%, owing it to a 25.9% y-o-y decline in their imported volume to 5.97M tons by September 2018.  Meanwhile, the average price of oil increased by 35.51% y-o-y to $72.73/barrel over the same period.

As for the value of machinery and electrical instruments (some 11.7% of the total imported goods), it recorded a rise of 23.6% y-o-y to settle at $1.77B.  Moreover, the value of imported products of the chemical or allied industries (grasping 10.91% of the total imported goods) also increased by 5.93% to $1.65B over the same period.  In terms of top trade partners, Lebanon primarily imported from China, Greece, Italy and the US with shares of 10.18%, 8.48%, 7.65% and 7.34% in the total value of imports, respectively, by September 2018.  As for exports, the value of pearls, precious stones, & metals (holding 22.97% of the total export goods) rose by an annual 9.66% to reach $505.38M by September 2018.  In turn,  the value of base metals and articles of base metal (holding 13.39% of the total export goods) climbed by a yearly 20.76% to $294.53M.  Meanwhile, the value of prepared foodstuffs, beverage, and tobacco (holding 13.37% of the total export goods) decreased by 12.01% y-o-y to $294.18M.  In September 2018, the UAE, followed by South Africa, Saudi Arabia and Syria were Lebanon’s top four export destinations, respectively constituting 14.54%, 7.49%, 6.92% and 6.36% of the total value of exports.  (Blom 26.11)

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5.3  Jordan’s PM Razzaz Launches Amman’s 2019 – 2020 Priorities Plan

On 19 November, Jordanian Prime Minister Razzaz announced a wide range of priorities his government will work to realize over the next two years with the aim of uplifting public services, creating more job opportunities and reinvigorating the economy among other priorities.  He said finance needed to achieve these priorities has been earmarked in the 2018 general budget and that a time-framed and measureable performance indicators program is already in place to monitor the implementation of the plan.  Regarding employment, the prime minister indicated that a total of 30,000 job opportunities will be created in addition to the 35,000-40,000 jobs the economy is estimated to generate.

Razzaz also announced that his government will launch a program dubbed “Khidmat Watan” (Serving the Nation) that seeks to provide vocational and military training to 20,000 young men and women.  On education, he said the government will work to make sure that children’s enrollment in kindergartens rises to 70%, adding that 120 new schools will be built.  The government will do whatever necessary to increase foreign direct investments by 10% and national exports by 5% annually, the prime minister also pledged.  By the end of 2020, Razzaz said, 35% of the Kingdom’s electric power production will come from national resources, including shale oil and renewables.  (Petra 19.11)

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5.4  Jordan’s Income Tax Law Passed With Amended Taxability Threshold

The Lower House on 18 November passed the controversial 2018 Income Tax Law with parliamentary-committee amendments raising the income thresholds for taxability from the ones set by the government.  Under the House’s amendments, the income threshold was raised from an annual JOD18,000 (to go down to 17,000 in 2020) as in the government’s version of the law to JOD20,000 for families and from JOD9,000 to JOD10,000 for individuals.  Under the existing law, the figure is JOD24,000 for households with JOD4,000 in exemptions on VAT medical and educational receipts and invoices, and JOD12,000 for individuals.

The MPs also raised the VAT exemption in the new law to reach JOD2,000 instead of JOD1,000 in the government’s proposed bill for families, and to JOD1,000 for individuals, provided that such expenses are covered by bills for health, education, loan interests or murabaha (an Islamic finance and investment instrument).  As per MPs’ amendments, income tax on banks will remain at 35% as in the original law and not 37% as proposed by the government.

The House also went back on its decision to grant full exemption to agricultural inputs and outputs from income tax, endorsing instead the government’s amendments under which exemptions are granted to individual farmers and agricultural companies whose annual income is less than JOD50,000 and JOD1 million respectively.  The bill was passed in the Senate on 26 November.  (Petra 27.11)

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5.5  IMF’s Lowered Growth Projections for Jordan Realistic

The International Monetary Fund (IMF) lowered its projection for Jordan’s economic growth from 2.5% to 2.3% in 2018, which economists said was “realistic” and “based on external and internal factors”.  In its 2018 Regional Economic Outlook: Middle East and Central Asia, which was issued this month, the IMF also lowered its projections for economic growth in Jordan for 2019, dropping it from its previous outlook of 2.7% to 2.5%.  The IMF report also anticipated a decline in the Kingdom’s consumer price index from 4.5% in 2018 to 2.5% in 2019, attributing those forecasts to the impact of regional conflicts.

Violent conflicts in the Middle East and central Asia impose vast humanitarian and economic costs, the report indicated, noting that, while the direct effects are concentrated in just a few countries — Afghanistan, Iraq, Syria and Yemen accounting for more than 90% of conflict-related deaths in the region in 2017 — the indirect effects spill across the region.  It highlighted the challenges host countries, including Jordan, face in light of these circumstances and the huge flow of refugees it had created across the region.

In its reports, the IMF stressed that even if consolidation efforts go as planned in 2018, debt will remain very high in a number of countries such as  Bahrain, Egypt, Jordan, Lebanon, Mauritania, Morocco, Pakistan, Sudan and Tunisia, expecting it to remain above the 60% vulnerability threshold for emerging market economies.  A large section of the regional economy is dominated by low-productive informal sectors, with the formal sector accounting for only a third of employment in the region, the report claimed, adding that businesses with five or fewer employees dominate the private sector in Jordan accounting for about 40%.

However, the informal sector has difficulty accessing credit, market opportunities and government services, which limits the vibrancy of the private sector, the report continued, stating that tight labor market regulations impede firms from expanding and gaining economies of scale, constraining most small businesses to informality. Moreover, the government loses out on revenues since this sector remains largely untaxed.  Growth in the region is projected to reach 4.5% in 2018, up from 4.1% in 2017, before moderating to 4% in 2019, according to the IMF report.  (IMF 15.11)

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5.6  Libya Agrees to Pay Medical Costs to Jordanian Hospitals for Treating Injured Libyans

The Libyan government has reached an agreement with Jordan to pay medical costs to Jordanian hospitals for treating injured Libyans.  The Libyan authorities agreed to reimburse the association an amount of $250 million for the medical services the Jordanian hospitals have offered to Libyan nationals who were wounded or fell ill as a result of the 2011 war in Syria.  The medical bills were the subject of continuous negotiations between Jordan and the Libyan government since 2013.  The bills will be paid back in three stages.  The first sum of $125 million will be paid in December, while the rest will be paid during next year.  (AMMONNEWS 25.11)

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5.7  Jordan’s New Labor Draft Law May Increase Women’s Economic Participation

The Lower House is currently reviewing the 2010 temporary Labor draft law which includes important amendments that will positively affect the economic participation of women.  During the National Forum for Pay Equity, held on 15 November, Jordanian Labor Minister Murad said that the government is an avid advocate of gender pay equity.  For her part, Norwegian Ambassador to Jordan, Tone Allers, lauded Jordan for being the first Arab country to join the National Council on Pay Equity, noting that this makes Jordan a leading example in the region, stressing that equity pay is important to motivate woman to participate on the economic level.  Allers said, based on a Norwegian point of view, that creating economic motivations for women to work has contributed to changing customs and preferences, expressing her contentment that the Jordanian NCPE has achieved palpable results.  (Petra 15.11)

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►►Arabian Gulf

5.8  Bahrain Signs $912 Million Deal for Attack Helicopters

Bahrain has signed a $912 million deal with US-based Bell Helicopter to buy 12 AH-1Z Viper helicopters.  The GCC nation will receive the first batch from the American aerospace manufacturer by the end of 2022.  The news came during a news conference held by Air Vice-Marshal Sheikh Hamad bin Abdullah bin Al-Khalifa, the commander of Bahrain’s royal air force, at Bahrain International Airshow.  The deal came on the same day that the US Senate rejected a long-shot effort to block $300m in arms sales to Bahrain, as the bill’s opponents stressed the island nation was a critical ally hosting an American naval base.  (BNA 19.11)

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5.9  RTA Unveils $160 Million Plan to Expand Dubai Smart Traffic Systems

The Roads and Transport Authority (RTA) has endorsed an AED590 million ($160.6 million) project for the expansion of smart traffic systems in Dubai.  The project comes as part of plans to broaden the scope of smart traffic systems in support of efforts to rank Dubai as the smartest city worldwide, said Mattar Al Tayer, director-general and chairman of the RTA.  The project envisages lifting the smart system coverage of Dubai roads network from the present 11% to 60%.  He added that the project will also cut the time of detecting accidents and congestion, accelerating the response time.  It will also provide instant traffic information to the public about the network via new messaging signs and smart apps.  The initial stage will be split into five key bundles – the first of which covers traffic monitoring and data capturing systems such as cameras, vehicle detection devices as well as Bluetooth devices and weather sensors.

The second bundle relates to the installation of 112 message boards while the third bundle involves constructing the infrastructure such as civil works, fiber optic lines, and electricity distribution network.  The fourth bundle covers the advanced central traffic system while the fifth bundle covers the construction of the traffic control center at Al Barsha South.  (AB 19.11)

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5.10  Oman Announces Merger to Create New Oil Giant

The largest Arabian Gulf producer that’s not an OPEC member is combining state-run oil investment and refining companies to form a business that spans pumping crude and natural gas to processing and trading fuels.  Government-owned Oman Oil Co and Oman Oil Refineries & Petroleum Industries Co named Musab Abdullah Al Mahruqi as chief executive officer of the merged group starting from 2 December.  It marks a further step in combining their management and operations, according to a joint statement.  The merged company will have combined stakes in about 1.1 million barrels per day of refining capacity in Oman, India and Hungary.  (AB 19.11)

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5.11  Saudi Oil Output Said to Surge to Record High Amounts in November

Saudi Arabian oil production surged to a record near 11 million bpd this month after the kingdom received stronger-than-usual demand from clients preparing for a disruption in Iranian supplies, according to industry executives who track Saudi output.  Riyadh has been pumping about 10.8 million to 10.9 million bpd of crude, while on some days, more than 11 million bpd were supplied to the market by drawing down domestic and overseas stockpiles.  The International Oil Daily, a trade publication, reported Saudi production numbers earlier on 21 November.

It’s unclear if Riyadh plans to sustain its elevated production and supply rates for the whole month, or output will taper off in the second half of November, lowering the monthly average.  The November surge will come into the spotlight when OPEC meets on 6 December in Vienna to discuss its 2019 production strategy.  Riyadh has already indicated it supports a deep output cut and as a first step will reduce its shipments by 500,000 bpd in December from November.

Saudi Arabia told OPEC that it produced about 10.65 million barrels a day in October.  The country’s oil minister, Khalid Al-Falih, said earlier this month that the kingdom would be producing more in November than October, but declined to provide an estimate.

Riyadh plans its production level about four to five weeks before the start of any given month as it receives requests from clients – “nominations” in the industry jargon.  When the nominations for November were submitted, in the first week of October, the market was grappling with concerns of a large reduction in Iranian supplies, prompting buyers to request unusually large volumes.  At that point, the White House had threatened to cut the Islamic Republic’s oil exports to zero.  A few weeks later the US granted surprise waivers to buyers of Iranian crude including China, India, Japan and South Korea, easing supply fears.

Saudi Arabia set an oil production record of 10.72 million bpd in November 2016 just before the kingdom led a group of OPEC and non-OPEC countries in cutting output.  After the agreement, Riyadh slashed production dramatically over the next two months, with output dropping to 9.8 million bpd by January 2017.  The surge in Saudi output in early November means that the world’s top three oil producers – the US, Russia and Saudi Arabia itself – are now pumping at, or near, record levels.  (AB 21.11)

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►►North Africa

5.12  Egyptian Exports Decline by 12.2% in August

According to the Central Agency for Public Mobilization and Statistics (CAPMAS) bulletin on foreign trade for August 2018, exports value decrease by 12.2%, falling to $1.98 billion during August 2018, versus $2.26 billion for the same month of the previous year.  This is due to the decrease in the value of some commodities such as garments 19.3%, plastics in primary forms 22.6%, food preparations 5.6% and carpets 20.1%.  Meanwhile, exports value of some commodities increased during August 2018, versus the same month of previous year such as crude oil by 22.5%, fertilizers by 19.3%, petroleum products by 86.2% and flat rolled iron products by 29.2%.

The CAPMAS added that imports value increased by 0.3% reaching $5.94 billion during August 2018, versus $5.92 billion for the same month of the previous year, due to the increased value of some commodities such as crude oil by 83.7 %, raw iron and steel by 0.3%, vehicles by 29.2%, and pharmaceutical products by 2.6%.  Imports of some commodities decreased in August 2018, versus the same month of the previous year such as petroleum products by 8.6%, plastics in primary forms by 6.1%, wheat by 31.7% and meat by 15%.  (CAPMAS 15.11)

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5.13  Remittances from Egyptians Abroad Increase 20.4% on Annual Basis in September

Remittances from Egyptians abroad rose 20.4% year-on-year in September to $1.8 billion, according the Central Bank of Egypt.  The figure means remittances grew by 1.5% in the first quarter of the 2018/19 financial year to $5.9 billion.  Remittances in September of last year were at $1.5 billion and stood at $5.8 billion in the first quarter of the 2017/2018 fiscal year.  Egypt’s fiscal year runs from July to June.

Remittances have become a crucial source of hard currency for the import-dependent country, which has struggled to boost exports or foreign direct investment despite economic reforms tied to a $12 billion IMF loan program it began in late 2016.  (CBE 16.11)

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5.14  Egypt’s Employment Rate Increases to 10% in Third Quarter

Egypt’s unemployment rate registered 10% of the total labor force in third quarter (Q3), while it was 9.9% in Q2 2018, which is an increase of 0.1% and a decrease of 1.9% from the same quarter last year, according to Central Agency for Public Mobilization and Statistics (CAPMAS).  The CAPMAS said that the labor force was estimated at 29.215 million individuals (23.447 million males and 5.768 million females) with an increase of 179,000 individuals by 0.6% compared to Q2/18.  This is due to the inflow of graduates and the start of the work season, with a decrease of 257,000million individuals by 0.9% compared to the same quarter last year.

The CAPMAS added that the number of unemployed individuals reached 2.920 million (1.602 million males, 1.318 million females), 10% of the total labor force, and an increase of 45,000 unemployed individuals by 1.6% compared to Q2/18, a decrease of 593,000 unemployed individuals by 16.9% compared to the same quarter of the previous year.  (CAPMAS 15.11)

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5.15  King Mohammed VI Inaugurates New Large-Scale Railway Projects

King Mohammed VI inaugurated the tripling of the Casablanca – Kenitra railway tracks, the complete doubling of the Casablanca – Marrakech railway tracks, the stations dedicated to high-speed trains (Rabat-Agdal, Tangiers, Kenitra and Casa-Voyageurs), and the new stations of Oujda and Benguerir.  These large-scale projects required a global investment of MAD 10.5 billion.

The tripling of the Casablanca-Kenitra railway tracks, which required MAD 5.2 billion, will enable the desaturation of the Casablanca railway junction and multiply the capacity of this line by 2.5, thus offering the possibility to schedule up to one departure every 3 minutes.  Eighty percent of the project’s construction works were achieved by national companies, mobilizing 3 million working days and generating 280 jobs during the exploitation stage.  The complete doubling of the Casablanca – Marrakech railway tracks (174 kilometers), which required MAD 3 billion, will allow the increase of the capacity of the tracks by more than 100 pc, in addition to environmental benefits (6.5 million tons of greenhouse gas emissions avoided per year).

As part of its development strategy, Morocco’s Railway Office (ONCF) has carried out an ambitious program of modernization and construction of small, medium and large train stations.  The new stations of Oujda (MAD 170 million) and Benguerir (36 MAD million) are among these stations. These two train stations will improve the conditions of reception and comfort of travelers, respond to the growth of passenger traffic and support the urban development of the cities served.  (MWN 17.11)

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6.1  Turkish Jobless Rate Rises to 11.1% in August, Highest Since Early 2017

Turkey’s unemployment rose to 11.1% in the July-September period, official data showed on 15 November, hitting its highest level since early last year and up from a revised 10.6% in the June-August period.  The figure was up 0.5% compared to the same month a year earlier, according to data from the Turkish Statistical Institute (TUIK).

The non-agricultural unemployment stood at 13.2% on average during the July-September period, the data also showed.  The youth unemployment rate—persons aged between 15 and 24—was 20.8%, indicating an increase of 0.2-percentage points on a yearly basis in August.  TUIK said unemployment for the 15-64 age group went up 0.6% annually to 11.4% in August.  The number of unemployed persons aged 15 years and over increased by 266,000 year-on-year to reach 3.67 million in August.  In August, the employment rate rose by 0.3%age points from the same month last year up to 48.3%.  (TUIK 15.11)

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6.2  Turkey’s Health Spending Exceeds $38.5 Billion in 2017

Turkey’s health expenditures jumped 17.4% in 2017, compared with the previous year, the Turkish Statistical Institute said on 15 November.  Total costs reached 140.65 billion Turkish liras ($38.53 billion) last year, TurkStat said, up from around 120 billion Turkish liras ($39.6 billion) in 2016.  The institute said that health expenditure per capita increased to 1,751 Turkish liras ($479.7) in 2017 from 1,511 Turkish liras ($498.7) in 2016.  The proportion of total health expenditure of the country’s GDP was 4.5% last year and 3.5% in 2016.

Out-of-pocket health expenditures made by households for treatment, pharmaceuticals etc. reached 24.4 billion Turkish liras ($6.7 billion) with an increase of 22.7% in the year 2017.  The proportion of household health expenditure to total health expenditure was 17.1% in the year 2017.  The proportion of general government health expenditure to total health expenditure was 78% in last year and 78.5% in 2016.

Turkey operates 894 hospitals, 7,950 family health centers, nearly 2,700 emergency health stations, and 171 community mental health centers with around 1 million medical personnel.  The number of doctors per 100,000 population was 186 in the country, under the OECD average of 351 per 100,000 population.  Life expectancy at birth is 78, baby mortality rate per 1,000 live birth is 6.8 while mother mortality rate per 1,000 live birth is 14.6.  Turkey has also general health insurance system to protect all citizens’ health.  (TurkStat 15.11)

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6.3  Cyprus’ Utilities & Housing Costs Lift Inflation by 1.9%

Cyprus’ Harmonized Index of Consumer Prices climbed by 1.9% in October 2018, compared with the respective period of last year, due to increases in prices for housing, water, electricity and gas.  According to Cystat, compared with October 2017, the highest positive change was recorded in energy products with a rise of 16.8%.  Compared to September 2018, harmonized inflation declined by 0.3%. Prices in clothing and footwear increased by 5.2%, while prices in restaurants and hotels declined by 3.9%, marking the highest reduction among the economic categories.  For the period from January to October, HICP rose by 0.7% compared with the respective period of 2017.  (CAN 19.11)

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6.4  Tourist Arrivals to Cyprus Stand at an All Time High

Tourist arrivals in Cyprus for the period of January – October 2018 increased by an annual 7.8% to 3.67 million, marking a new record for tourist arrivals for the first ten months of the year.  According to the Cyprus Statistical Service (Cystat), in October 2018 tourist arrivals amounted to 433,617 marking an increase of 6.6% compared with October 2017.

The United Kingdom continued to constitute Cyprus’ main tourist market with 34% for the ten-month period, compared with 34.5% in January – October 2017, with Russia the second highest market with its share dropping to 20.5% compared with 23.2 in January – October 2017.  Israel was the third largest source of tourism for Cyprus with its share declining to 5.90% compared with 8.1% in 2017, followed by Germany whose share in the tourist market decreased marginally to 4.6% in January – October 2018 compared with 5.0% in the respective period of 2017.

For the period of January – October 2018 tourist arrivals from the UK increased by 6.1%, tourists from Greece rose by 9.0% year on year, while tourist from Switzerland increased by 29.1% and tourist from Denmark by 22.4%.  During the period of January – October 2018 tourists from Russia declined by 4.9% compared with the respective period of 2017, from Israel by 11.4% and by 1.8% from Germany.

In October 2018, tourist arrivals from the UK increased by 12.4% compared with October 2017, while tourist inflow from Sweden increased by annual 4.8% and from Greece by an annual 2.0%.  Tourist arrivals from Russia in October declined by 4.5% compared with October 2017, while arrivals from Germany declined by 19% compared with the respective period of 2017, Cystat said.  (Cystat 20.11)

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6.5  Greece Grants Country’s First Medical Cannabis Licenses

Eight months after green-lighting the cultivation and production of medical cannabis, Greece’s leftist-led government has issued the first licenses to two private firms for growing hemp in the country.  The announcement was during a joint press conference in Athens by Health Minister Andreas Xanthos, Deputy Economy Minister Stergios Pitsiorlas and Deputy Agricultural Development Minister Vassilis Kokkalis.  It involves a €9.5 million investment in Larissa, central Greece, and a €12.5 million investment in Corinth, in the Peloponnese.

Officials said up to 12 more licenses could be granted by the end of the year, creating about 770 new jobs and representing a total investment of €185-200 million.  Most of the investment is expected to come from Canada and Israel.

Meanwhile, authorities are taking steps to include medical cannabis products in the country’s electronic prescription system.  However, while products will be available on prescription from pharmacists, they will not be covered by state health insurance.  (Various 20.11)

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6.6  Greek Current Account Surplus Shrinks in September While Tourism Revenues Stay Steady

Greece’s current account balance showed a smaller surplus in September compared to the same month a year ago on the back of a wider deficit in the balance of goods, driven by a rise in oil imports, the Bank of Greece announced.  Central bank data showed the surplus shrank to €551 million from a surplus of €978 million in September 2017.  At constant prices, exports of goods decreased by 1.8%, while imports of goods increased by 11.3%, the bank said.  Tourism revenues remained steady at about €2.4 billion.  In 2017 as a whole, Greece’s current account deficit reached €1.5 billion, down by €418 million year-on-year.  (Reuters 20.11)

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7.1  Chanukah Celebrated in Israel & the World Over

On Sunday evening, 2 December, the Jewish world began the observance of the eight day Chanukah holiday.  From the Hebrew word for “dedication” or “consecration”, Hanukkah marks the rededication of the Temple in Jerusalem after its desecration by the forces of Seleucid Greeks and commemorates the “miracle of the container of oil”.  The re-dedication followed the liberation of Jerusalem by the Jewish forces, or Maccabees, who were fighting to regain their independence against the Greek invaders.  There was only enough consecrated olive oil to fuel the eternal flame in the Temple for one day.  Miraculously, the oil burned for eight days, which was the length of time it took to press, prepare and consecrate fresh olive oil.  The holiday also celebrates the military victory and the restoration of Jewish independence.  The holiday lasts until 20 December.

Though business is permitted during this holiday, the week in Israel is marked by many leaving work early to be with the family at nightfall, in time to light the chanukiah or menorah, an eight branched candelabra.  The primary observance is to light a single light each night for eight nights.  As a universally practiced “beautification” of the mitzvah, the number of lights lit is increased by one each night.  There is also a custom of eating foods fried in oil as a culinary way of commemorating the Chanukah miracle after the Maccabees won the war against the Greeks, liberating Israel.  While the favored fried Chanukah treat of Israelis is the jelly doughnut, most North American Jews prefer latkes, a grated potato-and-onion pancake fried in oil and served with sour cream or apple sauce.

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7.2  Tunisia Appoints First Jewish Minister in Decades

Tunisia on 13 November approved a cabinet reshuffle that included Jewish businessman Rene Trabelsi as minister of tourism.  The reshuffle of 10 new ministers was proposed by Prime Minister Youssef Chahed last week, in hope of injecting fresh names into his government amid a political and economic crisis.

Trabelsi is the third member of the country’s small minority of 2,000 Jews to join Tunisia’s cabinet since its independence in 1956.  Albert Bessis served in the 1955 government that led to the country’s independence, while Andre Barouch was a close aide to president Habib Bourguiba in 1956.

The tourism minister is from the island of Djerba, known as the heartland of Tunisia’s Jewish community and site of pilgrimage, which attracts a number of tourists every year.  The island is recovering from a 2002 terrorist attack on the famous Ghriba synagogue that killed 21 people, including German tourists.  Trabelsi’s father, Perez Trabelsi, is the president of the synagogue and has been the leader of the community since 1985.  He has played a vital role in organizing the pilgrimages and is known for efforts to promote Jewish-Muslim coexistence in the region.

Tunisia is home to one of North Africa’s largest Jewish community.  The group has lived in the country since the Roman era and their community once numbered 100,000.  But fear and poverty pushed several waves of emigration after the re-birth of Israel in 1948.  Many Jews left the country after the 1967 Arab-Israeli war, with most going to France or Israel.  (Various 13.11)

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7.3  Greek Population May Shrink by 1.4 Million by 2035

Greece’s population could decrease by between 450,000 and 1.4 million by the end of 2035, according to a parliamentary committee’s recently published report.  The report shows that Greece’s population may shrink to between 9.5 and 10.4 million in 2035 – compared to 10.9 million in 2015 – and shrink even further to between 8.3 and 10 million by 2050.  A special committee of experts commissioned by the Greek Parliament published the findings 18 October.  The report follows other researchers’ similar warnings regarding Greece’s dwindling population and also raises alarm over the aging of the country.  It forecasts that 65+ year-olds will make up 30.1-33.3% of the population by 2050 — compared to 20.9 in 2015 — while the working-age population (20-69 years old) will shrink from 7.1 million in 2015 to 5.7 million in 2050.  (GN 12.11)

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7.4  Athens Technical University to Offer Joint Degrees with Columbia University

For the first time in Greek higher education, a major university will now offer joint programs with Columbia University of New York City.  According to a new agreement between the National Technical University of Athens (NTUA) and the US-based university, the two educational institutions will now offer joint undergraduate degrees to their best students.  There will be no tuition fees for NTUA students who finish their education at Columbia because the Athenian university has agreed to cover the cost with scholarships and sponsorships.  The agreement was reached between Athens Polytechnic Chancellor Giannis Gkolias and the officials at Columbia university.  The program will begin in 12 months and will be tailored to meet the needs of honors students. The agreement is expected to be extended to the postgraduate level as well, with students from one University being able to attend the classes of the other.  (Various 22.11)

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8.1  Aurum Ventures and Direct Insurance Join Investment in KidneyCure

KidneyCure completed a round of financing from Aurum Ventures, a venture capital firm, and Direct Insurance Financial Investments.  The new investors join KidneyCure’s strong team of existing investors including Jonathan Leitersdorf, Prof. John Finberg and Gilad Altshuler Holdings.  The investment from Aurum Ventures and Direct Insurance brings the total amount raised by KidneyCure to $4 million.  Aurum provides KidneyCure and its board with a strong professional track record and knowledge of the relevant industry.

KidneyCure is developing cell-based personalized medicine therapy designed to compensate for renal cell depletion by administrating autologous, revitalized renal progenitor cells.  Upon administration, these cells are expected to significantly improve kidney function, prevent the formation of fibrotic renal tissue and delay the progression of the disease.  The major benefit is expected to be a substantial delay in the need for dialyses and kidney transplantation.

Tel Aviv’s KidneyCure is developing proprietary cell therapies aiming to prevent progression of Chronic Kidney Disease.  The scientific basis and motivation for KidneyCure’s approach was provided by a world-renowned authority in Nephrology Prof. Benjamin Dekel, through genuinely pioneering research carried in his laboratory at Sheba Medical Center in Israel, one of the world’s leading medical centers.  KidneyCure’s unique 3D renal cell cluster technology is expected to significantly delay the need for dialysis and transplantation and give millions of patients an opportunity to live longer higher quality lives.  (KidneyCure 19.11)

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8.2  Salt of the Earth Expands Global Availability

Salt of the Earth announced new, exclusive distribution agreements for Australia, Poland, South Africa and Thailand of its clean-label Mediterranean Umami savory flavor enhancement and sodium reduction ingredient.  The company is expanding offerings of the plant-based ingredient by partnering with leading food ingredient distributors around the world.  These global deals have served to underline the broad functionality of this ingredient and have elicited the company to identify several key factors for marketing Mediterranean Umami in the four new countries.

Mediterranean Umami is a distinctive blend of simple, consumer-friendly ingredients based on natural plant extracts combined with sea-salt.  It was granted an IFT17 Innovation Award and provides multiple functions as a savory flavor enhancer, a salt-reduction agent, and a sugar reduction ingredient.  In addition to existing agreements for the four new countries as well as North America, the UK, and Benelux, Salt of the Earth continues to seek additional distribution partners

With innovation and quality as its driving principles, Atlit’s Salt of the Earth has been producing sustainable sea salt solutions for the global food industry since 1922. Salt of the Earth’s customers span more than 20 countries on 5 continents.  The company controls and tracks sustainable salt resources and works to promote balanced salt consumption through innovative sodium reduction solutions.  (Salt of the Earth 20.11)

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8.3  Evogene Establishes Ag-Chemicals Subsidiary – AgPlenus

Evogene announced the establishment of a new subsidiary – AgPlenus.  All of Evogene’s ag-chemical activities focusing on the design and development of effective and safe next generation agro-chemical products are being transferred to the new subsidiary, along with access to Evogene’s Computational Predictive Biology (“CPB”) platform.

The ag-chemical activities being transferred to AgPlenus, which were initiated in 2014, now consist of a substantial internal and collaborative product pipeline focusing on herbicides and insecticides with a clear go-to-market strategy.  This rapid product candidate discovery and early stage development was achieved through the use of Evogene’s CPB platform, a well-established disruptive technology platform.  AgPlenus’ promising product candidate pipeline includes advanced hits for potential new Mode-of-Action herbicides and new Sites-of-Action for key insecticidal targets.  Evogene’s existing ag-chemical collaborations with world leading crop protection companies such as BASF and ICL will also be transferred to the new subsidiary.

Rehovot’s AgPlenus, a fully owned subsidiary of Evogene, aims to discover, develop and bring to the market effective and safe agrochemical products utilizing proprietary computational predictive technologies.  The Company aims to develop agrochemicals: herbicides, insecticides, fungicides and crop enhancers. AgPlenus will continue ongoing collaborations with industry leaders such as BASF and ICL.

Rehovot’s Evogene is a leading biotechnology company developing novel products for major life science markets through the use of a unique computational predictive biology (CPB) platform incorporating deep scientific understandings and advanced computational technologies.  Today, this platform is utilized by the Company to discover and develop innovative products in the following areas (via subsidiaries or divisions): ag-chemicals, ag-biologicals, seed traits, integrated castor oil ag-solutions and human microbiome based therapeutics.  (Evogene 19.11)

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8.4  BioLineRx Receives FDA Designation for Novel Cancer Immunotherapy Candidate AGI-134

BioLineRx announced that the U.S. FDA has granted the Biological Product Designation for AGI-134, the Company’s novel immunotherapy compound.  This designation provides the Company with eligibility to obtain 12 years of market exclusivity upon approval of the product for commercial use by the FDA.  This regulatory market exclusivity adds an incremental layer of protection in addition to that afforded by existing patents granted in the United States and Europe, and pending in other countries, covering the use of AGI-134 for the treatment of solid cancer tumors.  These patents are valid until May 2035, with a possible term extension of up to five additional years.

Pre-clinical studies have demonstrated that treatment with AGI-134 leads to complete regression of primary tumors, prevents growth of untreated distal secondary tumors, and triggers a vaccine effect that may prevent the development of future metastases.  Furthermore, in prior studies, the combination of AGI-134 with an anti-PD-1 immune checkpoint inhibitor demonstrated a synergistic effect in protection from secondary tumor growth.  BioLineRx recently initiated a Phase 1/2a study of this promising product in solid tumors, as both monotherapy and in combination with checkpoint inhibitors, and anticipates initial top-line results from this important study by the end of 2020.”

Tel Aviv’s BioLineRx is a clinical-stage biopharmaceutical company focused on oncology and immunology.  The Company in-licenses novel compounds, develops them through pre-clinical and/or clinical stages, and then partners with pharmaceutical companies for advanced clinical development and/or commercialization.  (BioLineRx 20.11)

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8.5  E-Motion Receives CE Mark for Its Stimulation Therapy for Patients With Acute Digestive Dysmotility

E-Motion Medical has received CE Mark approval for its lead product, the E-Motion System, providing stimulation therapy that restores the natural motor function of the digestive system for patients with acute gastrointestinal dysmotility (GID).  Acute GID is common in neurological, trauma, surgical, geriatric and severe diabetic patients.  It manifests itself as reduction in, or lack of, motility in the digestive system, and leads to increased risk of complications and longer recovery time.

To restore motility to the digestive system, the E-Motion System delivers unique patterns of electrical stimulation to the esophagus.  The stimulation is applied to the esophagus using the Company’s proprietary applicator, the E-Motion Tube, which is easily placed by the nursing staff in the same manner as a regular feeding tube.  The applied stimulation generates contractions, which restore natural function to the digestive system and promote motility throughout the gastrointestinal tract.

Founded in 2011, Tel Aviv’s E-Motion Medical developed the first non-pharmaceutical therapy for restoring the natural motor function of the digestive system for people suffering from digestive dysmotility.  The CE Mark approved E-Motion System was successfully tested in clinical trials in Europe and Canada.  (E-Motion Medical 20.11)

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8.6  Mazor Robotics Shareholders Approve Merger Agreement With Medtronic

Mazor Robotics announced that at a Special General Meeting of Shareholders, Mazor Robotics shareholders approved the previously announced definitive merger agreement with wholly-owned subsidiaries of Medtronic.  Approximately 53% of Mazor Robotics ordinary shares were represented in the meeting.  Approximately 95% of the shares represented in the meeting which are neither held by a Medtronic affiliated party nor by a controlling shareholder of the Company or a shareholder with a personal interest in the merger proposal, were cast in favor of the merger.  The transaction remains subject to certain closing conditions and is expected to close during Medtronic’s third fiscal quarter ending January 25, 2019.

Caearea’s Mazor Robotics believes in healing through innovation by developing and introducing revolutionary technologies and products aimed at redefining the gold standard of quality care.  Mazor Robotics Guidance System enables surgeons to conduct spine and brain procedures in an accurate and secure manner.  (Mazor 19.11)

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8.7 Aidoc and SaferMD Team Up to Close the Loop of AI Radiology Medicare Payments

Tel Aviv’s Aidoc, a leading provider of AI radiology solutions, announced a partnership with New York’s SaferMD to provide the first complete solution to use AI to both improve clinical performance and reward radiologists with higher scores in the Medicare Merit-Based Incentive Payments System (MIPS).  This can enable them to earn positive payment adjustments for Medicare procedures.  Under MIPS, healthcare providers can earn positive payment if they demonstrate that they provide high-quality, efficient care.

SaferMD’s Radiology Qualified Clinical Data Registry (QCDR) is approved by the Centers for Medicare & Medicaid Services (CMS) for 2018-2019 MIPS reporting.  It currently offers 19 high priority measures and eight sub-measures that reflect communication performance for critical and actionable results in imaging exams.  Radiologists can use SaferMD and Aidoc’s combined solution to automatically generate the data they need to report MIPS and show the value of AI-based imaging analysis.  Aidoc’s AI-driven radiology solution immediately flags critical conditions and moves them to the top of the work list, speeding diagnosis and treatment times for the most serious cases.  It already has FDA clearance for detecting intracranial hemorrhage in Head CTs.  (Aidoc 19.11)

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8.8  BrainStorm Cell Therapeutics Submits IND for NurOwn for Treatment of Progressive Multiple Sclerosis

BrainStorm Cell Therapeutics has submitted an Investigational New Drug (IND) application with the U.S. Food and Drug Administration (FDA) to initiate a Phase 2 study of NurOwn® in patients with progressive multiple sclerosis (MS).  MS affects approximately 1 million individuals in the U.S. and 2.3 million individuals worldwide.  Approximately half of affected individuals will eventually develop progressive disease, which may lead to increasing levels of motor, visual, and cognitive functional impairment and disability.

Petah Tikva’s BrainStorm Cell Therapeutics is a leading developer of innovative autologous adult stem cell therapeutics for debilitating neurodegenerative diseases.  The Company holds the rights to clinical development and commercialization of the NurOwn technology platform through an exclusive, worldwide licensing agreement.  NurOwn has received Fast Track designation from the U.S. FDA in ALS and orphan status by the U.S. FDA and the European Medicines Agency (EMA).  BrainStorm is currently enrolling a Phase 3 pivotal trial in ALS (NCT03280056), investigating repeat-administration of NurOwn at six sites in the U.S., supported by a grant from the California Institute for Regenerative Medicine (CIRM CLIN2-0989). The pivotal study is intended to support a filing for U.S. FDA approval of NurOwn in ALS.  (BrainStorm 19.11)

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8.9  BGU Shows that Heating Raw Human Excrement Could Provide a Reusable Energy Source

For the first time, a Ben-Gurion University pilot study has demonstrated that raw human excrement can potentially be converted to a safe, reusable fuel and a nutrient rich fertilizer, thus addressing two major worldwide issues of sanitation and fuel for energy.  According to the groundbreaking study published in the Journal of Cleaner Production, researchers at BGU’s Zuckerberg Institute for Water Research have refined a process using hydrothermal carbonization (HTC) to heat solid human waste in a designated “pressure cooker” and convert excreta into hydrochar, a safe, reusable biomass fuel resembling charcoal.  The BGU researchers conducted similar research last year on turkey and other poultry excrement.

The development addresses two challenges prevalent in the developing world: sanitation and growing energy needs.  While access to waste treatment worldwide has expanded significantly in recent years, approximately 2.3 billion people still lack basic sanitation services, according to the World Health Organization.  This includes 892 million people – mostly in rural areas – who defecate in the open.  The Bill and Melinda Gates Foundation sees sanitation as a major world health issue and has Reinvent the Toilet Challenge to address this problem.

In the pilot and laboratory study, the researchers subjected the raw waste material through HTC to three temperatures (180, 210 and 240 °C) and reaction times (30, 60 and 120 min.).  The solids become dehydrated, creating a substance known as hydrochar, a combustible solid, as well as a nutrient-rich aqueous (liquid) phase.   The researchers said the reaction that creates the hydrochars sterilizes the waste material, so it becomes safe to handle.  The “coals” can potentially be utilized for household heating and cooking, while the liquid byproduct, (the aqueous phase) can be used as liquid fertilizer.  The study was funded by the Rosenzweig-Coopersmith Foundation and the Israel Water Authority.  (BGU 15.11)

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8.10  Ireland’s Medtronic to Acquire Nutrino Health

Dublin’s Medtronic, a global leader in medical technology, and Nutrino Health announced the companies have entered into a definitive agreement under which Medtronic will acquire Nutrino.  Given that food and nutrition are central components in effective diabetes management, the companies recognized an opportunity to improve clinical outcomes for people with diabetes by integrating Nutrino’s extensive food analysis infrastructure, nutrition science expertise and artificial intelligence (AI)-driven personalized insights with Medtronic’s technology and future innovations.

The Diabetes Group at Medtronic is focused on innovating diabetes management resources to improve the lives of people with diabetes.  Medtronic will add Nutrino’s comprehensive food database, food analysis system and nutrition-science expertise to its capabilities, upon closing of the transaction.  In addition, Nutrino has been developing algorithms to predict glycemic responses to food.  By leveraging Nutrino’s technology and infrastructure with continuous glucose monitoring (CGM) and industry-leading closed loop systems, Medtronic can help reduce the substantial physical and mental burden of food and nutrition management for people with diabetes.  The acquisition is expected to close in Medtronic’s third fiscal quarter, ending January 25, 2019, subject to the satisfaction of certain customary closing conditions.

Tel Aviv’s Nutrino is a leading provider of nutrition-related data services, analytics and technologies.  At its core, Nutrino strives for improved universal health by enabling AI-led analysis of how nutritional intake will affect a person’s health.  Nutrino has also built a leading food database and nutrition data insights platform, collating data from millions of access points and food items globally.  Nutrino helps people discover their FoodPrint, a personalized assessment of their personal response to different foods.  (Medtronic 21.11)

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8.11  CytoReason Model Overcomes Cross-Species Drug Development Barriers

CytoReason announced publication of a groundbreaking new model for translating data from mouse models to human disease.  Described in Nature Methods, the mouse to human model (Found In Translation or FIT), proved its ability to more accurately and effectively extrapolate results from the mouse-based research that is a vital, and necessary, part of every drug discovery and development program.

Much of what we know about disease is rooted in research done using mouse models (mice bred specifically to have the characteristics of the disease being studied).  Furthermore, every single new drug will have first had to demonstrate some level of safety and efficacy on mice.  But mice are not humans, and cross-species differences have consistently been a major stumbling block to translating lab-based research into something that will be meaningful for patients and clinicians.

Until now, knowledge of species differences has not been systematically incorporated into the interpretation of animal models.  In trying to overcome this huge issue, scientists from CytoReason and the Systems Immunology and Precision Medicine Lab at the Technion Faculty of Medicine, developed their mouse to human model.  This new model builds on CytoReason’s mission of driving biological insights that transform drug discovery and development, lifting analysis of datasets out of an isolated vacuum and applying the full context of existing knowledge, in a similar way to CytoReason’s Cell-Centered Models of the immune system do in terms of identifying and understanding gene/cell/cytokine relationships.

At the heart of the process is the pairing of human and mouse model datasets with a human-disease dataset of comparable conditions to produce cross-species pairings.  For each cross-species pairing in each species the difference was calculated between disease and control samples, which was then used to study how different human and mouse genes express under similar conditions and fed into the mouse to human model.

Tel Aviv’s CytoReason has a singular focus on re-defining understanding of the immune system at a cellular level. CytoReason’s technologies, data and process are all unique and proven.  They lie at the heart of CytoReason’s ability to map the correlation and causality of gene/cell/cytokine relationships that are central to understanding diseases, and their treatment – and do so faster and more accurately than ever before.  (CytoReason 26.11)

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8.12  Merchavia Signs MoU for First Investment in the Medical Cannabis Sector

Ramat Gan’s Merchavia Holdings and Investments, an Israeli investment company specializing in early-stage life science sector companies, has signed a non-binding Memorandum of Understanding (MoU) in an Israeli company developing a medical device that will allow the measured and precise consumption of medical cannabis, according to a pre-defined dosage and without the need of heating.  According to the MoU, the company will invest a total of $400,000 in exchange for shares representing about 20% on a fully diluted basis.

This step is part of the implementation of the company’s business strategy to invest in breakthrough technologies, with major worldwide potential and in high growth markets.  As part of this strategy, and following the company’s announcement one month ago, about its intention to begin investing in companies in the Cannabis field, when the deal becomes a binding agreement, Merchavia will invest for the first time in the aforementioned company.  According to Merchavia’s information, the medical cannabis market is expected to grow to about $55 billion in 2024.  Sales of cannabis concentrates on the cannabis market are expected to exceed $3 billion by the end of 2018.

As part of its investment in companies in the medical cannabis sector, Merchavia will realize its capabilities in the sector through life sciences and technology investments and fulfill its investment policy in this field, as well as its international connections with leading enterprises, which are also in the field of medical cannabis with an emphasis on R&D companies. The company is conducting talks with several other companies with R&D activities related to medical cannabis.  (Merchavia 26.11)

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8.13  CannaLean Develops New Cannabidiol Formulation to Safely Lower Cholesterol Levels

CannaLean has completed in vivo studies showing a significant decrease in cholesterol/triglyceride, demonstrating the potential clinical effect of the novel patent-protected formulation.  When lifestyle changes are insufficient to reduce lipid levels (including cholesterol and triglycerides), statins are the most common treatment.  While statins are highly effective, they often cause side effects, such as memory loss, muscle pain, digestive problems, and, in the worst cases, liver damage and death.  CannaLean is developing an alternative to statins for the reduction of lipids using CBD as the active ingredient.  CannaLean has developed a novel formulation of Cannabidiol (CBD), with chitosan, a biocompatible, non-toxic, and non-immunogenic compound that enhances the potential of CBD to significantly reduce cholesterol and triglycerides.  Their preliminary in vivo results in animal models show the effect of the novel formulation on cholesterol and triglycerides reduction, as compared to controls and each compound alone.

Founded in 2017, Bnei Brak’s CannaLean is committed to the research and development of a novel proprietary formulation of Cannabidiol (CBD) and Chitosan that will potentially benefit millions of patients suffering from dyslipidemia.  CannaLean has completed various in vivo studies showing a significant decrease in cholesterol triglyceride blood levels, demonstrating the potential clinical effect of the novel patent-protected formulations.  CannaLean has established an active partnership with one of their shareholders – MOR Research Applications, the tech transfer company of Clalit Health Services.  (CannaLean 26.11)

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9.1  Darillium Emerges from Stealth to Help Multi-Platform & Multi-Cloud Management

More than 80% of enterprises take a multi-cloud approach and spread their workloads across several public and on-premise platforms instead of going all in on a single cloud.  The complexity and costs of managing multi-cloud workloads delays new product releases.  It’s a challenge that Tel Aviv-based start-up Darillium is tackling with its flagship product, Galaxy.

Fresh from stealth mode, Darillium, alongside large enterprise partners will solve this multi-platform problem.  The company announced on 15 November that it has raised a $2 million seed round lead by Hanaco Ventures and joined by JANVEST Capital Partners.  Darillium’s first product, Galaxy, allows customers to deploy applicative workloads and support new business services across multiple platforms and clouds.  Darillium’s unified API and Artificial Intelligence-driven recommendation engine enable cross platform functionality and are designed to support both technical and business teams.

Tel Aviv’s Darillium is on a mission to enable enterprises to design and release new business services faster and with less risk across multiple platforms and clouds.  Leading venture capital investors include Hanaco Ventures and JANVEST Capital Partners.  (Darillium 15.11)

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9.2  Transmit Security Wins Javelin’s 2018 Mobile Biometrics Platform Leader Award

Transmit Security, the identity orchestration company, has been named a leader in the inaugural edition of the Javelin Strategy & Research Mobile Biometrics Platform Scorecard.  The Transmit Security Platform earned the “Leader” award in all three of the report’s categories: Functional, Innovative and Tailored.  Javelin evaluated twelve leading mobile biometric platform providers with an emphasis on how well they support multiple biometric modalities across a variety of channels.

Transmit SP was named leader in each of the following categories for:

-Functional: Its broad support for a range of biometric modalities and providing a one-stop shop for biometric authentication and risk assessment.

-Innovative: Cutting-edge biometric modalities and analytics features that operate behind the scenes.

-Tailored: Providing robust, flexible and configurable implementation options that enable the platform to adapt to the needs of customers and end users.

Tel Aviv’s Transmit is the leader in identity orchestration.  The company’s technology enables large enterprises to standardize and simplify their identity infrastructure to accelerate and reduce the cost of new account opening, authentication, authorization, compliance and fraud prevention related initiatives.  (Transmit Security 15.11)

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9.3  Abellio London Reduces Collisions & Injuries Via Mobileye Safety Trial

Abellio London, one of London’s leading bus operators, has launched a major trial of safety technology from Mobileye, an Intel company.  The trial is supported by Transport for London (TfL) through a grant from its Bus Safety Innovation Fund.  Focused on reducing bus collisions with cyclists, motorcycles, pedestrians and other road users, the trial’s findings to date show the Mobileye collision avoidance technology has reduced avoidable collisions by 29% and reduced injuries from such collisions by 60%.

Abellio London’s safety technology trial is employing Mobileye’s aftermarket collision avoidance technology, which is engineered by the same team developing some of the world’s most sophisticated advanced driver assistance systems (ADAS) and autonomous vehicle technology.  The solution can be retrofitted to almost any vehicle already on the road.  For bus drivers, in particular, the Mobileye system provides critical audio and visual alerts that assist in preventing or mitigating collisions.  (Intel 14.11)

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9.4  CyberArk Named a Leader in Privileged Identity Management by Independent Research Firm

CyberArk was named a Leader in “The Forrester Wave: Privileged Identity Management, Q4 2018.”  Based on Forrester’s evaluation of the 11 most significant privileged identity management vendors, CyberArk ranks highest in both the current offering and market presence categories.

According to the report, “The [CyberArk] solution has strong password safe, session management, and privileged threat analytics, as well as the broadest DevOps support of any vendor evaluated in this Forrester Wave.” CyberArk received the highest possible score in report criteria including customer satisfaction; privileged threat/behavior analytics; privilege delegation and escalation; privileged session monitoring plans; and container support plans.  The CyberArk Privileged Access Security Solution is the most comprehensive solution on the market for protecting against the exploitation of privileged accounts, credentials and secrets anywhere – including on the endpoint and across on-premises, hybrid cloud and DevOps environments.

Petah Tikva’s CyberArk is the global leader in privileged access security, a critical layer of IT security to protect data, infrastructure and assets across the enterprise, in the cloud and throughout the DevOps pipeline.  CyberArk delivers the industry’s most complete solution to reduce risk created by privileged credentials and secrets.  (CyberArk 14.11)

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9.5  Pioneering a New Era in 3D Printed Production Metal Parts

Helping customers pioneer a new era in additive manufacturing for production-grade metal parts, Stratasys is releasing further details of its new platform currently being developed and designed for short-run metal applications.  First unveiled earlier this year, the additive platform is based on Stratasys’ innovative, first-of-its-kind “Layered Powder Metallurgy” (LPM™) technology, designed to make production of metal parts quicker, easier and more cost-effective than ever before.

Intended to disrupt conventional manufacturing approaches, the advanced platform is being developed to combine the value of additive manufacturing with short-run metal parts production.  The innovative technology is built to drive improved efficiency and cost savings using standard Powder Metallurgy (PM) alloys, mechanical properties with high accuracy and controlled shrinkage, as well as extremely fast throughput.

Developed internally over the past several years, Stratasys’ platform incorporates the company’s proprietary jetting technology and commonly-used powder metallurgy, starting with offering Aluminum powders.  The LPM solution includes a 3-step, additive manufacturing process combining traditional powder metallurgy with Stratasys’ PolyJet robust ink-jet technology.  The process includes printing of boundaries with proprietary thermal ink, powder dispensing and spreading, and then compaction of the powder layer to achieve high-density and controllable shrinkage.

Rehovot’s Stratasys is a global leader in additive manufacturing / 3D printing technology, and is the manufacturer of FDM and PolyJet 3D Printers.  The company’s technologies are used to create prototypes, manufacturing tools and production parts for industries, including aerospace, automotive, healthcare, consumer products and education.  (Stratasys 13.11)

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9.6  AppNexus Mobilizes Anodot’s Autonomous Analytics to Improve Customer Service

Anodot announced that AppNexus, a Xandr company, is leveraging Anodot’s Autonomous Analytics platform to detect and resolve business incidents in real-time, alerting customer-facing teams of problems that impact customers’ revenue-generating ads.  Ad tech leaders like AppNexus and its customers depend on “viewability” metrics to estimate the value of a given digital ad impression.  Ads buried at the bottom of web pages, obscured from view by competing site content, or un-loaded due to rapid user navigation have been constant challenges in an ever-shifting digital landscape of rich media content.  Anodot Autonomous Analytics ensures that AppNexus’ viewability measurements continually enhance its customers’ digital advertising performance, promoting optimal engagement from end-users.

Anodot uses automated AI and machine learning to help companies all over the world run their business better to achieve more predictable results. Its patented algorithms enable the fastest time to detection and root cause analyses, saving strategic time and energy in determining the scope and source of problems in ways that traditional BI tools and dashboards just can’t deliver.

Ra’anana’s Anodot applies automated AI to deliver autonomous analytics in real-time, across all data types, at enterprise scale. Unlike the manual limitations of traditional BI, we provide analysts mastery over their business with a self-service AI platform that runs continuously to eliminate blind spots, alert critical issues and investigate root causes. Anodot has nearly 100 customers in digital transformation industries like eCommerce, FinTech, AdTech, Telco, Gaming, including Microsoft, Lyft, Waze, Pandora, Appnexus, Wix and King.  (Anodot 15.11)

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9.7  Techniplas’ Illuminated Steering Wheel Designed Using Nano Dimension’s DragonFly Platform

Nano Dimension announced that Techniplas, a leading global design and manufacturing provider of automotive products and services, today unveiled a new steering wheel concept that incorporates its proprietary cognitive lighting technology with 3D printed electronics.  Using a Nano Dimension DragonFly Pro 3D printer, Techniplas engineers directly printed conductive paths into a concept wheel in a single step.

A leading additive electronics provider, Nano Dimension joined the Techniplas Open Innovation Program earlier this year to make additive electronics available for the first time to the automotive industry for the prototyping and manufacturing of conductive components, encapsulated sensors and smart surfaces.  Both companies believe that the combination of smart lighting with additive electronics can shape and transform the future of mobility enabling the creation of customized and short run functional electronics such as sensors, conductive geometries, antennas, molded connected devices, printed circuit boards and other devices.

Ness Tziona’s Nano Dimension is a leading electronics provider that is disrupting, reshaping and defining the future of how cognitive connected products are made.  With its unique 3D printing technologies, Nano Dimension is targeting the growing demand for electronic devices that require increasingly sophisticated features.  Demand for circuitry, including PCBs – which are the heart of every electronic device – covers a diverse range of industries, including consumer electronics, medical devices, defense, aerospace, automotive, IoT and telecom.  (Nano Dimension 15.11)

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9.8  Maytronics Dolphin iO Wins 2018 Piscine Global Innovations Trophy for Smart Pool Products

Kibbutz Yizreel’s Maytronics, the global leader in robotic pool cleaners, was chosen co-winner of the Piscine Global 2018 Pool Innovations Trophy in the Smart Pool Category.  The award-winning product is the Maytronics Dolphin iO™, the first-ever robotic pool cleaner powered by Opteq™, a self-learning artificial intelligence technology featuring 3D digital mapping of the pool.  The trophy was presented on 13 November at Piscine Global in Lyon, France, Europe’s leading swimming pool and wellness event, in recognition of outstanding innovation in new products or sustainable development solutions for the pool.

With the iO, Maytronics is the first company to leverage artificial intelligence for pool cleaning, bringing robotic pool cleaning into the age of smart, self-learning devices.  Powered by Maytronics’ revolutionary Opteq™ technology, the iO knows its exact location in the pool and can navigate to any point in the pool as if it has an underwater GPS system.  This enables it to automatically determine the most efficient way to clean each pool in accordance with the pool shape, structure, obstacles and requested cleaning mode.  It defines the scanning path and time required to cover all surfaces and can provide tangible proof of complete coverage of the entire pool surface, including floor, walls, and waterline.  End-users can fully control the cleaner from anywhere via a mobile app, including setting it to navigate to any point in the pool, clean only certain parts of the pool, go to a pre-defined location at the end of the cleaning operation, or climb to the waterline at a pre-defined precise location.  The Maytronics Dolphin iO will be introduced for select partners and pool owners for evaluation during 2019.  General availability to the market is expected in Europe and North America in 2020.  (Maytronics 14.11)

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9.9  OptimalPlus’ “Test Data Analysis as a Service” Complements Internal Semiconductor Teams

OptimalPlus will be offering its analytic-driven insights for semiconductor teams as a Service.  The company pairs unprecedented visibility into the entire electronics supply chain with advanced data science and domain expertise to enable customers to enhance their production metrics and ensure overall product reliability.  OptimalPlus’ standalone offering includes its extensive expertise supporting semiconductor customers with access to its experts, methodologies, and best practices, allowing them to pair that data with information collected by in-house analytic teams.

In today’s world semiconductor companies rely on experienced in-house engineers to manage product yield, efficiency and quality.  While requirements are ever-growing, there aren’t enough in-house experts to address them. Test Data Analysis is a service aimed to scale and complement product engineering and supply chain teams.  OptimalPlus’ veteran data scientists and semiconductor engineers will analyze customers’ test data and identify areas for improvement.  These insights and recommendations help companies prioritize internal resources and focus on the highest-value items.

Holon’s  OptimalPlus is the established leader of lifecycle analytics for the electronics industry and its entire supply chain.  The OptimalPlus open platform pairs unprecedented visibility into the entire electronics supply chain, with advanced data science and domain expertise.  This unique platform enables OptimalPlus customers to enhance their production metrics and ensure overall product reliability.  (OptimalPlus 14.11)

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9.10  Wi-Charge Unveils Wireless Power Kit for Amazon Echo Dot and Google Home Speakers

Wi-Charge announced an innovative Wireless Power Kit that transforms – within minutes – an existing wired Amazon Echo Dot or Google Home Mini smart speakers into a beautiful, fully functional, wire-free product.  The transformed product can be placed and used anywhere without cables or proximity to a power outlet.  Once the smart speaker transformation is complete, there are no wires.  Consumers are not asked to change the way they use the product.  Instead, they gain dramatic new freedoms on placement options.  Previously, one needed to place the speaker near a power outlet and then route or hide the power cord.  With the Wireless Power Kit, that is no longer a problem.  The smart speaker can be on a table, hang on a wall, or work practically anywhere in the room.

Wi-Charge also announced today the “Powered by Wi-Charge OEM Program,” a new program aimed at helping select partners bring wirelessly-powered products to market.  Such products might be wireless smart home speakers, home security devices, phone charging solutions and many additional innovative products that were previously constrained by battery power or power cords.  To ensure the success of OEM partners in this program, Wi-Charge will be accepting a limited number of partners into the program at this stage.  OEMs interested in participating can contact Wi-Charge for additional details, including costs and logistics.  The Wireless Power Kit is available as a reference implementation for manufacturers that seek to incorporate Wi-Charge long-range wireless power modules into their product line.

Rehovot’s Wi-Charge is the long-range wireless power company, founded with the goal of enabling automatic charging of phones and other smart devices.  Their patented infrared wireless power technology can deliver several watts of power to client devices up to 10 meters away.  The company developed remote charging solutions that enable mobile and wireless devices to seamlessly recharge themselves without user intervention.  (Wi-Charge 16.11)

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9.11  Safe-T Recognized by Gartner as One of Seven Representative SDP Vendors

Safe-T has been included in Gartner’s recent “Fact or Fiction: Are Software-Defined Perimeters Really the Next-Generation VPNs” report on software defined perimeters (SDPs).  Safe-T is the only Israeli company, listed as a Representative Vendor.  In addition to defining SDP and comparing and contrasting with other access solutions such as a VPNs, the report recognizes seven SDP vendors, including Safe-T.  Within the list, Safe-T is included as one of the three vendors offering stand-alone SDP products and is the only one of those that does not require any client installed on the end-user’s machine.

Herzliya’s Safe-T Group is a leading provider of software-defined access solutions which mitigate attacks on enterprises’ business-critical services and sensitive data.  Safe-T solves the data access challenge by masking data at the perimeter, keeping information assets safe and limiting access only to authorized and intended entities in hybrid cloud environments.  Safe-T enhances operational productivity, efficiency, security, and compliance by protecting organizations from data exfiltration, leakage, malware, ransomware, and fraud.  (Safe-T 19.11)

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9.12  vHive Releases Autonomous Drone Solution for Complex Cell Tower Inspection

vHive announced the enhancement of its fully automated workflow for cell tower inspection using drones to also support guy wire towers.  vHive enables enterprises to scale their drone operations, which uniquely empowers field technicians to fly autonomous, off-the-shelf drones, generating data in a fraction of the time and cost required by human operators.

vHive provides solutions to companies in a variety of industries ranging from telecom towers, to rail, bridges and civil engineering.  vHive enables tower companies and mobile network operators to gain intelligence on their infrastructure by capturing field data in minimal time and generating 2D and 3D tower models to visualize, analyze and share.  Safely handling the complexity of autonomous flight and data acquisition in a guy wire tower environment further enhances the company’s solution for the telecom industry, enabling customers to address a variety of asset types that they need to digitize.

Herzliya’s vHive is the developer of cloud-based AI that enables enterprises to operate autonomous drone hives for the acquisition, management and processing of field data.  vHive’s Mission AI uniquely enables organizations in a variety of industries such as infrastructure, telecom, rail and civil engineering to scale their drone operations.  (vHive 19.11)

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9.13  Team8 Launches Portshift, a New Breed of Automated Application Security

Team8, the leading think tank and company-creation platform specializing in cyber resilience and data science, announced the official launch of Portshift, a cloud-workload protection platform backed with $5.3 million in seed funding.  Portshift introduces a new IT security paradigm in which developers can deploy applications at efficiency and speed with security built-into the deployment rather than layered on after.  The solution offers continuous security from code to run-time.  While operating in stealth mode, Portshift is already working with several large organizations across multiple sectors with massive deployment in the cloud in both US and Europe.

Portshift is built on the premise that the world of IT has changed dramatically, defined by unprecedented and unmanageable infrastructure complexity that render traditional legacy systems as obsolete. Infrastructure that ran for months before being updated or changed is now replaced with ongoing deployments of new applications and hourly updates of granular compute units.  Whereas security signoff was previously required for firewall rules to be configured, and servers to be installed, today developers enjoy the agility to deploy new applications at scale, independent of the traditional security checkpoints.   Security teams are left behind with the old network rules and firewalls that cannot keep up with the pace of change. The result is a loss of ownership and lack of control of what is happening in the enterprise networks.

Portshift is an identity-based cloud workload protection platform that secures applications from CI/CD to runtime.  Portshift enables organizations to know which applications are running on their cloud environments, to see and enforce how the applications communicate and to easily find information that is associated with their development and deployment cycles enabling DevOps teams to orchestrate security as part of their day-to-day job.  Portshift’s unique model introduces security that is decoupled from the network and operations that is decoupled from security

Tel Aviv’s Team8 is a leading think tank and company creation platform specializing in cyber resilience and data science.  Leveraging the expertise of former leaders from Israel’s elite military intelligence Unit 8200, Team8 is supported by an in-house team of top researchers, engineers and analysts.  Team8 combines its in-depth understanding of the attacker perspective, data science AI to develop disruptive technologies and category-leading companies that enable businesses to reap the benefits of digital transformation in an agile and secure manner.  (Team8 20.11)

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9.14  ELTA Unveils Next Generation Drone Guard to Counter Unmanned Aircraft System (C-UAS)

ELTA Systems, a division and subsidiary of Israel Aerospace Industries (IAI), has unveiled a new and enhanced configuration of its Drone Guard system which detects, identifies and disrupts the operation of UAS and small drones.  With hundreds of units already operational across the world, the new modular configuration has added a Communication Intelligence (COMINT) system for more precise detection, classification and identification based on broadcast frequency and unique communication protocol analysis and verification for neutralizing threats.  Furthermore, the Drone Guard’s 3D Radars, Electro-Optical (EO), and Jammer systems have all been upgraded with bolstered capabilities.

The use of commercially available UAS and small drones has increased dramatically over the past few years as these platforms have become a potential threat to sensitive facilities, crowds, high profile individuals and other aircraft, due to their small size, slow velocity, and low altitude flight.  Small drones can be further used for hostile applications such as unwanted intelligence gathering, smuggling and even as weapon carriers.

ELTA has responded to these challenges with new and enhanced Drone Guard capabilities.  In addition to the current radar, EO and jamming capabilities a hostile threat can now also be detected, classified, identified by means of the enhanced COMINT system.  The system can effectively jam or disrupt the drone’s control channel and navigation, by supporting an array of communication protocols that can ‘fend off’ a single drone or even a swarm of drones from the guarded premises.  (ELTA Systems 21.11)

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9.15  Phone Calendar Launches Timeet, a Free Mobile App That Makes Your Calendar Social

Phone Calendar released Timeet for iOS and Android.  Timeet breaks down the barriers between IM platforms and personal calendars by enabling users to send and manage calendar invites to any phone contact or share through any messaging platform without the need for the meeting or event organizer to know invitees email addresses.  Meetings and events typically involve discussion around logistics, format or agenda.  By offering event-specific chat, Timeet significantly eases the entire scheduling process.  Timeet enables schedule invites to be sent directly to any contact identified by their phone number without the need to know the e-mail addresses of any of the invitees.  In addition, Timeet enables calendar events to be shared across any IM platform, offers event-specific real time chat and visual event branding and full two-way synchronization between existing calendar(s) and Timeet.

Founded in 2017, Hod HaSharon’s Phone Calendar seeks to create the de facto industry standards for calendars and scheduling technologies in the age of instant messaging and social communication.  (Phone Calendar 21.11)

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9.16  Altair Semiconductor and JIG-SAW Partner on LTE-Enabled Sensors for Industrial IoT

Altair Semiconductor has partnered with Japan’s JIG-SAW, a leading provider of A&A (Auto sensoring and Auto Direction) solutions for IoT, to develop LTE-enabled sensors for a wide variety of global industrial IoT applications.  The partnership combines Altair’s dual-mode Cat-M/NB-IoT ALT1250 chipset with JIG-SAW’s software control technology to enable developers to create new IoT business models that can drive new efficiencies across their organizations.  Potential market applications include IoT sensors for warehouse site management, equipment monitoring, logistics and more.  The collaboration will enable users with connected IoT devices to control and monitor individual devices and their statuses at all times via a modem chip connection. Additionally, auto-control services will enable users to address alerts in a timely manner.

Hod HaSharon’s Altair Semiconductor, a Sony Group Company, is a leading provider of LTE chipsets for IoT.  The company’s flagship ALT1250 is the smallest and most highly integrated LTE Cat-M and NB-IoT chipset, featuring ultra-low power consumption, hardware-based security and a carrier-grade integrated SIM.  Altair partners with leading global OEMs and ODMs, including Sierra Wireless, Murata and WNC, to provide low-power and cost-efficient modules for a range of industrial and consumer IoT applications such as trackers, smart meters, wearables and vehicle telematics.  (Altair 21.11)

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9.17  Finscend’s AI Technology is Revolutionizing the Way Banks Process Credit Card Disputes

Finscend has reported a significant spike in interest in the solution from banks and other financial institutions that issue credit cards throughout Northern Europe.  When a card holder requests the issuing bank to raise a dispute, BDP jumps into action to facilitate and streamline the entire system.  What enables it to do so is a proprietary technology that incorporates machine learning and artificial intelligence while interacting seamlessly with all existing banking infrastructure.  This synthesis allows BDP to automatically calculate a unique dispute-or-not score based on input it receives from hundreds of data points within the payment ecosystem.  Based on the score, BDP generates an optimal result for the bank’s dispute department.

Beit Shemesh’s Finscend is revolutionizing the way disputes are processed by creating a solution that will streamline and simplify the entire process.  The Finscend Bank Dispute Platform will reduce a bank’s dispute processing expenses by an estimated 25%.  This will be accomplished by the creation of a seamless end-to-end system that begins with customer onboarding and extends all the way to chargeback processing (when needed).  Moreover, it places all relevant information onto one clear dashboard that allows bank personnel to quickly process disputes and their managers to monitor workloads and analyze data.  Additionally, the Finscend system provides an AI- generated score that indicates what the best outcome would be for any dispute.  (Finscend 21.11)

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9.18  BigID Achieves Certification in the Amazon Web Services Partner Network

BigID has earned Advanced Partner status with Amazon Web Services (AWS) Partner Network (APN).  With BigID, AWS customers can automatically perform discovery across the data estate at scale, index and inventory personal information by identity, and operationalize privacy compliance mandates, such as the EU’s General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA).

As more organizations migrate data to the cloud, it’s critical that they know what data they have, who it belongs to, and document how that data is being processed, shared or exposed.  By achieving APN Advanced Partner status, BigID makes it easier to provide organizations a global view of their data across the data center, SaaS, and AWS environments, including AWS S3, Dynamo, Redshift, EMR, RDS, Aurora and Athena.  Further, BigID improves detection of privacy violations based on policy orchestration and delivers privacy intelligence input to drive automated actions by AWS enforcement points.

The BigID platform leverages machine learning and identity intelligence to transform how enterprises protect and manage the privacy of personal data.  Through data-driven inventory and mapping, BigID enables the automation and fulfillment of GDPR Data Subject Access Requests and Article 30 Record Keeping amongst other GDPR requirements.

Based in New York and Tel Aviv, BigID uses advanced machine learning and identity intelligence to help enterprises better protect their customer and employee data at petabyte scale.  Using BigID, enterprises can better safeguard and assure the privacy of their most sensitive data, reducing breach risk and enabling compliance with emerging data protection regulations like the EU General Data Protection Regulation.  (BigID 26.11)

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9.19  MazeBolt Launches Definitive DDoS Knowledge Base

MazeBolt Technologies announced the launch of the largest and most extensive Knowledge base, for all technical and operational related DDoS threat assessment materials.  The Knowledge Base is designed to bridge a gap between customers & IT Network professionals, on the one hand, and DDoS mitigation vendors on the other, to help manage DDoS vulnerabilities most effectively.  Furthermore, the Knowledge Base helps IT professionals identify attacks in real time by providing them with low level descriptions & packet captures (example from SlowLoris) of real DDoS attack vectors.  MazeBolt’s Knowledge Base includes close to 100 articles about DDoS attacks, with an in-depth Technical Analysis, Screenshots as well as Analysis in WireShark – Filters and sample packet captures for each and every DDoS attack Vector.

Givatayim’s MazeBolt is an Israeli Cyber Security company that strengthens companies’ resistance to cyber-attacks.  MazeBolt’s pioneering DDoS Testing & Phishing Simulation & Awareness solutions are used by Fortune 1000 & NASDAQ listed companies in over 50 countries and are operating in 20 languages.  (MazeBolt 26.11)

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9.20  GetSAT Selected as SatCom Component for U.S. Coast Guard Airborne Missions

GetSAT announced that its MilliSAT L/W has been selected as the beyond line of sight (BLOS) SatCom component for U.S. Coast Guard Airborne Communications by Hughes Defense Systems in support of Intelligence, Surveillance and Reconnaissance (ISR), Humanitarian Aid, Search and Rescue (SAR), and Disaster Relief (DR) Missions.  In partnership with systems integrator Hughes Networks Systems, a global leader in broadband satellite networks and services, GetSAT’s technology was selected from multiple competitors to support mission critical communications link by U.S. Naval Air Systems (NAVAIR).

GetSAT’s MilliSAT L/W (lightweight) provides the U.S. Coast Guard with a fully integrated airborne secure COTM applications.  The company’s micronized communications terminal is based on a patented fully-interlaced InterFLAT panel technology for transmitting and receiving signals on the same panel.  Meeting the demanding requirements of full-time usage in harsh environments, this rugged satellite on the move (SOTM) terminal in a super-light compact installation offers significant savings in size, weight, and power usage (SWaP).

A privately held company located in Rehovot, Israel, GetSAT Communications provides affordable, portable, and extremely efficient antenna and terminals that offer high-data-rate communications for ground, air, and maritime applications. GetSAT provides services for government and military use, enterprises, first responders, and nongovernmental organizations (NGOs) and humanitarian groups.  (GetSAT 26.11)

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10.1  Israel’s CPI Rises by 0.3% in October

On 15 November, the Central Bureau of Statistics announced that Israel’s Consumer Price Index (CPI) rose by 0.3% in October.  The increase is in line with market expectations.  The rate of inflation in the twelve months to the end of October was 1.2%.  Notable rises were recorded in October in the clothing and footwear item (8.1%) and fresh vegetables (1.5%).  There were falls in fresh fruit (1.6%) and transport (0.5%).

The Home Price Index for August-September showed a rise of 0.1% in comparison with July-August.  In the twelve months to the end of September, the index fell 1.9%.  Prices of new homes fell 0.6% in August-September.  The proportion of transactions under government subsidy schemes (the Buyer Price program and the Target Price program) was 34.1%.  (CBS 15.11)

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10.2  Israel’s Economy Grew By 2.3% in Third Quarter

Israel’s GDP growth grew 2.3% in the third quarter of 2018, at an annualized rate, the Central Bureau of statistics has reported in its first estimate.  The Central Bureau of Statistics has also revised downwards growth estimates for the first and second quarters.  The second quarter growth estimate was revised down from 1.8% to 1.2% and the first quarter growth estimate was revised down from 5.1% to 4.6%.  The Bank of Israel forecast for GDP growth in 2018 is 3.7%, although in light of these latest figures that forecast is likely to be lowered.  (CBS 18.11)

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10.3  Israel’s Composite State of the Economy Index for October 2018 Increased by 0.3%

The Bank of Israel’s Composite State of the Economy Index for October 2018 increased by approximately 0.3%, a pace similar to the average of the past three months.  The average growth rate of the Index since the beginning of the year is slightly lower than the rapid pace of the past two years, reflecting a rate that is similar to the long-term growth rate of the economy following the more rapid growth of the past two years.  The Index was positively impacted by the increase in consumer goods imports and by the increase in exports. In contrast, the declines in industrial production and in indices of retail trade revenue and services revenue moderated the Index’s rate of growth this month.  The Index reading for July was revised downward by approximately 0.1%.  (BoI 21.11)

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10.4  CreditEase Israel Innovation Fund Second Most Active Chinese Investment Institution in Israel

IVC Research Center, a world-renowned Israeli venture capital research institute, released a list of the most active Chinese investment institutions in Israel’s high-tech venture capital market in the first three quarters of 2018.  CreditEase Israel Innovation Fund (CEIIF) is ranked the second on the list, next to Horizons Ventures.  The list represents an array of well-known Chinese investment institutions, such as Horizons Ventures, Alibaba Investment and Radiant Venture Capital.  CEIIF’s presence together with these well-known investment institutions demonstrates the outstanding capability of CEIIF’s team in project acquisition and funding.

CEIIF, established in 2015, has completed two rounds of fund raising with a total size of $76 million, including RMB 200 million for round one, and $45 million for round two.  CEIIF has invested in 20 high-tech start-ups in Israel.  Currently, their projects are found in, among others, Corephotonics, a mobile phone dual-camera algorithm technology company, EarlySense, a medical IT company, WeedOut, a biotechnological company, and Kaminario, a big data storage technology company, engaged in fields ranging from digital medicine to artificial intelligence, network communication security, agricultural technology, cloud and data storage, etc.  Many of these companies have the potential for growing into unicorns.

CEIIF, established in 2015, has completed two rounds of fund raising with a total size of $76 million, including RMB 200 million for round one, and $45 million for round two.  CEIIF has been mainly engaged in investment in high-tech start-ups in Israel and/or the US.  (CreditEase 14.11)

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11.1  ISRAEL:  The State of Medical Cannabis

On 19 November, Globes surveyed Israel’s medical cannabis sector, in which more than 100 companies are already operating.

It sometimes seems as though the State of Israel inhaled something and woke up as the state of medical cannabis.  More than 100 companies are currently active in this area, which only a few years ago was not even whispered of, but even if it looks that way, this industry did not spring up overnight but grew for years in the dark, chiefly in an overseas direction.  The legalization of cannabis in several countries, the developing regulation of medical cannabis (in Israel too) and the opening of the local market to competition and expectations that the export market will be opened up as well have led to the current boiling point.

In the past five years, and particularly in the past two-three years, most of the attention has been on the companies in this field traded on the Tel Aviv Stock Exchange, twelve in number, but most of them are companies at the beginning of the road, and are focused on growing and processing the plant.  There are also older agricultural and industrial companies, and technology companies.  These develop cannabinoid-based drugs, delivery methods, technologies for improving plant growth and so on.  Even if cannabis exports are prohibited, these companies can export their know-how.

Israel is at a unique nexus thanks to its expertise in advanced agricultural technologies, in research on the effect of cannabis on the human body (a field defined and established by Prof. Raphael Mechoulam of Hebrew University, who in the course of his career trained dozens of researchers who followed in his path); and in drug delivery – an area that the Israeli pharmaceutical industry has specialized in because it requires shorter development times and more inter-disciplinary thought than classic pharmaceuticals.  Another area that Israel specializes in is medical equipment.

With the aid of a survey by Cann10 of the Shizim group, in collaboration with Deloitte and crowdfunding platform OurCrowd carried out in advance of an international conference held recently, Globes presents here the areas of activity and the outstanding companies in the cannabis industry, and analyzes the forces at work in the market.

The Growers: The Market Pioneers

Israel’s cannabis industry can be divided into several segments.  The first is the growing companies.  The leading company in this segment is Tikun Olam, the scope of whose activity was recently revealed after it emerged that it was a partner with several other companies around the world.  One of them has already been sold for billions of dollars.  Alongside Tikun Olam are the eight pioneers that received cannabis growing and marketing licenses before the government’s reform of the industry and have been active in the market for several years.  Tikun Olam, the pioneer among pioneers, held 27% of the market and was the most prominent company in shaping the image of the market and its lobby, and in activity overseas.  The remaining companies held 8-12% of the market each.

The best known are two companies that have linked up with public companies.  One is BOL (Breath of Life) Pharma, which already produces its products, processes them in its own factory and distributes them through pharmaceuticals company Rafa.  BOL had 10% of the Israeli market before the reform.  The second is Canndoc, which held 8% of the Israeli market before the reform.  Both companies plan to storm the global market shortly, but at present neither of them has overseas activity.

Among the eight growers is also Sech, which collaborates with Cann10.  Sech grows cannabis and produces extracts from it at the factory of Panaxia (which is described in more detail below), and Cann10 markets them for it.

Unlike, BOL, Canndoc and Se?ch, Tikun Olam has as yet no GAP standard approval indicating that is products are produced in accordance with the Ministry of Health’s new standards, which came into force in April this year.  It is working towards obtaining the standard for its new farm in Kfar Yehoshua.  Earlier this month, the Ministry of Health shut down Tikun Olam’s farm in Biria, on the grounds that it did not meet ministry standards, but the company hopes that the farm will be restored to full activity shortly.

Other companies are Pharmocann, which makes medical cannabis products for cosmetic and dermatological use, and has started developing special compounds for products of this kind and to gear up for production of its cannabis strains in Australia; Better Cannabis; IMC (Israel Medical Cannabis); Teva Adir and Cannabliss.

Support Companies: Adapting Technologies

According to a report compiled by IVC last February, there were 68 active companies in the Israeli cannabis market at that time, and they had raised $76 million between them – not a large amount in relation to the number of companies, indicating an industry just starting out.  Although many financing deals in this industry go unreported, and many more companies than in the biomedical sector in general get underway without raising external capital, this is still an industry mostly at the seed stage, as it were.

The companies supporting medical cannabis growing divide into several sub-categories: special lighting for growing in hothouses; sensors for the plants; new fertilizing methods; home growing kits; and environmentally friendly pest extermination methods.  Most of the companies in these categories are just at the beginning, and their chances of success are similar to those of any Israeli startup.  Some of them, however, have a distinct advantage: they started out in traditional agriculture, and have accumulated proven know-how that can be applied to cannabis growing.

One such company is humidity control equipment company DryGair, which exemplifies very well the unexpected connections that can give birth to an Israeli startup.  The company’s CEO since it was founded has been Adv. Rona Orlicky, daughter of Dr. David Cohen, one of the pioneers of energy exploration in Israel, and she is a partner in her father’s business activity, which includes the Leviathan and Tamar offshore gas discoveries.  DryGair was founded on the basis of agricultural technology developed at the Volcani Agriculture Institute.  Its main shareholder is Lod-based Misha Refrigeration, which has been active for 60 years in installation of air conditioners and cooling systems for large customers.  The company has a German investor by the name of Antan Group, a family fund that puts an emphasis on environmentally beneficial investment.

Seedo Lab is an example of a company that has circumvented the export barrier.  It has developed an appliance for growing cannabis at home.  The appliance is not designed solely for cannabis, but practically no other plant would justify investing $2,400 in a domestic appliance aimed at people who don’t like gardening.  Since it is not necessarily connected to cannabis, it can be exported to the US without any problem and that is what the company does.  Another company called Leaf has developed a similar appliance that can be operated using a smartphone, so that it also provides entertainment for the home grower.

Exporting Know-How Rather Than Cannabis

Three companies have so far completed construction of cannabis production facilities in Israel: Panaxia; Breath of Life Pharma and Bazelet, which is still waiting for approval for its facility.  These companies will presumably be the spearhead when the time comes for exports.  Panaxia was a pioneer in this area and as well as setting up its facility in Israel, it used its know-how to set up facilities in the US.  The US does forbid cannabis imports, but know-how in the production process, from beginning to end, can be exported to it. Panaxia did so, and has been well rewarded.  It has also set up a facility in South Africa.

Panaxia has used its pharmaceutical know-how to develop a range of cannabis products and production methods: pastilles for swallowing and for placing under the tongue, oils and essences, creams and patches, and even suppositories.  The company’s delivery methods are patent-protected, and it plans to produce gels and a device for inhaling a product in powder form.

Panaxia does not grow cannabis itself, but since it has one of the few approved facilities in Israel, it collaborates with agricultural companies, among them Se?ch, Pharmocann, Teva Adir and Better Cannabis.  Its products are marketed in Israel by Cann10 and Rafa. Together with its partners, it carries out clinical research to examine the use of its delivery methods for various diseases.

BOL has also built a manufacturing facility, which sells the products that the company develops.  It is in fact the only company in Israel that covers the entire value chain.  It recently received a loan of up to $30 million from Amir Marketing and Investments in Agriculture and from Super-Pharm owner Leon Koffler, and as part of the deal announced its intention of operating overseas.  It also disclosed its financials, showing that in 2016 its revenue totaled NIS 8.7 million, on which it earned a tiny profit of NIS 0.1 million. In 2017, still before the cannabis reform in Israel, its revenue reached NIS 10.8 million, but it posted a loss of NIS 17 million, among other things because of the construction of its production facility, which gives some indication of the cost involved in that.

Bazelet Pharma has established itself as a distribution and service company in the cannabis industry and before the reform it was the distributor for Seàch, Canndoc, IMC and Better Cannabis, accounting for one third of the Israeli market.  Bazelet also dealt in extraction for these companies, and in 2017 began setting up its new facility.

The company currently collaborates with Alvit LCS Pharma, which is about to merge its cannabis activity into listed company Tefen, on research and development for unique cannabis strains.  For the purposes of setting up its facility, Bazelet received a loan, convertible to equity, from the Peninsula Fund, and it will become a significant player in distribution as well, alongside Cann10, Rafa and BOL.

A few TASE-listed cannabis companies said that they were interested in setting up cannabis processing factories.  One of them has a relative advantage in this – CannAssure, which merged with stock exchange shell Direct Capital, is converting an existing factory for processing food supplements (which formerly belonged to Solbar Industries to medical cannabis.

Both the cannabis growing companies and companies that process cannabis are likely to succeed in creating differentiation in the market and become leading players overseas, even before they export.  Tikun Olam has already demonstrated how an agricultural company that manages to brand its unique strains and growing methods can create partnerships with overseas growers.  This know-how is worth percentages of a company and royalties, provided that the company does succeed in showing that it is unique.  Many Israeli companies now offer knowledge and expertise of “Israeli cannabis” overseas, and the world is sympathetic, but not all of the companies have experts with the same degree of experience in growing high-quality medical cannabis.  Not every company with connections to patients has derived information of the same quality from it – information about matching strains to diseases, about the side effects of strains and suitability for personal preferences, etc.

The processing companies are attractive because if exports from Israel are permitted, they will be in the forefront, the final station before the material is sent out.  As of now, however, it appears that exports have been suspended for political reasons that no one has gotten to the bottom of, and there is therefore also no way of predicting if or when this bottleneck will be released.  In such a situation, the operating companies will be interested in the global market only if they can assemble unique knowledge about cannabis production, as Panaxia is doing.

Software Companies: Unrealized Potential

Israel has “pure” software companies in the cannabis field, but it appears that this category has not yet developed as it could have in the Israeli ecosystem.  Software activity can be relevant to matching cannabis strains to specific diseases, managing information about patients, researching the distinguishing effect of various materials within the plant, and to its genetic research.

Unsurprisingly, the companies in this sector include one founded by the former CEO of Compugen and Evogene, the leading big data biology companies in Israel.  The company is NRGene and the founder is Dr. Gil Ronen. NRGene deals with genomics of a variety of agricultural plants and animals.  In the cannabis sector, it has already signed a number of cooperation deals with growers in Israel, Europe and the US, which hope to develop cannabis strains with genes whose superiority has been demonstrated by software.  NRGene’s main activity is still in non-cannabis agriculture.

Another prominent company is Cannabis Mercantile Trading Exchange, which developed a cannabis trading platform.  The company’s founder and CEO, Saul Singer (not the founder of Start Up Nation Central), worked with software and tools for the diamond market, and built a leading commercial platform for the sector.  He is now transferring the knowledge to another difficult-to-commercialize product.  The company recently launched its first product.

Drug Delivery Companies: The Veterans Have Not Yet Taken Up Cannabis

Over the years, Israeli drug companies have developed expertise in drug delivery, which they are now applying to the cannabis sector. Intec is a good example.  It developed the accordion pill that releases fixed dosages of active ingredients upon entering the intestine.  Releasing the material in the intestine has special effects on both the probability that the material will be absorbed and the ability to control the dosage. Intec initially thought about going into the cannabis sector – it develops conventional drugs and is about to complete a clinical trials of its drug for Parkinson’s Disease – but cannabis was an opportunity for a company whose entry into the market is being delayed to develop a product that could rapidly contribute value to it and its share. Intec’s share indeed rose 14% on the day it announced that it was entering the cannabis field.  The company recent completed Phase I trials of cannabis elements for treatment of pain.

Biota, founded at the Technion, Israel Institute of Technology, has worked for two decades in creating alginates used to deliver drugs on the tongue.  The company, which conducted trials for years without attracting attention or reaching the market, recently began also developing cannabis products.  Alginates are designed to reduce aftertaste, increase absorption speed, and reduce the amount of material in the liver.

Most of the well-known Israel drug delivery companies (e.g. NeuroDerm, Sol-Gel, Foamix Pharmaceuticals and PolyPid) have not yet made a move towards cannabis.  Most of the companies operating in this category were founded by parties outside the pharma industry.  The following are some of the most prominent.

Syqe Medical is one of the few startups in cannabis accessories to raise a substantial amount of capital.  It develops a special inhaler that provides a fixed dosage of the material.  The company has an agreement with Teva Pharmaceutical Industries, which distributes its products in hospitals. It has raised $32 million to date.

Brainose Technologies is a new company founded by Shizim and Nextar Chempharma Solutions, both of which have founded incubators.  Brainose develops a new method of delivering cannabis molecules by sniffing through the nose.  The V4-Twenty company markets vaporizing products marketed online described by users as “discrete and tailor-made,” in other words, designed mainly for the recreational cannabis market, not the medical one.

Trichome Shell developed technology for producing quasi-toothpicks made exclusively from active cannabis ingredients.  The toothpick can be put into a cigarette and smoked.  The technology for producing the toothpick can be exported, even if the product itself cannot.

Pharma Companies: Easy to Start Trials

Several companies are developing specific cannabis ingredients into a drug, but a drug has a long and expensive road to travel before it reaches the market, so most investors stay clear of this.  At the same time, the sale several weeks ago of Therapix Biosciences, which develops a product for treatment of Tourette Syndrome (TS), for $48 million, shows that cannabinoid magic can also work in this sphere.

The advantage of cannabis over other drugs is that cannabis ingredients can be put into clinical trials more easily, without going through safety trials.  It is particularly easy to reach human trials for cannabis in Israel, which is therefore developing an advantage in this sector.

CannRX, a subsidiary of Izun Pharma, located on Har Hahotzvim in Jerusalem, was founded for the purpose of “medicizing” herbal medicine.  It recently completed Phase II clinical trials of a product for treatment of the mouth sores of cancer patients.  CannRX applies its parent company’s capabilities in mapping the precise composition of the plant and its special extraction methods.  CannRX hopes to develop cannabis products that will gain adherents in the health system.

Lumir Lab, a laboratory founded this year in order to estimate the quantities of the various ingredients in a plant for research purposes, has agreed on its first cooperation with Gynica, another Israeli company developing cannabis-based products for women’s health.  The company also develops a product named Anandamide – an ingredient found in the cannabis plant that operates receptors in the brain for cannabis.

Cannabics developed a cannabis extract that the company is considering for cancer treatment.  The extract showed activity of these ingredients against cancer cells in the laboratory.

Alvit Medical, founded five years ago, developed formulations for medical cannabis (tablets, suppositories, sprays, etc.).  It is now merging cannabis growing and production into a stock exchange shell under its control.  The idea is for the cannabis unit to operate independently in researching and developing its products.  The company recently signed a cooperation agreement for researching and developing products with Bazelet.  The companies’ joint products, which will be produced in Bazelet’s new factory, are projected to reach the market in 2019.

GemmaCert can also be included in the pharma category.  The company, which develops a home kit for the small grower to test the active ingredients content of a plant, has already raised $5.3 million.  Its products are currently marketed to the home market; it is possible that greater precision will be needed in the medical cannabis market. The company was founded on the basis of technology developed by Oded Shoseyov at Hebrew University.

Education & Research: Knowledge Converted to Cannabis

Shizim, a multidisciplinary medical group has a subcontracting company for clinical trials by other companies and by its own companies, founded in its incubator, which is not part of the Israel Innovation Authority’s network of incubators.  The group also trains medical executives in both Israel and Poland. Shizim is now trying to apply this approach to the cannabis sector.

It began in training and study, as it also did in the medical sector to some extent.  Cann10, one of the group’s companies, started the first training course for developing cannabis products with Technion. Initially, this respectable institution hesitated to enter this sphere, but cannabis became one of its most sought after degree tracks.  This model of a degree course and international conference is now being reproduced by Cann10 in other countries.

The company also has a technology incubator in the cannabis field, and wants to establish an incubator outside Israel.  It is conducting studies in the sector, and this year launched Cannarit, its own cannabis brand sold at pharmacies. In order to close a circle, the company is now building its own cannabis-growing site.

Another important company that came from the knowledge field and expanded its activity to incubators is Nextar, managed by chairperson and CEO Dr. Orna Dreazen.  The company, which develops formulations for drug companies, is in an ideal position to specialize in development of reproducible and effective formulations in the cannabis-based ingredients field.  Nextar founded Nextage Innovation, an incubator for cannabis startups interested in getting help from its analytic capabilities and capabilities in building chemical compounds.  The incubator has already received its first investment from an Australian concern.

Another concern, iCAN, was founded by CEO Saul Kaye, a partner in several international and Israeli cannabis companies, for the purpose of giving cannabis companies consultation and related services, such as business intelligence and market research, negotiating with potential investors and formulations and clinical trials services.  The company also holds an international conference, and has substantial holdings in two startups: CannRX in the formulations segment and Steep Hill in laboratory testing.

Which Israeli companies will succeed cannot be predicted at present: not those developing cannabis-based products, nor those making products tangential to the market, such as manufacturers of accessories for cannabis growing, nor developers of drug delivery systems, nor providers of other services.  In the short term, the first group will reach a market with strong demand.  In the long term, however, it will be difficult to generate differentiation in it.  The second group can already export now, but it is by no means sure that profits on their products will continue to be high just because they are linked to the cannabis industry.  Those who succeed in creating something unique in the market – special molecules, delivery systems with added value that cannot be easily imitated, truly unique knowledge about the connection between the plant’s composition and its effect on various diseases – will probably be the ones to stand out in the future cannabis market.  Meanwhile, money available for investment in the market is plentiful at the moment.  (Globes 19.11)

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11.2  IRAQ:  For the Iraqi Prime Minister, a Slew of Economic Challenges

On 10 November, Ahmed al-Hajj posted in Fikra Forum that with economist Adil Abdul-Mahdi as the new Iraqi Prime Minister, he faces the daunting task of guiding the government through necessary economic reform, service quality improvement and reconstruction.  Economic issues represent one of the most major challenges in Iraq today, and in order to truly effect change, Adbul-Mahdi must alter a single-source economy, major public debt, weak monetary policy, a fragile banking system and financial corruption.  Though overcoming these obstacles is not impossible, the Prime Minister must act quickly and with the full support of both domestic and international forces if he is to change the course of Iraq’s economic system.

Debt and Capital Flight

Perhaps the most immediate challenge is accurately predicting government revenues.  With oil making up some 93% of total revenues in the federal budget, Iraq’s economy has become especially unstable in the face of oil price volatility brought about by widespread challenges in the region.  Moreover, according to the Parliament’s Financial Committee estimates, oil revenues are consistently overestimated in draft budgets, as the government rarely receives the full amount of projected oil revenues.  The unofficial version of the 2019 General Budget estimated that non-oil revenue would cap out at $10 billion, down from $12 billion in 2018.  The new prime minister must be especially cautious against overestimating revenue with figures unrepresentative of on-the-ground realities, as this would complicate all subsequent economic planning.

Understanding available revenue is especially vital due to Iraq’s massive public debts.  This is an issue with which Abdul-Mahdi is intimately familiar: in 2004, he headed the Iraqi delegation to the Paris Club in an attempt to renegotiate Iraq’s debts, which then amounted to $39 billion.  The negotiations were a success, and member states agreed to write off 80% of the country’s debt, reducing the total figure to just $7.8 billion.  Yet in subsequent years, Iraq’s public debt crisis has returned and even worsened due to failed economic policies, declining oil prices, and the depletion of the country’s revenues in the war against the Islamic State.

Today, Iraq’s total public debt is estimated at $124 billion, three times as large as when Abdul-Mahdi arrived at the Paris Club almost fifteen years ago.  According to the unofficial 2019 draft budget, Iraq will owe $3 billion in interest on loans alone, on top of $9 billion in payment installments this year.  At a total of $12 billion, negotiations for debt servicing will present a difficult test for Abdul-Mahdi, especially given Iraq’s limited cash reserves.

As of late 2014, estimates placed these reserves at around $80 billion.  However, the collapse of oil prices and increase in state expenditures have drained these reserves to less than half their 2014 numbers.  The government’s indirect borrowing from the Central Bank – through its purchase of government securities in accordance with Article 26 of the Federal Central Bank Law – has only exacerbated the issue.  The Central Bank announced last month that Iraq’s foreign reserves are at $60 billion.

Economists also question the common practice of foreign currency auction by the Central Bank, through which it maintains a fixed exchange rate.  This practice, however, is conducive to financial corruption and capital flight.  Foreign currency flight is a particular challenge for Iraq: figures provided by the late Chairman of the Parliamentary Finance Committee Dr. Ahmed Chalabi show that $312 billion has left the country from 2005 to 2014.  While the prime minister could limit the outward flow of capital by abandoning fixed exchange rate in favor of a free-floating regime, such a reform would prove difficult since it collides with the vested interests of powerful figures benefiting from the corruption currency auctions allow.

Liquidity Shortfalls

It is equally challenging to translate the reserves that stay inside Iraq into a capital market.  The country’s fragile and undeveloped banking sector – considered among the worst in the world – further restricts the wealth-inducing use of the currency actively in circulation.  Most citizens do not trust banks, and consequently only a few thousand people per region have bank accounts.  Limited reserves have rendered Iraqi banks unable to extend loans to investors who are in turn incapable of contributing to development projects.  Even when loans are available, those taking out loans are often forced to pay a broker in order to actually retrieve the borrowed sums.

Neither has the Iraqi stock market been able to carry out its most basic functions of buying and selling bonds and shares.  More broadly, most citizens only trust cash in their hands, reverting to electronic banking only rarely.  Consequently, the Central Bank is pushed to continue printing paper money.  The amount of Iraqi Dinars now totals IQD 60 trillion, with around IQD 39 trillion in circulation and IQD 21 trillion stored in the Central Bank’s vaults.  Even so, approximately half of the currency in circulation is practically reserve stocks, stored in households and safes.  In effect, more than half of all cash at people’s disposal is outside of economic activity.

This is clear result of a weak federal monetary policy, which has weakened the purchasing power of Iraqi currency.  As a result, the Central Bank has committed itself to maintaining the currency’s value by selling dollars in the market and depleting the Bank’s foreign currency reserves, all in order to uphold monetary stability.  Some traders try to protect themselves from exchange rate losses by dealing in foreign currencies rather than the local currency to buy and sell certain commodities.  Therefore, weak monetary policy and the lack of monetary stability are key factors rocking the Iraqi economy. In order to reverse the current domestic purchasing power, the new Prime Minister must first create a sense of trust in the banking system.  Federally mandated reforms structured to stimulate investment and achieve economic growth will go far towards helping in this respect.

A Menu of Options

As is evidenced above, Abdul-Mahdi faces a difficult test if he is to effectively implement economic reform inside Iraq.  Nonetheless, the Prime Minister has a number of options available to begin situating Iraq on a path towards economic stability.  Here, decisiveness is key: Abdul-Mahdi must quickly implement radical reforms of fiscal, monetary and credit policy, and he must ensure the participation and support of the parliament as well.  These internal changes must be coupled with an advocacy of social reform, as trust in a system where Iraqis do not face discrimination because of their religion, denomination, nationality, ethnicity, or gender will also encourage them to engage in Iraq’s economic future.

Any reform, no matter how expansive, must also grapple with the realities of Iraq’s system of financial corruption.  Iraq ranks a dismal 169th out of 180 countries on the 2017 Corruption Perceptions Index.  Experts have pointed to a number of governmental contracts for oil export and infrastructure projects where billions of dollars have been wasted.  Rahim al-Darraji, a member of the Parliament’s Integrity Committee, has confirmed that some $228 billion has been wasted on infrastructure contracts, most of which exist only on paper.  The enormous scale of administrative corruption in Iraq has led to a lack of public services, deterioration of infrastructure and industrial and agriculture development.  Corruption has understandably eroded trust among Iraq’s public and it is likely that any true reforms must dismantle this system in order to be effective.

In order to move forward on these monumental challenges, Abdul-Mahdi should work with international expectations and recommendations.  Iraq should implement strict laws on money laundering and work towards compliance with international standards and commitments.  The government should also work with both the International Monetary Fund and the World Bank, as they have stood with Iraq through adversity and played a role in writing off the Paris Club debts and others in 2004.

Finally, the new Iraqi government must abide by international transparency standards and allow international regulatory organizations, civil society organizations, and the media to participate in fighting corruption.  Hopefully, these measures can create a sense of trust and confidence between the people and the government by involving non-governmental actors in the process of economic reform.  In many ways, Abdul-Mahdi is responsible for ensuring that political actors take responsibility for that which they have always been historically responsible – the economic future of the country.  While this is a tall order for Abdul-Mahdi, he may also represent the last chance for reform in Iraq and the overall preservation of the country.

Ahmed al-Hajj is an Iraqi economic expert, member of the Iraqi Federal Parliament, and member of the Governorate Council of Sulaymaniyah. He has published academic economic research in a number of articles and has appeared on a number of television programs.  (Fikra Forum 10.11)

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11.3  QATAR:  IMF Staff Completes Visit to Qatar

An International Monetary Fund (IMF) team visited Doha from 29 October to 4 November to assess recent economic developments and outlook since the completion of the 2018 Article IV consultation in May.  At the end of the visit, the IMF issued the following statement:

“Qatar’s economic performance continues to strengthen.  Non-hydrocarbon output grew by about 6% during the first half of 2018, as the economy recovered from the impact of the diplomatic rift and oil prices surged.  However, hydrocarbon output fell by about 1.6% during the same period, culminating in overall real GDP growth of 2.3%.  Real GDP growth of 2.4% is projected for 2018 as a whole up from 1.6% in 2017.  Headline inflation remains subdued.  Fiscal and external positions are strengthening, and the central bank’s foreign exchange reserves have increased.  Monetary and financial conditions have improved significantly, with banks attracting non-resident flows and were able to reduce reliance on the financial support from the fiscal and monetary authorities.  Excises would likely be put in place in 2019.

“The near- to- medium-term outlook for the Qatari economy is benefiting from increased oil prices and prudent macroeconomic policies.  We anticipate overall real GDP growth of 3.1% in 2019, with still robust non-hydrocarbon growth and recovery in oil and gas production.  Over the course of 2020 – 2023, real GDP growth of about 2.7% annually is projected, underpinned by still significant public infrastructure spending, expansion of liquid natural gas production, and the hosting of 2022 World Cup.  The authorities’ plan to introduce a VAT, with an implementation target date towards the end of 2019 or early 2020.  This is expected to slightly lift prices upon implementation.  Fiscal and external balances will remain in surplus during 2019-2023, supporting additional foreign exchange accumulation by the central bank. Nonetheless, the outlook is subject to downside risks, including the economic and financial impact of escalated global trade tensions, tightened monetary policy stance in the U.S. and increased volatility in global financial markets.

“Despite higher oil prices, Qatar plans to pursue prudent fiscal policy while taking into consideration its associated impact on the economy.  The 2019 budget is expected to contain overall expenditure growth, with continued emphasis on allocation to critical sectors (health and education.  The current account surplus is projected at about 7% of GDP in 2019. QCB’s foreign exchange reserves are expected to increase further, reaching about $36 billion in 2019.

“Qatar’s banking sector remains sound.  Foreign liabilities withdrawn in the immediate aftermath of the diplomatic rift have been partially replaced with greater attention being paid to the diversity of funding sources and deposit maturity structure.  Official deposits placed with banks after the rift have been reduced. As higher oil prices and returning foreign liabilities have enhanced banking liquidity, credit to the private sector has been growing at a healthy pace. QCB continues to closely monitor developments in the real estate sector in view of the softening in prices and potential implications for the banking sector.

“Progress with structural reforms continues.  The second national development strategy highlights the need for economic diversification.  The strategy identifies priority sectors including manufacturing, financial services, and tourism, while emphasizing competitiveness and the role of the private sector.  The Private Sector Committee is promoting public-private partnership in areas such as food security, manufacturing, health, and education.  (IMF 14.11)

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11.4  SAUDI ARABIA:  Fitch Affirms Saudi Arabia at ‘A+’; Outlook Stable

Fitch Ratings on 22 November affirmed Saudi Arabia’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘A+’ with a Stable Outlook.

Key Rating Drivers

Saudi Arabia’s ratings are supported by strong fiscal and external balance sheets but weighed down by oil dependence, weak governance indicators compared with ‘A’ category peers and high geopolitical risks.

The fiscal break-even oil price, which we estimate at over $80/bbl, is higher than for many regional peers and above our forecast oil price levels.  We forecast the central government deficit at 5.3% of GDP in 2018 (SAR152 billion), from 9.3% in 2017, as sharp increases in oil and non-oil revenue offset resurgent government spending.  Underlying fiscal policy has become more expansionary as measured by the expected widening of the non-oil primary deficit in 2018.  We expect this to be reflected in a renewed widening of the overall budget deficit to 7.5% of GDP by 2020 as oil prices moderate to our baseline assumption of an average of $57.5/bbl (for Brent).  In the recent 2019 pre-budget statement, the medium-term forecast for government spending and revenue is 8%-9% higher than in the Fiscal Balance Program (FBP) update released alongside the 2018 budget.  The 2018 FBP update had pushed back the target year for fiscal balance to 2023 from 2020.

The government has taken a number of measures to diversify its revenue base and trim the fiscal deficit.  This year started with the introduction of a 5% VAT, a 130% hike to petrol prices, increases to household electricity tariffs as well as an increase in levies on expatriates.  These measures contributed to a 48% jump in non-oil revenue in 9M18.  We expect the full-year increase in 2018 to be a more moderate 21%, after 38% in 2017.

Some of the budgetary impact of structural non-oil revenue measures is being offset by additional spending to soften their social impact and support growth.  The government has introduced means-tested transfers from the new SAR32 billion Citizen’s Account (expected to increase alongside further reforms affecting the cost of living).  The 2018 budget also earmarked SAR72 billion of central government spending for a private sector stimulus program focused on infrastructure, SMEs and export financing.  Another SAR50 billion stimulus package was announced shortly after the publication of the 2018 budget (to be funded by receipts from last year’s anti-corruption campaign and savings elsewhere).

There are prospects for spending to grow less than in our baseline forecast, helping to reduce the deficit further.  Expenditure was 73% of the budget in the first three quarters of 2018, and 69% of the government’s updated fiscal projections.  If full-year expenditure ends up being in line with the budget, the deficit could narrow to 2.7% of GDP in 2018.  We estimate that an increase of oil prices by $5/bbl over our baseline forecast would lead to a 1.7% of GDP improvement in the fiscal balance.

Amid continued deficits, we expect that the government will continue to issue domestic and international debt.  Under our baseline oil price assumptions, we see the central government debt ratio rising from a little over 17% in 2017 to about 34% of GDP in 2020, by which time debt net of general government deposits could turn marginally positive.  Our fiscal forecasts imply net financing needs of about SAR176 billion in 2019 and SAR219 billion in 2020.  The broader public sector balance sheet will remain a rating strength, underpinned by sovereign net foreign assets of 67% of GDP in 2018 (reflecting government, central bank and pension fund foreign assets less foreign debt).

We assume no proceeds from privatization in 2018-2020.  The government’s privatization program unveiled in April this year targets proceeds of SAR40 billion by 2020 from selling or otherwise handing over to the private sector various government assets.  The IPO of a 5% stake in Saudi Aramco has been pushed back to at least 2021.

We forecast Saudi Arabia’s current account surplus at 8.3% of GDP ($63 billion) in 2018 after 2.2% in 2017 as a result of a bounce back of hydrocarbon receipts.  However, we expect central bank reserves to increase only by a modest $11 billion by year-end amid continued non-resident investments abroad (partly related to the Public Investment Fund).  The level of central bank reserves in 2018 will remain exceptionally high at over 24 months of external payments.  We expect the current account surplus to narrow by 2020, reflecting a moderation in oil receipts and a recovery in domestic demand, capital spending and imports.  The financial account could have some support from a pick-up in inward FDI ($1.7 billion in H1/18 from a low of $1.4 billion in the whole of 2017), inward portfolio equity investment (related to Saudi Arabia’s inclusion in major equity indices) and public sector borrowing.

We expect growth to pick up to 2.2% in 2018 (from -0.9% in 2017) and stay in that range in 2019-2020.  The fiscal expansion will accelerate non-oil growth to 1.8% (from 1.1% in 2017), but, in our view, it is still likely to be held back by high domestic uncertainty.  Our forecasts incorporate oil GDP growth of 2.7% in 2018 (from -3.1% in 2017) related to continued growth in refining activity and a recovery in oil production.  We assume that oil production will stay at its September 2018 level of 10.5 mmbbl/d and do not assume a new OPEC deal to cut output.  Structural reforms under the “Vision 2030” program could boost growth over the medium term.

In our view, political risks are high compared with peers and historical norms, due to Saudi Arabia’s prominent role in a volatile region, the country’s increasingly assertive and unpredictable foreign policy and the rapid pace of change domestically.  The potential for politics to harm growth, trade and investment has been highlighted by Saudi Arabia’s recent diplomatic rows with Canada and Germany, the international reaction to the murder of Jamal Khashoggi in the Kingdom’s consulate in Istanbul and the ongoing dispute with Qatar.  Meanwhile, tensions between Saudi Arabia and Iran remain high over Yemen, Iran’s nuclear program and its influence across the region.

Rating Sensitivities

The following factors could, individually or collectively, trigger positive rating action:

– Fiscal consolidation or an extended rise in oil prices that generate a sustainable fiscal surplus and reverse the decline in the government’s net creditor position.

The following factors could, individually or collectively, trigger negative rating action:

– Failure to reduce the budget deficit and halt the deterioration of the public sector balance sheet; and

– Spill-over from regional conflicts or a domestic political shock that threatens stability or affects key economic policies or activities.

Key Assumptions

Fitch assumes that Brent crude oil prices will average $70/bbl in 2018, $65/bbl in 2019 and $57.5/bbl in 2020, in line with its Global Economic Outlook – September 2018.  (Fitch 22.11)

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11.5  ALGERIA:  Breaking Algeria’s Economic Paralysis

On 19 November, the International Crisis Group wrote that Algeria’s longstanding need to diversify its economy away from hydrocarbons has gained fresh urgency since oil prices started falling dramatically in 2014.  New financial realities have rendered the preceding decade’s high spending unsustainable, rapidly emptying state coffers and increasing the deficit.  But despite successive governments’ vows to implement reforms and rebalance state finances, political paralysis has militated against decisive policy.  Recent history – memory of the economic recession of the 1980s and the ensuing political instability which led to civil war in the 1990s – hinders government efforts to seek a political consensus on reforms and implement them.  Yet a failure to reform could precipitate a new period of instability.  To resolve this conundrum, the government should pursue greater transparency and better communication about the economic challenges the country faces, greater inclusivity vis-à-vis socio-economic stakeholders, and a sharper focus on the youth demographic in particular.

Two chief obstacles stand in the way. Politically influential vested interests seek to protect the status quo, which benefits a state-dependent business class.  Political factors dampen enthusiasm for a more aggressive approach: memory of the political turmoil and bloodshed that followed austerity measures and political reforms in the 1980s and 1990s lingers.  Acknowledgement that generous state spending helped pacify the country in the aftermath of the “black decade” of the 1990s, when as many 200,000 Algerians died in fighting between the state and Islamist groups, has made the government understandably cautious to reverse it.  The question of presidential succession and what legacy Abdelaziz Bouteflika, president since 1999 and the architect of national reconciliation, will leave behind looms large.  Bouteflika appears intent on running for a fifth five-year term in elections next April, despite his poor health and public calls for him to pass the torch to a new generation, a factor that contributes to a general sense of paralysis.

Despite an increase in revenues in 2018 due to a recovery in oil prices (which might not last), a potential economic crisis could come as soon as 2019.  It could thus overlap with tensions surrounding the presidential election (which Bouteflika is expected to win easily should, as expected, he run again) and, beyond that, a looming leadership transition.  To stave off a crisis, the government has carried out successive rounds of spending cuts, which will take time to deliver results, and implemented an expansionary monetary policy, which fuels inflation and merely serves to buy the government time without addressing underlying problems.  Although officials have outlined a broader agenda of industrial diversification and subsidy reform, among other measures, both local and foreign experts say an overarching strategy for reform is still missing.  Entrenched political and business interests have too many incentives against change and are squandering the opportunity to get ahead of the curve of a potential fiscal crisis that, if handled too late, will demand more painful and destabilizing policies.

The political uncertainty surrounding economic policymaking was evident under Prime Minister Abdelmajid Tebboune in 2017, who was ousted after attempting aggressive changes to economic policy.  His replacement, Ahmed Ouyahia, is a three-time former prime minister and a pillar of the establishment; what he lacks in novelty he makes up in experience and ability to navigate the government’s murky internal divides.  Ultimately, however, any government is limited by the growing paralysis – whether on economic policy or elsewhere – of Algeria’s strongly presidential system, a reflection of Bouteflika’s health and the uncertainties around how his eventual successor will reshape the relationship between political power, the public sector and the private sector.

In time, Algeria will have to make more than marginal technical adjustments to its economic policy.  It should seek to renegotiate an implicit social contract between the state and its citizens long constrained by the advantages (and disadvantages) of its oil-based “rentier” economy, namely that the state should provide and the people should abide.  Cracks in that arrangement have become more apparent, manifesting themselves chiefly in frequent socio-economic protests across the country. However, since the late 1980s, contestation that expressed the desire for change – mass protests, calls for political reform and various other forms of activism that sometimes resulted in concessions from the state – often generated profound instability and conflict. Nearly twenty years after the end of the civil war of the 1990s, it is time to begin moving away from a model that, for all the stability and peace it brought, increasingly appears unsustainable.  (ICG 19.11)

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11.6  MOROCCO:  Moody’s Changes Outlook on Morocco’s Rating to Stable, Affirms Ba1 Rating

On 20 November, Moody’s Investors Service (Moody’s) has changed the outlook on the Government of Morocco’s long-term issuer ratings to stable from positive and has affirmed the Ba1 issuer ratings.

Moody’s decision to change the outlook from positive to stable reflects the agency’s view that the pace of fiscal consolidation will be slower than previously assumed, implying that the central government debt/GDP ratio will peak later and at a level that exceeds the median debt ratio of peers at similar rating levels.  Lower than expected fiscal space will constrain the government’s capacity to absorb domestic or external shocks in a tightening global financial environment.  The slower than expected pace of fiscal consolidation reflects a slight weakening of institutional strength, and specifically policy effectiveness, relative to Moody’s expectations when the positive outlook was assigned.

The affirmation of the Ba1 rating balances the credit challenges posed by comparatively low wealth levels against the demonstrated resiliency of Morocco’s credit profile, supported by the government’s access to relatively deep domestic capital markets that help to shield the government from international capital market volatility.  It also reflects the continued expansion of the economy into higher value-added export segments in the automotive and aeronautics sectors, and the renewed build-up in foreign exchange reserves as a backstop to the gradual foreign-exchange liberalization introduced in January 2018.

The foreign and local-currency bond and deposit ceilings remain unchanged.  Specifically, the foreign-currency bond ceiling remains at Baa2, the foreign-currency deposit ceiling at Ba2, and the local-currency bond and deposit ceilings at Baa1.

Ratings Rationale

Rationale for the Stable Outlook:  Fiscal setback in 2018 and slower than anticipated pace of fiscal consolidation over the next three years diminishes fiscal space and capacity to absorb shocks

Budget execution data for 2018 point to an end-year deficit of 3.8% of GDP against a targeted 3%, resulting from weaker-than-budgeted corporate tax receipts and slower grant disbursements from the Gulf Cooperation Council (GCC) in addition to higher-than-targeted subsidy and investment bills.  Moreover, the 2019 budget envisages a broadly unchanged fiscal deficit at 3.7% (excluding privatization receipts) and a slower than previously anticipated pace of fiscal consolidation over the next three years, implying a later and higher peak in the central government debt/GDP ratio at about 67% in 2020 and gradually declining thereafter.  This contrasts with Moody’s expectation when the positive outlook was assigned that the debt ratio would peak below 65% at the end of 2016 and decline thereafter.

The budget focuses on social policies and targeted social support programs following public dissent especially in response to higher fuel prices in the wake of the price liberalization in 2015.  Taking into account the debt trajectory’s high sensitivity to fiscal overruns, the erosion of fiscal space – as reflected in the higher debt ratio and in the interest/revenue ratio at over 10% – constrains Morocco’s future shock absorption capacity, especially in comparison to sovereigns rated Baa3 and above.

The slower than previously planned consolidation effort in the face of social demands suggests a marginal weakening in institutional strength, and specifically in policy effectiveness, relative to Moody’s expectations when the positive outlook was assigned.  The willingness and capacity to articulate and implement credit positive economic and fiscal policies is an aspect of institutional strength that is a characteristic of sovereigns rated Baa3 and above; Moody’s decision to change the outlook to stable reflects in part the rating agency’s somewhat lower assessment of institutional strength than anticipated at the time the positive outlook was assigned in 2017.  The current institutional strength assessment nevertheless recognizes the government’s coherent macroeconomic policies and fiscal reforms that have been implemented over the past few years, including the elimination of fuel subsidies, the enactment of parametric public pension reform and the implementation of the organic budget law.

Rationale for the Ba1 Rating:  Demonstrated resiliency of Morocco’s credit profile, albeit constrained by comparatively low wealth, high debt burden and low productivity

Morocco’s main credit constraints are its comparatively low wealth levels with GDP per capita at $8,568 (on a Purchasing Power Parity basis) in comparison to Moody’s rated universe, the elevated debt burden which has risen quite materially over the past decade, and the relatively subdued trend growth compared to peers at similar income and development levels.  Potential growth is constrained by rigid labor markets, skill mismatches and poor education standards by international comparisons, in addition to the very low labor force participation rate among women.  These constraints result in a low productivity performance, making the growth trajectory dependent on continued capital deepening.

Set against those constraints, Morocco’s credit profile has proven quite resilient to changes in the domestic and external environment in recent years.  Growth has remained positive in recent years, averaging about 3.5%. Inflation has remained low.  The resilience of Morocco’s credit profile also reflects the government’s access to relatively deep domestic capital markets in local currency which shields the credit somewhat from any financial market volatility resulting from tightening international liquidity conditions.  Moody’s estimates that the government’s gross borrowing requirements are in the 10-15% of GDP range, most of which is funded domestically.  Both the foreign currency and external debt share in total central government debt are around 20%, reducing the debt trajectory’s sensitivity to exchange rate volatility and to adverse investor sentiment shifts.

The main driver of event risk is the banking system, with assets at over 120% of GDP which – while providing an ample funding base for the government in domestic currency – also represents a source of contingent liabilities.  The largest banks’ expansion into Sub-Saharan Africa represents a potential source of risk although subject to the strict supervision of Bank Al-Maghrib.

Continued expansion in higher value-added automotive and aeronautics exports supports FX revenue generation capacity

The share of higher value-added exports in the automotive and aeronautics sectors continues to expand, enhancing access to foreign exchange with more limited exposure to commodity price volatility.

Based on Moody’s oil price assumption of $74 per barrel in 2018 and $75 in 2019, the current account deficit is likely to increase to 4.4% of GDP in 2018 and to 4.5% in 2019 from 3.5% in 2017, as expanding exports only partially offset the negative affect of higher oil prices.  However, over the longer term, Moody’s expects the continued expansion in the share of renewable energy in electricity production, especially via wind and solar installations, to contribute to reducing Morocco’s high external sensitivity to oil prices.

The foreign exchange reserve buffer at 5 months of goods and service imports as of October 2018 provides an adequate backstop for the gradual foreign exchange rate liberalization introduced in January 2018.  The new policy widens the daily trading band around the reference rate, which is pegged to a basket of 60% euro and 40% US dollars, to 2.5% in each direction, from 0.3% previously.  Moody’s expects the higher degree of currency flexibility to support Morocco’s price competitiveness and external shock absorption capacity over the longer term.

What Could Change the Rating Up/Down

An upgrade would likely be predicated on action taken to address at least some of the key constraints noted above.  That would most likely involve further policy action that ensures that the public debt ratio – including external debt guarantees from state-owned enterprises (SOEs) – is firmly positioned on a downward trajectory, supported by the continued implementation of fiscal and business environment reforms that improve the economy’s non-agricultural growth prospects.  Together, such a policy mix would also support an increasingly positive view of Morocco’s institutional strength.

The credit profile’s resilience to fiscal and external shocks in recent years suggests there is limited likelihood of a downgrade in the next few years.  That said, continued fiscal deterioration or the materialization of significant contingent liabilities emanating from SOEs or from the banking sector could lead to a downgrade.  Similarly, an unforeseen and sustained deterioration in the external accounts would likely be more in line with a lower rating level.  (Moody’s 20.11)

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11.7  TURKEY:  Turkey & Russia Finish New Gas Pipeline

Jasper Mortimer posted in Al-Monitor on 19 November that Ankara and Moscow have inaugurated a portion of a natural gas pipeline under the Black Sea.

Turkey and Russia marked the completion of a natural gas pipeline under the Black Sea with a short ceremony in Istanbul on 19 November attended by their presidents.  “TurkStream is a historic project and we put in a lot of effort to realize it,” President Erdogan said of the twin pipelines that run 930 kilometers (580 miles) from the Russian port of Anapa to the coastal village of Kiyikoy in northwest Turkey.  When the onshore work is completed by the end of next year, the pipelines will deliver 31.5 billion cubic meters of natural gas per year.

At a time when US President Trump is scolding European countries for their dependency on Russian energy, Turkey has no qualms about increasing its purchase of natural gas from its big neighbor to the north.  “Countries’ decisions on how to obtain natural gas according to their circumstances must be respected,” Erdogan said in a clear reference to Trump.  “Pressure, which violates sovereign rights and prevents states from serving their citizens, will benefit no one.”

Turkish Energy Minister Fatih Donmez told the audience in the Istanbul Congress Center that the one pipeline will deliver 15.75 billion cubic meters for Turkey’s own consumption.  The other will deliver an equal amount to customers in the Balkans and further afield.  “The gas coming from the first pipeline can provide for the consumption of 15 million houses per year,” Donmez said.  “We used to get gas via Russia, Ukraine, Romania and Bulgaria.  Sometimes we had technical problems on the way but now, with the new pipeline, the distance will be shorter and we do not expect to have any technical difficulties with the supply,” the minister added.

After making short speeches in which they complimented each other, Erdogan and Russian President Putin stood together on the auditorium stage and spoke via video link to the Turkish and Russian chief engineers in the control room where the pipelines come ashore in Kiyikoy.  The next stage of the project is to build the overland pipelines to Luleburgaz, a town 65 kilometers (41 miles) to the southwest.  In Luleburgaz, the Turkish pipeline will be connected to the national grid, while the other pipeline will proceed either west to Greece or northwest to Bulgaria.

The route of the extension has not yet been determined and it is the decision of the Russian corporate supplier Gazprom.  Putin said that after Luleburgaz, the second pipeline would go to “east and southern Europe.”  Donmez said Turkey would earn transit fees from the second pipeline.

Putin announced that Russia would build TurkStream after a summit in Ankara in 2014.  Gazprom began construction in May last year.  The project followed years of tension between Moscow and Kiev over supplies of natural gas to Western Europe via Ukraine.

Russian supplies amounted to 51.8% of Turkey’s total imports of natural gas in 2017, according to the official Anadolu Agency.  It is unclear as to how much this percentage will rise when the first TurkStream pipeline comes online as it will replace an existing pipeline.

Jasper Mortimer is a South African-trained journalist who works for France24 TV and GRN.  While traveling the world, he was waylaid in the Middle East, married a Turkish woman and settled in Ankara in 2007.  He covers the Kurdish issue, the Syrian war and Cyprus.  (Al-Monitor 19.11)

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