Fortnightly, 9 September 2015

Fortnightly, 9 September 2015

September 9, 2015





1.1  State Budget Passes First Knesset Reading
1.2  Netanyahu Government Cuts Taxes to Stimulate Economic Growth
1.3  Budget Deficit Falls to 2.1% in August
1.4  Knesset Vote Leaves Gas Agreement Stuck
1.5  Litzman Becomes First Haredi-Ashkenazi Minister Since 1952
1.6  Bank of Israel Governor Ranked Among Best in the World


2.1  Augury Announces $7 Million Series A Round to Diagnose the Internet of Things
2.2  Israeli Document App Company Docady Raises $1.5 Million
2.3  Israeli Startup Wins Chinese Innovation Contest
2.4  NICE Receives Two TMC Awards for its Ground-Breaking Contributions
2.5  Elbit Systems Awarded Israeli Police Force Helicopters Project
2.6  Elbit Subsidiary CYBERBIT Awarded Contracts by European and African Customers
2.7  LabStyle Innovations Closes $2.5 Million Funding to Support Dario Global Rollout
2.8  Vention Medical Expands to Israel
2.9  ForeScout to Expand Tel Aviv Workforce
2.10  Crosswise Receives Series A Financing
2.11  HeartWare International Enters Into Definitive Agreement To Acquire Valtech Cardio


3.1  The Melting Pot Brings its Dining Experience with First Restaurant in Dubai
3.2  Morocco Purchases US-Made M1A1 Abrams Tanks


4.1  Israel Approves Gas Pipeline to Jordan


5.1  US to Increase Military Aid to Jordan

♦♦Arabian Gulf

5.2  Saudi Arabia Set to Cut Billions from Its Budget

♦♦North Africa

5.3  Egypt & China Sign Comprehensive Strategic Partnership
5.4  Eight Million Egyptians Suffer From Diabetes
5.5  Morocco has the Arab World’s Cheapest ADSL


6.1  Turkish August Inflation Rises 0.4%, Exceeding Forecasts
6.2  New Turkish Economy Tsar Sees Below-Target Growth But Uncertainty Clearing
6.3  Turkey’s Foreign Trade Gap Widens in July



7.1  Rosh Hashanah – the Jewish New Year
7.2  Fast of Gedaliya Marked on 16 September
7.3  School Year Opens for 1.7 Million Israeli Children
7.4  Israel Ranks 6th in Healthy Life Expectancy
7.5  First Female Israeli Ambassador to an Arab Country Assumes Her Post


7.6  1.9 Million Jordanian Students Start a New Scholastic Year
7.7  Iraqi Lawmakers Focus on Eradicating Internet Porn
7.8  Greek Supreme Court Head Named Caretaker Prime Minister


8.1  Itamar Medical Receives $28 Million Investment from Viola Private Equity
8.2  Integrity Applications Receives CE Mark Approval for GlucoTrack Model DF-F
8.3  BioLight Identifies New Genetic Markers to Predict Risk of Developing BRONJ
8.4  Novocure Files for $300 Million NASDAQ IPO
8.5  EarlySense Brings Hospital Care Expertise to the Home
8.6  NanoPass Supplies MicronJet600 Device to Immune Design for Oncology Products


9.1  Acronis and Check Point Strengthen Partnership to Eliminate Mobile Threats
9.2  AA Shipping Deploys Customized ERP System Based on the Magic Platform
9.3  Mellanox Begins Shipping Spectrum – First Open Ethernet 25/50/100 Gigabit Switch
9.4  Stratasys Compact Dental 3D Printer Combines Versatility & Quality for Smaller Labs
9.5  Hebrew University Uses Magic to Provide Smartphone Apps for 24,000 Students


10.1  Israel’s Salary Average Reaches High of $2,500 per Month
10.2  Israel Collected Record NIS 10 Billion in Vehicle Taxes in 2014
10.3  Israel Car Deliveries Increase by 16.4% in August
10.4  Israel Railways Breaks Passenger Record in August


11.1  MENA Review and Quarterly Outlook – Second Quarter of 2015
11.2  JORDAN: Despite Regional Unrest, Jordanian Economy Shines Bright
11.3  SAUDI ARABIA: Substantial Buffers Against Low Oil Prices
11.4  SAUDI ARABIA: Saudi Arabia Breaks Gulf Silence on Peg That’s Seen Here to Stay
11.5  EGYPT: Russia to Build Egyptian Nuclear Reactor
11.6  TUNISIA: IMF Mission Concludes the 2015 Article IV Discussions
11.7  TURKEY: What’s the Greatest Risk to Turkey’s Economy?
11.8  TURKEY: Fitch Says Extended Electoral Cycle Prolongs Uncertainty
11.9  CYPRUS: Economics Research Centre Revises 2015 Growth Forecast Upwards to 1.1%


1.1  State Budget Passes First Knesset Reading

The 2015-2016 state budget bill passed its first Knesset reading on 2 September, following a marathon session that ended with 57 MKs voting in favor and 53 MKs against it.  At NIS 424.8 billion ($108.2 billion), the two-year plan is the biggest budget in Israel’s history.  It includes NIS 103 billion ($26 billion) to cover government debts, NIS 56 billion ($14 billion) for defense spending, NIS 48 billion ($12 billion) for education, and NIS 29 billion ($7 billion) for health care.  The Knesset’s Economics Committee will prepare the bill for its second and third Knesset readings, scheduled for coming weeks.

This vote was held as part of a special session called during the Knesset’s summer recess, as Israel has been functioning without a state budget throughout this year, since elections were called and the last Knesset was dissolved in December 2014.  The elections halted the 2015 budget discussions and they resumed only in early April, after the current Knesset was sworn in.  Throughout this year, government ministries have had to manage with month-to-month budgets.  Under Israeli law, once a coalition is formed, the finance minister has to present the budget bill within three months, but Finance Minister Moshe Kahlon was granted an extension when the government decided to pursue a biennial budget.  (Various 03.09)

Back to Table of Contents

1.2  Netanyahu Government Cuts Taxes to Stimulate Economic Growth

Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon announced two major tax cuts on 3 September, in a move meant to stimulate economic growth and boost trade and commerce activity following Israel’s lower growth during Q2/15.  It is proposed that the value added tax will be reduced from 18% to 17%, and corporate tax will be cut by 1.5%, from 26.5% to 25%.  Netanyahu and Kahlon met three times in the span of 36 hours prior to the decision on the tax cuts, to full evaluate the move’s potential impact on the cost of living and growth projections.

Finance Ministry officials have been debating the move for the past week, which was approved after the Israel Tax Authority said the rise in state revenues, a trend noticed over the past few months, is likely to yield a surplus of up to 5 billion shekels ($1.3 billion) in the coming months, and therefore a tax cut was unlikely to affect state revenue.

In a press conference held Thursday, Netanyahu and Kahlon explained the tax cuts aimed to serve three goals: Stimulate economic growth; refund the public, so to signal to the various industries that such a move is possible when state revenue allows it; and fight the high cost of living.  The finance minister stressed that if the move has a negative effect on the economy, the issue of VAT and corporate tax rates will be revisited.  (Various)

Back to Table of Contents

1.3  Budget Deficit Falls to 2.1% in August

On 8 September, the Ministry of Finance announced that state tax revenues exceeded the forecast by NIS 2.6 billion in August.  The surplus reduced the budget deficit to an annualized 2.1%, leading Minister of Finance Kahlon to initiate tax cuts of 1% in VAT and 1.5% in corporate taxes.  Trend data over the past four years show a 5% ongoing average rise in tax collection.  Tax proceeds in June 2014-August 2015 were up 9-14% for direct taxes and 5% for indirect taxes.  State revenues from taxes and fees totaled NIS 23.4 billion in August 2015.

The most substantial increase in tax proceeds was in revenues from land taxes (net of refunds), which totaled NIS 1.3 billion, a real increase of 92% in comparison with August 2014.  Revenues from improvement taxes and purchase taxes rose by similar rates.  The rise in betterment tax revenues is attributable to four exceptional land deals (for industry and residential construction).  The rise in purchase tax revenues is attributable to a large volume of land sales by construction companies in June, and in second apartment deals that took place in that month, while payment for some of those deals was forthcoming in July.

Income tax refunds totaled NIS 1.0 billion, up 19%, compared with August 2014.  Net of legislative changes, revenues rose 9.8% in real terms, compared with August 2014.  Revenues from direct taxes rose 7.9%.  Tax revenues in August 2014 were higher than usual because of Operation Protective Edge in July 2014, when residents of the south were given the opportunity to postpone tax payments from July to August.  (Globes 08.09)

Back to Table of Contents

1.4  Knesset Vote Leaves Gas Agreement Stuck

On 7 September, the Knesset passed the gas framework agreement with a 59-51 majority. However, the vote on the transfer of powers from Minister of Economy Aryeh Deri to the government was split into a separate vote that is still to be held.  The framework was supported by MKs from the Likud, Yisrael Beytenu, Kulanu, HaBayit HaYehudi, Shas and United Torah Judaism.  The vote was opposed by Yesh Atid, the Joint Arab List, the Zionist Union, and Meretz.

Efforts to achieve a majority to approve the transfer of authority to bypass the regulator from Minister Deri to the government have not stopped, but Prime Minister Netanyahu has been unable to garner the necessary support, falling one vote short.  Without the follow-up vote, the Knesset’s approval of the gas framework becomes merely symbolic and does not legally have to be brought to a vote of the full plenum.  If the second vote is not held, Netanyahu has a few options left to advance the deal.  (Globes 07.09)

Back to Table of Contents

1.5  Litzman Becomes First Haredi-Ashkenazi Minister Since 1952

Yaakov Litzman (United Torah Judaism) was sworn in on 2 September as Minister of Health.  Eighty three MKs supported a resolution approving the appointment and 10 opposed it.  Due to a decades-old policy against full acceptance of the legitimacy of a non-religious Jewish state, ultra-Orthodox politicians have refrained from serving as ministers.  Instead, when a coalition seeks to appoint a haredi to head a portfolio, he is named deputy minister but does not have a minister above him in the ranks.  This was the case with Litzman, but secularist Yesh Atid party filed a motion to the High Court and demanded that he either become minister or resign.  The court upheld the motion, and UTJ’s Council of Sages decided to allow Litzman to become a full-fledged minister.  (Various 02.09)

Back to Table of Contents

1.6  Bank of Israel Governor Ranked Among Best in the World

Bank of Israel Governor Karnit Flug has made the Global Finance’s list of best central bank governors for the second year in a row.  On 3 September, the magazine Global Finance published its annual ranking of the world’s central bank governors.  Flug received an A ranking, along with another eight central bankers.  It ranks them from A to F, the measures affecting the score are coping with and gaining control of inflationary pressures, meeting objectives of economic growth, domestic currency stability and interest rate management. A marks a perfect job whereas F complete failure.  Other central bankers who received an A grade for a second year in a row were India’s Raghuram Rajan, Malaysia’s Zeti Akhtar Aziz, the Philippine’s’ Amando Tetangco Jr. and Taiwan’s Fai-Nan Peng.  (Various 03.09)

Back to Table of Contents


2.1  Augury Announces $7 Million Series A Round to Diagnose the Internet of Things

Augury announced a $7 million Series A funding round led by Formation 8 Hardware Fund and joined by Pritzker Group Venture Capital.  The capital will be used to accelerate product development, expand Augury’s sales and marketing and support the company’s ongoing growth.  Augury is redefining the predictive maintenance market, one that has remained inaccessible and expensive for decades.  Augury is bringing its proprietary algorithms, smart sensing device and mobile diagnostics tool to new markets, starting with diagnosing HVAC systems within commercial buildings.  The company’s technology has the potential to save billions of dollars in maintenance and energy costs.  In doing so, Augury is helping to create a much larger market for predictive maintenance and will eventually expand its reach to diagnosing the IoT (Internet of Things).

Augury has already made significant headway in its efforts to capture market share, winning a strategic partnership with a Fortune 100 building services company that has adopted its predictive maintenance tool, the Auguscope.  Augury continues to secure deals by utilizing its mobile solution to enable businesses to solve maintenance issues faster and at a significantly lower price point than current market offerings.

Augury is a New York- and Israel-based company that is bringing predictive maintenance technology to new markets.  Built on the idea that each machine has a unique acoustic fingerprint, Augury has developed technology that listens to the machine, analyzes the data and catches any malfunctions before they arise.  The Augury solution can be applied to HVAC in industrial factories as well as commercial facilities.  Augury is building the mechanical diagnostics platform for the Internet of Things.  (Augury 27.08)

Back to Table of Contents

2.2  Israeli Document App Company Docady Raises $1.5 Million

Docady, which has developed an app for critical documents, announced $1.5 million of seed funding from a group of leading investors including Pitango Venture Capital, Disrupt-ive by Tal Barnoach, Eilon Tirosh and former AOL video execs. The new funding will be used to expand to additional platforms such as Android and continue enhancing the Docady app with new features and services designed to not only make critical documents more accessible and secure, but to enable add-on services that make these documents work for the user.

Launched in May 2015, Docady helps users stay in control of their most important documents by gathering all of a person’s critical paperwork in one secure app, and then providing a host of features to ensure they can access, manage and interact with those documents easily.  The app offers a unique document discovery feature, which helps users collect existing digitized documents from online storage accounts and email.  Once documents are in the app, Docady leverages SmartDoc intelligence to process the dumb image of the digital document and extract relevant data, allowing it to keep users up to date with upcoming deadlines by sending push notifications in plenty of time to take care of renewals.  (Globes 27.08)

Back to Table of Contents

2.3  Israeli Startup Wins Chinese Innovation Contest

DiaCardio has won first place in a global innovation competition held in Beijing.  The final stage included 21 competitors from across the globe, three of which were based in Israel.  DiaCardio will be meeting with representatives from China’s largest tech firms like Alibaba, Tencent, Baidu, and Xiaomi.  The competition, which began eight months ago, is sponsored by Chinese consulting firm Shengjing 360 Group. The contest was led in Israel by Jerusalem-based venture capital firm JVP.

Omer’s DiACardio is an imaging processing software company that is developing tools for automating the evaluation of echocardiographic images, sometimes referred to as “ultrasounds of the heart”.  DiACardio’s technology is based on a platform of proprietary algorithms that enable 1) automatic detection of the heart’s ventricle walls borders, and 2) accurate quantitative assessment of the heart’s dynamic performance. This platform enables the evaluation of echo images to be fully automated.  This is a revolutionary step that makes the process faster, easier and less expensive than using today’s subjective manual and semi-automatic static evaluation methodologies.  DiACardio’s tools will enable automatic detection of heart failure signs, such as impairment of the ejection fraction (EF) of the LV (left  ventricle), as well as analysis of ventricular wall movement, segmental movement, Doppler-like analyses and more.  These tools will enable accurate, timely evaluations to be obtained automatically from video data generated by any echo device.  (Globes 26.08)

Back to Table of Contents

2.4  NICE Receives Two TMC Awards for its Ground-Breaking Contributions

NICE Systems announced that it received two awards from TMC’s CUSTOMER magazine, demonstrating the company’s exceptional innovation.

NICE received the 2015 TMC Labs Innovation Award for its Robotic Automation solution, which optimizes back office efficiency and resource allocation.  This award honors products that display innovation, unique features and significant contributions toward improving communications technology. It is granted to companies demonstrating ground-breaking contributions to the industry.  NICE Robotic Automation performs all routine back office processes that require accuracy and speed, but no employee decision-making. With desktop-based clerical tasks fully automated, employees are free to focus on more important activities that demand a human touch.

NICE also collected a 2015 Communications Solutions Product of the Year Award for the NICE Engage Platform and Advanced Interaction Recorder (AIR).  The recipients of this award represent the best-of-the-best products and solutions available on the market today.  NICE Engage and AIR provide the most advanced recording platform in the market, enabling recording consolidation which dramatically reduces the TCO for our customers, improving the recording reliability, and setting the foundation for future advanced real-time applications which will turn every contact center into a real-time engagement center.

Ra’anana’s NICE Systems is the worldwide leading provider of software solutions that enable organizations to take the next best action in order to improve customer experience and business results, ensure compliance, fight financial crime and safeguard people and assets.  (NICE Systems 27.08)

Back to Table of Contents

2.5  Elbit Systems Awarded Israeli Police Force Helicopters Project

Elbit Systems was awarded an Israeli Ministry of Public Security and the Israeli Police contract, valued at approximately $115 million, to supply leasing and maintenance services for the Israeli Police Force’s aircraft.  The contract, awarded following a public tender, will be performed over a twenty-year period, and will include acquiring six new helicopters, adapting them to meet the Police requirements and performing routine maintenance.  The helicopters’ configuration and onboard mission systems will be fitted to accommodate a wide variety of missions such as surveillance and policing, search and rescue, command and control and fire-fighting.  Elbit Systems, which will operate the helicopters under a PFI (Private Finance Initiative) contract, has been successfully operating PFI projects with the Israeli Defense Forces and in a number of countries around the world.

Haifa’s Elbit Systems is an international high technology company engaged in a wide range of defense, homeland security and commercial programs throughout the world.  The Company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance (C4ISR), unmanned aircraft systems, advanced electro-optics, electro-optic space systems, EW suites, signal intelligence systems, data links and communications systems, radios and cyber-based systems.  (Elbit 27.08)

Back to Table of Contents

2.6  Elbit Subsidiary CYBERBIT Awarded Contracts by European and African Customers

Elbit Systems announced that its wholly-owned subsidiary, CYBERBIT, was recently awarded two contracts.  One of the contracts was awarded by the National Police of a European country, and the second contract was awarded by a law enforcement agency of an African country.  Each of the contracts, which are in a total amount that is not material to Elbit Systems, will be performed over a two-year period.  CYBERBIT, established several months ago, is comprised of Elbit Systems cyber activities, and includes the recently acquired Cyber and Intelligence division of NICE Systems, which was awarded the above-mentioned contracts.

Haifa’s Elbit Systems is an international high technology company engaged in a wide range of defense, homeland security and commercial programs throughout the world.  The Company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance (C4ISR), unmanned aircraft systems, advanced electro-optics, electro-optic space systems, EW suites, signal intelligence systems, data links and communications systems, radios and cyber-based systems.  (Elbit 30.08)

Back to Table of Contents

2.7  LabStyle Innovations Closes $2.5 Million Funding to Support Dario Global Rollout

LabStyle Innovations Corp. recently closed a round of funding totaling approximately $2.5 million.  Funds will be used to support the global rollout and initial U.S. commercial launch of the Dario, a mobile, cloud-based, diabetes management solution that includes novel software applications combined with a stylish, ‘all-in-one,’ pocket-sized, blood glucose monitoring device, and for working capital purposes.  The Dario recently launched in Canada with reimbursement through a majority of medical plans and the U.S. FDA’s clearance is anticipated in the coming months.

Caesarea’s LabStyle Innovations Corp. develops and commercializes patent-pending technology providing consumers with laboratory-testing capabilities using smart mobile devices.  LabStyle’s flagship product is the Dario™ personalized smart meter.  Dario received CE mark certification in September 2013 and began a world rollout in select countries in December 2013.  LabStyle filed a Premarket Notification Application, also known as a 510(k), with the US FDA for the Dario smart meter (Dario Blood Glucose Monitoring System) in December 2013.  LabStyle is pursuing patent applications in multiple areas covering the specific processes related to blood glucose level measurement as well as more general methods of rapid tests of body fluids using mobile devices and cloud-based services.  (LabStyle 31.08)

Back to Table of Contents

2.8  Vention Medical Expands to Israel

South Plainfield, NJ’s Vention Medical has opened a facility in Israel to support innovation in the region’s rapidly growing medical device market.  Vention Medical Israel will offer complete design and development services, stock and custom components and technologies, and manufacturing services to support rapid product launch and scalable production.  With about 1,000 medical device companies and growing quickly, Israel is an emerging player in this industry.  The facility near Tel Aviv will offer design and development services from initial concept through finished device, including engineering and technical expertise, prototype development and assembly (including DFM), quality systems and regulatory support.

Vention Medical is a global integrated solutions partner with more than 30 years of experience in design, engineering and manufacturing of complex medical devices and components.  Vention Medical specializes in components and services used in interventional and minimally invasive surgical products including catheters, balloons, extrusions, polyimide and composite tubing, heat shrink tubing, braid-reinforced shafts, cleanroom injection molding, and finished device assembly and packaging.  (Vention Medical 31.08)

Back to Table of Contents

2.9  ForeScout to Expand Tel Aviv Workforce

ForeScout Technologies announced plans to expand the size of its Tel Aviv office in order to meet global demand.  ForeScout plans to hire an additional 100 cyber technology experts in the near future and double the size of its Tel Aviv-based technology team.  ForeScout’s incredible growth stems from its ability to deliver solutions that address the most pressing security issues facing Global 2000 and government organizations today – solutions that offer visibility of networked devices, the ability to control them, and increasing capacity to orchestrate information sharing and operation among disparate third-party security tools.  One of the biggest challenges facing ForeScout is hiring enough talented people to sustain its rapid growth and address the nearly continuous string of high-profile data breaches.  “Israel is a global leader in cyber security innovation, and its workforce is second to none in skill, dedication, and passion for cyber security,” says the CEO of ForeScout Technologies.  “Our technology roots began in Israel.  ForeScout is committed to our Tel Aviv location and creating the best and most rewarding workplace possible for our employees.”

ForeScout enables organizations to continuously monitor and mitigate security exposures and cyber-attacks. The company’s CounterACT appliance dynamically identifies and evaluates network users, endpoints and applications to provide visibility, intelligence and policy-based mitigation of security problems.  (ForeScout 01.09)

Back to Table of Contents

2.10  Crosswise Receives Series A Financing

Tel Aviv’s Crosswise has closed a $3 million Series A round of financing led by Pereg Ventures with the participation of ZhenFund, Emerge and existing investors Giza Venture Capital, OurCrowd and Horizons Ventures.  The company will use the funding to expand its international presence and increase its sales and marketing efforts.  Crosswise’s technology anonymously identifies which devices-such as smartphones, tablets, PCs and digital TVs-are being used by individual consumers. Identifying these connections from among billions of different devices allows companies to shift their advertising, retargeting, content personalization and marketing analytics from being device-focused to being person-focused.  The results include improved online experiences for consumers, dramatically improved marketing ROI for advertisers, and more valuable ad space and audience segments for publishers.  (Crosswise 02.09)

Back to Table of Contents

2.11  HeartWare International Enters Into Definitive Agreement To Acquire Valtech Cardio

Framingham, Massachusetts’ HeartWare International, a leading innovator of less invasive, miniaturized circulatory support technologies that are revolutionizing the treatment of advanced heart failure, has entered into a definitive agreement to acquire Valtech Cardio.  Patients with advanced heart failure who receive a ventricular assist device (VAD), like HeartWare’s HVAD System, commonly undergo a concomitant, therapeutic mitral or tricuspid valve procedure.  This transaction provides HeartWare with a highly complementary portfolio of technologies to broaden the treatments it offers heart failure patients and enhance patient outcomes.

Or Yehuda’s Valtech Cardio is a privately held company specializing in the development of devices for mitral and tricuspid valve repair and replacement.  Valtech Cardio has full, in-house development, manufacturing, and clinical research capabilities, and over 130 patents and patent applications.  The company, comprised of multidisciplinary development teams, works in close collaboration with world-renowned heart specialists to provide the best possible therapy for mitral patients.  (HeartWare 01.09)

Back to Table of Contents


3.1  The Melting Pot Brings its Dining Experience with First Restaurant in Dubai

Tampa, Florida’s The Melting Pot Restaurants, a fondue restaurant and leading polished casual dining franchise, announced its first restaurant in the United Arab Emirates has opened in Dubai.  This is the fifth international location for the company, which made its overseas debut earlier this year in Jakarta, Indonesia.  The Melting Pot in Dubai is located in BOXPARK, an offbeat, outdoor concept in the urban district of the city offering a selection of unique retail experiences and quirky dining options from around the world.  Featuring four distinct courses with menu items dipped into heated fondue pots at the center of each table, The Melting Pot’s concept fits well with the hip, modern setting and eclectic community.  The Melting Pot franchise is on track to open its first restaurant in Riyadh, Saudi Arabia.  (The Melting Pot 31.08)

Back to Table of Contents

3.2  Morocco Purchases US-Made M1A1 Abrams Tanks

Morocco has reached an agreement with US Joint Systems Manufacturing Center to purchase M1A1 Abrams tanks.  Morocco will buy tanks under the Foreign Military Sales program.  As well, the Moroccan Royal Army awarded a contract to General Dynamics Land Systems for $17 million to provide removal and disposal of 50 M-1A1 frontal turret armor packages.  The deal also includes the installation of the M-1A1 situational awareness frontal turret armor packages for the Kingdom.  This deal dates back to 2013 when U.S. Senator Portman (R-Ohio) met with Moroccan Ambassador to the United States Bouhlal to discuss the potential M1A1 Abrams tanks sale to the Moroccan Armed Forces.  This package of M1A1 tank enhancements will contribute to the modernization of Morocco’s tank fleet, improving its ability to meet current and future threats.  The closing of this deal was delayed for two years, due to ongoing negotiations on the price.  (MWN 30.08)

Back to Table of Contents


4.1  Israel Approves Gas Pipeline to Jordan

Israel’s National Planning and Building Commission approved for cabinet review a detailed national outline plan for the route of the natural gas pipeline from the Sdom 2 gas station to the Jordan border.  The pipeline is designed to make it possible to transport gas to Jordan within a year, in accordance with the agreement signed between the two countries.  Under the plan, a 15.5-kilometer underground pipeline will be laid along Highway 90 and eastward to the Jordanian border, south of the Dead Sea Works evaporation ponds and north of the agricultural fields belonging to Moshav Neot Hakikar.  At the eastern end of the route on the border with Jordan, an underground valve will be built between the transportation systems of the two countries.  The pipeline route was approved according to an environmental document and opinion by the Ministry of Environmental Protection, while taking into account comments by the district committees and objections by the public.  When the detailed route in the plan is approved, the general outline route for this section in the main national outline plan for the gas transportation system will be canceled.  (Globes 08.09)

Back to Table of Contents


5.1  US to Increase Military Aid to Jordan

The United States is significantly increasing its military aid to Jordan.  Over the next three years, Jordan will receive at least a billion dollars in military assistance.  The aid package will include advanced weaponry that until now has not been provided to the country.  Among the weapons are Javelin and Hellfire anti-tank missiles, Cougar armored personnel carriers, Paveway laser-guided bombs, and targeting system for the country’s fleet of F-16 fighter jets.  In addition to the military aid, another $500 million will be given to Jordan to train Syrian rebels to fight the Islamic State terror group.  Jordan also receives over a billion dollars in economic aid each year from the US.  Officials said that that sum would likely be increased in the coming years as well.  The aid level to Jordan has jumped significantly in the past several years.  In 2011, the country only received $300 million in military assistance.  Since the rise of ISIS and the beginning of the civil war in Syria, however, Jordan has become much more important geopolitically for the US, and hence the increased levels of aid.  (AMMONNEWS 03.09)

Back to Table of Contents

►►Arabian Gulf

5.2  Saudi Arabia Set to Cut Billions from Its Budget

Saudi Arabia’s government is considering making significant cuts to its 2016 budget because of the continued drop in oil price.  Two sources told Bloomberg that the country is seeking advice on reviewing its budget for next year, which could lead to delays or reduce some of the country’s infrastructure projects.  The report suggests that the government could cut its budget by as much as 10%, roughly $10 billion based on the country’s current investment spending of $102 billion.  Spending on areas like public sector salaries wouldn’t be affected, according to the sources.

The International Monetary Fund (IMF) projected that the Saudi government would run a fiscal deficit of around 20% of GDP in 2015 – much larger than the 14.2% gap that it had forecast in May, and the biggest deficit since at least 1999, IMF records show.  Oil accounts for 90% of the country’s revenue, and with the price dropping from $110 a barrel last April to the current price of $45, Saudi’s finances are coming under increasing pressure, with the current budget deficit covered by drawing down financial reserves.  Saudi Arabia sold $5.33 billion of debt on earlier this month and said it would issue further sovereign bonds, as it tries to close a budget deficit caused by the collapse in oil prices.  (Bloomberg 26.08)

Back to Table of Contents

►►North Africa

5.3  Egypt & China Sign Comprehensive Strategic Partnership

Egypt’s President Abdel Fattah Al-Sisi paid an official visit to China on 1 September as a part of his Asian tour, to increase Chinese investments in Egypt.  It is anticipated that Al-Sisi’s visit will have great impact on the bilateral economic cooperation between Egypt and China.  Al-Sisi held talks with his Chinese counterpart Xi Jinping, which led to the signing of a Comprehensive Strategic Partnership Agreement and a cooperation deal that will boost production capacity, state news agency MENA reported.  The two presidents agreed on many projects in the power, transportation and ports sectors, with Al-Sisi also pushing to finish the paperwork and feasibility studies to put these projects into action.  A $100m loan from the Chinese Development Bank (CDB) is expected to be secured, to provide the small- and medium-sized Egyptian projects with the necessary funds.  (Various 03.09)

Back to Table of Contents

5.4  Eight Million Egyptians Suffer From Diabetes

Egypt has eight million people suffering from diabetes and ranks eighth internationally in diabetes rates, said President of the International Diabetes Association, Professor Michael Hirst.  Egypt is expected to rise in the new classification to the seventh rank, due to several factors, most notably Egyptians’ unhealthy lifestyle, said Hirst, pointing out that he plans to visit Egypt later this year.  Statistics have shown that one person around the world dies every 6 seconds as a result of diabetes and every 3 seconds a person is diagnosed with the disease, Hirst said.  He expects the number of people with diabetes will climb to 529 million people by 2035.  (Al-Masry Al-Youm 30.08)

Back to Table of Contents

5.5  Morocco has the Arab World’s Cheapest ADSL

Morocco has the cheapest digital subscription for ADSL in the Arab world in 2015, a new report from the Arab Advisors Group revealed.  The report, which provides an analysis for the price of residential broadband ADSL in 19 Arab countries, said that Morocco and Tunisia have the lowest ADSL fees in the Arab world, while Sudan has the highest average ADSL fees.  The report, which was released on 10 August, said that Morocco has the Arab World’s minimum total annual cost of residential ADSL services ($145 per year), while Sudan has the maximum ($2,652 per year).

The report noted that ADSL remains the prevailing fixed internet broadband technology in the Arab World, although Internet fiber technologies are emerging in the region.  The Arab Advisors Group based this report on an analysis of the rates for the residential broadband ADSL in Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, UAE and Yemen.  (MWN 26.08)

Back to Table of Contents


6.1  Turkish August Inflation Rises 0.4%, Exceeding Forecasts

Turkey’s consumer prices rose 0.40% month-on-month in August, the Turkish Statistics Institute said, exceeding a forecast of a 0.11% rise in a Reuters poll.  Consumer prices rose 7.14% year-on-year, while domestic producer prices rose 0.98% on the month, for an annual rise of 6.21%, the data showed.  (TUIK 02.09)

Back to Table of Contents

6.2  New Turkish Economy Tsar Sees Below-Target Growth But Uncertainty Clearing

Turkey’s new deputy prime minister in charge of the economy said on 8 September that growth and inflation would miss government targets this year but the political uncertainty which has hammered the lira would ease after a November election.  In his first interview since taking office less than two weeks ago, Cevdet Yilmaz told Reuters growth may reach 3% in 2015, short of the official 4% target, but broadly in line with market expectations. Inflation would end the year higher than expected but would fall in 2016, he said.

Yilmaz, a former state planning official who served as development minister for four years, was appointed last month to an interim government formed after the ruling Justice and Development Party (AKP) lost its parliamentary majority in a June election.  The temporary cabinet will lead Turkey until a new vote on 1 November.  Yilmaz – one of the architects of Turkey’s “medium-term economic programs,” the three-year policy roadmaps it renews each year – took over from Ali Babacan, who had overseen the economy for the best part of a decade and was highly regarded by international investors.

Consumer inflation climbed back above 7% in August, above forecasts and stoking fears of a worsening outlook.  The government’s target is 5%, although the central bank is forecasting 6.9% at year-end.  Polls suggest the AKP will again struggle to win enough votes to form a single-party government in November, suggesting it may be forced back to the negotiating table to try to strike a coalition deal.  While a coalition could lead to less decisive policy-making, many investors are warm to the prospect of a “grand coalition” between the AKP and the main CHP opposition, hoping such a deal could ease political tensions in a country deeply polarized by what will have been four elections in 18 months.  (HDN 08.09)

Back to Table of Contents

6.3  Turkey’s Foreign Trade Gap Widens in July

Turkey’s foreign trade deficit widened by 6.5% to over $7 billion in July compared to the same month of last year, data from the Turkish Statistical Institute (TUIK) showed on 31 August.   The rise in July was mainly caused by the increase in the country’s car and gold imports, according to analysts, who said expectations of further losses in the value of the Turkish lira probably pushed up the immediate domestic demand for cars and gold.  Turkey’s July exports were at $11.2 billion, marking a 16.2% decrease year-on-year. Imports also declined to $18.2 billion, with an 8.7% decrease.  The foreign trade gap decreased by 13% to around $40.3 billion in the first seven months of 2015 compared to the same period of 2014.  Turkey’s exports declined by around 10% to $84.6 billion in the first seven months of this year compared to the same period last year, according to TUIK.  Meanwhile, exports to the European Union, Turkey’s main trading partner, declined by 13.8% in July to $5.2 billion from $6 billion last year. Germany was the largest recipient of Turkish goods in July, at a value of $1.1 billion.  Turkey imported $2.1 billion worth of goods from China in July. Germany was the second-largest exporter to Turkey, at a value of almost $2 billion over the month.  (TUIK 31.08)

Back to Table of Contents



7.1  Rosh Hashanah – the Jewish New Year

Rosh Hashanah, commonly known as the Jewish New Year, is celebrated on the first and second days of the Hebrew month of Tishrei.  This year that date falls on the afternoon of 13 September and continues until the evening of 15 September.  In Hebrew, Rosh Hashanah literally means “first of the year.”  The name Rosh Hashanah is not used in the Bible to discuss this holiday.  The Bible refers to the holiday as Yom Ha-Zikaron (the day of remembrance) or Yom Truah (the day of the sounding of the shofar).  The holiday is instituted in Leviticus 23:24 – 25.  The shofar is a ram’s horn; the sounding of the shofar in the synagogue is one of the most important observances of this holiday.  The Bible gives no specific reason for this practice, though one that has been suggested is that the shofar’s sound is a call to repentance.  No work is permitted on Rosh Hashanah.  Much of the day is spent in synagogue, where the regular daily liturgy is somewhat expanded.  In fact, there is a special prayer book called the machzor used for Rosh Hashanah and Yom Kippur because of the extensive liturgical changes for these holidays.  Religious services for the holiday focus on the concept of G-d’s sovereignty.  One popular observance during this holiday is eating apples dipped in honey, reflecting the wish for a sweet new year.

Back to Table of Contents

7.2  Fast of Gedaliya Marked on 16 September

The Fast of Gedaliya (or Tzom Gedaliya, falling on the 3rd of Tishrei), follows Rosh Hashanah.  This year it is observed on 16 September.  It marks the assassination of Gedaliya ben Achikam and the exile of the small Jewish community that remained in Israel after the Destruction.  When Nebuchadnezzar King of Babylonia, destroyed the Temple in Jerusalem in 586 BCE and exiled the Jewish people to Babylonia, he allowed an impoverished remnant to remain in the land and appointed Gedaliah Ben Achikam as their Governor.  Many Jews who had fled to Moab, Ammon, Edom, and other neighboring lands returned to the land of Judea, tended the vineyards given to them by the king of Babylonia and enjoyed a new respite after their earlier oppression.  However, political machinations led Yishmael Ben Netaniah, to assassinate Gedaliah.  Yishmael murdered Gedaliah, together with most of the Jews who had joined him and numbers of Babylonians whom the Babylonian King had left with Gedaliah.  The remaining Jews feared the vengeance of the Babylonian King and fled to Egypt.  The surviving remnant of Jews was thus dispersed and the land remained desolate, until the Jewish polity was re-established in some 70 years’ time.  The fast is observed from daybreak until the stars appear in the evening.

Back to Table of Contents

7.3  School Year Opens for 1.7 Million Israeli Children

On 1 September, the 2015/6 school year opened in Israel at 4,805 educational institutions, with 1,689,939 students going to school, including 157,477 pupils entering first grade.  Some 680,000 more children will end their summer vacations by going to kindergarten.  It was announced that 166,208 teachers will teach in 68,271 classrooms in the Israeli educational system – an increase of only one teacher, compared with last year.  (Various 01.09)

Back to Table of Contents

7.4  Israel Ranks 6th in Healthy Life Expectancy

The latest study by the World Health Organization’s (WHO) World Health Report (WHR) confirms that general life expectancy in Israel is among the longest in the world: Israeli men are fourth in the world with an average of 80.2 years, behind Icelandic (81.2), Swiss (80.7), and Australian (80.5) men.  Israeli women are also doing well, being ranked tenth in the world in life expectancy, with even longer lives than the men – 84 years on average.

A combined calculation of women and men shows that Israel is in third place beside other countries: Japan is in first place, with a combined average age of 84 years.  In second place are Australia, Italy, Singapore, San Marino, Switzerland and Andorra with 83.  Third place sees Israel stand alongside France, Spain, Sweden, Norway, New Zealand, Monaco, Luxemburg and Cyprus, with an average of 82 years.

Israel’s Central Bureau of Statistics (CBS) figures indicate that life expectancy in Israel in 2013 was 83.9 years for women and 80.3 years for men.  That’s an increase of 0.3 years for women and 0.4 years for men, compared to 2012.  The gap in life expectancy between women and men stood at 3.6 years in 2013.  In the last decade, life expectancy has risen 2.9 years among men and 2.4 years among women.

The CBS found that life expectancy has risen 8.9 years for women and 8.7 years for men in the past 35 years.  Mortality rates for the late 1970s show that only 33% of men and 43% of women born in that decade were expected to reach the age of 80.  But since then there have been significant improvements, leading to the current situation, where 59% of boys and 72% of girls born today are expected to reach that age.

An international comparison of life expectancies (using 2012 figures) shows that Israeli men keep their high standing with 79.9 average years of life.  Their life expectancy is third among OECD countries, along with Sweden and Australia, 1.7 years lower than that of Icelandic men (ranked first) and 0.7 years lower that of Swiss men (second). Israeli men’s life expectancy is 2.4 years higher than the OECD average.  (Various 31.08)

Back to Table of Contents

7.5  First Female Israeli Ambassador to an Arab Country Assumes Her Post

Israel’s new ambassador to Jordan, Einat Shlain, presented her credentials to Jordan’s King Abdullah II at a ceremony at the Basman Palace in Amman on 7 September.  Shlain is the first woman to serve as an Israeli ambassador to an Arab country.  She has worked for the Foreign Ministry for more than two decades.  In past roles, she served as head of the international division at the Foreign Ministry’s Diplomatic Research Center and as a Middle Eastern affairs adviser at the Israeli Embassy in Washington, D.C.  Abdullah received the credentials of eight new ambassadors to Jordan, including from Mexico, Brazil, Switzerland, Belgium, Italy, Germany and the United Arab Emirates.  According to the report, the ceremony included the playing of national anthems of Jordan and the ambassadors’ countries.  Also, the new ambassadors laid wreaths at the tombs of Kings Hussein, Talal and Abdullah I.  (Israel Hayom 08.09)

Back to Table of Contents


7.6  1.9 Million Jordanian Students Start a New Scholastic Year

Around 1.9 million Jordanian students headed to the first day of school on 1 September, attending classes at 6,924 public, private, military and UNRWA schools.  Some 190,000 students are first graders this year.  (JT 01.09)

Back to Table of Contents

7.7  Iraqi Lawmakers Focus on Eradicating Internet Porn

Abdul-Hadi al-Hakim, an Iraqi parliament member with the Citizen Coalition, announced on 28 July that more than 150 parliament members’ signatures had been collected to pass a bill calling on the authorities to block pornographic sites on the internet.  Hakim said that most of the National Iraqi Alliance parliamentarians have signed the draft law, while most representatives of the Sunni National Forces Union and the Kurdistan Alliance refrained from signing.  Blocking pornographic sites is ineffective, as circumvention techniques are widely available to the public. For instance, the same Pornhub statistics showed that visitors from Iran and Saudi Arabia spend more time on the site than Iraqis, even though these states’ religious regimes ban pornographic websites. Visitors in Iran registered an average of 7 minutes and 46 seconds per visit, while those in Saudi Arabia registered 8 minutes 23 seconds.

The announcement of the bill stirred controversy in Iraq.  Some Iraqis welcomed the proposal and created a Facebook page to support the bill, while others believe it is an attempt to impose religious laws on the country and a preliminary step to gradually bring religious rule to Iraq, especially considering the bill was submitted at the initiative of Islamist members of parliament and justified from religious perspectives.  According to civil activists, this bill is not a priority in the midst of the current deteriorating security and political situation in Iraq.  TV presenter Ali Wajih posted on Facebook on 28 July, “Did our problems in Iraq end, and the only remaining one is porn sites?  Isn’t our tragic situation in Iraq much worse than pornographic movies?”  (IBN 23.08)

Back to Table of Contents

7.8  Greek Supreme Court Head Named Caretaker Prime Minister

The head of Greece’s Supreme Court, Vassiliki Thanou, was named as the country’s caretaker prime minister ahead of early elections, the president’s office said.  Thanou, who at 65, was the first woman to assume the post.  The date for Greece’s general election – the fifth in six years – is to be officially announced by President Pavlopoulos soon, but it is likely to be scheduled for 20 September.  Outgoing Prime Minister Tsipras ruled out forming a national unity government should he fail to win an outright majority in the snap elections triggered after he resigned.  Tsipras, who called for the fresh vote last week after suffering a major rebellion in his hard-left SYRIZA party over Greece’s huge new international bailout, dismissed suggestions he could work with the conservative opposition New Democracy, the PASOK socialists or the center-right Potami if the poll results were inconclusive.  (AFP 27.08)

Back to Table of Contents


8.1  Itamar Medical Receives $28 Million Investment from Viola Private Equity

Itamar Medical and Viola Private Equity announced a private investment in public equity (PIPE) deal, in which Viola Private Equity will invest up to $28.4 million in Itamar Medical.  Through this deal, Viola Private Equity will become the largest shareholder of Itamar Medical and will work closely with the company’s management to accelerate growth and market expansion.  According to the investment agreement, Itamar Medical will issue shares to Viola Private Equity at the price of NIS 1.449 per share for consideration of $24.1 million.  In addition, Itamar Medical will issue to Viola Private Equity, for no additional consideration, non-tradable warrants for the acquisition of up to 50% of issued shares for an exercise price of NIS 1.642 to NIS 1.745 per share.

Based in Israel’s Caesarea Industrial Park, Itamar Medical is a publicly traded medical device company that develops non-invasive medical devices using the Company’s proprietary platform technology, the PAT (Peripheral Arterial Tone) signal.  The company currently markets the WatchPAT home sleep test for respiratory sleep disorder diagnosis, and the EndoPAT, the only device approved by the U.S. FDA for testing endothelial (arterial) function and assessing the risk of coronary artery disease and other cardiovascular diseases.  (Itamar Medical 27.08)

Back to Table of Contents

8.2  Integrity Applications Receives CE Mark Approval for GlucoTrack Model DF-F

Integrity Applications has received CE Mark approval from Dekra Certification, its Notified Body in the European Union for improvements to the GlucoTrack model DF-F noninvasive glucose measurement device.  As a result of these improvements, the calibration process for the device, which previously required eight finger stick measurements as a reference and took approximately two and half hours to complete, now requires just three finger stick measurements and takes less than thirty minutes to complete.  These improvements are expected to greatly enhance the user experience and allow for doctors and clinicians to calibrate more users, more expeditiously, which is expected to reduce or eliminate any backlog created as new device users await calibration.  In addition, the Notified Body has approved an expansion of the intended use of the GlucoTrack model DF-F to allow for the marketing of the device to the pre-diabetic population as well.

Integrity Applications is a medical device company focused on the design, development and commercialization of non-invasive glucose monitoring devices for use by people with diabetes.  Integrity Applications operates primarily through its wholly-owned Israeli subsidiary, A.D. Integrity Applications, Ltd.  (Integrity Applications 31.08)

Back to Table of Contents

8.3  BioLight Identifies New Genetic Markers to Predict Risk of Developing BRONJ

BioLight Life Sciences Investments announced that its cancer diagnostics subsidiary, Micromedic Technologies, has identified several new genetic markers with high potential to predict necrosis of the jawbone in patients treated with bisphosphonate drugs and was able to repeat findings from a previous study for one significant marker in a larger and more diversified group tested in a second trial.  The BRONJ side-effect appears in cancer patients who receive intravenous therapy (approximately 500,000 patients each year) with a prevalence rate of up to 18.6% among multiple myeloma patients, 1.2%-12% among breast cancer patients, 6.5%-7% among prostate cancer patients, and up to 0.1% among osteoporosis patients who receive orally administered treatment (approximately 200 million patients worldwide).

BioLight invests in, manages and commercializes biomedical innovations grouped around defined medical conditions – ophthalmology and cancer diagnostics.  The ophthalmic technologies include IOPtiMate, a laser-based non-invasive surgical treatment for glaucoma; TeaRx, a point-of-care multi-parameter diagnostic test for dry eye syndrome; Eye-D, a controlled release drug-delivery insert platform and a new technology a drug-delivery platform for the improvement of ocular molecule transmission; and OphRx, a drug delivery technology platform for ocular uses.  The cancer diagnostic technologies include proprietary tests that are designated for bladder, cervical, multiple myeloma and other cancers.  (BioLight Life Sciences 31.08)

Back to Table of Contents

8.4  Novocure Files for $300 Million NASDAQ IPO

Novocure has submitted a prospectus for an IPO on NASDAQ.  The company aims to raise $300 million at an estimated company value of $1 billion, after money.  The chief underwriters for the issue are JPMorgan, Deutsche Bank, and Evercore, while the secondary underwriters are Wells Fargo, JMP, and Wedbush PacGro.  The company has raised $473 million to date, and had $106 million in cash as of the end of June.

Novocure’s product, which has been approved for marketing by the US FDA following a comprehensive clinical trial in 2011, is designed to treat Glioblastoma brain cancer.  It was developed by Technion Israel Institute of Technology researchers.  Novocure’s treatment is one of the few new treatments approved in recent years for treatment of this type of brain cancer.  At this stage, approval is limited to treatment of Glioblastoma that has recurred following chemotherapy.  Novocure has filed a request for approval of the device for use in combination with chemotherapy, following a successful trial in this format, which was discontinued before its official end because the results were obtained sooner than expected.  Novocure’s pioneering Tumor Treating Fields (TTF) therapy is a new modality for treating solid tumors.  Novocure’s US operations are based in Portsmouth, NH and the company’s research center is located in Haifa, Israel.  (Globes 01.09)

Back to Table of Contents

8.5  EarlySense Brings Hospital Care Expertise to the Home

EarlySense released myEarlySense, its first OEM solution for the digital health consumer market.  myEarlySense tracks and helps users improve sleep and overall wellness in an automatic and contact-free manner.  The ultra-sensitive sensor, placed under the user’s mattress, detects individual heartbeat, respiratory rate, sleep stages and movement, and then wirelessly transmits data to the accompanying smartphone application.  myEarlySense is designed to seamlessly integrate with smart home solutions, home security and smart bed solutions.  For the first time ever, users will be able to adapt their home environment to their needs, based on the information collected from the myEarlySense sensor.  The ability to automatically detect and analyze bed occupancy, heart and breathing rates, sleep/wake status, and sleep stage, combined with smart home systems, provides endless possibilities for integration.  Examples include automatically arming and disarming home security systems and optimizing home energy consumption – based on the user’s sleep cycle.

Ramat Gan’s EarlySense is the market leader in contact-free and continuous monitoring for the medical and consumer wellness markets, with a unique sensor that is placed under the mattress and advanced analytics that leverage big data capabilities to provide unique offerings.  The company’s solutions monitor heart and respiratory rate, as well as movement and sleep.  EarlySense’s medical solutions for institution and home environments assist clinicians in early detection of patient deterioration and in identifying and preventing potential adverse events such as patient falls and pressure ulcers.  (EarlySense 02.09)

Back to Table of Contents

8.6  NanoPass Supplies MicronJet600 Device to Immune Design for Oncology Products

NanoPass Technologies has entered into a clinical supply and support agreement for the supply of MicronJet600, its microneedle delivery device, for use with Seattle’s Immune Design’s oncology immunotherapy products from its ZVex discovery platform.  The agreement will provide Immune Design non-exclusive access and supply for use of the device in all of its relevant cancer immunotherapy programs globally. Financial terms were not disclosed.

Ness Tziona’s NanoPass Technologies is a pioneer in the development and commercialization of intradermal delivery of vaccines and immunotherapy.  NanoPass has concluded multiple clinical studies in various fields including vaccines (influenza, polio and others), cancer and allergy immunotherapy.  MicronJet is a microneedle-based device for intradermal delivery of vaccines and drugs.  MicronJet600 is registered for marketing in various territories including the USA, Europe, Canada, China and Korea, for use by health care professionals for intradermal delivery.  (NanoPass 08.09)

Back to Table of Contents


9.1  Acronis and Check Point Strengthen Partnership to Eliminate Mobile Threats

California’s Acronis, a global leader in data protection, and Check Point Software Technologies announced a partnership to eliminate mobile threats for companies by providing integrated data security and protection for mobile workers.  Through a new joint solution that combines Check Point Capsule – a mobile security solution – with Acronis Access Advanced – a secure file sync & share solution – companies can enable mobile workers to safely share content and collaborate on any device from any location, while protecting them from data loss, device theft and malware by extending the corporate security policy to mobile devices.

Acronis is focused on providing companies with complete data protection through an integrated set of solutions, including backup, disaster recovery and file sync & share.  Check Point protects companies from cyberattacks by leveraging a complete security architecture that defends against threats to an enterprise’s network and out to mobile devices.  Check Point Capsule provides seamless security to protect business data, establish a secure business environment on mobile devices, and secure business documents, devices, and networks.

By pairing Acronis Access Advanced with Check Point Capsule remote users are granted secure access to all corporate content on mobile devices with shared file repositories transparently synchronized, ensuring that users are able to seamlessly extend their work spaces to their devices while remaining secure at all times.  The seamless integration of Acronis Access Advanced with Check Point Capsule Docs ensures that all documents are encrypted and accessible only to authorized personnel. Enterprises also have a full audit trail of who accesses what document and when.

Tel Aviv’s Check Point Software Technologies is the largest pure-play security vendor globally, provides industry-leading solutions, and protects customers from cyberattacks with an unmatched catch rate of malware and other types of attacks. Check Point offers a complete security architecture defending enterprises’ networks to mobile devices, in addition to the most comprehensive and intuitive security management.  (Check Point 31.08)

Back to Table of Contents

9.2  AA Shipping Deploys Customized ERP System Based on the Magic Platform

Magic Software Enterprises announced that AA Shipping and its Royal Cargo tax division deployed a customized ERP system based on the Magic xpa Application Platform. Developed by Titan Systems, the customized system manages the group’s entire freight forwarding activities from booking through customs to operations and finance.  AA Shipping and Royal Cargo wanted a system to fully automate all internal processes required to manage their freight forwarding business, including customs clearance and taxes imposed by the government at the Israeli ports of Haifa, Ashdod, Tel Aviv and Ben Gurion International Airport.  Titan answered their need by customizing their existing Magic-based 4Trade ERP system to include an interface with the Israeli Tax Authority’s “Gateway to the World” application for customs and tax compliance along with customized interdepartmental application flows and reporting capabilities.  Under the terms of the deal, Magic Israel and Titan Systems will provide AA Shipping and Royal Cargo with maintenance and support services for the system for 10 years.

Or Yehuda’s Magic Software Enterprises empowers customers and partners around the globe with smarter technology that provides a multichannel user experience of enterprise logic and data.  (Magic Software 31.08)

Back to Table of Contents

9.3  Mellanox Begins Shipping Spectrum – First Open Ethernet 25/50/100 Gigabit Switch

Mellanox Technologies announced it is now shipping Spectrum, the industry’s first 10, 25, 40, 50 and 100 Gigabit Ethernet, Open Ethernet-based switch, to multiple cloud, Web 2.0 and enterprise data center customers world-wide.  The shipment of Spectrum, combined with Mellanox’s ConnectX-4 NICs, and LinkX fiber and copper cables, makes Mellanox the first to deliver comprehensive end-to-end 10, 25, 40, 50 and 100 Gigabit Ethernet data center connectivity solutions.  Spectrum is designed to overcome current data center infrastructure and economic challenges by providing a highly flexible, efficient and scalable solution that allows businesses to deploy the hardware-software combinations best suited to meet their unique needs.  The Open Ethernet architecture, on which Spectrum is based, provides Mellanox customers with the freedom to innovate and optimize their data center for their applications.  Spectrum 25, 50 and 100 Gigabit Ethernet switch systems enable data centers to drive their business forward, and to analyze data in real-time, making it the most efficient building block for cloud, Web 2.0 and enterprise applications.

Yokneam’s Mellanox Technologies is a leading supplier of end-to-end InfiniBand and Ethernet interconnect solutions and services for servers and storage.  Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability.  (Mellanox 02.09)

Back to Table of Contents

9.4  Stratasys Compact Dental 3D Printer Combines Versatility & Quality for Smaller Labs

Stratasys introduced the Objet30 Dental Prime, a high quality, low cost 3D printer designed to allow smaller dental labs to produce a wide range of models and appliances in-house.  While compact in size, the Objet30 Dental Prime is big in versatility, beginning with a choice of 3D print modes: High Quality and High Speed.  The High Quality mode 3D prints models with superior surface finish and intricate, delicate features required for precise fittings on crown, bridge, and prosthetic models (in 16 micron layers).  The High Speed mode 3D prints at accelerated speeds to produce orthodontic models and surgical guides with increased productivity (in 28 micron layers).  Together, these two print modes enable smaller labs to produce a wide range of dental and orthodontic appliances in-house – changing the economies for smaller dental labs by increasing productivity, shortening delivery times and improving patient satisfaction.

Stratasys, headquartered in Minneapolis, Minnesota and Rehovot, Israel, is a leading global provider of 3D printing and additive manufacturing solutions.  The company’s patented FDM and PolyJet 3D Printing technologies produce prototypes and manufactured goods directly from 3D CAD files or other 3D content.  Systems include 3D printers for idea development, prototyping and direct digital manufacturing.  (Stratasys 01.09)

Back to Table of Contents

9.5  Hebrew University Uses Magic to Provide Smartphone Apps for 24,000 Students

Magic Software Enterprises announced that The Hebrew University of Jerusalem (HUJI) used Magic’s Application Development Platform to create smart phone apps to provide its approximately 24,000 students with mobile access to their personal academic and administrative information.  The Hebrew University’s Information Systems department developed the apps using the Magic xpa Application Platform for rapid cross-platform development.  Magic xpa enabled The Hebrew University’s IS team to leverage the same business logic to quickly and simultaneously develop native Android and iOS apps. Secure connectivity to the university’s CRM system and databases provides users with access to their personal data, including tuition payments, grades and exam schedules.  The apps are available for download on Google Play and the Apple App Store.  Tablet devices are also supported.  The internal development team is currently working on adding navigational functionality to make it easier for students to get to classes and exams.

Or Yehuda’s Magic Software Enterprises empowers customers and partners around the globe with smarter technology that provides a multichannel user experience of enterprise logic and data.  (Magic Software 08.09)

Back to Table of Contents


10.1  Israel’s Salary Average Reaches High of $2,500 per Month

The Central Bureau of Statistics announced that during June, Israel’s average salary rose by 7.9%, or NIS 735 ($187), to reach NIS 10,078 ($2,562).  This was the largest monthly increase seen for a long time.  The number of employees in Israel has also increased, rising 2.5% in the first quarter of 2015 as 82,000 people joined the workforce, bringing the total number of workers to 3.41 million.

Several fields of employment in Israel are known for paying particularly high salaries.  The oil and gas exploration sector pays an average salary of NIS 23,598 ($5,998) a month.  The next best-paid sector is banking, where employees earn an average of NIS 20,704 ($5,265) a month.  Senior officials in government-owned companies take home monthly salaries of NIS 18,691 ($4,751), while the Israel Electric Corporation and the Mekorot Israel National Water Company pay an average of NIS 18,395 ($4,676) a month.  These figures would appear to contradict the trend toward a recession that has recently received considerable coverage.

However, despite the encouraging numbers and high salaries in some fields, 66% of employees in Israel earn less than the average salary, and 50% of employees, some 1.7 million people, earn less than NIS 6,500 ($1,652) a month.  Government clerks and managers of public services take home barely NIS 5,120 ($1,302) per month, 29% of the monthly salary of senior public officials.  Actors, singers and other entertainers make do with monthly salaries of NIS 6,097 ($1,550), and workers in the agricultural sectors make an average of NIS 6,857 ($1,744) per month.  Restaurant servers and cafe workers earn an average of NIS 4,206 ($1,070) per month, and workers in the bottom two percentiles earn between NIS 2,000 ($508) and NIS 4,200 ($1,068) a month, less than the minimum wage of NIS 4,650 ($1,182) per month.  (CBS 08.09)

Back to Table of Contents

10.2  Israel Collected Record NIS 10 Billion in Vehicle Taxes in 2014

New figures released by the Israel Tax Authority showed a 25% increase in tax revenue from car sales in 2014, revenues reaching NIS 9.4 billion.  A record number of 279,000 vehicles of all makes and models were sold in Israel, boosted by a 24% increase in imports.  The relative jump compared to 2013 is even more impressive because that year was one of the most successful in the history of the automotive industry.  In financial terms, there was a 15% increase in vehicle sales in 2014.

The overall tax revenue collected by the state from the automotive sector including car sales and replacement parts totaled NIS 10.3 billion, a 24% increase from 2013.  The 2014 data further shows that corporate fleets and leasing companies continue to lose influence in the market while the private consumer segment has been cementing its significance.  Much as in previous years, private leasing has continued to expand, as has the phenomenon of new vehicle sales by leasing firms.  (ITA 02.09

Back to Table of Contents

10.3  Israel Car Deliveries Increase by 16.4% in August

The Israeli auto market has set a new record with 188,633 new vehicles deliveries between January-August, increasing 8.5% compared with last year’s record pace.  In August alone, usually considered a vacation month with little activity, no fewer than 21,240 vehicles were delivered, a 16.4% jump, compared with August 2014.  For the first time ever, KIA Motors leads the auto deliveries table with 24,371 in January-August, 30% more than in the corresponding period last year.  In second place came Hyundai with 24,039 deliveries, a 3% increase.  Toyota was third with 21,488 deliveries, up 9.4%.  Mazda came fourth with 13,029 vehicles, a 1.2% decrease.  Mitsubishi was in fifth place with 11,927 deliveries, following a 3.14% rise.  (Globes 02.09)

Back to Table of Contents

10.4  Israel Railways Breaks Passenger Record in August

Israel Railways set a new record of 4.8 million passenger journeys in August, up 18%, compared with August 2014.  The number of passenger journeys in January-August 2015 totaled 35.4 million, an 11.4% increase, compared with the corresponding period last year.  The number of passenger journeys so far this year is the same or greater than the yearly totals for 2009, 2010 and 2011.  Israel Railways management expects the number of passengers to continue climbing in the coming months and in 2016, among other things, as a result of the operation of the operation of the Negev line, the inauguration of the Ofakim railway station, the running of the Northern Valley line, and the reform in railway ticket prices.  (Globes 08.09)

Back to Table of Contents


11.1  MENA Review and Quarterly Outlook – Second Quarter of 2015

BLOMINVEST reviewed the leading countries of the Middle East in the second quarter of 2015.  With most of MENA countries fainting under the strains of terrorism and violence, the frail levels of oil prices remained a double-edged sword during the second quarter of 2015.  While oil-exporting countries couldn’t refrain from the spillovers of the bearish oil trend on their economic activity despite their trials to diversify away from the black gold, oil-importing countries were struggling to buffer themselves from the security and political developments that were hitting the region.

Thus, and in the face of lower oil prices, Saudi Arabia was tapping into its large reserve assets at the Central Bank, using up to $65B of those reserves since oil prices started slumping.  The kingdom also opened up its bourse to foreign investors, allowing the stock market index to register a 9% year-to-date increase in the first half of the year.

Stepping towards the neighboring United Arab Emirates (UAE), the ongoing bearish international oil prices have taken a toll on their trade and fiscal performances over the second quarter of 2015.  However, the rate of business expansion remains strong thanks to a favorable business environment combined with growth in government spending.

As for Qatar, and though facing big challenges concerning the right to host the 2022 World Cup, the preparations undertaken were accomplishing the Emirate’s mission to progressively shrink its dependence on hydrocarbon industries, which led the country to be fairly immune to declining oil prices.

In Egypt, the country upheld its will to recover 2011’s uprisings and to maintain a robust economic performance amid mounting terrorist attacks.  On the brighter side, Lebanon’s economy showed a modest recuperation in most of its economic sectors as the security situation remained stable.  The tourism sector rallied, mainly owing to the low base reached in 2013 and 2014.  The monetary sector remained sturdy, while the external and fiscal sectors weakened.

When it comes to Jordan, and even as the surrounding region fell in to more political disruption and violence, the Hashemite kingdom not only succeeded in shielding itself from the drawbacks of such an environment, but also managed to push forward and achieve significant progress in various economic sectors, epitomized in the successful completion of the 2-year aid agreement with the International Monetary Fund (IMF).  (BLOMINVEST 25.08)

Back to Table of Contents

11.2  JORDAN: Despite Regional Unrest, Jordanian Economy Shines Bright

Concerning Jordan, BLOMINVEST observed that the second quarter of 2015 proved to be a further step forward for the Hashemite Kingdom’s economy, as most economic sectors improved.  However, the tourism sector and the local bourse suffered the brunt of the force of local and regional difficulties.  Regarding the influx of Syrian refugees, data from the United Nations’ High Commissioner for Refugees (UNHCR) reports that, as of 17 June, the number of Syrian refugees in the country has roughly remained stable over the past three months, with the total number standing at 629,128.  Unfortunately, the funding necessary to provide the required care for refugees in Jordan is still well below expectations, with only $267.80M of the estimated required budget of $1,191.32M so far received.

The most note-worthy development in the Kingdom’s economy was the conclusion of the seventh and final review of the International Monetary Fund (IMF).  Jordan’s overall economic performance throughout the year satisfied pre-arranged standards of performance and granted Jordan access to the remaining $400M of the $2B stand-by arrangement.

On the economic front, the International Monetary Fund (IMF) anticipated growth rate to reach 3.5% in 2014, up from 2.9% in 2013, while the inflation rate for 2014 stood at 3.0%, with the largest increases in the CPI observed in the clothing and footwear index, followed by real estate and housing.

Tourism in Jordan continued to experience poor results in 2015.  According to the Ernst & Young hotel occupancy report, the capital Amman has experienced a 10% year-on-year (y-o-y) decrease in hotel occupancy rates by May 2015 to 55%.  Over the same period, average room rates and room yields in Amman experienced respective declines of 5.6% and 20.2% to $155 and $86.  These drops in performance can be mainly attributed to the regional terrorism threat that has escalated since the start of the year.  Similarly, travel receipts dwindled by 14.8% y-o-y to $1.24B by April 2015.

In contrast, Jordan’s performance in trade revealed notable improvements, as the deficit narrowed by 15.66% y-o-y by end-April 2015 to $4,082.18M.  This improvement can be directly traced to the 14.34% decline in total imports to $6,557.02M.  This decrease can be linked to significant drops in the value of imported petroleum crude, gas and diesel oil and fuel oil by 29.15%, 57.14% and 55.79% to respective values of $539.34M, $356.73M and $62.84M due to lower international oil prices and supply cuts from Egypt, which were partially offset by increases in imports from Russia, India and the UAE.  It is also worth mentioning that iron and steel witnessed an annual 22.66% slow-down in imports to $197.94M by May 2015, while nuclear reactors, machinery and mechanical appliances witnessed an 18.44% increase to $646.11M over the same period.  On the exports side, the 12.08% annual decline during the first five months of 2015 to $2,474.84M is largely linked to the respective declines of pharmaceutical products, mineral/chemical fertilizers and potassium crude by 19.68%, 45% and 14.62% y-o-y to respective amounts of $168.72M, $99.83M and $190.29M.

Regarding the fiscal balance, the Hashemite Kingdom succeeded in recording a fiscal surplus (including foreign grants) equivalent to $113.47M by end-March 2015, compared to a fiscal deficit of $420.34M over the same period in 2014.  Disregarding foreign grants of $294.62M, Jordan’s fiscal deficit for the first quarter of 2015 tallied $181.15M, while this figure stood at $712.08M by end-March 2014.  Net outstanding public debt by March 2015 edged up by 1.42% y-o-y to equal $30,018.38M, and stood at 76.8% of GDP, compared to 80.8% during the same period last year. In details, net outstanding public debt increased 2.86% y-o-y to $18,551.52M (47.5% of GDP), while outstanding external public debt inched down by 0.83% y-o-y to $11,466.86M (29.3% of GDP) by March 2015.  In terms of public revenues, Jordan witnessed a 14.87% annual increase to $2,403.07M, as tax revenues rose 7.94% to $1,456.85M, equivalent to 69.10% of domestic revenues.

Developments in the Kingdom’s banking sector were summarized by a 3.93% year-to-date (y-t-d) uptick in money supply M2 to $43,761.17M by March 2015, following the increase of both domestic deposits and currency in circulation by 4.39% and 0.85% to $38,236.46M and $5,524.71M, respectively.  Credit facilities provided by Jordanian banks rose by $896.11M since the start of the year to attain $28,651.39M by end-Q1/15.  Net domestic assets at the country’s licensed banks gained 4.23% y-t-d to $40,618.66M, while net foreign assets at the same banks experienced a slight 1.10% slip to $2,922.19M during the same period.  Meanwhile, foreign currency reserves at the Central Bank of Jordan experienced a $421M decrease by end-March to stand at $13,657.80M, thereby covering roughly 7.2 months of Jordan’s imports.

In addition, the Central Bank of Jordan reduced each of the re-discount rate and the overnight, weekly and monthly repurchase agreements rates by 25 basis points (bps) to 4%, 3.75%, 2.75% and 2.75%, respectively.  The overnight deposit window rate experienced a more pronounced decrease of 100 bps to 1.75%.

A surge in prices of listed securities following the unveiling of the “Jordan 2025” development blueprint between 12 – 16 April was not enough to maintain positive investor sentiment on the Amman Stock Exchange.  The Jordanian Bourse witnessed the resultant gains erased by the end of the quarter, closing on 30 June 30 at 2,116 points.  This value is equivalent to a 2.26% y-t-d decline.  During the first half of 2015, 1.29B shares were traded on the exchange for a combined value of $1.88B, compared to 1.32B shares worth $1.90B over the same period in 2014.  Meanwhile, the total number of transactions witnessed a 15.44% y-o-y decline by June 2015, totaling 447,170 transactions.  By end-June 2015, the Index’s market capitalization stood at $25.48B, compared to $27B at 30 June 2014.  (BLOMINVEST 20.08)

Back to Table of Contents

11.3  SAUDI ARABIA: Substantial Buffers Against Low Oil Prices

BLOMINVEST observed that the newly appointed king Salman reshuffled several power positions in the Kingdom.  After Prince Muqrin relinquished the title of crown prince, Muhammad Bin Nayef was appointed to the role.  As for the second position in line to the throne, it was designated for Prince Mohammed Bin Salman, the current king’s son who is also assuming the functions of defense minister, secretary general of the royal court and head of the Council for Development and Economic Affairs.  The foreign minister Prince Saud al-Faisal was also replaced by Adel Al Jubeir, Saudi Arabia’s ambassador to the US.

On the economic front, Saudi Arabia’s Purchasing Managers’ Index (PMI), reflecting the performance of the non-oil private sector, slumped to its lowest level in six years during the second quarter of 2015 (Q2/15).  The gauge went from an average of 58.8 in Q1/15 to an average of 57.13 in Q2/15 as the kingdom paddles through a period of low oil prices and through a period of political tension by opposing Shiite Houthi rebels in Yemen.  The lower PMI readings still point to an expansion in the Saudi non-oil private sector, but simply at a slower rate.

Inflation remained subdued but edged up from 2.00% in April to 2.1% in May and then to 2.2% in June.  The prices of “food and beverages”, holding the largest weight in the consumer price index of 21.7%, grew by a yearly 2.2% in June.  Moreover, rental inflation has accelerated over the first few months of 2015 after dipping to 3.2% in March, the lowest in 2015, rental inflation edged up again to reach 4.0% in June.

A recent report by Jones Lang La Salle (JLL) confirms the notion that rents are on the up in the kingdom, growing between 10 to 15% per annum.  Renting property has become a more appealing option than purchasing property since borrowers are only allowed to borrow 70% of the property’s sale price which entails a large down-payment.  Borrowers are also hesitant to commit to a housing loan since they might face higher repayment costs when and if the US Federal Reserve increases interest rates.  According to JLL, since the introduction of the loan-to-value restriction back in November 2014, the volume of villa and apartment transactions shrunk by around 70% and 33%, respectively.

Non-oil exports and imports both decreased in June.  Non­-oil exports declined by a yearly 21% to $4.1B while imports fell by a yearly 10% to $13.82B.  Due to declining oil prices, exports of products of the chemical or allied industries recorded a double-digit annual drop of 28% to $1.32B while exports of plastic, rubber and related items also slumped by 22% to $1.31B in June.  The downward trend was also seen with imports of machines, equipment and electrical appliances dropping by a yearly 4% to $3.9B in June, with imports of transport equipment and parts falling by 1% to $2.26B and with imports of regular metals decreasing by 35% to $1.35B.  The top three export destinations were the UAE, China, Singapore, India and Egypt.  The top three import destinations were China, the USA, Germany, South Korea and Japan.

Tadawul Q2/15

Saudi Arabia consistently upped its oil output throughout Q2/15.  After the huge leap in Saudi Arabian oil during the month of March, crude oil production rose again to 10,308 million barrels per day (mbpd) in April, to 10,333 mbpd in May and to 10,564 mbpd in June.  The kingdom is still upping its production in order to preserve market share in a context of low oil prices and has to tend to local demand which reached an all-time high of 2.98 mbpd in June.  According to the Saudi Arabian Monetary Agency (SAMA), the average price of a barrel of Saudi Arabian oil (Arab Light) fell from $62.6 in May to $60.9 in June.

With the absence of regular data regarding government spending and government revenues, bank claims on the public sector serve as an indicator of fiscal policy.  According to central bank figures, bank claims on the public sector stopped posting annual double-digit growths since September 2014, after June’s slump in oil prices.  Lower oil prices as well as lower non-oil exports continued to reflect on the central bank’s reserve assets.  Reserve assets at the central bank declined by an annual 9.5% and a quarterly 3.7% in Q2/15 to reach $672.11B.  In fact, the kingdom is tapping into these reserves in order to continue to fund the spending on wages, projects and the intervention in Yemen.  The kingdom used up $65B of reserve assets since oil prices started to fall.

Despite the opening of the bourse to foreigners in June, the TADAWUL All Share Index (TASI) closed at a level of 9,086.89 points in the first half of 2015 (H1/15), down by 4.48% y-o-y and up by 9.04% y-t-d.  The total value of shares reached $278.33B, down by 7.08% y-o-y while the number of traded shares reached 38,783.72 billion shares compared to 38,433.90 billion shares in the same period last year.  (BLOMINVEST 25.08)

Back to Table of Contents

11.4  SAUDI ARABIA:  Saudi Arabia Breaks Gulf Silence on Peg That’s Seen Here to Stay

Bloomberg reported that Saudi Arabia’s pledge to maintain its dollar currency peg, amid oil’s slump to a six-year low, is likely to be followed by its smaller Gulf neighbors.  Ahmed Alkholifey, the Saudi central bank’s deputy governor for research and international affairs, told Al Arabiya television that authorities would maintain the peg at 3.75 riyals per dollar.  One-year forward contracts for the riyal which have surged this month on speculation it may be devalued fell after his remarks.

Investors have increased bets that the six Gulf Cooperation Council countries would be next to abandon their pegs after China devalued the yuan and Kazakhstan allowed its currency to float.  The trade’s premise?  The dollar is appreciating, the region has about 30% of the world’s proven crude reserves and its governments depend on oil revenue to fund much of their spending.

That argument understates Gulf countries’ currency reserves and investment inflows that allow them to protect the pegs when oil prices are falling, according to analysts and economists including Farouk Soussa at Citigroup.  Gulf nations are also large importers of food, consumer goods and equipment, making a currency devaluation unattractive, he said.  “I don’t see a policy desire to move away from the dollar,” said Soussa, the bank’s London-based chief Middle East economist.  Abandoning the peg would boost inflation, “which is not a policy objective that countries such as Bahrain and Oman want to introduce,” he said.

Expectation that currency pegs may be abandoned gained momentum after Kazakhstan Prime Minister Karim Massimov said last week that most oil-producing countries, including Saudi Arabia and the United Arab Emirates, would move away from their currency pegs as the world enters a “new era” of low oil prices. Kazakhstan had scrapped a trading band for its currency, sending the tenge to a record low against the dollar.

One-year forward contracts for the Saudi riyal jumped to their highest in over a decade on 24 August, signaling more bets that the currency would weaken.  Contracts for the UAE dirham have also surged this month to the highest level since 2009.

The trades coincided with a further slump in oil prices and less favorable economic forecasts for countries in the region.  The International Monetary Fund said growth in Saudi Arabia is set to slow this year and next as the government reduces spending to compensate for lower oil prices.  The kingdom’s budget deficit will reach 20% of gross domestic product, it said.

In the UAE, where official data show the oil and gas sector contributed 34% of GDP last year, lower oil prices will lead to its first budget deficit since 2009, according to the IMF.

A prolonged period of low oil prices, a rapid decline in foreign exchange reserves combined with rising debt would cause countries to adjust their pegs, Raza Agha, chief Middle East and Africa economist at VTB Capital Plc in London, said.  Rather than abandoning them entirely, the likely response will be a “repeg at a higher level,” he said.  “The peg should be one of the last things to go, but policy opacity in such countries is very high,” Agha said.  “Hence, the most credible thing to say is the peg stays in place, until it doesn’t.”

Both Saudi Arabia and the UAE have sufficient assets to enable them to cope with deficits without abandoning their currency pegs, said Robert Burgess, Deutsche Bank AG’s chief economist for emerging markets in Europe, the Middle East and Africa.

Saudi Arabia had net foreign assets of $664 billion at the end of June, according to data from the central bank.  Abu Dhabi Investment Authority, the UAE’s sovereign fund, held $773 billion in assets at the end of June, according to estimates from the Las Vegas-based Sovereign Wealth Fund Institute.  Kuwait and Qatar are even better off due to their stronger fiscal positions, making them the region’s “least at risk,” Burgess said.  “Kuwait, Qatar, the UAE and Saudi Arabia are not under any imminent pressure to ditch their pegs,” he said.

The countries have history on their side.  Amid the turmoil of the 2008 global financial crisis, when the price of oil plunged to $37 from $97, most Gulf nations stood by the pegs.  Kuwait had abandoned its dollar peg in May 2007.

Abandoning them, or re-pegging at a lower value, would undermine investor confidence, leading to capital outflows or weighing on foreign direct investment, Khatija Haque, head of Middle East and North Africa research at Emirates NBD PJSC, said in a report.  Moving to a floating exchange rate may add to volatility and undermine trade and investment.  “Even if they are adjusted rather than abandoned, this would in our view add uncertainty about future adjustments, and ultimately make the pegs more vulnerable to speculative attacks,” Haque said.  “Devaluation of the exchange rate would also push up inflation across the region, eroding any short term boost to export competitiveness.”

Oman and Bahrain are more at risk than their wealthier neighbors, with less oil to sell, thinner fiscal buffers and in Bahrain’s case, more debt, analysts said.  One-year forward contracts for the Omani rial reached their highest level in almost 14 years this month.  Bahrain’s fiscal deficit may widen to 11.6% of GDP this year, from 3.6% in 2014, narrowing to 9.2% next year, according to HSBC.  Oman expects to post a budget deficit of 8% of GDP this year, based on an oil price of $75 a barrel.  Bahrain and Oman are “both running large budget deficits and neither of them has very large stocks of assets, so for them, the pressures are more imminent,” said Burgess at Deutsche Bank.

In the long-term all Gulf countries need higher oil prices, Burgess added. If oil remains at its current level, concern about the currency pegs across the Gulf is “very justified.”  The Saudi authorities “have to say” they’re committed to the peg, Gary Greenberg, head of emerging markets for Hermes Investment Management, said in an interview with Bloomberg TV.  “If the oil price stays down here for a couple of years, I think it will go,” he said.  (Bloomberg 27.08)

Back to Table of Contents

11.5  EGYPT:  Russia to Build Egyptian Nuclear Reactor

Al Monitor posted on 4 September that the Egyptian government is about to sign a contract with Russia’s Rosatom State Atomic Energy Corporation, which specializes in the manufacturing of nuclear plants, to build the Dabaa nuclear power plant in Matrouh governorate.

The Matrouh governor, Maj. Gen. Alaa Abu Zeid, said on 26 August that Egyptian President Abdel Fattah al-Sisi will lay the cornerstone of the project in October and Russia will take on the execution of the project.  On the same day, Cairo announced that Rosatom made the best offer from a financial, technical and political perspective, beating offers from other countries, including Japan, France, South Korea and China.

During Russian President Vladimir Putin’s visit to Cairo on 10 February, Sisi and Putin signed a memorandum of understanding to build a nuclear power plant in Dabaa, northern Egypt.  Sisi was keen to meet personally with the head of Rosatom, Sergey Kiriyenko, during his visit to Moscow on 26 August to study financial and technical matters that have yet to be resolved before carrying out the contracts, according to the Egyptian president.

According to Egyptian media reports, the Russian offer distinguished itself from the others in seven areas.  Most important, the Russian company will produce 100% of the power plant’s components and will not rely on the import of plant components from other countries, some of which may have disputes with Egypt, thus endangering the project.  Moreover, there are no political conditions on Egypt for the establishment of the nuclear plant.  The Russian company will also establish an information center to promote popular acceptance of nuclear energy.  Egypt would have to pay off the nuclear power plant after it is completed and is in operation.  In addition, Russian factories will be established in Egypt to manufacture nuclear plant components locally and transfer Russian expertise in this field to the Egyptians.  The Russian offer includes establishing a station with four units of 1,200 MW capacity each, at a cost of more than $10 billion.

Since February, Russian energy experts have made several visits to the Dabaa site that was chosen by Egypt as the best place to establish a nuclear power plant — a project that has been in the works since the era of President Anwar Sadat (1970-1981).  The project had been stalled during the presidency of Gamal Abdel Nasser (1956-1970).

In regard to the reason for the project having been stalled since its announcement in 1955, Ali al-Saidi, the former minister of electricity and one of the scientists who participated in building the Anshas nuclear research reactor in 1960, told Al-Monitor, “At first, the nuclear project was stopped because of the 1967 war [Six-Day Way], and [the project] was to be implemented with the Soviet Union at the time. …  The project was bid upon in the 1970s in a competition between US companies, after US President Richard Nixon promised to provide nuclear plants to both Egypt and Israel.  Then a US law was passed obliging countries acquiring nuclear plant technologies to be subject to inspection standards from the country of origin, which is America, so the project stopped.”

Saidi said, “In the 1980s, there was competition between US and French companies.  Then came the Chernobyl incident, giving nuclear projects a bad name for the Egyptian public.”  He added that Egyptian decision-makers moved away from the project in the 1990s because of the discovery of gas in Egypt.  “The gas was sufficient to cover the country’s needs for a while.  Then in 2006, the idea emerged again and “Egypt started its procedures with the International Atomic Energy Agency [IAEA] to build a nuclear plant in Dabaa,” he said.

The Dabaa project is one of the most significant Egyptian national projects that was stalled again under President Hosni Mubarak (1981-2011).  There was widespread controversy in the popular and political circles about whether the location was suitable for the project.  Egyptian businessmen asked the government to move it to another location so that Dabaa could be used to develop tourism projects. Also, the area’s people held several protests to express their fear of harmful environmental effects.

In 2009, the Egyptian government resorted to an Australian company to review the appropriateness of the Dabaa nuclear reactor.  The results of the study prepared by Australian company WorleyParsons were presented to the IAEA, which certified that Dabaa was a suitable location based on meteorological conditions, earthquake risks, groundwater movement, sea currents and tides, as well as demographic studies.  But the government did not start implementing the project until the time of the January 25 Revolution.

Saidi expects the Egyptian nuclear power plant to enter service in 2022, for a period between six and eight years.  He stressed that Egypt’s nuclear project in Dabaa currently being implemented in cooperation with Russia has a political dimension as well as a technical dimension, because it is considered an extension of the Egyptian-Russian alliance in Nasser’s era, when Russia had a long history in supporting Egypt.  Russia established the Anshas nuclear research reactor in 1961 in al-Sharqia governorate and contributed to the establishment of the High Dam in the Aswan governorate in southern Egypt.

For his part, strategic and military expert Maj. Gen. Hossam Sweilam said that choosing a Russian company to complete the Egyptian nuclear plant in Dabaa has no political significance.  He told Al-Monitor, “The better offer was chosen. Russia will implement [the project] at the lowest price and with the least burden on Egypt. … Six nuclear reactors will be set up in the area.  They will allow Egypt to overcome the power outage crisis and help support development projects in the West Delta in Toshka for the cultivation of 540,000 acres, and in east Sinai to reclaim new land.”

On 16 April 2011, Egyptian scholar Farouk El-Baz had expressed in a press statement his concerns of the risks of building an Egyptian nuclear reactor.  In this regard Sweilam said, “The Chernobyl explosion did not prevent the rest of the world from using nuclear energy for peaceful purposes.  It is used by the United States, Russia and Korea.  Why should Egypt be afraid?”  Fulfilling the dream of an Egyptian nuclear project that has been stalled for more than 60 years is no longer a luxury.  This project is crucial amid the repeated energy crises that threaten development projects and amid the continuous power outages.  (Al Monitor 04.9)

Back to Table of Contents

11.6  TUNISIA:  IMF Mission Concludes the 2015 Article IV Discussions

The IMF staff reached staff-level understandings with the Tunisian authorities on the sixth review under the SBA.  These understandings are subject to approval by IMF management and the Executive Board, which is tentatively scheduled to consider the review in late September.  Upon completion of this review, SDR 214.87 (about $303.08 million) will be made available to Tunisia.  The mission welcomes the authorities’ continued commitment to implementing their national economic program following the successful conclusion of their political transition, and looks forward to continuing the close cooperation to achieve the program objectives of macroeconomic stability and stronger and more inclusive growth.

“In recent years, Tunisia’s economy has been resilient in a period marked by a difficult international economic environment, spillovers from regional conflicts, increased security risks, and high social tensions.

“However, after reaching 2.4% in 2014, growth momentum has waned.  Growth is projected to slow to 1% for 2015 as the repercussions of the tragic Bardo and Sousse attacks and persistent social tensions – as shown by work stoppages and strikes – dampened the benefits from the post-transition confidence boost, lower global oil prices and the Eurozone recovery.  External imbalances are expected to remain high, with the current account deficit improving marginally to 8.5% of GDP in 2015 while foreign exchange reserves remained at an appropriate level of 4-months import coverage, which is necessary to strengthen external buffers and reduce vulnerabilities.  Inflationary pressures are expected to remain contained, helped by lower energy and food prices, and a prudent monetary policy.

“In response to the changes in the domestic and international environment, the authorities’ program has been adjusted to respond to the current challenges, and overall performance under the Fund-supported program has been satisfactory in view of those challenges.  All end-March 2015 quantitative performance criteria have been met except for the indicative floor on social spending.  Progress on structural reforms has been slow, but picked up recently on the banking sector front.

“The mission welcomed the modest loosening of the fiscal stance in 2015 to accommodate the short-term economic fallout of the recent economic slowdown, including through increased security expenditures and transfers to SMEs.  The mission noted the growing public sector wage bill and called for the need to contain it to make room for priority and productive capital spending, which had reached record lows.

“The recent reduction in energy subsidies, resulting from the decline in global oil prices, is a welcome development.  An automatic fuel price formula should be designed urgently to allow for a much needed decline in domestic retail fuel prices, which are currently above international levels for some products.  It will also be important for the government to move quickly in adopting the tax reform, whose design followed a long process of consensus building during the national tax consultations, and aims at promoting greater transparency, efficiency and equity.

“A prudent monetary stance would continue containing inflationary pressures while greater exchange rate flexibility – including through continuing to limit foreign exchange interventions to smooth large fluctuations – will contribute to reducing external imbalances and strengthening reserve buffers.

“The implementation of the authorities’ broad reform agenda is progressing.  However, at 15.2% unemployment, there is an urgent need to push ahead with structural reforms to boost job creation and help meet the aspirations of the Tunisian population for a more inclusive society.

“The reform of the banking sector is of particular significance.  Steps taken to strengthen public banks, such as the initiation of the recapitalization of public banks and changes in their governance framework, are important.  The adoption of a new banking law and further strengthening of the supervisory and regulatory framework will be needed to construct a modern banking sector and facilitate financial sector intermediation.

“Creating a level playing field for investors will require adopting and implementing key legislation, such as bankruptcy and competition laws.  Advances in strengthening the social safety net by better identifying and targeting the vulnerable population is also welcome.”

The two-year SBA in the amount of SDR 1.146 billion (about $1.68 billion, 400% of Tunisia’s quota) was approved by the Executive Board on 7 June 2013.  The fifth review under the SBA was approved by the Board on 12 December 2014, bringing total disbursements to date to SDR 787.87 million or about $1.15 billion.  A 7 month extension of Tunisia’s SBA to 31 December 2015 was approved in May 2015.

The mission visited Tunis in June and July 2015 to carry out discussions with the Tunisian authorities on the Article IV consultation and the sixth review of their economic and financial program supported by a Stand-By Arrangement (SBA).  Discussions continued in Washington.  The mission thanks the authorities and all those with whom they met for their warm welcome, and frank and fruitful discussions.  (IMF 26.08)

Back to Table of Contents

11.7  TURKEY:  What’s the Greatest Risk to Turkey’s Economy?

Barin Kayaoglu posted in Al Monitor of 27 August that any one of the following problems would ring alarm bells for an emerging market: a slowing economy, rising inflation, distrustful citizens exchanging local currency deposits for dollars whenever possible, a rising tide of violence scaring away foreign tourists and hurting hard currency reserves and concerned foreign investors eyeing the exit because of a bearish stock exchange and a possible hike in interest rates by the US Federal Reserve.

Regional and domestic volatility is threatening Turkey’s finances while the country’s political and financial uncertainties worry global investors.

Not content with just one, Turkey is facing all of those headaches and more.

The country’s “peace process” with the militant Kurdistan Workers Party is all but dead.  The war in Syria and the Islamic State (IS) continue to threaten civilians in Turkey.

In this context, because no party secured a majority in the parliament after the 7 June elections and no coalition has been formed, President Erdogan has called for early elections to be held on 1 November.  In fact, Erdogan buried the peace process and launched attacks against Kurdish militants and IS to rally the voters around the flag and lure them back to his Justice and Development Party (AKP).  Since 7 June, perfectly aware that he would not be able to assert his authority without an AKP majority, Erdogan saw to it that Prime Minister Ahmet Davutoglu will not form a coalition with another party.

The result has not been pleasant for Turkey’s financial and economic outlook.

The Turkish currency, which had an average value of 1.90 to the dollar in 2013, is likely to decline further and surpass the three-lira threshold soon.  “Never mind three, it could even be four to the dollar,” wrote Mert Yildiz, a senior economist at the prestigious economic and financial analysis firm Roubini Global Economics.  According to one report, because the AKP has used dollar figures to boast of its role in the “Turkish economic miracle,” the bleeding in the lira means Turkey could lose its place in the G-20, the group representing the world’s top 20 economies.

And that’s not even the worst of it.

Whereas a depreciated currency benefits many countries, such is not the case for Turkey. Philippe Dauba-Pantanacce, a senior economist covering Turkey and the Middle East-North Africa region at the London-based Standard Chartered Bank, told Al-Monitor, “In balance, Turkey suffers from a lower [lira].  There is the collapse of consumer confidence or the high share of imports for each unit exported.  Even with the lower oil prices — which should be an undisputable benefit to Turkey — the currency depreciation offsets that benefit to a certain extent.  Furthermore, companies with loans in [Forex] will have to mobilize more of their cash to address the mismatch.”

Yildiz is not optimistic, either. He told Al-Monitor, “If the [snap] elections do not produce a result different from the June election, [foreign investors] would leave.  However,” he warns, “it is not clear how much of that exit would be due to political uncertainties and how much of it because the Fed raises interest rates.”  At any rate, Yildiz points out that other threats facing Turkey are a stagnant economy and a relative rise in inflation.

As Turkey found out in the past, “stagflation” is a bit of a death trap: Any governmental effort to boost economic activity — especially increasing public spending — fuels inflation.  Yet, attempts to curb inflation usually slow down the economy.

Sebnem Kalemli-Ozcan, the Neil Moskowitz Endowed Professor of Economics at the University of Maryland, wrapped it all up for Al-Monitor as follows: “At a time when Turkey’s growth model is based on borrowing financed by foreigners, both the Fed interest hike and political uncertainties could create a terrible effect.”  She warned, “Remember the Asian financial crises [of 1997] and the 2001 crisis in Turkey, when the economic situation deteriorated within days as a result of heightened political risks and existing vulnerabilities.”

Still, all may not be lost for Turkey.  For the past few days, reports have come out that the Fed may not increase interest rates in September in the face of the ongoing tumult in various global stock exchanges.  If the Fed does not entice global investors to park their money in the United States, the flight of foreign capital may not be as serious a problem for Turkey after all.

But if the worst does come to pass and it creates an economic crisis, it would be tragically ironic for Erdogan.  It was the worst financial and economic crisis in Turkey’s history in 2001 – 2002 that brought Erdogan and his AKP to power.  From 2002 to 2014, Erdogan and the AKP consistently won elections on account of their stewardship of Turkey’s economy.  Soon, a similar economic-political crisis — for which the Turkish president has no one to blame but himself — could lead to his undoing.  (Al Monitor 27.08)

Back to Table of Contents

11.8  TURKEY: Fitch Says Extended Electoral Cycle Prolongs Uncertainty

Fitch Ratings announced on 28 August that the new elections in Turkey (‘BBB-‘/Stable) may prolong rather than end the political uncertainty that threatens to exacerbate Turkey’s domestic and external policy challenges.

President Erdogan asked Prime Minister Davutoglu to form an interim government before fresh parliamentary elections, probably on 1 November.  This follows June’s inconclusive elections, when the Justice and Development Party (AKP) lost its majority while remaining the largest party by some margin, and the failure to reach a coalition agreement.

The uncertainty has coincided with the breakdown of the peace process with the Kurdistan Workers’ Party (PKK) and the start of military operations in Syria.  This could be negative for the sovereign risk profile in the medium term, for example, if there were an escalation of violence within Turkey, or if the country is drawn into a protracted regional conflict.

Political risk in Turkey has long weighed on the country’s sovereign rating with concerns about discretionary policy making, government effectiveness and policy predictability.  The prolonged electoral process follows a heavy electoral calendar in 2013-2015, and various political shocks, such as the anti-government protests in the summer of 2013 and the fallout from corruption investigations later that year, that have helped undermine economic performance.

Opinion polls predict that new elections will deliver a similar result to June.  This suggests that the political outcome may not be conducive to reforms that could gradually revitalize economic growth and promote a durable rebalancing that would reduce the size and improve the quality of the funding of Turkey’s current account deficit.

The previous AKP government had formulated a reform program, but an extended electoral cycle may reduce opportunities for, and political commitment to, its implementation. The recent sell-off in emerging markets currencies, which saw the lira hit an all-time low, highlights Turkey’s continuing exposure to shifts in investor sentiment, reflecting the role of portfolio and short-term capital inflows in deficit financing.

Shortcomings in the monetary policy framework are a long-standing sign of Turkey’s relatively weak economic policy coherence and credibility.  The Central Bank of the Republic of Turkey (CBRT) left interest rates unchanged on 18 August, and published its “roadmap” for the period of global monetary policy normalization.  This includes narrowing the interest rate corridor, which could facilitate monetary tightening, and measures that aim to provide FX liquidity to banks while limiting the impact on reserves.  Nevertheless, the roadmap is lacking in detail, and its release offered little support to the lira.

More positively, we do not believe that a political impasse presents an immediate risk to the public finances, which have been kept on a close rein.  Pressure for a moderately looser fiscal stance may increase if the economy slows further, but political commitment to fiscal restraint appears broad-based.  (Fitch 28.08)

Back to Table of Contents

11.9  CYPRUS:  Economics Research Centre Revises 2015 Growth Forecast Upwards to 1.1%

The Economics Research Centre of the University of Cyprus revised upward its economic forecast for the current year to a 1.1% growth rate from a previous 0.9% contraction issued in April.

The economy will also grow 1.1% in 2016, the center said in a statement on its website.  The ERC also revised its forecast for inflation this year to -1.7% from a -0.9% in April, reflecting lower energy prices and weaker domestic demand which led to a drop in the general price level in the first six months of the year.

The main drivers of the projected recovery include the increase in economic output, a drop in unemployment in the first quarter of the year, and the return of economic confidence to pre-crisis levels, the ERC said.  Also, the expansion of output in the European Union in the first three months of 2015 makes the external environment for Cyprus more favorable.

In addition, lower oil prices, combined with a weaker euro versus the US dollar and low inflation in the EU, strengthen incomes and external demand while the depreciation of the euro towards the British pound is expected to offer tourism a boost, the ERC said.  “The slowdown of the Russian ruble depreciation against the euro in the second quarter has created less unfavorable conditions for foreign demand in Cyprus.  The recent reductions in domestic lending interest rates amid conditions of weak demand and elevated unemployment are found to facilitate economic recovery”.

On the other hand, the high level of non-performing loans in the Cypriot banking system threatens financial stability and subsequently the outlook of the economic, while an ineffective implementation of the foreclosure and insolvency legislation and “and bottlenecks in the introduction of legislation for the sale of loans could delay the resumption of healthy credit conditions and economic growth,” the ERC said.  Lack of progress in structural reforms agreed with international lenders in Cyprus’s adjustment program, including the overhaul of public administration, the introduction of the national health system and privatizations could also threaten growth.

In addition, external factors such as “the recent economic developments in Greece which have worsened the outlook for the Greek economy could have a direct negative impact on the domestic economy, but could also cause adverse effects on Cyprus’s sovereign bond yields through heightened market uncertainty,” the ERC said.  “The recession in the Russian economy and ruble depreciation against the euro are likely to affect the outlook especially for 2015”.  ( 04.08)

Back to Table of Contents


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