Fortnightly, April 22nd 2015

Fortnightly, April 22nd 2015

April 22, 2015





1.1  Prime Minister Receives 14 Day Extension to Form Coalition
1.2  In Coalition Talks, Netanyahu Insists on Economic Reforms
1.3  Israel’s Gas Production Growth Offset Gaza Campaign


2.1  Avid to pay $60 Million for Israel’s Orad Hi-Tec Systems
2.2  Apple Buys Camera-Technology Company LinX
2.3  EarlySense & Mitsui Sign Strategic Partnership Agreement
2.4  Matomy Invests in Avenlo, a Leader in Data-Driven Email Marketing
2.5  BlackBerry Acquiring WatchDox to Bolster Mobile Content Security
2.6  InfinityAR Raises $5 Million
2.7  GamEffective Raises $3 Million


3.1  Dairy Queen System Announces Expansion into Jordan
3.2  Edelman to Buy Dubai PR Agency
3.3  UAE Steel Industry Calls For Protection


4.1  Tafileh Wind Farm to Begin Initial Operations by End of April


5.1  First Quarter Tourist Spending Recovered by a Yearly 11%
5.2  Lebanese Car Sales Showed No Improvement in First Quarter
5.3  French Weapons Arrive in Lebanon in $3 Billion Saudi Funded Deal
5.4  IMF Expects 3.8% GDP Growth in Jordan
5.5  Jordan’s Foreign Trade Rises By 7.5% in 2014
5.6  Jordan Rejects Draft Oil Exploration Deal with Korean Company
5.7  Remittances from Jordanian Expatriates Rise by 50% in 10 years
5.8  $50 million from the World Bank to Jordan

♦♦Arabian Gulf

5.9  Kuwait Records Dramatic Fall In Budget Surplus
5.10  Saudi & US Firms Buy $201 Million Stake In Canadian Grain Handler

♦♦North Africa

5.11  Egypt’s January Trade Deficit Down by 20.7% Year-On-Year
5.12  Number of Tourists Visiting Egypt Drops 5.5 % in February 2015
5.13  World Bank Approves $400 Million for Two Egyptian Social Schemes
5.14  Egypt Sees Continuous Decline in Number of Mobile Users Last January
5.15  Tunisia Says it Needs $1.3 Billion in Foreign Loans to Meet 2015 Budget
5.16  Morocco Reduces Euro’s Weighting in its Currency Basket
5.17  UAE Group to Invest $3 Billion in Medical Tourism in Morocco
5.18  Morocco Ranks 78 in the 2015 Global Information Technology Report


6.1  Turkey’s Current Account Gap Wider than Expected
6.2  Turkish Industry’s Gears Grinding to a Halt
6.3  Turkey’s Unemployment Rate Highest in 5 Years
6.4  Turkey Breaks Ground For First Nuclear Plant Amid Protests



7.1  Memorial Day for Fallen Soldiers and Victims of Terrorism
7.2  Israel’s Population Grows 2% During 2014 to 8.345 Million


7.3  Kuwait Set to Withdraw Paper Notes by October
7.4  Dubai to Introduce New Court for Tourists
7.5  Egypt’s Parliament Gets Record Number of Seats


8.1  Rosetta Genomics to Acquire PersonalizeDx
8.2  Leviticus Cardio Completes Finance Round
8.3  BioLight Announces First IOPtiMate System Sale in Hungary
8.4  Teva & Eagle NDA for Bendamustine Rapid Infusion Product Accepted
8.5  Compugen Obtains Rights for Biological Materials from US NIH
8.6  C-FDA Approves IND for D-Pharm’s Anti-Epileptic Drug, DP-VPA in China
8.7  One World Cannabis Tests Human Cells in Multiple Myeloma Study
8.8  Rosetta Receives Key U.S. Patent for Cancer of Origin Diagnostic Assay
8.9  cCAM Biotherapeutics Starts Trial of CM-24 for Cancer Immunotherapy
8.10  Syneron Candela’s PicoWay Picosecond Laser Receives FDA Clearance
8.11 EyeYon Medical Raises $3.6 Million from Leading VCs


9.1  Jinni Enters ADTECH Domain
9.2  Sapiens Reports Outstanding ALIS v6.5 Benchmark Results
9.3  SKA Africa Selects Mellanox to Build World’s Largest Radio Telescope


10.1  Israel’s CPI Increases by 0.3% in March
10.2  Israel Tax Revenues Rose 11% in March
10.3  Israeli Economy Sees Highest Growth During Fourth Quarter


11.1  QATAR: Qatar Looks to Economic & Corporate Growth
11.2  OMAN: Double-Edged Sword for Omani Industry
11.3  MOROCCO: IMF Article IV Consultations
11.4  MOROCCO: Ratings on Kingdom of Morocco Affirmed At ‘BBB-/A-3’
11.5  TURKEY: Economy Top Concern for Turks Ahead Of Election


1.1 Prime Minister Receives 14 Day Extension to Form Coalition

Prime Minister Benjamin Netanyahu met with President Reuven Rivlin on 19 April morning and asked him for a two-week extension to finalize the coalition negotiations. Netanyahu has yet to secure signed agreements with any of Likud’s potential coalition partners. Likud insiders said negotiations with the ruling party’s natural partners were in full swing and predicted that agreements with Kulanu, Shas and United Torah Judaism would be signed by the end of the week. Israel’s 34th government is likely to number 22 ministers, so as to accommodate the various parties’ demands, though the number of Likud ministers was expected to grow to 11 or 12.

It is estimated that Kulanu leader Moshe Kahlon will be named finance minister and given authority over the Interior Ministry’s Planning Administration. Kahlon’s No. 2, MK Yoav Galant, will be appointed construction minister and Kulanu MK Eli Alaluf will be named environmental protection minister. (Various 20.04)

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1.2 In Coalition Talks, Netanyahu Insists on Economic Reforms

Prime Minister Benjamin Netanyahu would like to usher in a spate of economic reforms after his new government is sworn in and has communicated this intent to all other would-be coalition partners. The Prime Minister would like to waive the value added tax on certain staple goods and pass two budget laws that would spell out the government’s expenditures for two years at a time. The first budget law would be passed immediately upon his government being sworn in, and it would apply to 2015-2016. The other would be in effect for the following two years, 2017-2018. Netanyahu would also like to impose a tax on foreign athletes playing for Israeli teams and to establish a new authority to regulate the oil industry.

Netanyahu wants to have one agency regulate gas and electricity and pass the national projects bill, whose basic contours have already been disseminated to the respective parties. The bill is designed to streamline large-scale housing and transportation-related projects across the country. (IH 09.04)

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1.3 Israel’s Gas Production Growth Offset Gaza Campaign

The Bank of Israel annual report said that the flow of natural gas from the Tamar offshore gas field contributed 0.3% to the GDP growth of Israel’s economy in 2014, and 0.8% in 2013, according to the Bank of Israel’s 2014 annual report. Thus the flow of gas offset the 0.3% reduction in growth caused by Operation Protective Edge in Gaza in July and August 2014. The report also said that Israel’s current account surplus was about $9 billion in 2014, representing 3% of GDP, and up from $6.9 billion in 2013 and $2.1 billion in 2012.

According to the Bank of Israel, growth in gas and oil exploration investment in 2014 reduced demand for domestic credit. “This growth, which included many investments in gas and oil exploration, was in part implemented by foreign companies. The participation of foreign companies in the investments in Israel reduced the demand for domestic credit (banking and non-banking) and the rate of its growth was significantly lower than in satellite countries. The Bank of Israel report also said, ‘The consolidation of the natural gas sector on local production is a positive structural change for the Israeli economy, which has contributed to “a high rate of productivity than the long-term average.” (BoI 12.04)

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2.1 Avid to pay $60 Million for Israel’s Orad Hi-Tec Systems

Burlington, Massachusetts’s Avid announced that it has signed a definitive agreement to acquire Orad Hi-Tec Systems, a Frankfurt stock exchange-listed public company with its headquarters in Kfar Saba, Israel, for €5.67 per share in an all-cash transaction. Orad is a leading provider of state-of-the-art 3D real-time graphics, video servers and related asset management solutions. The acquisition is consistent with Avid’s stated growth strategy and Avid believes it will continue to deliver on the company’s Avid Everywhere vision, by adding key content creation and media management solutions to the Avid MediaCentral Platform, the industry’s most open, innovative and comprehensive media platform.

Orad is a world-leading provider of real-time 3D broadcast graphic, video server, and media asset management solutions including news, channel branding, sports production and enhancement, elections and special events, virtual studios, and virtual advertisement. Orad’s compelling solutions streamline production workflow, enhance viewer experience, and improve production value. (Avid 12.04)

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2.2 Apple Buys Camera-Technology Company LinX

Apple has reportedly acquired Israel-based camera technology company LinX in a deal estimated at $20 million. LinX is a small company based in Israel and specializes in very small camera modules that are suitable for implementation in smartphone cameras. LinX multi-lens modules can be used for 2D and 3D capture and are capable of a range of special effects such as the ability to refocus an image after it has been captured, measurement of the true dimensions of objects and real time background replacement for video calls. The company also claims its modules “set new standards for image quality parameters such as low light performance, HDR, refocusing, color fidelity, shutter lag and more.

The acquisition would indicate that Apple is planning to do more of the imaging hardware development in-house. Currently the iPhone range uses image sensors supplied by Sony. An implementation of the LinX technology in future iPhone generations could not only mean improved image quality but also a whole new range of features. LinX is known for building “miniature multi-aperture cameras designed for mobile devices. The Israeli company also builds such cameras for tablets and ultra-books, so it is likely the technology will also be implanted in the iPad and Mac Books. (Various 16.04)

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2.3 EarlySense & Mitsui Sign Strategic Partnership Agreement

EarlySense signed a partnership agreement with Mitsui & Co., one of the largest general trading companies in Japan. Under the terms of the agreement, EarlySense will exclusively partner with Mitsui in the Japanese market to bring the EarlySense continuous, patient monitoring solution to hospitals as well as the wellness/sleep improvement product to homes. As part of the agreement, Mitsui has invested $5 million in EarlySense, bringing the F round financing to $25 million. Other investors that have contributed significantly to this round include Samsung, Pitango Venture Capital, Welch Allyn, JK&B, Proseed and Noaber.

Ramat Gan’s EarlySense is the market leader in contact-free and continuous monitoring solutions for hospitals and rehabilitation centers. In both the hospital and home product, a unique sensor is placed under the mattress and advanced analytics leverage big data capabilities to provide unique offerings. The company’s solutions monitor heart and respiratory rate, as well as movement and sleep. (EarlySense 14.04)

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2.4 Matomy Invests in Avenlo, a Leader in Data-Driven Email Marketing

Matomy Media Group announced a strategic investment in leading performance email marketing and ad targeting company, Toronto’s Maven Marketing Group, which operates under the name Avenlo. Matomy has acquired a controlling 70% interest in a newly formed company that has purchased the principal business activity and operations of Avenlo, with the option to acquire the remaining 30% of the company that is currently held by Avenlo over the next three years. Avenlo brings significant real-time, data-driven ad targeting and media buying capabilities to Matomy, and will materially strengthen Matomy’s existing email acquisition marketing solution. The Avenlo email optimization platform utilizes large sets of customer data and performance-driven algorithms to improve advertisers’ reach and return on investment for performance-driven email marketing campaigns. Avenlo’s innovative consumer profile creation process combines live user actions with behavioral and demographic information and sophisticated statistical modelling algorithms to predict the likelihood for a specified consumer action.

Matomy’s strategic investment in Avenlo follows two other recent international partnerships. Last October, Matomy entered into a strategic affiliation with leading global advertising company Publicis Groupe, and last November, the company acquired mobile programmatic advertising platform MobFox, which now forms the core of Matomy’s mobile performance advertising solution.

Tel Aviv’s Matomy Media Group is one of the world’s leading digital performance-based advertising companies. Working across Web, mobile and social media platforms, Matomy offers advertisers, media partners and publishers a range of opportunities to generate risk-free performance-based results, delivering quality, scale and speed by providing a single gateway to all digital media channels. (Matomy 15.04)

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2.5 BlackBerry Acquiring WatchDox to Bolster Mobile Content Security

Waterloo, Ontario’s BlackBerry, a global leader in mobile communications, entered into a definitive agreement to acquire WatchDox to further enhance BlackBerry’s best-in-class mobile security and give enterprises unmatched control over their files even after data leaves the corporate network. WatchDox’s technology will be offered as a value-added service that complements BlackBerry’s Enterprise Mobility Management (EMM) portfolio and will be available with BES12, a multi-OS EMM solution. Terms of the transaction were not disclosed. Completion of the transaction is subject to customary closing conditions.

Headquartered in Palo Alto, California, with research and development facilities in Petah Tikva, Israel, WatchDox serves leading organizations across a variety of industry sectors in which secure collaboration and mobility are essential, including government, healthcare, financial services, manufacturing, law and media. WatchDox security travels with shared files on both mobile and desktop devices to give organizations full visibility and control over how files are edited, copied, printed or forwarded. The solution also allows end users to revoke access or delete files remotely, enables secure mobile productivity for repositories both in the cloud and on premises, and gives administrators the ability to lock or remove access to files compromised in a data breach. The acquisition of WatchDox will form the basis of a new security-focused BlackBerry R&D center in Israel. (BlackBerry 21.04)

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2.6 InfinityAR Raises $5 Million

Infinity Augmented Reality (InfinityAR) signed an agreement for a Series B financing round, raising $5 million. The funds will be invested by Japanese SUN Corporation, a prominent player in the Japanese gaming and mobile market, a New Zealand private investment fund Singulariteam Fund II and US-based fund Platinum Partners Value Arbitrage Fund L.P. The round contemplates a company pre-money valuation of $6 million and will be directed towards further developing InfinityAR’s product and expanding into the Japanese market. SUN Corporation is major player in the Pachinko industry – a form of gaming extremely popular in Japan. The investors have invested $1.25 million through the purchase of convertible notes at an initial closing dated 6 April 2015. Upon the implementation of the increase in the Company’s authorized capital, the investors have agreed to invest the remaining $3.75 million and the notes will be converted to Preferred B Stock.

Petah Tikva’s InfinityAR vision is about creating a new digital environment that will enable people to interact with augmented content in their physical surrounding. InfinityAR’s engine can turn any device with two simple cameras into a powerful content augmentation platform. InfinityAR’s technology maps the 3D environment, in real time, and enables projecting augmented reality 3D scenes as if they were part of the real world. Furthermore, it enables the user to control augmented reality content using natural hand movements. InfinityAR’s technology usage of passive cameras together with smart and efficient computer vision algorithms, requires less computation and energy resources, while allowing the AR engine to work in any environment, indoor or out. (InfinityAR 06.04)

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2.7 GamEffective Raises $3 Million

Enterprise gamification developer GamEffective has raised $3 million in its series A round of financing. The investment round was led by Verint Systems, with the participation of existing investors including 2B Angels and Shaked Ventures, Lipman, Chomski and others. The company’s seed round was led by 2B Angels and Shaked Ventures. Based in Ramat HaSharon, GamEffective offers a comprehensive gamification platform to support sales, customer service, social collaboration and employee training and eLearning. The company is focused on the enterprise, and its platform uses game mechanics and game rules to grow employee engagement. GamEffective goes beyond badges or leaderboards and uses rich game narratives to give employees clear calls to action that encourage on the job mastery and leave lasting organizational change, reflecting corporate objectives and performance goals. (Globes 20.04)

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3.1 Dairy Queen System Announces Expansion into Jordan

The Dairy Queen system, global retail treat category leader and international (quick-service restaurant) QSR fan favorite, part of Berkshire Hathaway, announced that SKM Franchise Co., a subsidiary of El Rancho Group in Garland, Texas, has signed a multi-unit agreement to develop DQ Grill & Chill and DQ Treat locations throughout the country of Jordan. These will be the very first locations in Jordan for the Dairy Queen system. SKM Franchise Co. plans to open a minimum of 10 DQ locations within the first five years of the long-term agreement. The company’s first of five DQ Grill & Chill restaurants will open later in 2015. Jordan marks the latest country with the rights to develop the Dairy Queen brand outside of the U.S. and Canada. The Dairy Queen system has more than 6,400 locations, more than 1,400 locations of which are outside the U.S. and Canada. (ADQ 08.04)

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3.2 Edelman to Buy Dubai PR Agency

Edelman, the world’s largest independently owned public relations firm, signed a deal to buy Dubai PR agency Dabo & Co. Edelman, which has more than 5,500 employees in 65 cities worldwide and in 2014 had net revenues of around $780 million, will merge Dabo & Co into its UAE operations. Dabo & Co, which was founded by sisters Camilla and Lucy d’Abo, has around 65 staff and its clients have included the likes of BMW, Unilever, Canon, DHL, HSBC, Hilton Worldwide, Qantas, Nokia and Rolls-Royce. (AB 12.04)

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3.3 UAE Steel Industry Calls For Protection

Emirates Steel, the largest integrated steelmaker in the UAE, warned of the damaging effects from the flow of China and Turkey’s steel to the UAE markets, and called for protective actions to face the increasing competition and falling prices that will affect the UAE’s future industrial development plans. The inflow of Chinese and Turkish steel imports into the UAE at prices below an acceptable market value negatively impacts production volumes and profitability of UAE steel players, thereby causing damage to both existing and future steel expansion and investment projects and threatening UAE steel sector. The lack of strong customs protection in the UAE will lead to the escalation of the problem. Besides the introduction of anti-dumping duties, it was also recommended that a uniform standard should be introduced to fend off low-quality Chinese imports and force Chinese exporters of steel into the UAE to comply. Similar practices, such as the American Standards for Testing of Materials and British Standards, are applied in the US and Europe. (KT 21.04)

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4.1 Tafileh Wind Farm to Begin Initial Operations by End of April

A 117 MW wind farm in Tafileh, 180km southwest of Amman, will begin its initial operations by the end of April, producing electricity from five turbines, Energy Minister Ibrahim Saif said. Saif added that the project is scheduled to start operating commercially by the end of August. The Jordan Wind Project Company is implementing the JD205 million venture. The company has finished setting up 13 out of the planned 38 turbines in the project, executed on a build-own-operate basis, according to Saif. Each turbine produces 3 MW. The wind farm aims at increasing the use of renewable energy to reach 10 per cent of the total energy mix by 2020.

The Jordan Wind Project Company signed a purchase agreement with the National Electricity Power Company (NEPCO) in November 2013, and received the required funds in February 2015, which allowed it to begin implementation based on the timeline set in the agreement. The wind farm is expected to produce around 400 gigawatt hours per year, which will be connected to the Rashadieh Transformer Station affiliated with NEPCO, producing 2% of annually generated power. (Petra 13.04)

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5.1 First Quarter Tourist Spending Recovered by a Yearly 11%

Tourist spending in Lebanon grew 11% y-o-y in the first three months of 2015, mainly the result of the relatively stable political and security environment and the successful skiing season, which both encouraged tourists to visit Lebanon. Arab tourists continued to capture the largest share of spending in Lebanon, led by Saudi Arabian residents with 16% and followed by tourists from the UAE and Egypt with 14% and 7% respectively. In fact, spending by tourists from Saudi Arabia saw the highest growth of 41% y-o-y in Q1/15, which was expected following the substantial increase of Saudi tourists as they almost doubled in January 2015 alone reaching 5,142, up from 2,204 a year earlier. (Blominvest 17.04)

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5.2 Lebanese Car Sales Showed No Improvement in First Quarter

The Lebanese car importers extended their contracting performance by March 2015, mirroring the economic slowdown that was overshadowing Lebanon in the past few years and heavily impacting their car sales. In fact, Q1/15 showed a 3.8% y-o-y slump in the total number of car sales (newly registered commercial and passenger cars) to settle at 8,045. The number of newly registered passenger cars fell by 3.3% y-o-y in the first 3 months of the year to reach 7,542 (almost 93.7% of total newly imported cars). In addition, the number of newly registered commercial cars fell at a faster pace of 10.8% to 504 cars.

Japanese cars remained the most popular cars amongst Lebanese in Q1/15, taking 38.7% of newly registered cars. Korean cars came second (with a share of 34.1%), while European cars took the third place constituting a share of 21.9% of newly registered cars. Car sales breakdown according to brand ranked Kia at the top with 1,531 vehicles sold (or 20.30% of total newly registered cars), followed by Toyota with 1,300 units (or 17.24% of total newly registered cars), Hyundai (1,040 units or 13.79% of total newly registered cars) and Nissan (743 units or 9.85% of total newly registered cars). (Blominvest 17.04)

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5.3 French Weapons Arrive in Lebanon in $3 Billion Saudi Funded Deal

The first shipment of French weapons and military equipment arrived in Lebanon on 20 April under a Saudi-funded deal worth $3 billion to bolster the Lebanese army’s fight against militants encroaching from neighboring Syria. Lebanese news channels showed a military plane at Beirut International airport with green boxes of weapons and missiles laid out in front. Saudi and French flags waved and the French and Lebanese ministers of defense attended the ceremony. Lebanon, whose sectarian divisions have been exacerbated by the war over the border in Syria, has said it needs more resources and better hardware.

The deal will involve about 20 French companies and cover a mix of land, sea and air equipment, including armored vehicles, heavy artillery, anti-tank missiles, mortars and assault weapons. Saudi Arabia sees itself as the defender of Sunni Islam in the region and wants to help beef up Lebanese security forces in the face of threats from both Sunni jihadis and Lebanon’s powerful Shi’ite movement Hezbollah. The deal was signed in November in the Saudi capital Riyadh. Saudi Arabia has already provided $1 billion in military aid to the Lebanese army. (Reuters 20.04)

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5.4 IMF Expects 3.8% GDP Growth in Jordan

Jordan’s gross domestic product (GDP) is expected to grow by 3.8% this year and 4.5% in 2016, according to the IMF. Lower oil prices and further reforms should contribute to higher growth this year. The IMF also forecast that the GDP in the Middle East and North Africa would reach 2.7% this year and 3.7% in 2016. The inflation rate in the Hashemite Kingdom is expected to be around 1.2% in 2015 and it is forecast to reach around 2.5% next year. Regionally, the report estimated that the inflation rate will reach 6.2% and 6.4% in 2015 and 2016 respectively. IMF expects the current account deficit to stabilize at 7.6% this year, with a chance to drop to 6.6% in 2016. (JT 15.04)

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5.5 Jordan’s Foreign Trade Rises By 7.5% in 2014

The Amman Chamber of Commerce (ACC) announced that Jordanian exports last year increased by 7.5% to JD5.2 billion ($7.3 billion) compared to JD4.8 billion ($6.7 billion) in 2013. In total, the foreign trade index rose %3.8 last year reaching JD23 billion ($32 billion), compared to JD21.3 billion ($30 billion) in 2013. The figures also showed that the kingdom imported goods worth of JD16.1 billion ($22 billion) or %3.1 higher than 2013 when it stood at JD15.7 billion ($22.1 billion). The survey also revealed that the biggest partner was the Grand Arab Free Trade Zone, topping the list of commercial and economic bloc partners in 2014 with 35.1% share foreign trade, standing at JD7.8 billion ($11 billion). The study also showed that Iraq was the biggest partner, followed by Saudi Arabia, while the EU block stands as the second strongest partner.

The survey also revealed that national exports accounted for 33.3% of the overall foreign trade in 2014, compared to 22.5% in 2013, which noted that re-exports declined last year by 2.8% to JD790 million ($1.1 billion) from JD813 million in 2013 ($1.21 billion). (ANSAmed 20.04)

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5.6 Jordan Rejects Draft Oil Exploration Deal with Korean Company

On 14 April, Jordan’s Lower House rejected a draft oil exploration agreement with the Korea Global Energy Corporation and Enegi Oil that the government approved last year. The House also referred the agreement to a committee investigating energy-related cases.

In October last year, the Cabinet approved a co-production agreement with the Korea Global Energy Corporation for oil exploration in the Dead Sea and Wadi Araba regions under which it will carry out exploration in three phases over a 6,819 sq. km. area. Some felt the Korea Global Energy Corporation was a mining company and not technically efficient for oil exploration.

Energy Minister Ibrahim Saif said the government floated an international tender for oil exploration and the Korean company was selected out of three other bidders. In addition, the House passed a draft law annulling the mining agreement signed between the Jordan Atomic Energy Commission and the AREVA-backed Jordanian French Uranium Mining Company. (JT 14.04)

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5.7 Remittances from Jordanian Expatriates Rise by 50% in 10 years

Remittances by Jordanians recorded an increase of 50% over the past 10 years, according to the United Nations Economic and Social Commission for Western Asia (UN-ESCWA). ESCWA said that expatriates’ remittances totaled $3.7 billion in 2013, or 12% of Jordan’s GDP. The report indicated that the Kingdom ranked fourth after Egypt, Lebanon and Morocco in terms of expatriates’ remittances. (Petra 13.04)

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5.8 $50 million from the World Bank to Jordan

A new $50 million World Bank assistance package to Jordan will enhance access to finance for micro, small and medium enterprises (MSMEs). The project will reach out to underserved governorates and marginalized segments of society and increase financing for start-up businesses. The Jordan MSME Development for Inclusive Growth Project is a five-year undertaking that is largely geared to rural parts of Jordan, where living conditions are modest at best. This project will leverage support from the Arab funds, specifically the Arab Fund for Economic and Social Development (AFESD), which will provide parallel financing of $50 million. Through improved financial intermediation, the project will enhance the creation of private sector job opportunities, contributing to inclusive economic growth and supporting poverty reduction efforts.

MSMEs growth is constrained by various factors, including timid financing by conservative and risk adverse commercial banks. The challenge is dual: commercial banks’ systematic search for secure lending, and MSMEs lack of capacity to develop viable business plans and operate on the basis of predictable cash flow. This project aims at mitigating the impact of these two constraints, and open the way for further development of this growing industry. (WB 10.04)

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►►Arabian Gulf

5.9 Kuwait Records Dramatic Fall In Budget Surplus

Kuwait’s budget surplus shrunk by a whopping 50% during the 2014-15 fiscal year, falling to KD8.3 billion ($27.45 billion), according to the Kuwaiti Institute of Banking Studies (KIBS). GDP also declined by 6.3% during the year, which ended 31 March, the institute said. The 2014-15 surplus, equivalent to 18.1% of GDP, fell from KD12.9 billion, or 26.3% of GDP, during 2013-14, the study found. Despite the country’s declining reserves and the significant fall in oil revenues, which account for about 92% of Kuwait’s revenues, government spending was likely to “remain largely unaffected” during the 2014-15 and 2015-16 fiscal years. The institute predicts Kuwait could record its first deficit in nearly 20 years during the 2015-16 fiscal year. The International Monetary Fund (IMF) also has warned Kuwait risks recording a deficit by 2017, although that forecast could be brought forward following the decline in the oil price. (AB 14.04)

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5.10 Saudi & US Firms Buy $201 Million Stake In Canadian Grain Handler

Saudi Arabia’s state-owned agricultural investment firm and US grain trader Bunge will buy a controlling stake in Canadian grain handler CWB in a bold move by the Gulf state to secure food supplies. G3 Global Grain Group, a joint venture of Bunge and Saudi Agricultural and Livestock Investment Co (SALIC), said it will buy a 50.1% stake in CWB for $201 million. The remaining stake will be held in trust for Canadian farmers with G3 having an option to buy them out after seven years. Canada owned the CWB, formerly known as the Canadian Wheat Board, until the government stripped it of its Western Canadian grain monopoly in 2012.

Saudi Arabia began scaling back its domestic wheat-growing program in 2008, planning to rely completely on imports by 2016 to save water. SALIC was formed in 2011 by late King Abdullah to secure food supplies for the kingdom, mainly through mass production projects and foreign investment. In a multibillion-dollar search for food security, Saudi Arabia and other Gulf desert states, which rely on imports for 80 to 90% of their food needs, have invested heavily in agricultural projects overseas since 2008. (Reuters 18.04)

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►►North Africa

5.11 Egypt’s January Trade Deficit Down by 20.7% Year-On-Year

Egypt recorded a trade deficit of EGP19.44b in January, 20.7% less than the same period last year, according to CAPMAS. The decrease came as the decline in global crude prices play in the country’s favor. Imports stood at EGP 31.47b during January, 21.2% less than the EGP 39.97b recorded a year earlier. This decline was largely driven by the drop in some commodities, such as petroleum products which were 69.9% less than last year; steel which was 46.9% less; and wheat which was 42.5% lower. Exports also witnessed a decline of 22.3% during January, as it stood at EGP 12.3b compared to EGP 15.44b in the same period last year. This drop was spurred by a reduction in the value of key exported products, such as fertilizers, petroleum products and crude oil which dropped by 55.1%, 54.7% and 54.2% respectively.

Inflation, however, continued to rise as government subsidy reforms weighs down on domestic inflationary pressures. According to CAPMAS figures, Egypt’s annual inflation rate rose to 11.8% in March, up 1.1% from the month before. (CAPMAS 13.04)

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5.12 Number of Tourists Visiting Egypt Drops 5.5 % in February 2015

The total number of tourist arrivals to Egypt dropped 5.5% in February 2015 compared in the previous month, the Finance Ministry reported. The report indicated that a total of 640,200 tourists visited Egypt in February 2015, down from the 677,500 who visited during January 2015, while the number of tourists’ arrivals increased 3.8% in February compared to the same month last year. Tourist nights decreased 17.6% during the month of February 2015 to reach almost 5.6 million nights, compared to 6.8 million nights during January 2015. Tourism activities, Suez Canal revenues and workers’ remittances, are the main sources of foreign currencies that the Net International Reserves (NIR) in Egypt depends on. The NIR in Egypt decreased to 15.3 $ billion in March of 2015 from 15.5 billion in February of 2015. (Al-Masry Al-Youm 11.04)

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5.13 World Bank Approves $400 Million for Two Egyptian Social Schemes

The World Bank approved support for Egypt’s government with $400 million for a project that is set to benefit 1.5 million poor Egyptian families. Earlier this year, Egypt’s government established conditional cash transfer projects called “Takaful and Karama” (Solidarity and Dignity). Takaful targets poor families with children younger than 18 to send them to schools, while Karama targets the elderly and the disabled, so long as they can’t earn their living. Impoverished Upper Egypt is expected to benefit from the project that will insure children get access to education and healthcare.

With staggering poverty rates reaching 26% of the population, Egypt remains one of the top 20 countries suffering from the prevalence of chronic malnutrition with a third of its children under the age of five stunted. In addition, at least quarter of children don’t enroll in basic education and up to half of them do not access secondary schools. Takaful pays each family LE325 in addition to LE60 – LE100 per child on a monthly basis, while Karama pays each elderly or disabled person LE350 per month. Both Egypt’s education and healthcare systems are rundown after years of negligence, conditions the government aims to improve by liberalizing these sectors, raising concerns among some of further price hikes. The World Bank currently has 26 projects underway in Egypt at a value of $5.4 billion. (WB 10.04)

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5.14 Egypt Sees Continuous Decline in Number of Mobile Users Last January

The number of Egyptian mobile users declined slightly last January, to record 95.2 million users compared to 95.3 million users last December, according to a report from the Ministry of Communications and Information Technology. This caused the rate of mobile service usage in comparison to the population fall to 110.6% compared to 110.9% in December 2014. These numbers coincide with the toughening of subscription procedures for mobile and data lines, and the revision of all data for current lines by the National Telecommunication Regulatory Authority (NTRA), leading to the halting of many mobile lines. The number of active mobile lines declined to 95.2m lines last January, compared to 100.3m lines in January 2014. On the other hand, the number of internet users continued to increase during January 2015, to reach 49.27 million users against 48.3 million users during December 2014, constituting a 1.9% growth rate.

According to the Ministry of Communications’ report, mobile phones continue to dominate the largest share of internet users, as the number of internet users through mobile phones reached 33.4 million users in January 2015, against 31.7 million users during December 2014. The number of internet users through USB devices exceeded 4.1 million users to acquire second place among the means of access to the internet, while the number of internet users through ADSL continued its slight growth to reach 3.08 million users by the end of January 2015. (DNE 14.04)

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5.15 Tunisia Says it Needs $1.3 Billion in Foreign Loans to Meet 2015 Budget

Tunisia needs $1.3 billion in foreign financing and loans to meet its budget deficit target this year, Finance Minister Slim Chaker said. That would include $1 billion in loans from the World Bank and the IMF that Tunis has already said it expects to receive this year. The government expects the budget deficit to narrow to 5% of gross domestic product in 2015, from 5.8% last year, but that target has been made tougher by salary hikes for tens of thousands of public sector teachers who went on strike last month and boycotted student exams to press wage demands. He also said Tunisia would spend 1.2 billion dinars less on petrol due to a sharp fall in global oil prices. Tunisia’s total budget for this year is 29 billion dinars.

The North African country faces pressure from creditors to cut high public spending, including subsidies on basic foods and fuel, through a series of politically sensitive reforms. An Islamist militant attack on the national museum in Tunis last month, which killed 21 foreign tourists, also risks hitting the tourism sector, a main source of revenue. The government plans to sell minority stakes in several state-run banks this year to raise around $670 million to help cut its deficit, it said this month. (Reuters 13.04)

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5.16 Morocco Reduces Euro’s Weighting in its Currency Basket

Morocco’s central bank has reduced the euro’s weighting in the currency basket used to set the dirham’s exchange rate, to reflect a fall in trade with the euro zone. It is the first time in a decade that the bank has changed the basket’s weighting, aiming to make its currency regime more flexible, as recommended by the IMF. The dirham is still mostly pegged to the euro but the single currency’s weighting falls to 60% from 80%, while the dollar’s weighting rises to 40% from 20%. The North African country has seen an increase in trade with the United States, China and the rest of Africa as it sought new export markets in the wake of the euro zone debt crisis, which badly hurt the Moroccan economy.

It is the first step toward adopting more exchange rate flexibility to make its economy more competitive and better able to absorb shocks. The IMF, which gave Morocco a $5 billion credit line last year to help the country purse economic reforms, has urged Rabat to make its currency regime more flexible. As part of financial reforms, the government proposed in February a draft law that gives the central bank much more independence and prepares it for major financial reforms and a more flexible currency system. Morocco is also set to allow the creation of Islamic banks and enable private firms to issue Islamic debt, after parliament approved and Islamic finance bill last November. (Reuters 13.04)

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5.17 UAE Group to Invest $3 Billion in Medical Tourism in Morocco

UAE’s Tasweek Real Estate Development and Marketing is planning to expand its healthcare portfolio in Morocco by investing an estimated $3 billion in medical tourism and other projects. The company will create advanced ‘Healthcare Cities’ in Tangiers, Agadir and Casablanca. The advanced medical infrastructures will be financed by Emirati investors. Tasweek is also expected to inaugurate the Marrakech Healthcare City by H1/15. Tasweek Real Estate Development and Marketing is a provider of comprehensive real estate development solutions for the UAE and the broader Middle East. (MWN 11.04)

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5.18 Morocco Ranks 78 in the 2015 Global Information Technology Report

Morocco has been ranked 78th in the 2015 Global Information Technology Report. It is the country that has improved the most (up 21 places) over the past year. The report, co-published by the World Economic Forum, INSEAD and Cornell University, has revealed that advanced economies are better than developing ones at leveraging Information and Communication Technologies (TICs).

Morocco’s strengths include ICTs accessibility (24), the use of ICT by the government (41), social impact of ICT (64), individual use (70) and political and regulatory environment (71). Its weaknesses include business environment and innovation in ICT (83), infrastructure (87), the use of ICT in business (105), skills (110) and the economic impact of ICT (120).

The UAE topped the list of Arab countries, ranking 23rd in the world for network readiness. Two other GCC countries are ranked in the top 30 for the third consecutive year: Qatar (27) and Bahrain (30). Saudi Arabia (35) and Oman (42) feature in the top 50. According to the report, GCC countries owe their success to a very strong commitment to ICT development by their respective governments. However, countries in North African and the Levant still face problems to fully leverage ICT, including Egypt (94), Lebanon (99) and Algeria (120). Mauritania (138th) remains the region’s worst-performing country

The 2015 edition of the NRI ranks Singapore as the top country in the world when it comes to leveraging ICTs for social and economic impact. It is followed by Finland, Sweden, the Netherlands, Norway, Switzerland, the United States, the United Kingdom, Luxembourg and Japan. (GIT 15.04)

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6.1 Turkey’s Current Account Gap Wider than Expected

Turkey’s current account gap stood wider than expected at $3.2 billion in February, the Turkish Central Bank said on 10 April. The decrease in the current account deficit is mainly attributed to a $346 million decrease in foreign trade, with a deficit recording $3.1 million, and a $38 million increase in services surplus reaching $724 million. Contrary to this, the improvement in the current account deficit was partially offset by a $238 million increase in the primary income deficit, now valued at $853 million. The gap in the current account, however, shrank to $3.2 billion from $3.3 billion a year earlier, the Bank added. The gap narrowed for the third month in a row, as weak domestic demand curtailed Turkey’s imports and continued decreases in energy costs.

Analysts expect more decreases in the current account deficit within the coming months along with expectations of a slowdown in the economy and a decreasing trend in energy costs. Turkey’s GDP slowed in 2014 and demand has been weak in the early months of this year, according to the official data. The GDP only grew 2.9% in 2014, compared with the 2013 rate of 4.4%. (HDN 10.04)

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6.2 Turkish Industry’s Gears Grinding to a Halt

A recent Turkish Union of Engineers and Architects’ Chambers (TMMOB) report indicates that Turkey’s industrial sector is coming to a grinding halt. The report noted that growth in the industrial sector has slowed since 2012, that the sector did not record any growth for the first quarter of this year and may even slip into negative territory.

Economists have recommended that Turkey engage its industrial sector to achieve more sustainable long-term growth; however, many firms have focused their sights on the construction sector, a short-term, high-profit-based sector that has witnessed a boom in Turkey during the tenure of the ruling Justice and Development Party (AK Party).

As of March, manufacturing industry capacity was at 72.4%, a slight year-on-year decline and a discouraging outlook for the rest of the year regarding growth. Official figures from earlier this month showed industrial production falling 2.2% year-on-year, disappointing economists who had predicted positive growth. Indicating that Turkey has bolstered its growth via large amounts of debt while savings rates have decreased, the bulletin said that the short-term foreign debt total rose from $16 million in 2002 to $133 million in 2015. (Zaman 14.04)

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6.3 Turkey’s Unemployment Rate Highest in 5 Years

Turkey’s unemployment rate rose from 10.9% in December to 11.3% in January, the highest since April 2010, the Turkish Statistics Institute (TurkStat) said on 13 April. The labor participation rate was at 50%, with 28.7 million employed as of January and 3.25 million people out of work. In January, there were 454,000 more unemployed people than the previous month, official figures revealed. In the same period, the non-agricultural unemployment rate rose by 1.3% to reach 13.4%, while the youth unemployment rate (age 15-24) soared by 2.3% to 20%. Turkey’s unemployment rate will increase from 9.9% in 2014 to 11.4% in 2015, rising further to 11.6% in 2016. The non-farm unemployment rate rose to 13.4% in January from 12.9% in the previous month. The unemployment rate for the 15-64 age group rose by 1.1% to 11.6% over the same period. The labor force participation rate (LFPR) was 50%, a 1.8%age point increase year-on-year, meaning that 1.45 million more people were looking for work. (TurkStat 13.04)

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6.4 Turkey Breaks Ground For First Nuclear Plant Amid Protests

A groundbreaking ceremony held for the construction of Turkey’s first nuclear power plant in Akkuyu in the southern province of Mersin was marked by anti-nuclear protests. Energy Minister Yildiz and officials from the Russian company Rosatom, which is undertaking its construction, attended the groundbreaking ceremony for the construction of the marine hydro-technic plant. Environmentalists say that the nuclear plant model VVER-1200 to be built in Akkuyu has not undergone safety tests on its prototype. Yildiz also said that some 10,000 workers will be employed for the construction of the plant, which will cost an estimated $20 billion, with Turkish engineers working in the plant once it begins operations.

Construction company Cengiz Insaat, known for its close ties to President Erdogan, recently won a public tender for the construction of the power plant’s hydro-technical structures. Along with this, Cengiz Insaat will undertake the construction of the port planned as part of the nuclear power plant project. The financial value of the tender remains unknown. Turkey has plans for two other nuclear power plants in the Black Sea province of Sinop and the northwestern province of Kirklareli. Several protests have been staged in opposition to these plans as well. (Zaman 15.04)

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7.1 Memorial Day for Fallen Soldiers and Victims of Terrorism

This past Tuesday night, Israel marked Memorial Day for Fallen Soldiers and Victims of Terrorism. A total of 23,320 Israelis have fallen in battle or been killed in terrorist attacks since 1860, when Jews first moved outside the walls of Jerusalem’s Old City. In the past year, 116 Israeli soldiers were added to the list of the fallen, including 67 who were killed in Operation Protective Edge last summer and 35 disabled IDF veterans. There are 553 Israeli soldiers whose places of burial are unknown, including most recently Staff Sgt. Oron Shaul, whose body was seized by Hamas last July. On Wednesday, around 1.5 million Israelis were expected to visit military cemeteries across the country, from Kiryat Shemona in the north to Eilat in the south. At 11 a.m. on Wednesday, a two-minute siren sounded throughout the country.

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7.2 Israel’s Population Grows 2% During 2014 to 8.345 Million

Israel’s population stands on the eve of Israel’s 67th Independence Day at 8.345 million people, the Central Bureau of Statistics (CBS) announced on 21 April – compared to just 806,000 in 1948. Of the 8.345 million Israelis, 6.251 million are Jews (74.9% of the population); 1.73 million are Arabs (20.7%) and 364,000 (4.4%) are defined as “other” (non-Arab Christians, other religious sects and atheists according to the population registry). Since 2014, Israel’s population grew by 162,000 – a 2% increase. Israel’s population grew by about -162 thousand, an increase of 2.0%. During this period, 176,000 babies were born; 44,000 people died; and 32,000 people immigrated. In 2014, about 75% of the Jews were born in Israel, compared to only 35% in 1948. In 1948, Israel only had one city with more than 100,000 residents – Tel Aviv-Yafo. Today, 14 cities number more than 100,000 residents. Six cities number more than 200,000 residents: Jerusalem, Tel Aviv-Yafo, Haifa, Rishon LeZion, Ashdod and Petah Tikva. (CBS 21.04)

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7.3 Kuwait Set to Withdraw Paper Notes by October

Kuwait will withdraw all paper notes from circulation by 1 October, the Central Bank of Kuwait governor announced on 19 April. The Gulf state introduced plastic currency in June, 2014, as one of only a handful of countries in the world to use the more durable banknotes. Plastic banknotes are made from polymer and last significantly longer than paper currency because they are resistant to heat, water, humidity and dust. They also have greater security features. The new plastic notes were the sixth new release of banknotes since the Kuwaiti dinar came into circulation in 1961. (AB 20.04)

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7.4 Dubai to Introduce New Court for Tourists

Dubai Courts has announced that it will establish a new court to deal with cases involving tourists who have committed petty offences. New tourists’ court, as well as a new misdemeanor court for residents that will deal with minor offences, will begin operations later this year. The new tourists’ court deal with will petty crimes, which are a common occurrence in the city. The misdemeanors’ court will similarly speed up the process for residents in the emirate. The three Primary, Appeal and Cassation courts in Dubai recorded a combined number of 118,077 cases in 2014, an increase of 14% over 103,847 cases in 2013. The number of civil cases registered in the Dubai Courts rose 13% and the number of criminal cases registered in the Dubai Courts increased 15%. (AB 15.04)

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7.5 Egypt’s Parliament Gets Record Number of Seats

The long-awaited re-amendment of the electoral constituencies’ law, the last obstacle in the way of Egypt’s long-delayed parliamentary polls, was approved by the cabinet on 14 April. The new draft of the constituencies’ law includes significant revisions, on top of which is that the number of the coming parliament’s seats will increase by 25, from 567 to 592. 202 constituencies (instead of 237 under the current law) will be created, returning a total 444 independent MPs. This will add to four constituencies that will return 120 party-based MPs, two of which will return 45 deputies each and the remaining two- 15 each. The number of presidential appointees will stand at 28 or 5% of the total, as stipulated by the constitution.

After president Abdel-Fattah Al-Sisi was elected in May 2014 and new election laws were drafted at the end of that year, it was decided that the number of parliament’s seats will increase to 567: 420 for independents, 120 for party MPs, and 10 for presidential appointees. The above division, however, was ruled unconstitutional by the SCC this past March, ordering the government to redraw constituencies to guarantee equality among independent constituencies in terms of the number of voters. To meet the above objective, the number of independent seats increased by 24 seats. (Various 15.04)

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8.1 Rosetta Genomics to Acquire PersonalizeDx

Rosetta Genomics agreed to acquire CynoGen (d/b/a PersonalizeDx) from Prelude Corporation, a Fjord Ventures portfolio company. The acquisition of PersonalizeDx by Rosetta Genomics is expected to close within the next several weeks and is contingent upon the closing of Prelude’s purchase of PersonalizeDx from a third party. PersonalizeDx is a rapidly growing molecular diagnostics and services company serving community-based pathologists, urologists, oncologists and other reference laboratories across the U.S. Through this transaction Rosetta Genomics will gain proprietary tests in prostate, bladder and lung cancer, strong commercial and laboratory operations capabilities and a state-of-the-art, high-complexity CLIA laboratory in Lake Forest, California. The purchase price includes $2.0 million in cash, 500,000 ordinary shares of Rosetta Genomics, some specified assets and certain services to be provided by Rosetta Genomics to Prelude Corporation. In connection with this transaction Rosetta Genomics will gain rights to market Prelude’s novel assay for ductal carcinoma in situ (DCIS).

Rehovot’s Rosetta develops and commercializes a full range of microRNA-based molecular diagnostics. Founded in 2000, Rosetta’s integrative research platform combining bioinformatics and state-of-the-art laboratory processes has led to the discovery of hundreds of biologically validated novel human microRNAs. Building on its strong patent position and proprietary platform technologies, Rosetta is working on the application of these technologies in the development and commercialization of a full range of microRNA-based diagnostic tools. Rosetta’s cancer testing services are commercially available through its Philadelphia-based CAP-accredited, CLIA-certified lab. (Rosetta Genomics 09.04)

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8.2 Leviticus Cardio Completes Finance Round

Petah Tikva’s Leviticus Cardio, a portfolio company of The Trendlines Group, announced the successful completion of its latest round of financing. The Company raised over $1.5 million through private investors, including acclaimed cardiovascular physicians. The funds will allow the Company to commence its eagerly anticipated “first-in-man” (FIM) feasibility study with the unique Coplanar Energy System (CET). The study will commence in 2015. The Company is currently in discussions with several key LVAD centers of excellence in Europe to determine which medical center/s will take part in the study. Successful preclinical in vivo studies and completion of the last round of financing has enabled Leviticus Cardio to advance its plans for the clinical study.

Leviticus Cardio is a medical device company founded in 2008 dedicated to improve the clinical outcome for patients implanted with a left ventricular assist device (LVAD) for impaired cardiac function. To date, Leviticus Cardio has raised $2 million in private venture capital and an additional $1 million in government funding. Major investors include The Trendlines Group, Israel’s foremost seed- and early-stage investment group, a consortium of acclaimed cardiovascular physicians, private investors and Israel’s Office of the Chief Scientist (OCS) in the Ministry of Economy. The Company has one approved and five pending US patents, covering wireless energy transfer into the human body and its related VAD implementations. (Leviticus Cardio 13.04)

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8.3 BioLight Announces First IOPtiMate System Sale in Hungary

BioLight Life Sciences Investments announced the first sale of the IOPtiMate system to a medical center located in Hungary. The IOPtiMate system is based on CO2 laser technology that enables the performance of a unique filtration surgery to treat glaucoma without penetrating the inner part of the eyeball, thus allowing for substantial reductions in post-operative complications and use of eye drops compared with alternatives. The sale of the first system in Hungary is a result of a marketing campaign to leading physicians and medical centers mainly in Asia and Europe for the IOPtiMate system as part of the company’s focus on markets with unmet needs for better solutions to treat glaucoma. BioLight recently announced a strategic partnership agreement with Rock-One International Holdings. The agreement will help BioLight maximize its presence in the Chinese market, the second largest healthcare market in the world after the U.S.

BioLight Life Sciences Investments 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 activities include tests that are designated for bladder, cervical, multiple myeloma and other cancers. (BioLight 13.04)

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8.4 Teva & Eagle NDA for Bendamustine Rapid Infusion Product Accepted

Teva Pharmaceutical Industries New Jersey’s Eagle Pharmaceuticals announced that the New Drug Application (NDA) for a liquid bendamustine hydrochloride (HCl) rapid infusion product has been accepted for filing by the U.S. FDA. The Prescription Drug User Fee Act (PDUFA) goal date for a decision on this NDA by the FDA is December 2015. This NDA requests FDA approval of the rapid infusion bendamustine HCl product for the treatment of patients with chronic lymphocytic leukemia (CLL) and patients with indolent B-cell non-Hodgkin lymphoma (NHL) that has progressed during or within six months of treatment with rituximab or a rituximab-containing regimen. This product candidate has received Orphan Drug Designations for both CLL and indolent B-cell NHL, and therefore may be eligible for seven years of exclusivity upon approval. The NDA is supported by data from a clinical trial completed in November 2014, which demonstrated that the rapid infusion bendamustine HCl product can be administered in ten minutes in a low-volume, 50 mL admixture.

In February 2015, Eagle and Teva Pharmaceutical Industries entered into an exclusive license agreement for the rapid infusion bendamustine product. Teva will be responsible for all U.S. commercial activities for the product including promotion and distribution. Eagle has responsibility for obtaining all regulatory approvals, conducting post-approval clinical studies, if required, and initially supplying drug product to Teva.

Teva Pharmaceutical Industries is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions to millions of patients every day. Headquartered in Israel, Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,000 molecules to produce a wide range of generic products in nearly every therapeutic area. (Teva 14.04)

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8.5 Compugen Obtains Rights for Biological Materials from US NIH

Compugen has obtained rights to use in-house certain biological systems and materials, developed by the U.S. National Institutes of Health (NIH), for purposes of advancing the research and development of the company’s multiple immuno-oncology programs toward future clinical evaluation. The experimental systems and biological materials obtained from the NIH enable the engineering of human T cells to specifically recognize tumor antigens on cancer cells. Utilizing this system, with the expression of specific Compugen-discovered immune checkpoint candidates on the surface of human cancer cells, or immune T cells, will strengthen Compugen’s evaluation abilities of the effect of such immune checkpoints on anti-tumor immune response. The NIH biological systems and materials are expected to facilitate robust and reproducible validation of Compugen’s multiple immune checkpoint target candidates and to enhance the identification of functional therapeutic antibodies and selection of lead antibodies for future clinical evaluation.

Tel Aviv’s Compugen is a leading predictive drug discovery company focused on monoclonal antibodies and therapeutic proteins to address important unmet needs in the fields of oncology and immunology. The Company utilizes a broad and continuously growing integrated infrastructure of proprietary scientific understandings and predictive platforms, algorithms, machine learning systems and other computational biology capabilities for the in silico (by computer) prediction and selection of novel drug target candidates, which are then advanced in its Pipeline Program. (Compugen 14.04)

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8.6 C-FDA Approves IND for D-Pharm’s Anti-Epileptic Drug, DP-VPA in China

Rehovot’s D-Pharm has been notified by its co-development partner, Jiangsu Nhwa Pharmaceutical Co. that they received an approval letter from the Chinese Food and Drug Administration (C-FDA) that allows clinical development of DP-VPA, through Phase 3, for epilepsy. The specific clinical protocols will be communicated to the C-FDA before the start of each new study. NHWA will begin with a bridging safety study and then proceed with a large dose-ranging Phase 2b clinical study in epilepsy patients. Prior to the IND approval, DP-VPA was granted Fast Track status, a designation designed to bring important new drugs which treat a serious or life-threatening condition and fill an unmet medical need to patients earlier.

DP-VPA is a novel drug discovered and developed by D-Pharm, a derivative of the valproic acid (VPA). VPA is the active ingredient in one of the best antiepileptic drugs, with combined peak sales over $1B in epilepsy, migraine and bipolar disorder. In Phase 1 and 2 clinical studies DP-VPA showed superb safety and efficacy in epilepsy patients. D-Pharm and Nhwa are developing DP-VPA following a strategic agreement signed in 2011. Nhwa has responsibility for development, manufacturing, registration and marketing of DP-VPA for epilepsy in China, Hong Kong and Macau. D-Pharm has the rights for DP-VPA in the rest of the world. D-Pharm also has the right to use data produced in China to support its global development program, primarily in North American and European markets. The financial terms of the collaboration agreement include milestone payments upon achieving the development and commercial goals, as well as royalty payments from sales of DP-VPA. (D-Pharm 14.04)

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8.7 One World Cannabis Tests Human Cells in Multiple Myeloma Study

OWC Pharmaceutical Research Corp. announced that its wholly owned subsidiary, One World Cannabis, an Israel-based developer of cannabinoid-based therapies targeting a variety of different indications, is proud to announce that after receiving preliminary results on the effect of several combinations of cannabinoil (CBD) and tetrahydrocannabidoil (THC) on multiple myeloma cells, its basic science study continues with multiple myeloma human cells. Multiple Myeloma, a cancer of plasma cells, accounts for 10% of all hematologic malignancies. It is the second most common hematologic cancer and represents 1% of all cancer diagnoses and 2% of all cancer deaths.

Petah Tikva’s One World Cannabis was founded in 2014 by a group of professionals with expertise in the field of medical cannabis (marijuana) treatment and medical cannabis regulatory affairs. The Company’s Research Division is focused on pursuing clinical trials evaluating the effectiveness of cannabinoids in the treatment of various medical conditions, while its Consulting Division is dedicated to helping governments and companies navigate complex international cannabis regulatory frameworks. (OWC 15.04)

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8.8 Rosetta Receives Key U.S. Patent for Cancer of Origin Diagnostic Assay

Rosetta Genomics received of a Notice of Allowance for U.S. Patent Application No. 13/856,190, entitled, “Methods and materials for classification of tissue of origin of tumor samples.” The allowed patent claims a method for identifying a tissue of origin of a cancer sample by the expression levels of 64 microRNAs using a combination of probes attached to a solid substrate, and employing a classifier algorithm in order to identify the tissue of origin. This patent specifically covers the second generation of Rosetta’s Cancer Origin Test, which uses more markers and identifies a larger spectrum of cancers than the previous generation. Further, it is based on microarray technology for microRNA expression profiling. Rosetta Genomics has 42 issued patents, five allowed patents and 45 patents pending worldwide.

Rehovot’s Rosetta develops and commercializes a full range of microRNA-based molecular diagnostics. Founded in 2000, Rosetta’s integrative research platform combining bioinformatics and state-of-the-art laboratory processes has led to the discovery of hundreds of biologically validated novel human microRNAs. Building on its strong patent position and proprietary platform technologies, Rosetta is working on the application of these technologies in the development and commercialization of a full range of microRNA-based diagnostic tools. (Rosetta 16.04)

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8.9 cCAM Biotherapeutics Starts Trial of CM-24 for Cancer Immunotherapy

cCAM Biotherapeutics announced that the first patient was dosed in a Phase 1 clinical trial of CM-24, a first-in-class immunomodulatory monoclonal antibody (mAb) for the treatment of various types of cancers. The Phase 1 trial is a first-in-human, open-label, multicenter, dose escalation study assessing the effect of the CM-24 mAb on cancer patients with advanced or recurrent malignancies, including melanoma, non-small-cell lung, bladder, gastric, colorectal and ovarian cancers. The main objectives of the study are to assess the safety and tolerability of CM-24 and to determine the recommended dose for Phase 2 trials, characterization of the pharmacokinetic profile and immunogenicity of CM-24, and evaluation of preliminary efficacy of the drug. The trial is conducted at four sites in the US and Israel, and is composed of a dose escalation stage and an expansion stage. The expansion stage will focus on tumor types that responded to treatment in the first stage of the study.

Founded in 2010, Misgav’s cCAM is a biopharmaceutical company focused on the discovery and development of novel immunotherapies to treat cancer. Its lead product, CM-24, is a first-in-class humanized anti CEACAM1 monoclonal antibody undergoing Phase 1 clinical trials. (cCAM 20.04)

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8.10 Syneron Candela’s PicoWay Picosecond Laser Receives FDA Clearance

Syneron Medical announced that the PicoWay picosecond laser received U.S. FDA clearance for the treatment of pigmented lesions. The PicoWay picosecond laser previously received FDA clearance for the removal of tattoos in November 2014 and was launched in the U.S. late in the fourth quarter 2014. PicoWay incorporates picosecond (one trillionth of a second) pulse duration to generate an ultra-short pulse and very high peak power of laser energy on the skin. The high energy ultra-short picosecond laser pulse creates a strong photo-mechanical impact that optimizes fracturing of tattoo ink or pigmentation. The innovative PicoWay Technology is integrated into a proven, reliable Candela platform which offers high reliability, superior performance and low cost of ownership.

Yokneam’s Syneron Candela is a leading global aesthetic device company with a comprehensive product portfolio and a global distribution footprint. The Company’s technology enables physicians to provide advanced solutions for a broad range of medical-aesthetic applications including body contouring, hair removal, wrinkle reduction, tattoo removal, improving the skin’s appearance through the treatment of superficial benign vascular and pigmented lesions, and the treatment of acne, leg veins and cellulite. (Syneron Candela 21.04)

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8.11 EyeYon Medical Raises $3.6 Million from Leading VCs

Jerusalem’s EyeYon Medical, which develops solutions for corneal edema and is a graduate of the VLX Ventures tech incubator program, has raised $3.6 million. The investors were Pontifax, TriVentures, a large Indian distributor, the Office of the Chief Scientist and existing investors. One of the existing investors who participated in the current round is Docor International, which is part of the Van Leer Group. The company has raised $4.3 million since its founding, and its first fundraising was three years ago, when it entered the Van Leer incubator program (now known as Van Leer Xenia, VLX). While the company participated in the incubator, it succeeded in making significant progress developing its product in a relatively short period of time.

EyeYon Medical’s leading product, which it will begin selling this year, is a hyper-osmotic contact lens. The lens absorbs corneal fluids and alleviates symptoms through hyper-osmotic concentration of corneal fluid. The unique contact lens has been found to be effective for many corneal diseases. Today the company is working expand the indications for which it is may be used. The company has another product in development – an implant that cures the disease entirely, and eliminates the need for corneal transplant. The current investment round will be used to carry out additional clinical trials, to penetrate global markets, and to develop and market its unique products. (Globes 21.04)

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9.1 Jinni Enters ADTECH Domain

Jinni has extended its product offering with a targeted audience buying platform addressing entertainment advertisers including movie studios, TV networks and OTT video content providers. Jinni’s position in the pay TV arena has made it keenly aware of the industry’s need for an effective entertainment user targeting solution and this has led to the recent release of a fresh taste-based approach for advertisers targeting online and mobile users. By applying its proprietary semantic technology to understand content and match it to user tastes, Jinni has created a next generation vertical DSP for movie studios and TV networks to effectively promote their content to the most relevant audiences. The company has already run successful commercial pilots with some of Hollywood’s major studios, resulting in much higher performance than other online targeting methods on the market.

Rosh HaAyin’s Jinni, the world’s leader of smart video discovery guide platforms and a targeted audience buying is the distinguished holder of the 66th annual Technology & Engineering Emmy for personalized recommendation engines for video discovery. Using content genetics and nuanced understanding of user tastes, complemented by collaborative filtering techniques, the Jinni engine brings a uniquely intuitive personalized experience that increases content consumption and consumer satisfaction. (Jinni 08.04)

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9.2 Sapiens Reports Outstanding ALIS v6.5 Benchmark Results

Sapiens International Corporation announced outstanding benchmark results for Sapiens ALIS v6.5, Sapiens’ core policy administration suite for the life insurance, annuities, savings, pension and medical markets. The benchmark included 1,600 concurrent online users and 10 million policies, based on a mixed insurance product portfolio typical of a tier-1 life and annuities insurance company. Sapiens used IBM SoftLayer technology from the company’s Dallas center to build a virtual lab fully deployed in an IBM cloud environment. Comprised of both batch and online tests, the benchmark produced impressive results: the batch run was completed in three hours and the system achieved a sub-second average screen response time.

Sapiens ALIS v6.5, a next-generation software suite, enables life insurers to introduce new products to the market more rapidly and efficiently. Carriers can leverage the functional and technology richness embedded in the Sapiens ALIS platform to achieve their ambitious business goals.

Holon’s Sapiens International Corporation is a leading global provider of software solutions for the insurance industry, with an emerging focus on the broader financial services sector. Sapiens offers core, end-to-end solutions to the global general insurance, property and casualty, life, pension and annuities, reinsurance and retirement markets, as well as business decision management software. (Sapiens 14.04)

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9.3 SKA Africa Selects Mellanox to Build World’s Largest Radio Telescope

Mellanox Technologies, through its local South African partner, Eclipse Holdings, announced that its SwitchX-2-based SX1012 and SX1710 10/40 Gigabit Ethernet switches and LinkX optical cables have been chosen to build a high capacity L3 multi-cast network to accelerate the South African MeerKAT radio telescope, a precursor to the Square Kilometer Array (SKA) telescope, which will be integrated into the mid-frequency component of SKA Phase 1. The SKA Project is an international enterprise to build the largest and most sensitive radio telescope in the world. Deploying thousands of radio telescopes, in three unique configurations, it will enable astronomers to monitor the sky in unprecedented detail and survey the entire sky thousands of times faster than any system currently in existence.

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 15.04)

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10.1 Israel’s CPI Increases by 0.3% in March

On 15 April, Israel’s Central Bureau of Statistics published the Consumer Price Index (CPI) for March, showing a 0.3% increase. The CPI has fallen 1% over the past 12 months and 1.3% since the beginning of 2015. Excluding housing, the CPI has fallen 2% over the past 12 months. Leading decreases in March include fresh vegetables (4.2%) and laundry, cleaning, and insecticide materials (3.7%). The most marked increases were in fuel and car oil (6.2%) and fresh fruit (1.7%). The CPI dropped by 0.9% in January and 0.7% in February, falls attributed to 10% cuts in water and electricity rates, but not to slower demand in the economy or a slide into recession. Most economists, including Governor of the Bank of Israel Karnit Flug, believe that inflation will revert to the target range of 1 – 3% within a year, to which the Bank of Israel is committed by law. (CBS 15.04)

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10.2 Israel Tax Revenues Rose 11% in March

Ministry of Finance data show that the March budget deficit was NIS 1.2 billion, making the deficit over the past 12 months only 2.63% of GDP. Government spending totaled NIS 30.5 billion, including NIS 21.7 billion in spending by government ministries, NIS 2.7 billion in interest payments, and NIS 6 billion in transfer payments for the National Insurance Institute. Since the beginning of the year, spending by government ministries has totaled NIS 57.8 billion, up 2.8%, compared with the corresponding period last year. The most prominent figure is tax revenues, which totaled NIS 69.4 billion in January-March 2015, up 4.4%, compared with the corresponding period last year. Revenues from direct taxes and indirect taxes rose 12.6% and 9.7% in March, respectively.

The Ministry of Finance said that tax revenues were higher than expected because various government programs that would have decreased revenues were not implemented when the government was dissolved, such as 0% VAT on purchases of first apartments, which would have cost the treasury NIS 2 billion. In addition, the closing of tax loopholes and higher taxes on foreign workers will add another NIS 1 billion to tax revenues this year, putting the 2015 tax revenues forecast at NIS 261.8 billion. The increase in housing purchases pushed March tax revenues from this source up to NIS 903 million, 31% more than in March 2014. The number of housing deals rose 22% in March and 7.5% in January-March. (Globes 15.04)

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10.3 Israeli Economy Sees Highest Growth During Fourth Quarter

The Central Bureau of Statistics announced that the Israeli economy grew by 7% during Q4/14, the highest rate of growth in recent years. The 7% growth in Q4/14 stands in stark contrast to the 0.3% growth in Q3/14, when Operation Protective Edge was under way, and a mere 1.5% in Q2. Total economic growth for 2014 stood at 2.8%, compared to total growth of 2.7% for all of 2013. These numbers indicate a real improvement in the economy Q4/14. Israel’s total economic value crossed the trillion shekel threshold and reached its highest-ever amount: NIS 1.09 trillion ($278 billion). Per capita economic growth grew by 5% in Q4.

The improvement in the living standard in those same months was reflected in new car purchases, which jumped by 75.5%, as well as in purchases of refrigerators, televisions, and washing machines and dryers, which all increased by 22.1%. Purchases of clothing and footwear increased by 10.3%, while spending on airfare for trips abroad rose by 8.1%. The only decreases noted were of newspapers and medications, which were down by 1.7%. (CBS 18.04)

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11.1 QATAR: Qatar Looks to Economic & Corporate Growth

The Oxford Business Group observed that a strong outlook for corporate earnings and the broader economy in Qatar, combined with an easing of restrictions on foreign ownership of firms, is pointing to a positive investment environment this year.

While many of the region’s larger oil producing countries will see GDP growth rates ease this year, Qatar’s relatively lower degree of reliance on hydrocarbons is giving impetus to investor confidence.

A recent report by Masraf Al Rayan Bank forecasts real GDP growth of 7.1% in 2015, in line with similar estimates for corporate earnings. Although oil and gas prices are likely to remain muted in the short-term, high levels of public spending on infrastructure and investment projects, underpinned by significant cash reserves built up over recent years, should help sustain growth and feed into private sector expansion, the report noted.

This figure tallies with estimates of 7% GDP growth this year, from Qatar National Bank (QNB), with the economy gaining further momentum in 2016 and 2017, where growth is forecast to rise by 7.5% and 7.9% respectively. “Qatar is well-positioned to withstand the temporary decline in oil prices due to its strong macroeconomic fundamentals,” QNB said in its latest “Economic Insight” report, published in March. “With substantial financial resources, Qatar has ample external and fiscal buffers to continue implementing its ambitious investment program.”

Earnings Increase

Qatar’s corporate earnings are also expected to outperform the regional average this year, according to investment management firm Kuwait Financial Centre (Markaz). This builds on strong momentum from Qatari listed-companies in 2014, which was marked by several significant events including a move in August to change the rules on foreign ownership whereby international investors are able to acquire up to 49% of shares in traded Qatari corporations. Previously this had been capped at 25%.

According to Markaz, corporate earnings are likely to rise by 7.8% this year, building on the double-digit earnings growth recorded in the second half of 2014. This also represents a solid improvement on the overall 6% year-on-year growth rate for Qatar’s companies in 2014. In contrast, regional growth will fall short of the 10% growth recorded in 2014, reaching a forecast average of 5%, the report noted.

In capital markets last year, the successful Mesaieed Petrochemical Holding Company IPO raised some $881m for a 26% stake previously held by Qatar Petroleum – making this the country’s biggest IPO in five years. In 2015, many investors will be watching to see if further offerings are made, with Barwa Bank and Qatar First Bank widely reported to be keen to list.

In addition, Qatari banks are expected to have the highest return on equity (ROE) in the GCC this year according to Kuwait-based investment firm, Global Investment House. The ROE of the banks is estimated to reach about 18% in 2015, in comparison to a GCC average of 14%.

FDI Support

Despite growth being fuelled by the non-hydrocarbon sector, more needs to be done to expand export diversification in the GCC countries, including Qatar, according to a recent report by the IMF. The fund noted that despite improvements in the environment for exporters in the GCC, intraregional trade remains limited. Based on available sector foreign direct investment (FDI) data, only 4% (in 2011) of FDI inflows to Qatar went to trade-related activity.

According to the latest official data, FDI in several major sectors accounted for 90% of all total inward investment at the end of December 2012. The Ministry of Development Planning and Statistics noted in a recent report that the mining and quarrying sector attracted the largest proportion of inward investment in 2012, followed by manufacturing and construction.

A report released by the UN Conference on Trade and Development at the end of March said that there had been a 4% year-on-year drop in FDI across the Middle East in 2014, in part as a result of increased regional instability, along with weaker oil prices. Qatar is no exception with inflows muted since the start of the decade, entering into negative territory in both 2011 and 2013, according to the UN’s “World Investment Report 2014”. Similar trends are seen in other GCC countries where persistent tensions in the region is cited for the reason behind a downward trend experienced since 2009. (OBG 16.04)

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11.2 OMAN: Double-Edged Sword for Omani Industry

From the start of this year, according to the Oxford Business Group, Oman has doubled gas tariffs for industrial producers, with the move expected to squeeze margins for operators. However, the higher prices may spur a move towards greater efficiency, which could benefit the sector over the long-term.

Approved in January, the price of natural gas to companies has doubled from a rate of $1.50 per million British thermal units (BTU) to $3 per million BTU, with the provision for annual increases of 3% in subsequent years. The raise is in part a response from the authorities looking to bridge some of the gap in the national budget left by weaker hydrocarbons revenue.

But the increase has led to those in the industrial sector warning that the sultanate’s competitive edge will be dulled by higher costs, and could stoke inflation. The two main cement producers, Raysut Cement and Oman Cement, have said that production costs will increase dramatically under the new price scheme, with officials from the two firms quoting increases in expenses of OR4.5m ($11.8m) and OR6.6m ($17.1m), respectively, after the hike was announced.

Bright Prospects

Weaker oil prices are set to have a significant impact on Oman this year, pushing both the budget and current accounts into a possible deficit, according to a report by the US-based Institute of International Finance (IIF) released in March. This will be partly offset by growth in the non-oil sector and possible cost-cutting measures by the government.

The non-oil sector, driven in part by industry, is pegged to lead growth in 2015, with non-hydrocarbon GDP forecast to rise by 4.8%, compared to a 4.5% increase for the broader economy according to the IIF report. These figures fall short of the 7.2% non-oil growth estimated for 2014 and 10.8% recorded in 2012.

According to the IIF, one upside to a drop in energy revenue for countries like Oman is an acceleration of moves towards economic diversification and greater energy efficiency. “Prospects further out remain bright,” the report noted. “Industrial development and economic diversification should continue to bear fruit and will be supported by a sharp increase in gas production over the next five years, which is critical as a feedstock for downstream projects being developed at Duqm and Sohar.”

Calls for Cuts

In early March the IMF’s country head, Ananthakrishnan Prasad, said that Oman needed to implement reforms to keep its deficit in check, with the scaling back of gas and energy subsidies at the top of the list of priorities. If adopted, the measures would further impact Omani industries, with those in the rapidly developing petrochemicals sector hit with higher raw materials prices and power dependent producers confronted with steeper electric bills.

N A Ansari, the CEO of iron & steel producer Jindal Shadeed, Oman, sees the rise in gas tariffs as untimely. “In the present critical market scenario, the gas price increase would adversely affect the survival of integrated steel plants” he told OBG. “Internally we will continue to take all possible actions to reduce the impact through cost control measures in all the activities of plant operations”.

Manufacturers also fear higher fuel expenses will have a negative ripple effect. “There will be pressure on the government to reduce subsidies, which may lead to an increase in input costs,” S. Gopalan, the CEO of car battery manufacturer Reem Batteries & Power Appliances, told OBG. “This could lead to a cascade effect across the supply chain.”

Although rising domestic power demands and falling world commodities prices have led to a dimmer short-term forecast, Oman’s industrial sector is expected to continue on a long-term upwards trajectory, with a host of value-added processing projects now under development across the country.

Furthermore, a tighter business environment may act as a catalyst for operational efficiencies, which could offset more costly inputs. “Industry can thrive in Oman, but only in highly-automated and capital-intensive sectors, and not in labor-intensive sectors,” said Gopalan. “Technology, in this regard, could play a big role to maximize output with less labor.” (OBG 20.04)

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11.3 MOROCCO: IMF Article IV Consultations

In 2014, the Moroccan economy made important developments in maintaining macroeconomic stability in a difficult environment, thanks to “strong policy actions” implemented by the authorities, International Monetary Fund (IMF) said in a statement issued at the end of its regular consultations with the kingdom under Article IV.

The IMF commended the Moroccan authorities for their “strong policy actions which have reduced economic vulnerabilities despite a difficult environment.”

The financial institution said that growth slowed in 2014 as a result of a contraction in agricultural activity following an exceptional 2013 crop and weak demand from Europe. However, growth is expected to rebound in 2015 to about 4.4% and remain robust in the medium term as external demand and domestic confidence strengthen.

In this regard, IMF added that the measures taken by the government to modernize the agricultural sector, continued expansion of Moroccan companies into new markets, the rise and growth of new sectors such as aerospace and automotive industries, as well as increased investments in infrastructure and human resources “should promote the growth rebound.”

Inflation has remained low and the financial sector remains sound. The 2014 current account deficit narrowed to an estimated 5.8% of GDP due to booming exports from newly developed sectors and lower oil prices. International reserves increased to above 5 months of imports. The 2014 fiscal deficit was also reduced to 4.9% of GDP.

The Fund also noted that the business climate in Morocco has improved, saying that the kingdom moved 16 positions in the 2015 World Bank’s Doing Business Report, which measures the costs to firms of business regulations. The kingdom is now ranked 71 out of 189 countries around the world.

Morocco won five places in the 2014 – 2015 Global Competitiveness Report. The IMF said that this is due to the country’s social and political stability and its efforts to diversify the economy and to modernize the business environment in recent years, as well as reducing the budget deficit between 2012 and 2013.

The IMF has also praised the “strong policy actions” implemented by the Moroccan authorities to reduce vulnerabilities. “These include significant progress to eliminate the cost and fiscal risks associated with energy subsidies by removing all subsidies on liquid petroleum products while extending programs to support the most vulnerable populations, and a strengthening of their economic and financial policies framework (e.g., new banking law, new organic budget law),” it added.

A 24-month Precautionary and Liquidity Line (PLL) in the amount of $5 billion was approved for Morocco by the Executive Board of the IMF on July 28, 2014. (IMF 11.04)

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11.4 MOROCCO: Ratings on Kingdom of Morocco Affirmed At ‘BBB-/A-3’

• Morocco’s economic growth should pick up as higher-value-added sectors increase output.

• We expect the large fiscal and current account deficits to continue to narrow, although their financing will increase government and external debt stocks.

• We are affirming our long- and short-term foreign and local currency sovereign credit ratings on Morocco at ‘BBB-/A-3’.

• The stable outlook reflects our expectation that the fiscal and current account deficits will continue to narrow over the next few years, while economic growth accelerates.

Rating Action

On 17 April, Standard & Poor’s Ratings Services affirmed its ‘BBB-/A-3’ long- and short-term foreign and local currency sovereign credit ratings on the Kingdom of Morocco. The outlook is stable.


Since our last review, in November 2014, we have revised down our forecasts for average global oil prices in 2015-2018 significantly, to $68 per barrel (/bbl) of Brent blend from $90/bbl. As Morocco is a significant net importer of oil products, this has led us to revise down our forecasts for the country’s current account deficits over this period.

However, somewhat offsetting this gain, we now expect the euro to be weaker against the U.S. dollar over the next four years than we forecast in November. Given the still-heavy weighting of the euro (despite being reduced from 80% to 60% in mid-April 2015) in the basket of currencies to which Morocco’s dirham is pegged, we now expect the dirham to also weaken against the U.S. dollar. This expected depreciation is somewhat mitigated by the recent decision of the central bank, Bank Al-Maghrib (BAM), to increase the dollar’s weighting to 40%.

Morocco has faced strong headwinds since the financial and economic crisis and the Arab Spring, but in our view it has demonstrated resilience. Unlike elsewhere in North Africa, political turmoil has been contained. This has been largely due to constitutional reforms, a rise in current spending by the government, and the continued popularity of King Mohammed VI. Moreover, ethnic, tribal, religious, and regional divisions are less pronounced in Morocco than in much of the Middle East and North Africa.

The country fares reasonably well in international comparisons of governance and institutional quality. For example, the World Bank ranks Morocco in the 53rd percentile globally for government effectiveness, 49th for rule of law, 50th for regulatory quality and 32nd for political stability and absence of violence. Transparency International, meanwhile, places the country in the middle of its Corruption Perceptions Index.

The coalition government, led by the moderate Islamist Justice and Development Party, has broadly demonstrated a willingness and ability to push through substantial and often-tough reforms, particularly to subsidies, but also to pensions and public salaries.

We now estimate income per capita at just over $3,000 in 2015, which is low for a sovereign rated ‘BBB-‘, and lower than at our last review, given our weaker forecasts for the exchange rate of the dirham against the dollar. Wider measures of development are also weaker in Morocco than in most investment-grade peers. The country’s Human Development Index score of 0.617 (with 1 being the highest possible) is mid-range, although it has been on a steadily rising trend for many years, from 0.399 in 1980, which has led to decreased poverty. Weaknesses include fairly low adult literacy rates (67% according to the U.N. Development Program), still high (albeit declining) gender inequalities, and rising wealth inequality.

Real GDP growth was sedate in 2012-2014, averaging 3.4%, or 1.9% on a per capita basis. Growth has been held back in part by the country’s still-pronounced, albeit declining, dependence on highly volatile agricultural output, weaker phosphate prices, and lower external demand from Europe.

Nonetheless, new sectors such as automotive, aeronautics and electronics are set to continue growing rapidly in line with the country’s industrial policy, which enjoys broad political support. In view of this trend, continued growth in tourism, and a likely rise in phosphate output, we expect real GDP growth to accelerate to 5% in 2018. We estimate the weighted average of trend growth in GDP per capita at just shy of 3% per year in 2009-2018, which is fairly rapid and in line with many similarly rated peers. The country will continue to welcome foreign direct investment (FDI), and its business environment should stay broadly supportive (it is ranked 71st out of 189 countries in the World Bank’s Doing Business 2015 Index). However, in our view, weaknesses in the country’s judiciary will remain a deterrent to investors. That said, recent and ongoing judicial reforms, such as changes to the penal code, could improve matters over the medium term.

The current account deficit shot up to nearly 10% of GDP in 2012, from 4.5% in 2010, amid high prices for imported food and fuel products and weak demand for Moroccan exports from major markets in Europe, as well as weaker phosphate prices. However, we expect the deficit to continue narrowing to 2.3% of GDP in 2018, from 7.6% in 2013. Lower global hydrocarbons prices should significantly ease pressure on imports, of which fuel products accounted for nearly one quarter in 2014.

We also forecast rising tourism receipts and higher export volumes of cars from the Renault factory in Tangiers. Cars have recently become the country’s leading export product by value, overtaking phosphates. We also anticipate increased phosphate production will support exports and, in turn, current account consolidation. The expected – although slow – economic recovery in key European markets for trade, investment, and tourism, particularly France and Spain, will also help Morocco’s external position in the next three years.

We expect FDI to finance a growing proportion of these deficits, from just over one-third in 2013, with external borrowing covering the remainder. We forecast narrow net external debt to drop slowly as a proportion of current account receipts (CARs) to 29% in 2018 from an estimated 37% in 2015. We forecast the country’s gross external financing requirements to be covered by its CARs over this period. Meanwhile, our revised forecast for lower current account deficits in 2015-2018 now leads us to expect the country’s reserve coverage to be slightly higher than at our last review, at just under five months of current account payments. However, this is still much lower than the nearly seven months’ coverage seen in 2009.

The renewed Precautionary and Liquidity Line (PLL) worth around $5 billion, which the IMF granted in July 2014, would provide a significant buffer in a stress scenario. As with the two-year PLL granted in August 2012, we do not expect the authorities will need to draw on it. Also supportive of Morocco’s external position are the pledged grants for project financing from Gulf Cooperation Council states, totaling around $1 billion a year in 2013-2017.

Fiscal metrics have shown strain in recent years, but we expect consolidation to continue apace, and for the government to hit its target of a central government deficit of just over 3% of GDP by 2017, from over 7% in 2012. We expect the general government balance, which includes surpluses of local governments and social security funds, to be lower still, at 2.6% of GDP in 2018.

Subsidies on fuel and food ballooned to over 6% of GDP following the onset of the Arab Spring in 2011. This led to wider fiscal deficits, and annual average changes in general government debt of more than 6% in 2011-2013. However, the government has managed to cut its subsidies bill substantially. It has also taken measures to slow growth in other areas of current spending, such as public salaries.

Given that there has been some slippage from budgeted spending in previous years, particularly on subsidies and wages, we foresee implementation risks to the proposed cuts. However, we expect a new budgetary framework (Loi organique relative à la loi des finances) to boost discipline. Notably, it should make wage appropriations binding, and increase the transparency and oversight of line ministries’ spending. Capital spending has broadly stagnated in the past three years, being squeezed by demands for sustained high current spending, but it is due to rise in 2015 by 9% year-on-year. This should help support economic growth and private-sector job creation to some extent.

We expect net general government debt (which excludes from gross debt the government’s liquid assets and the holdings of central government debt by other branches of state, such as public pension funds) to average 47% of GDP in 2015-2018. The stock has risen quickly in recent years to fund wide deficits. External financing has increased, and the government successfully tapped the international dollar and euro markets in 2013 and 2014 respectively, with issues of $750 million and €1 billion at favorable rates.

However, at end-2013 just over three-quarters of the stock was in local currency. Initial maturities of the stock are long, with roughly half at more than 10 years, which limits refinancing risk. With over 90% of the debt stock at fixed interest rates, debt-servicing risks are also mitigated.

Regarding monetary flexibility, we expect that the BAM will remain committed to the current pegged exchange rate regime for at least the next two years, and until a more supportive macroeconomic environment is in place, at which point the BAM has indicated its intention to liberalize the regime.

However, given the strong sensitivities surrounding the possible inflationary impact of a more flexible exchange rate, we currently foresee limited progress, if any, toward a more flexible exchange rate regime by end-2018. This will continue to limit monetary policy flexibility, but should contribute to continued low rates of inflation, which we forecast to average just over 2% a year in 2015-2018.


The stable outlook reflects our expectation that the consolidation of the still-large twin deficits will continue over the next few years, while economic growth accelerates from recently low rates.

We could lower the ratings if growth does not accelerate as markedly as expected, if the government deviates substantially from its deficit consolidation path, or if the current account does not narrow as anticipated, for example owing to lower-than-expected exports.

We see an upgrade as a more-remote possibility. It might require economic growth to substantially exceed our forecasts, for exchange rate flexibility to increase markedly, and for our assessment of Morocco’s institutional and governance quality to rise above that of similarly rated peers. (S&P 17.04)

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11.5 TURKEY: Economy Top Concern for Turks Ahead Of Election

According to a recent survey conducted by research company Ipsos, 53% of Turks consider economic issues to be their primary concern ahead of the upcoming 7 June general election. Some 22% of those polled said the general condition of the economy was their greatest concern, 21% said unemployment, while 10% identified their biggest problem to be their own financial hardships.

Ipsos’ Turkey Barometer survey has been conducted every two months since 2010, with results from the recent past revealing the increasing perception that the economy’s strength is on the decline. According to the November-December 2014 survey, 21% of those polled selected unemployment as their primary concern, while only 8% chose the general economy and 9% specified that their own financial hardships were their biggest issue, meaning that 38% of respondents chose economic issues as their foremost concerns.

Turkey Barometer results from 2011 — prior to the country’s last general election — painted a very different picture, revealing that citizens harbored positive outlooks toward the future and showed the government’s policies on health care and education to be popular.

Turkey’s economic success story has taken an increasingly bleak turn in recent months, with the lira falling to record lows against the dollar, while the country’s current account deficit (CAD) has remained high in spite of major drops in global oil prices that should have significantly scaled back the deficit. Export figures have receded while investors have expressed little confidence in Turkey’s stock market, indicating that the country is no longer among desirable developing economies for investment.

Personal debt continues to rise, as does the number of people who are unable to pay off their credit cards, while Turkish companies that hold debt in foreign currencies are suffering as the lira continues to weaken. After industrial output declined in January, it bounced back in March, but economists are still concerned that the country needs to diversify and focus on its industrial sector and place less dependence on the construction sector.

Voters are likely to send a message to the ruling Justice and Development Party (AK Party), which has been credited for rejuvenating the country’s economy and racking up impressive growth rates after a major economic crisis in 2001. If voters perceive the economy in an increasingly negative light, this is almost certain to result in a loss of votes for the AK Party because Turkish voters have traditionally blamed economic downturns on the party in power at the time.

Conflicting opinions with the government has resulted in speculation among analysts that Deputy Prime Minister Ali Babacan, who is in charge of the economy and respected internationally by investors, is unlikely to return for another stint in office. (Zaman 13.04)

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

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