• Knesset Votes To Formulate Two-Year Budget
• US Trade Mission Visits Jordan
• Bahrain Signs New Trade Agreements with US
• Greece's Ouzo Lovers Left With Bitter Taste
• Potato Power - Yissum Introduces Potato Batteries for Use in the Developing World
• Israeli Invents Crossword Puzzle For Blind
• GREECE: Moody's Downgrades Greece to Ba1 from A3, Stable Outlook
  

TABLE OF CONTENTS:

1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Knesset Votes To Formulate Two-Year Budget

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Europe Crisis Slows Israeli Economic Growth
2.2 Gadot Chemical Tankers & Terminals to Acquire a Chemical Terminal in Western Europe
2.3 Ampal's Gadot Chemical Tankers and Terminals to Acquire Merhav Agro

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 US Trade Mission Visits Jordan
3.2 Global Retail Development Index Identifies MENA as Growth Hot Spot
3.3 Historic First Flight Lands at Dubai's New Airport
3.4 Dairy Queen Expands into Saudi Arabia
3.5 Greek Supermarkets Battle Decline In Demand

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Abu Dhabi to Build 'World's Largest' Solar Power Plant

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5: ARAB STATE & PAKISTANI DEVELOPMENTS

5.1 Jordan's Inflation Rate Up 4.9% During First 5 Months of 2010
5.2 Arab Monetary Fund Approves $76 Million Jordan Loan
5.3 Jordan Plans Tax Hikes To Curb Deficit
5.4 Hashemite Kingdom's Exports Rise by 14.2%
5.5 Bahrain Signs New Trade Agreements with US
5.6 UAE May CPI at Annual Hugh
5.7 UAE is Poland's Largest Arab Trading Partner
5.8 Saudi Arabia's CPI Hits a 1-Year High of 5.4% in May 2010
5.9 Egypt Inflation Falls to 10.5% In May
5.10 Egypt Increases Trade with US as Pound Weakens Against Dollar
5.11 Suez Canal Revenues Rise In May To $395 Million

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6: TURKISH, CYPRIOT, GREEK & BULGARIAN DEVELOPMENTS

6.1 Turkey, Lebanon, Syria and Jordan to Set Up Free Trade Zone
6.2 Turkish March Unemployment Rate Falls To 13.7%
6.3 Cyprus Inflation Eases in May
6.4 Cyprus' Unemployment Climbs For 21st Straight Month
6.5 Greece's Ouzo Lovers Left With Bitter Taste
6.6 Greece's Ambitious Energy Plan Unveiled
6.7 Bulgarian Parliament Adopts 2010 Budget Revision Act
6.8 Bulgaria Avoids 'Special' Eurostat Mission Over EU Budget Worries
6.9 Bulgaria's May Inflation Up To 1.9%
6.10 Bulgaria Economic Decline Eases To 3.6% in First Quarter
6.11 Bulgaria Reports Positive FDI in 2010's First Quarter

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 The Fast Day of 17th of Tammuz

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Life Science Companies Predominate in New Incubator Undertakings
8.2 Merck Serono to Expand Israel Operations
8.3 Quark Pharmaceuticals Closes $10 Million Financing
8.4 EarlySense's Patient Supervision System Detects Patient Deterioration with Respiratory Analysis
8.5 Quark Orphan Drug Status for Prophylaxis of Delayed Graft Function in Kidney Transplant Patients
8.6 ElMindA's Brain Network Activation Technology Advances Kendle's Drug Development
8.7 Chiasma Reports Successful Oral Delivery Of A Peptide In Clinical Study
8.8 PositiveID Corporation Breakthrough for its Easy Check Breath Glucose Detection System
8.9 VBL Presents Positive Preclinical Data on Immune Modulator in Rheumatoid Arthritis
8.10 Potato Power - Yissum Introduces Potato Batteries for Use in the Developing World
8.11 Gamida Cell-Teva JV Receives FDA Fast Track Designation for StemEx for Leukemia & Lymphoma
8.12 EarlySense's New EverOn Touch System Receives FDA Clearance

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 NICE to Acquire eglue, a Leading Provider of Real-Time Decisioning and Agent Guidance Solutions
9.2 Pointer Telocation & Viasat Group Strategic Partnership for Innovative Solutions in Telematics
9.3 Magic Software Announces Deal With Israel Defense Forces at Over Half a Million Dollars
9.4 RAD Delivers IP Video Coverage of World Cup to Europe
9.5 Anobit Breaks the Cost Barriers of Solid State Drives (SSDs) for Enterprise Storage
9.6 Wavion Introduces a New Best-of-Breed Combo 5.X GHz Base Station for High-Interference Environments
9.7 Correlix Unveils RaceTeam 3.0 to Automate Real-Time Latency Trading Decisions
9.8 TowerJazz and Toppan Technical Design Center Announce Strategic Agreement
9.9 Silicom's SETAC Chosen by Leading European Security Solution Manufacturer
9.10 Israeli Invents Crossword Puzzle For Blind
9.11 Elbit Systems to Supply a Latin American Army with Advanced Electronic Systems
9.12 Orbotech Receives Acceptances for Its New FPD Gen 8 Array Checker
9.13 TowerJazz CIS Technology Selected by Canesta for Consumer 3-D Image Sensors
9.14 Ness Technologies Wins $4 Million Outsourcing Contract with Israel's Clalit Health Services

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israel's State of Economy Index Shows Slower Growth
10.2 Tourism to Israel Hits 6th Consecutive Record-Breaking Month
10.3 Number Of Israeli Millionaires Up 42.7% In 2009

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11: In Depth

11.1 BAHRAIN: Cruise Plans
11.2 QATAR: Retail on a Roll
11.3 EGYPT: Energy Analyst Urges New Approach in Egyptian Offshore Production
11.4 GREECE: Moody's Downgrades Greece to Ba1 from A3, Stable Outlook

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1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS

1.1 Knesset Votes To Formulate Two-Year Budget

On 22 June, the Knesset plenum approved the bill to have a biennial budget for 2011-12 in its second and third readings. The vote was 63:32. A 12-hour overnight filibuster preceded the vote part of an 18-hour discussion. The government had adopted a dual-year budget for 2009 and 2010 after it took over last April. A dual-year budget eases pressure on Israel's fractious coalition government since political wrangling over budgets, which in the past were annual, has threatened the stability of previous Israeli coalitions. Under Israeli law, failure to pass the current year's budget by the end of March would automatically trigger new elections. Last week, International Monetary Fund Managing Director Strauss-Kahn told an IMF-World Bank meeting that a dual-year budget leads to "stability and long term planning." "Since moving to a dual-year budget tends to aid the continuation of managing countries' economic policies we will recommend to IMF members to adopt it," he said. (Various 22.06)

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2: ISRAEL MARKET & BUSINESS NEWS

2.1 Europe Crisis Slows Israeli Economic Growth

Israel's economic recovery in January-April 2010 recovery continued in step with the recovery of the global economy, but there were signs of some slowdown in the rate of growth compared with the growth trend at the end of 2009, the Bank of Israel said in its "Recent Economics Developments" report of 9 June. The Bank of Israel warns that the slowdown of recovery throughout the eurozone due to the crisis in southern Europe, which became more severe at the end of the period reviewed, may have broad implications for Israel's exports to the eurozone at large, due to their heavy exposure to the European market. Some 33% of Israel's total exports (excluding diamonds) are directed to Europe. It added that the consequences of continued slowdown in the European recovery include both a direct effect, a decline in European demand for Israeli exports, and the indirect effect of nominal exchange rate appreciation against the euro on Israeli exporters' competitiveness. (Globes 09.06)

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2.2 Gadot Chemical Tankers & Terminals to Acquire a Chemical Terminal in Western Europe

Ampal-American Israel Corporation, a holding company in the business of acquiring and managing interests in various businesses, with emphasis in recent years on energy, chemicals, communications and related fields, announced that Herzliya's Gadot (http://www.gadot.com), Ampal's wholly owned subsidiary, entered into an agreement to acquire a chemical storage terminal in Western Europe. Gadot, through a wholly owned subsidiary, has signed an agreement for the acquisition of a chemicals storage terminal with a storage capacity of approximately 100,000 cubic meters in Western Europe which occupies a land in the size of 25 hectares. The purchase price is €30,000,000 (approximately $36.2 million). Closing of the transaction is subject to customary closing conditions, including, among others, obtaining financing and the consent of several customers of the sellers. Ampal (http://www.ampal.com) and its subsidiaries acquire interests primarily in businesses located in the State of Israel or that are Israel-related. Ampal is seeking opportunistic situations in a variety of industries, with a focus on energy, chemicals, communications and related sectors. Ampal's goal is to develop or acquire majority interests in businesses that are profitable and generate significant free cash flow that Ampal can control. (Ampal 14.06)

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2.3 Ampal's Gadot Chemical Tankers and Terminals to Acquire Merhav Agro

Ampal-American Israel Corporation, a holding company in the business of acquiring and managing interests in various businesses, with emphasis in recent years on energy, chemicals, communications and related fields, announced that Gadot, Ampal's wholly owned subsidiary, acquired Merhav Agro, a supplier of agricultural protection products in Israel. Gadot has signed an agreement to acquire the entire issued share capital of Agro for a purchase price of approximately $28.4 million. The closing of the transaction is subject to customary closing conditions, including the regulatory approval of the Israeli Antitrust Commissioner and is expected to occur on July 1, 2010, unless the approval of the IAA is delayed beyond that date. Agro is one of the leading suppliers of plant protection products, plant growth regulators and seeds in Israel, with over 50 years of experience. Agro serves as the Israeli representative of many leading multinational corporations, including Du Pont de Nemours, Bayer CropScience, Syngenta, Chemtura and others. Gadot has identified the agriculture sector as a potential growth driver and Agro will be integrated into Gadot's agro division. Gadot believes the integration of Agro's business into its own will create synergies that will allow Gadot to reduce costs and increase profitability, as well as expand its business activities and worldwide relationships with suppliers and customers.

Ampal (http://www.ampal.com) and its subsidiaries acquire interests primarily in businesses located in the State of Israel or that are Israel-related. Ampal is seeking opportunistic situations in a variety of industries, with a focus on energy, chemicals, communications and related sectors. Ampal's goal is to develop or acquire majority interests in businesses that are profitable and generate significant free cash flow that Ampal can control. For more information about Ampal please visit our web site at www.ampal.com. (Gadot 16.06)

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3: REGIONAL PRIVATE SECTOR NEWS

3.1 US Trade Mission Visits Jordan

On 16 June, a U.S. trade mission visited Jordan to take part in a U.S.-Jordanian food exhibition. Members of the mission, who comprised representatives from 8 companies, held meetings with Jordanian food importers. The visit is organized by the Southern United States Trade Association (SUSTA) in coordination with the U.S. Department of Agriculture. SUSTA is a non-profit agricultural export trade development association comprised of the departments of Agriculture of the 15 southern states and the Commonwealth of Puerto Rico. Since 1973, SUSTA's programs and services have assisted exporters of high-value food and agricultural products. (Petra16.06)

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3.2 Global Retail Development Index Identifies MENA as Growth Hot Spot

According to the 9th annual Global Retail Development Index (GRDI) study from management consulting firm A.T. Kearney, the Middle East and North Africa (MENA) region exhibits the most exciting retail growth opportunities today for international retailers. Eight countries in the MENA region are among the GRDI's top 21: Kuwait (2), Saudi Arabia (4), United Arab Emirates (7), Tunisia (11), Egypt (13), Morocco (15), Turkey (18) and Algeria (21) and most of these countries have increased in attractiveness from last years index. The study says smaller countries including Kuwait, represent increasingly attractive opportunities for international retail expansion. Fiscal stimuli in some MENA markets and the region's rich oil supply have contributed to the positive outlook. The MENA region appears poised for fast recovery from the global turbulence and its retail market has proven resilient. Retail sales are rising, driven by higher disposable incomes, urban population growth and a strengthening middle class and infrastructure investments. In addition to Kuwait, the continued strength of the UAE and Saudi Arabia places these markets among top 10 most attractive retail destinations globally. This high rank highlights the abundant opportunities for further in-country expansion and the ability to leverage regional experiences across the Persian Gulf. (BI-ME 22.06)

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3.3 Historic First Flight Lands at Dubai's New Airport

Dubai Airports paved the way for the successful opening of Dubai World Central-Al Maktoum International for cargo operations on 27 June after the new airport passed a series of operational tests successfully conducted during its first ‘live' flight. Phase 1 of the airport will feature one A380 capable runway, 64 remote stands, one cargo terminal with annual capacity for 250,000 tonnes of cargo and a passenger terminal building designed to accommodate five million passengers per year. When completed, Dubai World Central-Al Maktoum International will be the largest airport in the world with five runways, four terminal buildings and capacity for 160 million passengers and 12 million tonnes of cargo. The facility opens initially for cargo carriers, with passenger operations currently slated to start up at the end of March 2011 in concert with the IATA schedule change. In the short term Dubai World Central-Al Maktoum International will increase the airport capacity of Dubai to accommodate the 48% increase in cargo volumes from 1.9 to 3 million tonnes that is anticipated by 2015. In the long term it will serve as a multi-modal logistics hub for 12 million tonnes of freight and a global gateway for the 150 million passengers per annum that are expected to pass through Dubai by 2030. (BI-ME 21.06)

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3.4 Dairy Queen Expands into Saudi Arabia

Minneapolis' Dairy Queen signed an agreement with franchisee Al Safwa Food Group to open multiple locations in Saudi Arabia. The move into Saudi Arabia marks the 17th country outside of the U.S. and Canada where Dairy Queen will have a presence. The first Dairy Queen is scheduled to open in Riyadh in spring 2011 with a projected total of 32 locations by 2015. Dairy Queen currently has locations in the Middle East countries of Bahrain, Oman, Qatar and the United Arab Emirates. Riyadh-based Al Safwa Food Group is a new retail holding group whose members previously were involved in the casual dining segment in Saudi Arabia. DQ Grill & Chill locations throughout Saudi Arabia will feature all of the soft-serve products that have made Dairy Queen an icon in the industry. Dairy Queen currently has more than 680 locations outside the U.S. and Canada. (IDQ 14.06)

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3.5 Greek Supermarkets Battle Decline In Demand

The drop in demand even for basic commodities that is likely to continue in the coming months is generating a battle of offers among supermarket chains. Survey data compiled by IRI for the last 12 months show that sales of detergents in supermarkets have declined by 14.2% in volume and 3.7% in value on an annual basis; milk sales have dropped by 0.7% in volume and 6.6% in value; yogurt sales have fallen 2.8% in volume and 4.4% in value; and sales of olive oil have shrunk by 0.3% in volume and 9.9% in value. In view of this, supermarkets are adopting a more aggressive policy, with Lidl announcing that it will not pass on to customers the announced rise of value-added tax by 2% from July 1. Other chains are running promotional campaigns aimed at refreshing consumer interest in various products. (Kathimerini 15.06)

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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS

4.1 Abu Dhabi to Build 'World's Largest' Solar Power Plant

Spanish solar energy company Abengoa Solar and French oil major Total will build the world's largest concentrated solar power plant, Abu Dhabi's alternative energy company Masdar announced on 9 June. The plant will be built in Madinat Zayed on the outskirts of Abu Dhabi. The state-owned firm said it has selected a "consortium of Total and Abengoa Solar as a partner to own, build and operate Shams 1, the world's largest concentrated solar power plant and the first of its kind in the Middle East." Construction of the plant, which will cover an area of 2.5 square kilometers (1 square mile) and have a 100 megawatt capacity, will begin in the third quarter of 2010 and be completed in approximately two years, Masdar said. The cost of this project is estimated to be around $600m. The project is planned to meet 7% of Abu Dhabi's demand on clean energy. The joint venture between Masdar (60%), Total (20%) and Abengoa Solar (20%) will develop, build, operate and maintain the plant. (BI-ME 10.06)

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5: ARAB STATE & PAKISTANI DEVELOPMENTS

5.1 Jordan's Inflation Rate Up 4.9% During First 5 Months of 2010

Jordan's consumer price index (CPI) increased by 4.9% during the first five months of 2010 compared to the same period of 2009, according to official data. A Department of Statistics report indicated that the increase was driven by a rise in the prices of several commodities and services, including meat, poultry, fuel, electricity, sugar, and transport and education services. Meanwhile the main commodities which witnessed a decrease in their prices were fruits, dairy and its products and eggs and oil and fats." the report said. The prices data are collected by the Department of Statistics on a monthly basis through a sample that includes (3,786) commercial shops across the Kingdom covering the prices of 851 commodities. (Petra09.06)

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5.2 Arab Monetary Fund Approves $76 Million Jordan Loan

The Abu Dhabi based Arab Monetary Fund has approved a $76 million loan for Jordan to undertake key financial reforms that include bank stress tests and setting up a credit bureau. Governor of the Central Bank of Jordan Toukan traveled to Abu Dhabi to sign the loan agreement on 20 June. He said that the disbursement of the funds was tied to implementing the three-phased plan. Jordan's monetary authorities have strengthened supervision of the country's banking sector since the global downturn to reduce financial vulnerabilities by boosting capital adequacy ratios, liquidity and installing "early warning" systems. The AMF loan would be paid back in four years in five equal installments every six months, the governor said. Since 1983 and 2009, the AMF has extended 16 loans to Jordan worth $350 million to support the treasury and another $411 million to fund trade between Arab countries. (Various 20.06)

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5.3 Jordan Plans Tax Hikes To Curb Deficit

On 17 June, Jordan was poised to institute imminent tax hikes on gasoline, water and consumer items as part of austerity measures to keep the 2010 budget deficit target at 6.3% of GDP. These steps, which the cabinet has already decided upon, are part of bigger levies on the wealthy that also include a hike in VAT rates on a wide range of consumer items from alcoholic drinks to tobacco and coffee. An existing 16% tax on premium gasoline, whose prices that have been deregulated in recent years as part of cuts in fuel subsidies, will be raised by another 2%. Finance Minister Abu Hammour said that despite the imminent raise in gasoline prices, a formula that sets prices on monthly averages will remain intact. Official sources say public finances were in crisis with tax revenues having slumped due to the economy's downturn and cuts in income tax as part of an earlier stimulus package. Public debt is due to hit a record $14 billion this year, nearing a legal limit of 60% of GDP, as recession reduces local revenue and foreign aid. Unemployment is about 13%. The government said it sought $1.4 billion in budget cuts this year to slash its deficit by 3% to 6.3% of GDP and help its economy ride out the global downturn. The country has seen a sharp drop in foreign aid that has long cushioned Jordan's economy from disruptions and helped finance almost half of its budget deficit. It has already trimmed pension benefits for top earners and says it is making progress in across-the-board cuts in government operating costs. Alongside the latest tax hikes, the government had finalized a wide ranging stimulus package to spur investments, including tax breaks for the depressed real estate market, a key driver of the economy. (Various 17.06)

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5.4 Hashemite Kingdom's Exports Rise by 14.2%

Jordan's exports rose by 14.2 % during the first four months of 2010 to reach JD1.36 billion compared to JD1.19 billion in the same period of 2009, according to official figures. The figures, which were released by the Department of Statistics, showed that Jordan's exports of vegetables rose 23.6%, potash 26%, pharmaceuticals 13.9% and fertilizers 13%. The value of the re-exported goods plummeted by 33.1% to JD250.7 million compared to JD374.6 million in the same period of 2009, the figures showed, indicating that imports jumped by 9.4% to JD3.30 billion compared to JD3.02 billion. Jordan's trade deficit for the first four months of the current year rose by 16.4% to JD1.68 billion, according to the statistics. (Petra 16.06)

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5.5 Bahrain Signs New Trade Agreements with US

On 16 June, Bahrain said that it has signed deals in Atlanta, Oklahoma City and Houston that will boost commercial and economic ties between the kingdom and the United States. A delegation led by Shaikh Al Khalifa, chief executive of the Bahrain Economic Development Board (EDB), finalized several memoranda of understanding in a visit to the US. The agreements aim to maximize the opportunities presented by the trillion dollar Gulf and Bahrain-US Free Trade Agreement (FTA). The deals have been inked between the EDB and the City of Atlanta , the Greater Oklahoma City Chamber and the Bilateral US-Arab Chamber of Commerce (BUSACC) and the Greater Houston Partnership (GHP). The deals will see cooperation in key sectors of common interest including education, healthcare, energy, life sciences, R&D, development through innovation, technology and industry cooperation, financial services, industrial and commercial services, telecoms, media and entertainment. (AB 16.06)

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5.6 UAE May CPI at Annual Hugh

Inflation in the UAE hit a one year high of 0.88% on an annual basis in May but edged down slightly on the month on lower housing costs, official data revealed on 20 June. The OPEC member saw months of deflation over the past year but analysts expected prices in the world's third largest oil exporter to rise slightly in 2010 helped by economic recovery. Consumer prices started to rise again in March to reach 0.79% year on year in April, after three months of declines. On the month, UAE consumer prices fell 0.07% in May compared to a decrease of 0.04% in the previous month, data from the National Bureau of Statistics showed. Prices of housing, which has a 39% weight in the overall basket, fell by 0.52% in May, for the second month in a row, after a 0.68% fall in April. Conversely, food prices, which account for 14% of the basket, rose by 1.16%, following a 1.24% increase in April. Transport costs grew 0.46% in May, a slowdown after a 1.12% rise in the previous month. Analysts expect price pressures in the UAE, which faces slow credit growth due to multi billion dollar debt restructuring in Dubai, to stay muted this year on ample housing supply and the greenback's strength following the euro zone crisis. Inflation in the second largest Arab economy hit a nine year low of 1.56% last year, after a record high of 12.3% in 2008. (WAM 20.06)

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5.7 UAE is Poland's Largest Arab Trading Partner

The UAE has become Poland's largest trading partner in the Arab world, albeit three to four years ago, Saudi Arabia occupied that position. Trade in 2008 stood at $900 million, with about $670 million in exports from Poland to the UAE and $230 million in exports from the UAE to Poland. Although a major trade partner, Poland does not purchase oil from the UAE. (GN 17.06)

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5.8 Saudi Arabia's CPI Hits a 1-Year High of 5.4% in May 2010

Year-on-year inflation in Saudi Arabia rose for the fourth month in a row to 5.4% in May 2010, compared to 4.9% in April 2010, reaching a 12-month high, yet below its peak at 11.1% in July 2008. The change in the Consumer Price Index (CPI) has been rising on the back of higher rents and food prices, after hitting a low in October 2009 at 3.5%. The CPI rose by 0.6% month-on-month in May 2010, the highest increase in 7 months, compared to a 0.3% m-o-m increase in April 2010. The y-o-y increase in the index was mainly attributed to the food sub-index which accounts for 26% of the overall index, and the household costs sub-index which accounts for 18%. The food sub-index went up y-o-y by 5.4%, however, less on a m-o-m basis, by 0.1%, while the household costs sub-index appreciated on an annual and monthly basis by 9.4% and 1.1%, respectively. Price pressures have been rising with the recovery seen across the GCC states in general. However, inflation should be expected to remain within the single digit levels. The Saudi Arabian Monetary Agency (SAMA) said last month that inflation is expected to remain stable in Q2/10. Besides being sensitive to international food prices, Saudi Arabia is a net food importer and among the top five rice importers in the world, with its currency pegged to the US dollar, leaving limited room for the government to apply monetary policies to curb inflation. Additionally, Saudi Arabia became a major wheat importer in 2008 after departing from its 30-year self-sufficiency plan due to a lack of water. (Various 15.06)

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5.9 Egypt Inflation Falls to 10.5% In May

Egypt's annual urban inflation rate, the most closely watched price indicator, fell to 10.5% in May, its lowest level since August and giving the central bank more latitude to keep key interest rates steady. Core annual inflation rose to 6.69% in the year to May from 6.62% in April, the central bank announced. Core inflation strips out subsidized goods and volatile items including fruit and vegetables. Analysts had forecast urban inflation would fall to 10.7% in May from 11.4% in April. They attributed the bigger-than-expected drop to favorable base effects and a decline in food and beverage prices, which account for more than 40% of the basket used to measure inflation. The urban consumer price index for May was 147.1 versus 133.1 a year ago. Inflation has been on a downtrend since peaking at 23.6% in August 2008 but has fluctuated. It has been falling this year since hitting 13.6% in January. Analysts are looking for signs that urban inflation may be declining, making it easier for the central bank to reduce its key overnight interest rates. It has left rates unchanged at its last five meetings after a series of cuts that began more than a year ago. The central bank said last month that inflation remained within its comfort zone and interest rates were supportive of economic recovery. (Various 09.06)

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5.10 Egypt Increases Trade with US as Pound Weakens Against Dollar

The volume of trade exchange between Egypt and the United States during Q1/10 increased by 22.2% to hit $2.24 billion compared to $1.832 billion during the same period last year, the Egyptian Ministry of Trade & Industry announced on 19 June. There was a 9.5% decrease in deficit in the trade balance to reach $840.6 million in comparison to $929 million in 2009. This was the result of increasing the volume of Egyptian exports to the US by 55% during Q1/10 with total exports of $700 million against $452 million dollars during the same period in 2009. The value of non-oil exports rose by 26.8%, reaching $357 million in 2010, compared to $281.5 million during the same period in 2009. The value of exports in the context of the QIZ agreement rose by 13.2% reaching $267 million during the first quarter of 2010 compared to $236 million during the same period in 2009. Egyptian exports in the framework of the Generalized System of Preferences (GSP) increased by 13.2% to $12 million during the first quarter of this year, compared with $13.7 million during the same period in 2009. The Egyptian imports from the US rose by 11.5% as the Egyptian imports during the period were valued at $1.54 billion compared to $1.381 billion during the same period in 2009, adding that Egypt is ranked 32 among the top countries importing from the US. The increased trade with the US comes within the context of the Egyptian pound weakening against the US dollar reaching LE 5.6933 for a dollar on 19 June. (DNE 20.06)

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5.11 Suez Canal Revenues Rise In May To $395 Million

Egypt posted a rise in Suez Canal revenues for May, reaching $395 million compared to $342.4 million a year earlier, according to figures from the canal authority. May's revenues are also higher than the previous month, which totaled $374.9 million. According to the Suez Canal Authority, annual growth in revenues accelerated in May to 15.4% compared to 8.1% in April. Meanwhile, monthly growth rose to 5.4% in May after contracting 1.2% the month prior. Total tonnage of vessels passing through the canal advanced 20.7% annually in May to 71.7 million tons after a modest 8.2% growth in April. On a monthly basis overall tonnage grew 8.2% in May from a 2.7% contraction in April. Higher tonnage of both oil and non-oil vessels contributed to this increase. Oil vessels' tonnage rose 26% compared to the previous year in May after contracting 1% in April. The number of vessels also increased 6.4% annually after contacting 1.1% in April, backed by a rebound in traffic of both oil and non-oil vessels. Annual growth of the number of non-oil vessels jumped to 8% in May 2010, from -0.7% the month before, further emphasizing the rebound in global trade growth. The waterway is a vital source of foreign currency in Egypt, along with tourism, oil and gas exports and remittances from Egyptians living abroad. (DNE 10.06)

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6: TURKISH, CYPRIOT, GREEK & BULGARIAN DEVELOPMENTS

6.1 Turkey, Lebanon, Syria and Jordan to Set Up Free Trade Zone

Turkey, Lebanon, Jordan and Syria have agreed to set-up a regional agreement that would allow for free trade and travel between the four countries. This would mean the removal of visas for travel between the four countries, as well as the establishment of a joint cooperation council to develop a free trade zone. The deal, signed by the foreign ministers of the four countries on the sidelines of the Turkey-Arab Cooperation Forum in Istanbul, comes only one week after Turkey presented a range of measures to strengthen its economic ties with its eastwards neighbors, including Syria, Iraq and Iran. Turkey and Syria already signed a similar agreement in 2008, leading to a $300 million increase in trade flow between the two countries between 2008 and 2009, a trend that is expected to continue despite continued US sanctions on Syria. Analysts said the free trade zone would stand to benefit from are the increasing levels off Foreign Direct Investment (FDI) in Lebanon, a country seen as a safe economy during troubled economic times. (AB 20.06)

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6.2 Turkish March Unemployment Rate Falls To 13.7%

Turkey's jobless rate fell to 13.7% in the three months through April, according to figures announced by the statistics office in Ankara. The rate declined from 15.8% in the same period of 2009, the agency said. The seasonally adjusted jobless rate, which compensates for higher employment levels during the summer harvest and tourism months, was 12.7%, unchanged from a month earlier. Turkey's economy returned to growth on an annual basis in the last three months of 2009 after four quarters of contraction. It may have expanded 12% annually in the first quarter, Finance Minister Mehmet Simsek said. The economy added 636,000 jobs on farms and 957,000 in factories and companies compared to a year earlier, the agency said Tuesday. Unemployment among young people declined to 24.6% from 27.5% a year earlier. (TurkStat 15.06)

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6.3 Cyprus Inflation Eases in May

Cyprus' consumer price inflation rate eased to 1.6% in May from 2.4% in April, largely thanks to a fall in food price relative to the previous year. Compared with the previous month, the index fell by 0.08% to 112.67. The Cypriot Statistical Service reported that this was mainly owing to decreases in the prices of certain fresh vegetables and motor cars. Increases were recorded in the prices of certain fresh fruit, electricity, air fares, petroleum products and newspapers. For the period January-May 2010, the CPI recorded an increase of 2.3% compared with the corresponding period of 2009. Meanwhile, the EU-harmonized inflation rate (HICP) rose by 1.8% in May, compared with 2.5% in April 2010 and 0.5% in May 2009. For the period January-May 2010, the HICP recorded an increase of 2.4% compared with the corresponding period of 2009. (CSS 08.06)

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6.4 Cyprus' Unemployment Climbs For 21st Straight Month

Unemployment in Cyprus continued its relentless climb in May, rising by 5,425 or 35.8% compared with May 2009, having risen by 34.3% in April. The annual increase was mainly recorded in the sectors of construction (an increase of 976), wholesale and retail trade (944), public administration (858), manufacturing (545), hotels and restaurants (495), real estate and business activities (443), as well as newcomers in the labor market where an increase of 451 was recorded. The total number of registered unemployed was 20,583 persons. According to the Statistical Service, on a seasonally adjusted basis, unemployment rose by 3.2% compared with the previous month. According to the most recent Labor Force Survey, which includes not only the registered unemployed but all those seeking work, the unemployment rate in Q4/09 was 6%. (FM 10.06)

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6.5 Greece's Ouzo Lovers Left With Bitter Taste

Greece's consumption of ouzo is expected to fall by at least 30% due to successive hikes to alcohol taxes introduced by the government recently in a bid to up state revenues. The sharp drop in consumption comes at a time where the sector is also suffering liquidity problems. The tax applied to alcoholic drinks is paid to the state by drinks producers within 30 days. However, the companies are paid for their products with bank checks that take 180 days to clear. This, in combination with banks having turned off the lending tap to businesses, means that 80 to 90 alcoholic drink distilleries may shut down by the end of the year. This is how the general secretary of the Federation of Greek Distillates and Spirits (SEAOP), Haris Mavrakis, described the state of the industry in a meeting with journalists. The sharp drop in consumption will mean that the state will collect less than half of expected revenues from the sector after the hikes in taxes, he said. More than 2,000 people are directly employed in the sector, with a total of 100,000 employees indirectly involved in the business in industries such as transport and the production of raw materials. The economic impact on the industry due to the drop in consumption is expected to have a negative impact on exports. Ouzo sales represent 68% of Greek drinks exported, with the main destination being Germany, which has doubled imports of Greek ouzo in the last six years to 17.3 million liters in 2008 from 9.4 million liters in 2003. (Kathimerini 17.06)

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6.6 Greece's Ambitious Energy Plan Unveiled

Investments in Greece's renewable energy sources (RES) are seen reaching €16 billion by 2020 in order for the country to meet its energy goals, according to the Environment, Energy and Climate Change Ministry. In a plan unveiled by the ministry yesterday, 20% of the country's power will be produced by RES by 2020, which includes 40% of electrical power coming from green energy sources. By the end of 2020, it is estimated that 15,000 megawatts of RES will have been installed, up from 4,500 MW in 2010. The largest chunk of green power will come from wind farms that will produce 7,500 MW of energy, while solar power systems will generate another 2,500 MW. Biomass energy production is seen reaching 250 MW, with another 120 MW coming from geothermal sources. With the implementation of the plan needed to achieve goals set for 2020, the country will need to change the electrical energy mix it produces, placing renewable energy sources well ahead of lignite as future power providers.

For this to happen, however, investment activity must pick up to unprecedented levels for Greece. Every year, an additional 1,500 MW of green power must be included in the system, estimates show. Last year, just 118 MW was added. Once the investments have been implemented, according to the ministry, there will be a benefit of €1.3 billion for the 2010-20 period due to the reduction in costs from carbon emission trading. The plan to achieve the goals has been put up by the ministry for public discussion until June 28. At the start of July it will be sent to the European Commission for any further changes. Industry sources have described it as being ambitious, saying that significant investments in networks need to be completed in order to transport the larger amounts of RES power produced. In order for the necessary investments to be completed, tariffs need to be raised by about 40 to 45%, industry sources added. (Kathimerini 22.06)

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6.7 Bulgarian Parliament Adopts 2010 Budget Revision Act

The Bulgarian Parliament has approved the 2010 State Budget Revision Act, the first mid-year budget update in the country since 1997. A total of 120 MPs from the rightist ruling majority voted in favor of the revised budget, while 51 MPs from the opposition Bulgarian Socialist Party and the ethnic Turkish party DPS voted against. The GERB party government has sought to justify the revision with the reduced revenues as a result of the economic crisis, and its unwillingness to increase any taxes. One of the main factors that necessitated the revision of Bulgaria's 2010 state budget is the low level of domestic consumer demand, said Finance Minister Djankov at opening of the Parliament debate on the budget update. The 2010 Budget Revision Act projects a 1% GDP growth in 2010 and a deficit of 4.8% of GDP on a cash basis, with a 3.8% of GDP under EU accounting rules, far wider than initial estimates. Thus, the country's consolidated fiscal framework will end the year with a gap of BGN 2 B. The current 2010 Budget Act provided for a 2010 deficit of only BGN 560 M. It also provides for a 20% reduction of non-interest state spending; cuts in administrative expenses are expected to save BGN 900 M. (SMN 18.06)

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6.8 Bulgaria Avoids 'Special' Eurostat Mission Over EU Budget Worries

There will be no “special” exploratory mission on part of Eurostat in order to examine Bulgaria's state finances but instead there will be a “regular” mission in September 2010, announced Finance Minister Djankov after meeting EU Economic Affairs Commissioner Rehn. Djankov met with Rehn in Brussels on 21 June in order to present to him in person the most recent data about the revision of Bulgaria's 2010 state budget, the planned measures for reducing its 2010 budget deficit, and the issue of the arrears that the current Bulgarian center-right government claims to have inherited from the previous Socialist-led Cabinet, i.e. alleged “secret” contracts and annexes with private companies for about BGN 2.16 B that were unaccounted for. The meeting comes after in March the arrears together with reduced state revenues and increased spending have caused the Bulgarian government to change its 2009 budget deficit data from 1.9% to 3.7% of the GDP, a figure later corrected to 3.9% by Eurostat. This led to certain suspicions of “data cooking” on part of the Bulgarian authorities in light of the situation in Greece and the European Commission initially announced that the EU statistical office Eurostat would head for Sofia within weeks on what could have been its first exploratory mission under its newly expanded auditory powers. At the same time, the European Commission is considering setting Bulgaria under the excessive deficit procedure as the country's budget deficit is exceeding the 3% threshold set by the EU Stability and Growth Pact. Under Bulgaria's mid-year revision of its 2010 state budget adopted last week by the Parliament at first reading, the 2010 deficit is set at 4.8% of GDP on a cash basis and 3.8% of GDP under EU accounting rules.

The information provided by Bulgaria will be analyzed by the Commission until July 7, when it is going to submit its position on the proposed measures to the Ecofin, the Council of EU Finance Ministers. The Commission is going to decide if and when to propose setting Bulgaria under the excessive deficit procedure to reduce its budget deficit below 3%. (SMN 22.06)

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6.9 Bulgaria's May Inflation Up To 1.9%

Bulgarian consumer price inflation went up to 1.9% in May on an annual basis from 1.8% a month earlier, official data showed on 14 June. On a monthly basis the index fell 0.2% in May after increasing by 1.1% the previous month, driven by a fall in food and soft drinks prices. Meanwhile, the harmonized index of consumer prices stood at 3% on a yearly basis in May and was flat on a monthly basis. Double-digit inflation and a growing current account deficit have prevented Bulgaria from joining the ERM II, so-called waiting room to the eurozone, since it joined the European Union in 2007. The center-right government dropped its plans for applying for ERM II after raising the alarm that the 2009 budget gap was 3.7% of GDP rather than the 1.9 % due to unaccounted procurement deals. Bulgaria's economy contracted by 3.6% on an annual basis in the first quarter of 2010 from 5,9% in the previous quarter, but the government hopes for a 1% economic growth for this year as recovering exports bolster the expansion. (SMN15.06)

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6.10 Bulgaria Economic Decline Eases To 3.6% in First Quarter

The fall of Bulgaria's gross domestic product (GDP) slowed to 3.6% on an annual basis in Q1/10 from 5.9% in the previous quarter, data showed on 9 June. The National Statistics Institute has raised the figures about the decline of Bulgaria's economy from 4%. Even though the revised statistics show slower contraction of the Bulgarian economy, it marks one of the sharpest fall in GDP among European Union member states - the country is preceded only by Latvia, whose economy contracted last year by the record-high 15%. Bulgaria's government has revised up to 1% its economic growth forecast for this year as recovering exports bolster the expansion. Prime Minister Borisov's government previously estimated the economy would grow 0.3% after a 5.1% contraction in 2009 as investments dwindled and consumption shrank. The European Commission said last month that Bulgaria's economy is likely to start to recover towards the end of 2010 under the impact of the international cycle. Bulgaria's budget deficit increased to BGN 1.67 B in the first three months of 2010 due to a fall in revenues and a rise in spending for social payments. The lev is already linked to the euro in a currency board that keeps the Bulgarian currency at 1.9558 to the euro. Bulgaria's fiscal reserve decreased at the end of March to BGN 6.3 B from BGN 7.4 B over the previous month and BGN 8.3 B on an annual basis. (SMN 10.06)

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6.11 Bulgaria Reports Positive FDI in 2010's First Quarter

Bulgaria did not have a net outflow of foreign direct investments in the first quarter of 2010, according to revised data of the Bulgarian National Bank (BNB). A 16 June BNB announcement shows that Bulgaria ended the first quarter with a positive FDI balance of about €130m, reversing the data announced at the very end of May, saying that the country saw a negative FDI balance of €22m. The revised information shows €63m of foreign investments in January 2010, €146m in February and negative €78m in March. What is more, according to preliminary data, in April, Bulgaria attracted a total of €36.7m in FDI, bringing the total for the first four months of the year to €168.1m (0.5% of GDP). Despite the reversal of the negative FDI balance, the data still shows a staggering 82.4% decline of foreign investment in Bulgaria in January-April 2010 compared to the same period of 2009 when the country attracted a total of €955m (2.8% of the GDP). By country, the largest foreign investors in Bulgaria for the period January-April 2010 were the Netherlands (€579m), Russia (€48.6m) and the USA (€47m). (SMN 17.06)

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7: GENERAL NEWS AND INTEREST

*ISRAEL:

7.1 The Fast Day of 17th of Tammuz

The Jewish fast day of the 17th of Tammuz is observed this year from sunup to evening on Tuesday, 29 June. The fast day itself commemorates five tragedies: 1. Moses descended from meeting G-d and receiving the Torah on Mount Sinai, saw the Jews celebrating with the Golden Calf and broke the two tablets G-d had given him. 2. The daily offering, which had been brought regularly in Temple in Jerusalem, was halted during the Babylonian siege before the Temple was destroyed. 3. The Romans breached the walls of Jerusalem, prior to destroying the second Temple, in 70 CE. 4. A Greek or Roman official named Apostimos held a public burning of the Torah. 5. Idols were set up in the Temple itself; it is not clear what year this happened. The 17th of Tammuz is the second of the four fasts commemorating the destruction of the Temple and the Jewish exile.

In later years this day continued to be a dark one for Jews. In 1391, more than 4,000 Jews were killed in Toledo and Jaen, Spain and in 1559 the Jewish Quarter of Prague was burned and looted. The Kovno ghetto was liquidated on this day in 1944 and in 1970 Libya ordered the confiscation of Jewish property.

The 17th of Tammuz also marks the beginning of the “Three Weeks,” which ends with the fast of the 9th of Av. Some customs of mourning, which commemorate the destruction of Jerusalem, are observed from the start of the Three Weeks. Jewish mourning customs restricts the extent to which one may take a haircut, shave or listen to music, though communities and individuals vary their levels of observance of these customs. No Jewish marriages or other major celebrations are allowed during the Three Weeks, since the joy of such an event would conflict with the expected mood of mourning during this time. The Three Weeks can be thought of as having a variety of increasing levels of mourning. Some restrictions begin on the 17th of Tammuz, some from the beginning of the month of Av, and some only come into effect the week in which Tisha B'Av occurs.

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8: ISRAEL LIFE SCIENCE NEWS

8.1 Life Science Companies Predominate in New Incubator Undertakings

According to the Israel Technology Incubators Forum (ITIF), 53% of the 81 new companies established at incubators in 2009 were in the life sciences. Of these, 33 (41%) are developing medical devices and ten (12%) are biomed firms. So far this year, 19 life sciences start-ups have been founded at the incubators, 15 of which are medical devices companies. Prominent biomed companies that have emerged from the incubators program include Compugen, Protalix Biotherapeutics, D-Pharm, Mazor Surgical Technologies and Remon Medical Technologies. The aggregate value of M&As is about $1billion. Out of the 579 companies founded at incubators, 209 (38%) are medical devices companies, and 89 (16%) are biotech and pharmaceutical firms. 19 of Israel's 26 incubators invest in the life sciences. (Globes 15.06)

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8.2 Merck Serono to Expand Israel Operations

Merck Serono SA, Europe's largest biopharmaceutical company, plans to expand its Israeli operations. Globes reported that the company has called on Israeli entrepreneurs and start-ups to collaborate with it through its local R&D center, Yavne's Inter Lab Ltd. Merck Serono believes that it is the ideal partner of choice for the development of new drugs and that it has a proven track record of developing blockbuster drugs. Merck Serono has a long standing commitment to Israel, which commenced over 30 years ago. In the call to entrepreneurs, Merck Serono said that it wants to expand its drug pipeline in a range of fields, including autoimmune and inflammatory diseases, oncology and endocrinology. It also wants to apply new technologies to expand its drug discovery activity. (Globes 15.06)

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8.3 Quark Pharmaceuticals Closes $10 Million Financing

Quark Pharmaceuticals announced the closing of a private financing by the existing investors of Quark totaling an aggregate of $10 million. Quark Pharmaceuticals will use the funds to advance its RNAi drug pipeline, which has the largest number of clinical-stage siRNA therapeutic programs in the industry. The Company's pipeline candidates are currently being evaluated in five different clinical trials. Quark Pharmaceuticals (http://www.quarkpharma.com), the world leader in novel RNAi discovery and development, has the largest clinical-stage siRNA pipeline in the industry. The Company's fully integrated drug development platform spans therapeutic target identification to drug development. Quark's approach to delivery allows targeting of tissues and organs including the eye, kidney, ear, lung, spinal cord and brain. Quark is also committed to leveraging a broad research pipeline of siRNA drug candidates and novel siRNA structures to develop additional RNAi drug candidates. Quark is headquartered in Fremont, California and operates research and development facilities in Boulder, Colorado and Ness-Ziona, Israel. (Quark 10.06)

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8.4 EarlySense's Patient Supervision System Detects Patient Deterioration with Respiratory Analysis

EarlySense, developer of the EverOn contact-free, patient supervision system for hospital and post acute care, announced the results of a multicenter study conducted at several hospitals in the United States and Israel. The objective of the study was to evaluate the correlation between the different parameters measured by the EverOn system and the detection of patient deterioration in hospitals. The results show that by combining the measurements of respiratory rate, heart rate and a new respiratory pattern alert called “Double Respiration Pattern”, patients who are likely to deteriorate are effectively identified. A risk factor of 12.2 was shown for major patient deteriorations, i.e. there was a dramatic 12.2 times greater chance of a major deterioration in patients where the system alerted versus patients where it didn't.

EverOn is a contact-free patient supervision system installed underneath a hospital bed mattress. There are no leads or cuffs to connect to the patient, who has complete freedom of movement and is not burdened by any irritating attachments. The system measures patient vital signs and movements and alerts medical personnel of the changes in a patient's condition. EverOn detects heart and respiration rates, bed entries and exits, as well as patient movement. EverOn also helps the medical staff to better implement patient turns by verifying the turning process, which can positively influence the treatment and the prevention of pressure ulcers. Clinical evaluations performed worldwide with EverOn show significant improvement in clinical and economic outcomes for hospitals using the system. Ramat Gan's EarlySense (http://www.earlysense.com) is bringing to market a pioneering technology designed to advance proactive and preventive patient supervision to enable better patient outcomes. The company's flagship product, EverOn, is an automatic, continuous, contact-free patient supervision device that follows and documents a patient's vital signs and movement. (EarlySense 14.06)

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8.5 Quark Orphan Drug Status for Prophylaxis of Delayed Graft Function in Kidney Transplant Patients

Quark Pharmaceuticals announced that the European Commission has granted Orphan Medicinal Product Designation for QPI-1002 (also referred to as I5NP) for the prophylaxis of delayed graft function (DGF) in kidney transplant patients. QPI-1002 is a synthetic siRNA targeting p53 mRNA and is the first synthetic siRNA to be administered systemically to humans. The designation is granted under the name of the European sponsor, Verius, Ltd. of the United Kingdom. Orphan designation in the EU grants special status to a product to treat a rare disease or condition affecting less than five in 10,000 persons in the EU per year. The provisions for the EU orphan designation allow for incentives to pharmaceutical companies developing such products, thus providing better access to treatments for patients having conditions that otherwise might not be investigated.

Quark has completed enrollment for the dose escalation safety portion (Part A) of a multi-center, two-part Phase 1/2 clinical trial for prophylaxis of delayed graft function (DGF) in patients undergoing deceased donor kidney transplantation. An independent Data Safety Monitoring Board (DSMB) has recommended continuation as planned to evaluate the safety and potential clinical activity of selected dose(s) of QPI-1002 in the Phase II portion (Part B) of the study. Part B of the study is expected to commence enrollment of adult kidney transplant recipients by mid 2010.

Quark Pharmaceuticals (http://www.quarkpharma.com), the world leader in novel RNAi discovery and development, has the largest clinical-stage siRNA pipeline in the industry. The Company's fully integrated drug development platform spans therapeutic target identification to drug development. Quark's approach to delivery allows targeting of tissues and organs including the eye, kidney, ear, lung, spinal cord and brain. Quark is also committed to leveraging a broad research pipeline of siRNA drug candidates and novel siRNA structures to develop additional RNAi drug candidates. Quark is headquartered in Fremont, California and operates research and development facilities in Boulder, Colorado and Ness-Ziona, Israel. (Quark 15.06)

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8.6 ElMindA's Brain Network Activation Technology Advances Kendle's Drug Development

Cincinnati's Kendle, a leading, global full-service clinical research organization, announced it now offers Brain Network Activation (BNA) imaging providing a non-invasive platform for mapping, monitoring and understanding brain electro-physiological network activity in response to cognitive or physiological stimuli. The BNA imaging technology was developed by ElMindA, a medical technology development company based in Herzliya, Israel. Exclusively licensed to Kendle's early stage development efforts, this innovative solution reveals electrophysiological neural networks by using an innovative set of signal processing and pattern recognition techniques that combine the high temporal resolution of EEG with the spatial resolution of fMRI. The result is a three-dimensional image of neuronal connectivity and synchronization providing sensitive, specific and reproducible data on drug effects essential for early stage development. The BNA technology utilizes standard 64 electrode EEG and can be applied in any clinic by an EEG-trained technician rather than requiring scanning time in MRI machines. There are no limits to the number of scans or images that can be taken over a set amount time as EEG is completely non-invasive, allowing for assessments at multiple time points and multiple doses to determine the effects of novel drugs on brain function.

Herzliya's ElMindA (http://www.elminda.com) develops and markets a non-invasive, diagnosis and treatment management platform that addresses a critical unmet need in neurological and psychiatric disorders to dramatically enhance treatment efficacy and patients' quality of life while reducing costs. ElMindA's mission is to revolutionize the treatment of brain-related pathologies by revealing, for the first time ever, the dynamic electrophysiological neural network connectivity and synchronization of the brain, paving the way to affecting brain plasticity and empowering the dramatic improvement of brain disorder treatment at any neurological and psychiatric point of care. (Kendle 15.06)

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8.7 Chiasma Reports Successful Oral Delivery Of A Peptide In Clinical Study

Chiasma has successfully completed a Phase I clinical study evaluating the safety and pharmacokinetics (PK) of its proprietary product Octreolin, which contains the active ingredient octreotide actetate and is administered orally. Octreolin demonstrated a PK profile similar to that of subcutaneously injected octreotide acetate. In addition, no serious adverse safety events were reported for Octreolin. The Company also announced that it was advancing towards its goal of beginning a pivotal trial by the end of the year for Octreolin in acromegaly, a hormonal disorder that results from an excess of growth hormone (GH). Chiasma has submitted an Orphan Drug application to the US FDA for acromegaly and will submit an application for Orphan Medicinal Product Designation to the European Agency for the Evaluation of Medicinal Products (EMEA) shortly.

Jerusalem's Chiasma (http://chiasmapharma.com) applies its proprietary technology to approved drugs, which not only enables their being switched from injectable to oral, but importantly can result in new indications and/or enhanced absorption. The Company's TPE technology promotes the delivery of drugs to the GI wall and from there to the liver. It is applicable to macromolecules that to-date can be administered only by injection. TPE can be utilized also with small molecules that are already orally available but are poorly absorbed. (Chiasma 14.06)

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8.8 PositiveID Corporation Breakthrough for its Easy Check Breath Glucose Detection System

PositiveID Corporation has achieved an important milestone in the development of its non-invasive Easy Check breath glucose detection system. The Company has completed the development of a single-use capsule containing a proprietary chemical reagent that it believes will enable it to accelerate its development schedule and produce a lab-scale prototype device during the third quarter of 2010. Through the use of the capsule and proprietary chemical mixture contained therein, the prototype is expected to be able to measure the levels of acetone in a patient's exhaled breath, which, in turn, will be translated into a measurement of blood glucose levels. This could eliminate a patient's need to prick his or her finger multiple times per day to get a blood sugar reading. Continued research and development efforts of the Company's scientific team, based in Israel, have led to the initial design completion of the Easy Check chemical sensor, a single-use capsule that contains a proprietary chemical reagent, which mixes with the volatile organic chemicals in a patient's exhaled breath to create a chemical reaction that is measured by the device's optical density sensors. The readings are immediately translated by the device's software into blood glucose measurements that are expected to correlate closely to glucose readings obtained by conventional blood glucose measuring devices. The new capsule measures approximately five centimeters in length. PositiveID Corporation (http://www.PositiveIDCorp.com) develops and markets healthcare and information management products through its RFID-based diagnostic devices and identification technologies, and its proprietary disease management tools. (PositiveIDCorp 14.06)

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8.9 VBL Presents Positive Preclinical Data on Immune Modulator in Rheumatoid Arthritis

VBL Therapeutics announced preclinical data demonstrating that VB-201 possesses anti-inflammatory properties and effectively reduced the symptoms of arthritis in experimental models. VB-201 is the first in a new class of drugs and the lead candidate of several proprietary phospholipid analogs from VBL's proprietary Lecinoxoid family that were designed to be orally available, anti-inflammatory medicines. Oxidized phospholipids are abundantly generated in sites of inflammation, but unlike native oxidized phospholipids, which induce inflammation in rheumatoid arthritis and other chronic inflammatory diseases, Lecinoxoids exhibit anti-inflammatory properties. This study evaluated the efficacy of VB-201 in two validated preclinical models of rheumatoid arthritis (collagen-induced arthritis [CIA] mouse model and adjuvant-induced arthritis [AIA] rat model). VB-201 reduced infiltrates of inflammatory cells in the joints in both experimental models. In the mouse model, VB-201 significantly reduced arthritis incidence and severity (as measured by reduced IL-6 plasma levels and significantly less inflammatory cells and destruction in the arthritic joints). In the rat model, VB-201 prevented the onset of AIA (as measured by significantly reduced arthritis score and paw swelling).

Tel Aviv's VBL Therapeutics (http://www.vblrx.com) is an innovative, clinical-stage biotechnology company committed to the development of novel treatments for immune-inflammatory diseases and cancer. VBL has pioneered the Lecinoxoid class of oral anti-inflammatory agents and VB-201 is the lead candidate from this program, which has entered Phase 2 clinical development in patients with psoriasis. In addition, VBL has a proprietary Vascular Targeting System (VTS) technology platform that has yielded VB-111, the first dual-action, anti-angiogenic and vascular disruptive agent (VDA) for cancer, which is expected to enter Phase 2 clinical trials in 2010. (VBL 17.06)

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8.10 Potato Power - Yissum Introduces Potato Batteries for Use in the Developing World

Yissum Research Development Company introduced a solid organic electric battery based upon treated potatoes. This simple, sustainable, robust device can potentially provide an immediate inexpensive solution to electricity needs in parts of the world lacking electrical infrastructure. Researchers at the Hebrew University discovered that the enhanced salt bridge capability of treated potato tubers can generate electricity through means readily available in the developing world. This cheap, easy to use green power source could substantially improve the quality of life of 1.6 billion people, comprising 32% of the developing non-OECD populations, currently lacking access to electrical infrastructure. Such a source can provide important needs, such as lighting, telecommunication and information transfer.

The research discovered a new way to construct an efficient battery using zinc and copper electrodes and a slice of your everyday potato. The scientists discovered that the simple action of boiling the potato prior to use in electrolysis, increases electric power up to 10 fold over the untreated potato and enables the battery to work for days and even weeks. The scientific basis of the finding is related to the reduction in the internal salt bridge resistance of the potato battery, which is exactly how engineers are trying to optimize the performance of conventional batteries. The ability to produce and utilize low power electricity was demonstrated by LEDs powered by treated potato batteries. Cost analyses showed that the treated potato battery generates energy, which is five to 50 folds cheaper than commercially available 1.5 Volt D cells and Energizer E91 cells, respectively. The clean light powered by this green battery is also at least 6 times more economical than kerosene lamps often used in the developing world.

Jerusalem's Yissum Research Development Company of the Hebrew University (http://www.yissum.co.il) was founded in 1964 to protect and commercialize the Hebrew University's intellectual property. Ranked among the top technology transfer companies in the world, Yissum has registered over 6,100 patents covering 1,750 inventions; has licensed out 480 technologies and has spun-off 65 companies. (Yissum 17.06)

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8.11 Gamida Cell-Teva JV Receives FDA Fast Track Designation for StemEx for Leukemia & Lymphoma

The Gamida Cell-Teva Joint Venture has received an FDA Fast Track Designation for StemEx, in development as an alternative to a bone marrow transplant for patients with blood cancers such as leukemia and lymphoma. The fast track programs of the FDA are designed to facilitate the development and expedite the review of new drugs that are intended to treat serious or life threatening conditions and that demonstrate the potential to address unmet medical needs (fast track products). StemEx is a graft of stem/progenitor cells isolated and expanded from a portion of a single unit of umbilical cord blood and transplanted in combination with non-expanded cells from the same unit. StemEx is now being studied in an international, phase III, clinical trial at leading transplant centers in the U.S., Europe and Israel. StemEx has orphan drug designation in the U.S. and in Europe, in addition to long term patent protection. Jerusalem's Gamida Cell (http://www.gamida-cell.com) is a world leader in stem cell population expansion technologies and therapeutic products for bone marrow transplantation and regenerative medicine for illnesses such as leukemia and lymphoma as well as autoimmune, hematological and metabolic diseases. Gamida Cell's therapeutic candidates contain populations of adult stem cells, selected from non-controversial sources such as umbilical cord blood, which are expanded in culture. (Gamida 21.06)

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8.12 EarlySense's New EverOn Touch System Receives FDA Clearance

EarlySense announced that its EverOn Touch system has been cleared for marketing by the U.S. FDA. The FDA clearance covers several key additions to the traditional EverOn contact-free patient supervision system value proposition. For the first time, the EverOn system includes an online display that alerts medical staff regarding a patient's motion level and verifies patient turns as indicated by nurses. Identifying low patient movement and then turning patients methodically are key elements in the prevention of pressure ulcers, the most costly patient safety risk in U.S. hospitals. The newly cleared features augment the previously FDA-approved EverOn contact-free, patient supervision system which utilizes a sensor placed underneath a hospital bed mattress. There are no leads or cuffs to connect to the patient, who has complete freedom of movement and is not burdened by any irritating attachments. The system measures patient vital signs and movements and alerts medical personnel of the changes in a patient's condition. EverOn detects heart and respiration rates, bed entries and exits. Clinical evaluations performed worldwide with EverOn show significant improvement in clinical and economic outcomes for hospitals using the system.

Ramat Gan's EarlySense (http://www.earlysense.com) is bringing to market a pioneering technology designed to advance proactive and preventive patient supervision to enable better patient outcomes. The company's flagship product, EverOn, is an automatic, continuous, contact-free patient supervision device that follows and documents a patient's vital signs and movement. The system is currently installed at several medical centers in the USA and Europe. (EarlySense 21.06)

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8.13 PolyTouch Medical Receives FDA Clearance to Commercialize PatchAssist

PolyTouch Medical has received broad FDA 510(k) clearance to commercialize PatchAssist. PatchAssist is an innovative laparoscopic surgical instrument that enables accurate and rapid delivery and placement of soft tissue prosthetics for a variety of procedures, including laparoscopic ventral hernia repair (LVHR). PatchAssist is a stand-alone surgical device that is compatible with all currently commercialized soft tissue prosthetics. PatchAssist enables surgeons to rapidly deliver and position soft tissue prosthetics over the defect potentially reducing operation time by 30% - 50%. PolyTouch Medical is located in the Misgav Venture Accelerator, Israel. PolyTouch is a portfolio company of The Trendlines Group's (http://www.trendlines.com) Misgav Venture Accelerator (http://www.misgav-venture.com). PatchAssist is an innovative laparoscopic surgical instrument that enables accurate and rapid delivery and placement of soft tissue prosthetics for a variety of procedures, including laparoscopic ventral hernia repair (LVHR) potentially reducing procedure time by 30%-50%. PolyTouch plans to introduce the PatchAssist device into the U.S. market in the beginning of 2011. (PolyTouch 21.06)

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9: ISRAEL PRODUCT & TECHNOLOGY NEWS

9.1 NICE to Acquire eglue, a Leading Provider of Real-Time Decisioning and Agent Guidance Solutions

NICE Systems announced the signing of a definitive agreement to acquire eglue, a leading provider of real-time decisioning and guidance solutions. NICE customers will benefit from the strategic expansion of the company's enterprise contact center and back office offering, enhancing and further impacting compliance adherence, operational efficiency, customer experience and sales and marketing effectiveness, enabling their organization to become more customer-centric. Under the terms of the agreement, NICE will be acquiring the company for a total cash consideration of approximately $29 million. The transaction price may be increased by up to an additional $6 million, subject to certain performance criteria. The combination of eglue's leading real-time decisioning and guidance capabilities and the NICE SmartCenter suite of intent-based business solutions will enable contact centers to harness Customer Dynamics, turning insights from cross-channel customer interactions into business impact in real time.

Ra'anana's NICE Systems (http://www.nice.com) is the leading provider of Insight from Interactions solutions and value-added services, powered by advanced analytics of unstructured multimedia content - from telephony, web, radio and video communications. NICE's solutions address the needs of the enterprise and security markets, enabling organizations to operate in an insightful and proactive manner, and take immediate action to improve business and operational performance and ensure safety and security. (NICE 10.06)

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9.2 Pointer Telocation & Viasat Group Strategic Partnership for Innovative Solutions in Telematics

Pointer Telocation and Venaria, Italy's Viasat Group announced the establishment of a strategic partnership to offer innovative solutions in the areas of Stolen Vehicle Tracking, Telematics and Fleet Management, more commonly referred to as Location Based Services. The two companies have agreed to cooperate in order to develop products and solutions based on combined technologies for the benefit of customers in these markets. Solutions developed will be offered globally via the numerous Viasat Operation Centers, as well as with interested automobile clubs of ARC Europe, an association that brings together European Car Clubs. Viasat Group and Pointer Telocation intend to create international standards in the Location Based Services markets, by developing and promoting commercial and technological common innovations and solutions specifically tailored for the field of Location Based Services. Givatayim's Pointer Telocation (http://www.pointer.com) is a leading provider of technology and services to the automotive and insurance industries, offering a set of services including Road Side Assistance, Stolen Vehicle Recovery and Fleet Management. (Viasat 09.06)

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9.3 Magic Software Announces Deal With Israel Defense Forces at Over Half a Million Dollars

Magic Software Enterprises announced a large, multi-year project to upgrade and maintain the application platform and integration suite of the Israel Military Police, a part of the Israel Defense Forces (IDF). Magic Software and Minerva Systems, a Magic Software ISV partner, will upgrade the Military Police's core IT systems to the latest versions of the uniPaaS platform enabling both cloud and on-premise application development and deployment. The deal also includes the iBOLT code-free business integration suite. Information security was reported to be a vital system requirement for the project and one of the reasons for the selection of Magic Software's platform solutions. uniPaaS is an application platform enabling Enterprises and Independent Software Vendors (ISVs) to deliver business applications with minimal project risk and associated costs. uniPaaS is the first application platform combining agile development and a single paradigm for multiple deployment channels.

Or Yehuda's Magic Software Enterprises (http://www.magicsoftware.com) is a global provider of on-premise and cloud-enabled application platform solutions - including full client, rich internet applications (RIA), mobile or Software-as-a-Service (SaaS) modes - and business and process integration solutions. Magic Software's technological approach, product roadmap and corporate strategy are recognized by leading industry analysts. Magic Software has partnerships with global IT leaders including SAP AG, salesforce.com, IBM and Oracle. (Magic 09.06)

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9.4 RAD Delivers IP Video Coverage of World Cup to Europe

A major European carrier will be using a telecommunications access solution from RAD Data Communications to transmit IP video coverage of the World Cup, which begins tonight in Johannesburg. What makes this particular deployment newsworthy is that RAD's RIC-E3 Fast Ethernet over E3 Network Termination Units (NTUs) will enable the IP video broadcast to be transported over a legacy SDH network. The carrier will be maintaining two separate SDH connections between Africa and Europe, one active and one redundant, in order to guarantee transmission in the event of a network failure. The RIC-E3 enables Fast Ethernet traffic to be transported over E3 access lines by providing Ethernet-to-TDM conversion. In addition, the device can be used to extend Ethernet LANs over SDH, with remote fault monitoring, end-to-end traffic separation and guaranteed quality of service (QoS). RAD's RIC family, part of its EtherAccess strategy to ensure reliable, economical, accountable, and limitless (REAL) Carrier Ethernet access, allows the extension, demarcation and concentration of Ethernet services such as IP-video over TDM networks. With rate versatility ranging from E1 and bonded E1 to STM-4, EtherAccess delivers seamless mid-band Ethernet, Fast Ethernet and Gigabit Ethernet connectivity over PDH access circuits and SDH transport networks.

Founded in 1981, Tel Aviv's privately-owned RAD Data Communications (http://www.rad.com) has achieved international recognition as a major manufacturer of high quality access and backhaul equipment for data communications and telecommunications applications. These solutions serve the data and voice access requirements of service providers, carriers and enterprise networks. (RAD 11.06)

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9.5 Anobit Breaks the Cost Barriers of Solid State Drives (SSDs) for Enterprise Storage

Anobit unveiled its solid state drive (SSD) product portfolio – the Anobit Genesis SSD series – the first multi-level cell (MLC) solid state drive family to deliver true enterprise-class reliability and performance for datacenter storage and server infrastructure. Anobit Genesis SSDs utilize Anobit's patented Memory Signal Processing (MSP) technology to achieve an unparalleled write endurance rating of over 50,000 cycles using standard low cost MLC, enabling enterprise-class SSD storage at a fraction of the cost of today's single-level cell (SLC) SSDs. Thousands of Anobit Genesis SSDs are being distributed to OEMs for qualification. Based on proprietary algorithms that compensate for the physical limitations of NAND flash, Anobit's MSP technology extends standard MLC endurance from approximately 3K read/write cycles to over 50K cycles – a 20X improvement – to make MLC technology suitable for high-duty cycle applications. Anobit's Genesis SSD portfolio leverages Anobit's MSP technology to bridge the endurance gap between MLC SSDs and expensive SLC SSDs, eliminating the cost barriers that have impeded widespread SSD adoption in enterprise storage arrays and servers. Where the effectiveness of competing compression-based MLC SSD technologies is compromised in some use cases (ex. encrypted or pre-compressed data), Anobit Genesis SSDs remove MLC endurance limitations at the NAND level to ensure over 50K write cycles for any data type or level of application performance. This guarantees drive write endurance of ten full disk writes per day, for five years, or 7,300 TBs for a 400 GB drive, with fully random data (worst-case conditions).

Herzliya Pituah's Anobit (http://www.anobit.com) is a NAND-based solutions provider. Its products range from MSP components to complete, enterprise-class solid-state drives. Anobit works closely with some of the world's largest NAND manufacturers, consumer electronics vendors and storage solution providers. (Anobit 15.06)

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9.6 Wavion Introduces a New Best-of-Breed Combo 5.X GHz Base Station for High-Interference Environments

Wavion announced the release of a new Base Station for the 5.X GHz band, specially designed to cope effectively with high-interference environments. As a companion to its market leading WBS-2400 and WBS-5800 Base Stations, operating in the 2.4 GHz and 5.8 GHz bands, respectively, Wavion introduces the Combo WBS-5000 Sector Base Station for operating in the entire 4.9-5.9 GHz band. This new base station has been specially designed to cope effectively with high-interference environments. Based on Wavion's spatially adaptive beamforming technology, and leveraging three radios and three 120 degrees sectorial antennas, it provides enhanced interference immunity, extended range, superior non-line-of-sight coverage, high throughput and robust connectivity to any off-the-shelf standard 802.11a based CPEs. Its superior interference resilience stems from its narrow spatial directivity, provided by the sector antennas and the beamforming, in conjunction with its unique interference handling capabilities. The new base station also enables 10 MHz channel bandwidth, in addition to the customary 20 MHz bandwidth, thus further enhancing its noise-coping capabilities. Wavion's Carrier-Grade WBS-5000 can be deployed either as stand-alone, in cases that the coverage requirements are limited to a 120 degrees sector, or as part of a multiple-sector deployment, with up to three co-located sectors, in cases where higher capacity is required per given area. Unlike more conventional equipment, it does not require costly high towers and can be easily installed on poles and yet provide high quality and homogeneous coverage.

Yokneam's Wavion (http://www.wavionnetworks.com) is a technology leader in Metro and Rural Wi-Fi and Wireless broadband access, with deployments in more than 57 countries. The company's digital beamforming and SDMA technologies are the first and only to resolve the significant performance, penetration and profitability challenges facing large scale Metro and Rural deployments. (Wavion 14.06)

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9.7 Correlix Unveils RaceTeam 3.0 to Automate Real-Time Latency Trading Decisions

Correlix announced the release of version 3.0 of its RaceTeam latency monitoring service. RaceTeam 3.0 includes the industry's first market latency data feed. The new version of the RaceTeam service also introduces new capabilities to monitor and alert on other real-time trading events, including unacknowledged and stuck orders. RaceTeam 3.0 utilizes Correlix' proprietary patent-pending technology for processing real-time order and market data traffic and extracting real-time latency data. With Correlix' first industry market latency feed, RaceTeam customers have the ability to configure and read the real-time latency feed, which includes comparative latency metrics, such as the latency arbitrage between different stocks to adjust strategies for market making or statistical arbitrage. RaceTeam 3.0 also improves the operational monitoring capabilities by adding the ability to monitor other related real-time order issues, including unacknowledged orders or stuck orders. Correlix (http://www.correlix.com) is headquartered in New York with R&D offices in Herzliya Pituah. (Correlix 14.06)

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9.8 TowerJazz and Toppan Technical Design Center Announce Strategic Agreement

TowerJazz announced it was selected by Toppan Technical Design Center Co., Ltd. (TDC) as its preferred specialty foundry supplier. TowerJazz has successfully engaged in multiple specialty design projects in Japan with TDC in the area of Silicon Germanium (SiGe) BiCMOS technologies used for high speed RF applications. This partnership enables TowerJazz to strengthen its penetration in the Japanese market, particularly TDC's customers targeting RF, high-speed analog, power management, high voltage, CMOS image sensors and MEMS. Additionally, TDC was selected by TowerJazz as an official design center partner in Japan. This distinction applies to companies that achieve the highest standards of knowledge and experience on at least one TowerJazz specialty process technology and associated design enablement models and tools as well as deliver successful designs with high levels of customer satisfaction. This agreement enables TDC's diverse customer base greater access to TowerJazz's specialty process technologies, its technical support and manufacturing capacity.

Migdal Ha'Emek's Tower Semiconductor (http://www.towerjazz.com), the global specialty foundry leader and its fully owned U.S. subsidiary Jazz Semiconductor, operate collectively under the brand name TowerJazz, manufacturing integrated circuits with geometries ranging from 1.0 to 0.13-micron. TowerJazz provides industry-leading design enablement tools to allow complex designs to be achieved quickly and more accurately and offers a broad range of customizable process technologies including SiGe, BiCMOS, Mixed-Signal and RFCMOS, CMOS Image Sensor, Power Management (BCD), and Non-Volatile Memory (NVM) as well as MEMS capabilities. (Tower 17.06)

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9.9 Silicom's SETAC Chosen by Leading European Security Solution Manufacturer

Silicom announced that a leading European security solution company has selected Silicom's SETAC SErver To Appliance Converter concept as the basis for its latest security appliance. Its choice was made after evaluating the SETAC approach in contrast to “standard” designs based on the use of hardware appliances. To date, the customer has placed orders for initial quantities, and expects to ramp up a flow of orders over time. The customer is a network security vendor with a distribution channel of hundreds of partners in countries throughout the world. Among its products are innovative appliances used to protect users' networks from all types of security threats. Through the use of the SETAC, the customer will be giving its new security appliance field re-configurability, flexibility and other desirable functions without sacrificing the use of a branded, highly-reliable and supportable basic platform. Kfar Saba's Silicom (http://www.silicom.co.il) is an industry-leading provider of high-performance server/appliances networking solutions. The Company's flagship products include a variety of multi-port Gigabit Ethernet, copper and fiber-optic, server adapters and innovative BYPASS adapters designed to increase throughput and availability of server-based systems, WAN Optimization and security appliances and other mission-critical gateway applications. (Silicom 16.06)

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9.10 Israeli Invents Crossword Puzzle For Blind

Author Avi Rubinstein designed a special puzzle written in Braille, which allows blind people to solve game independently. Rubinstein approached Director of The Central Library for the Blind and asked him to consider a revolutionary idea – a special crossword puzzle for blind people. But Rubinstein, who thoroughly researched the subject, came up with a surprising solution – he created a special puzzle that is written in Braille and enables blind people to solve them independently. Immediately after publishing the first booklet of puzzles, Rubinstein was flooded with letters and compliments from blind crossword-solvers who were entertained for hours by his invention. Rubinstein is about to publish a unique educational series featuring puzzles that correspond with the Ministry of Education's textbooks. In addition, he voluntarily composes crossword puzzles that he developed for people with special needs as well as for a women's prison magazine. (Ynet 20.06)

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9.11 Elbit Systems to Supply a Latin American Army with Advanced Electronic Systems

Elbit Systems announced that it was awarded a contract to supply a Latin American Army with Command, Control, Computer & Communications (C4I) systems and Electronic Warfare (EW) systems, valued at approximately $130 million. The project, to be performed over the next three years, is a part of the Army's extensive modernization program and is designated for all echelons, from the maneuvering forces up to the command headquarters. The new, unified communications network will facilitate a real-time common operational picture of the battlefield providing the Land Forces with enhanced operational performance and situational awareness, as well as improved force protection and prevention of "friendly fire".

Haifa's Elbit Systems (http://www.elbit.co.il) is an international defense electronics company engaged in a wide range of programs throughout the world. The Company, which includes Elbit Systems and its subsidiaries, operates in the areas of aerospace, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance (C4ISR), unmanned aircraft systems (UAS), advanced electro-optics, electro-optic space systems, EW suites, airborne warning systems, ELINT systems, data links and military communications systems and radios. The Company also focuses on the upgrading of existing military platforms, developing new technologies for defense, homeland security and commercial aviation applications and providing a range of support services. (Elbit 20.06)

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9.12 Orbotech Receives Acceptances for Its New FPD Gen 8 Array Checker

Orbotech has received customer acceptances for its new Generation 8 FPD Array Checker electrical test systems. Revenues from sales of these systems that are delivered by June 30, 2010, expected to total approximately $45 million, will be recognized during the second quarter of 2010. Yavne's Orbotech (http://www.orbotech.com) is principally engaged in the design, development, manufacture, marketing and service of yield-enhancing and production solutions for specialized applications in the supply chain of the electronics industry. Orbotech's products include automated optical inspection (AOI), production and process control systems for printed circuit boards (PCBs) and AOI, test and repair systems for flat panel displays (FPDs). The Company also markets computer-aided manufacturing (CAM) and engineering solutions for PCB production. In addition, through its subsidiary, Orbograph Ltd., the Company develops and markets character recognition solutions to banks and other financial institutions, and has developed a proprietary technology for web-based, location-independent data entry for, among other things, in check and forms processing. (Orbotech 21.06)

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9.13 TowerJazz CIS Technology Selected by Canesta for Consumer 3-D Image Sensors

TowerJazz announced that Sunnyvale, California's Canesta is using TowerJazz's CMOS image sensor (CIS) technology to manufacture its innovative CanestaVision 3-D image sensors. CanestaVision chips are the industry's world's first single-chip CMOS 3-D image sensor System on a Chip (SoC) for use in consumer desktop computing, TV and entertainment applications. Next-generation consumer 3-D image sensors designed to enable a device to understand and interact with its environment will fuel the image sensor market. Canesta is excited to have the use of TowerJazz's advanced CMOS image sensor manufacturing processes. The 3-D image sensors are critically important to evolve to natural user interfaces for complex consumer electronic products. Migdal HaEmek's Tower Semiconductor (http://www.towerjazz.com), the global specialty foundry leader and its fully owned U.S. subsidiary Jazz Semiconductor, operate collectively under the brand name TowerJazz, manufacturing integrated circuits with geometries ranging from 1.0 to 0.13-micron. TowerJazz provides industry leading design enablement tools to allow complex designs to be achieved quickly and more accurately and offers a broad range of customizable process technologies including SiGe, BiCMOS, Mixed-Signal and RFCMOS, CMOS Image Sensor, Power Management (BCD), and Non-Volatile Memory (NVM) as well as MEMS capabilities. (Tower 21.06)

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9.14 Ness Technologies Wins $4 Million Outsourcing Contract with Israel's Clalit Health Services

Ness Technologies has been awarded a four-year outsourcing contract to provide around-the-clock help desk services to Clalit Health Services, Israel's largest Healthcare Management Organization (HMO) and one of the largest HMOs worldwide. The contract is valued at approximately $4 million. It includes an option to extend the contract for an additional period of up to four years. Ness will provide the services through an IT Client Service Center, which will be located at Ness and which will operate in a performance output measurement model according to a service level agreement (SLA) standard. The center will serve thousands of Clalit employees and will serve as the single point of contact to Clalit's IT division for Clalit's headquarters units, 14 hospitals and 8 districts, as well as private pharmacies working with Clalit. The center will provide a variety of support solutions, including expert support of unique healthcare applications, as well as support for hardware failures. The center in its new model will be operated by Ness Technologies' Unified Reference and Delivery (URD) Center, Israel's largest help desk center serving outsourcing customers. Tel Aviv's Ness Technologies (http://www.ness.com) is a global provider of IT and business services and solutions with specialized expertise in software product engineering; and system integration, application development, consulting and software distribution. Ness delivers its portfolio of solutions and services using a global delivery model combining offshore, near-shore and local teams. (Ness Technologies 21.06)

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10: ISRAEL ECONOMIC STATISTICS

10.1 Israel's State of Economy Index Shows Slower Growth

The Composite State of the Economy Index rose by 0.1% in May 2010, the Bank of Israel reports, indicating that economic growth is continuing, but at a slower pace than in preceding months. The Bank of Israel also revised index growth downwards to 0.4% in March from 0.5%, but reiterated the 0.1% rise in April. Gains in the manufacturing production, imports of consumer goods, and production inputs items boosted the State of the Economy Index, but were partly offset by drops in the goods and services exports items. The manufacturing production index rose 1.7% in April, after rising 0.3% in March; the trade and services revenue index rose 0.1% in April, down from its 1.5% increase in March; the services exports index fell 0.9% in May, following a 14% surge in April; and the goods exports index fell 2.6 % in May, after falling 4.7% in April. The results of the Composite State of the Economy Index for May follow the Israel Purchasing Managers Index, which showed that the economy was contracting. The index fell to 48.1% in May from 59.2% in April, the first time in 11 months that the index fell below 50%, the dividing line between economic expansion and contraction. (Globes 21.06)

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10.2 Tourism to Israel Hits 6th Consecutive Record-Breaking Month

The Central Bureau of Statistics announced that 309,000 tourists visited Israel in May 2010 – an all-time record for the month of May – and an increase of 4% over May 2008, which was Israel's record year for tourism. Some 1.4 million tourists have visited Israel since the beginning of the year, an increase of 11% over the same period in 2008. Of these, 1.1 million remained in Israel for at least one night – an increase of 5% over 2008. According to the Tourism Ministry's three-year plan, an additional million tourists will have visited Israel in 2012, in total four million tourists and business people. The ministry is to allocate a half-billion shekels to assist in hotel projects, which will construction and job opportunities. As part of this policy, the Tourism Ministry's Investment Administration approved grants worth 65 million shekels to five hotel projects in Jerusalem and the Galilee. The Capital Investment in Tourism Administration moved recently to the Tourism Ministry from the Industry, Trade and Labor Ministry. The new framework is designed to reduce bureaucracy facing Israeli and international investors and entrepreneurs who wish to invest in hotels in Israel. In addition, the National Tourism Outline Plan (NOP 12), developed by the Tourism Ministry over the last decade, has been completed and will be submitted for cabinet approval shortly. The plan seeks to ensure the preservation of land reserves for tourism, attractions and hotels in the coming years. It thus sends an important message to Israeli and international investors that Israel is an attractive country for investment in hotels. (IsraelNN09.06)

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10.3 Number Of Israeli Millionaires Up 42.7% In 2009

The number of Israeli millionaires rose by 42.7% to 8,419 in 2009 from 5,900 in 2008, according to Merrill Lynch Israel, based on the Capgemini World Wealth Report 2010. Merrill Lynch Israel attributed the increase of "high net wealth individuals" (millionaires) to long-term investment, which paid off during the economic downturn. Capgemini defines high net wealth individuals as persons with net assets of at least $1 million, excluding their primary residence and consumables, and an ultra high net wealth individuals, as persons with net assets of at least $30 million, excluding their primary residence and consumables. Merrill Lynch Israel said that the number of millionaires worldwide increased by 17.1%, Israel had the third highest rate of increase after Hong Kong (104%) and India (51%). It did not mention that the increase in the number of millionaires underscores Israel's rising social inequality among developed economies. The increase in the number of millionaires came during a recession, at least during the first half of 2009, even as most salaries employees suffered pay cuts and worsening terms. The aggregate investible assets of Israel's millionaires rose by 41% to $42.4 billion in 2009 from $30.1 billion 2008. The wealth drivers included a 40% rise in the value of Tel Aviv Stock Exchange (TASE) securities and a 15.5% increase in housing prices. Even as the number of Israel's millionaires soared in 2009, the number of multimillionaires - ultra high net wealth individuals in Capgemini parlance - rose by 14% compared with 2008, from 73 to 83. Worldwide, the number of multimillionaires rose by 15.4%. (Globes 22.06)

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11: In Depth

11.1 BAHRAIN: Cruise Plans

Bahrain is to step up its efforts to promote itself as an international tourism destination, unveiling plans to increase the number of European visitors while maintaining its appeal in the Kingdom's core market of the Middle East. Tourism is already a vital component of the Bahraini economy. According to the latest projections of the World Travel and Tourism Council (WTTC), the sector's contribution is expected to be just under $2bn this year, representing 8.6% of GDP, rising to $4bn by 2020. The council also predicts that the sector will expand by 3% this year, with growth to average a healthy 6.5% over the next decade.

Significantly for a government looking to provide employment to a young and expanding population, the WTTC report says that by 2020 travel and tourism will account for one in every 8.1 jobs in the Kingdom, totaling 64,000 positions, or 12.4% of the workforce. This compares to the 45,000 jobs that the sector has currently created, representing 10% of the employment pool, or one in every 9.9 positions in the economy.

However, while the country's tourism sector is expanding solidly, attracting increasing numbers of overseas visitors, the actual pool that Bahrain draws its tourists from is relatively narrow, with almost 90% coming from other member states of the Gulf Cooperation Council (GCC). In order to meet the projected growth targets, Bahrain is looking to broaden its horizons, seeking new markets to develop, particularly in Europe.

In late May, Heba Abdulaziz, the chief executive of the Ministry of Culture and Information's marketing and tourism promotion project, announced that Bahrain was in the process of developing a major international tourism promotion campaign, scheduled to be launched in the last quarter of the year, with the main focal point being the European market. As part of the initial wave of promotional activity, Abdulaziz said Bahrain would be represented at tourism expos and exhibitions in France, Spain and the UK between late September and early November.

According to Abdulaziz, one of the themes of the promotional activities will be "small is beautiful", reflecting the many cultural and natural attractions of the island state. There were many new projects in the pipeline to improve the tourism offering, she said. "We have greatly improved our infrastructure and we are doing more. There will be a sea change in the coming months," said Abdulaziz.

However, one segment that is already growing is cruise tourism. Until recently, Bahrain had limited success in getting itself included on the itineraries of the relatively small number of cruise lines that operated in the Gulf region. Over the past few years that has changed, with more than 150,000 ship-borne visitors coming to Bahrain in the 2009-10 cruise season. With the new season beginning in October, following the hot months of summer, Bahrain is preparing to host 100 visits by liners between then and May, well up on the numbers the preceding season.

Cruise tourism has the potential to both increase the sector's earnings and have a positive impact on a wide range of sectors across the economy, including ports, airlines, hotels, restaurants, retailers and tour operators, according to Abdulaziz. "A passenger ship with 2000 tourists makes Bahrain richer by [an average of] $274,000," she told delegates attending the First Seatrade Middle East Cruise Forum, held in Manama in mid-May. "With more than 70 ships docking in Bahrain in the cruise season from October to May, this has translated to a substantial figure."

Bahrain is not aiming to be a mass-market destination, instead aiming for quality over quantity, looking to underscore the appeal of the country's rich heritage. Indeed, the culture and information minister, Sheikha Mai bint Mohammed Al Khalifa, whose portfolio includes tourism, says that Bahrain is working to grow and promote the sector, though in a focused and carefully managed way. "We have a lot of places of cultural and historical interest and we are developing them," she told the Seatrade conference. "In the very near future, we have a plan to market these to the world." (OBG 19.06)

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11.2 QATAR: Retail on a Roll

While the acquisition of iconic British department store Harrods in May by Qatar Holding - one of the government's investment vehicles - made international headlines, the country's domestic retail sector is also very much on the move. Though impressive in themselves, the spate of new developments are less likely to catch the attention of the global media than the $2.2bn Harrods deal, Qatari shoppers are set to benefit from a major increase in retail options, some of which will rival the Knightsbridge emporium for opulence and range.

In the coming years a massive building surge is expected to add up to 400,000 sq metres of retail space to the existing stock, almost doubling the gross leasable area (GLA) in Doha. Qatar has among the highest retail rental rates in the Gulf region, due to the current gap between supply and demand, with new complexes quickly finding tenants as a result of the ready-made demand existing for retail space, the Alpen report said. "However, the current robust project pipeline - once completed - will bring some correction in demand/supply mismatch, thereby moderating the rental rates during the coming years. Moreover, as the majority of construction is in premium category malls, a drop in rentals could be more accentuated in this segment," the study said.

The projected increase in retail GLA is already having an impact on the sector, with rental charges for shopping space falling by 13-23% in the first three months of the year, according to a recent report by international consultancy DTZ. Though the firm is forecasting a 45% increase in GLA by the end of next year, the report says that in the short to medium term, the organized retail market outlook remains fundamentally sound, with demand continuing to outstrip supply and the growing number of foreign visitors giving a boost to the retail market. "As a result, vacancy rates are expected to remain low even as retail stock increases and rental growth on new developments, which can add diversity, exclusivity and depth to the retail market, will remain strong," DTZ said.

That strength was evident last year, with the Alpen report saying that Qatar had bucked the regional trend in 2009, which saw a weakening in the retail spend due to the international financial crisis. With its high per capita GDP translating into high levels of disposable income and strong purchasing power for residents, the global economic downturn had little effect on the Qatari retail sector, the survey said.

With GDP expected to expand by 15% or more in 2010, disposable income levels will likely follow suit, giving Qataris more money in the pocket to spend and a wider range of outlets in which to do so.

However, it is not just domestic custom that Qatar's retailers are looking to serve, with the government working to increase the number of overseas visitors to the country, many of the new shopping projects are being developed with an eye to the tourism trade. Qatari officials have said they expect tourist arrivals to hit 1.4m by 2011, though this could be affected by a re-emergence of economic woes in some of Qatar's major source markets,, particularly Europe.

Even with the massive expansion currently under way, GLA in Qatar will remain smaller than in some of its near neighbors, most notably Dubai and Abu Dhabi. More than 1m sq metres of new retail space is scheduled to be added to Dubai's existing stock by 2012, with Abu Dhabi in the process of building another 700,000 sq metres of floor space. What this means for Qatar is even stiffer competition both for the tourist trade and for leading brand names.

Though Qatar may not get as many overseas visitors as originally envisioned due to the global economic slowdown, local demand should keep the tills ringing at a more than satisfactory rate over the next few years and beyond. With the country's economy shifting into top gear, and a wider range of retailing outlets lining up to set out their wares, fewer well-heeled Qataris will need to fly to London to experience Harrods-like shopping. (OBG 19.06)

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11.3 EGYPT: Energy Analyst Urges New Approach in Egyptian Offshore Production

OilPrice.com (http://www.OilPrice.com) observes that although a recent U.S. government survey outlines the rich potential of offshore Egypt's natural gas reserves, the North African country is yet to offer attractive investment terms to companies carrying out broad exploration in deep waters, according to energy analyst Samuel Ciszuk. "It's a completely new technology field," argued Ciszuk, a senior energy analyst for the Middle East and North Africa at IHS Global Insight in London. "It requires a bit of a new approach."

The U.S. Geological Survey, part of the Interior Department, found that the Nile Delta Basin Province, which encompasses about 250,000 square kilometers of the eastern Mediterranean area, boasts an estimated 223 trillion cubic feet of "undiscovered, technically recoverable natural gas." These kinds of reservoirs may serve as a "bridging fuel" as the world moves toward a "carbon-constrained global economy," the study indicates.

When it comes to gas, Egypt, a member of the Gas Exporting Countries Forum, has become an increasingly deepwater play in the Mediterranean and an exporter on par with Europe, Ciszuk told OilPrice.com. The country's efforts include liquefied natural gas projects and a pipeline extending toward Jordan and Syria, he said, adding that it will eventually include Turkey and potentially Europe. Oil production is still significant for Egypt -- the survey estimated about 1.7 billion barrels of undiscovered oil - but "exports are almost non-existent," Ciszuk added. Siphoning out the energy windfall that the U.S. government appraised last month remains questionable, since assessing the geological potential of the area and actually drilling are "two very different things," he acknowledged.

Although the Egyptian government can recover these resources "to some extent," he said, there are financial risks linked to deepwater drilling and also dangers similar to "what happened in the Gulf of Mexico" when an oil rig exploded in April. Egypt's financial terms, while "very competitive," have been geared toward prospecting and production in shallow waters, a model that has been "slowing down development" over the last few years in other areas, he said.

Under the Egyptian model, one-third of gas reserves are destined for domestic markets, one-third can be exported and the balance must be kept for future generations, he explained. How much the government actually pays firms for the third of production going to the local market is "very, very crucial," Ciszuk said. These companies "need to get a decent price for the remaining third in order not to spoil the projects, especially when we talk about deepwater and the high cost involved." The main players in the offshore Mediterranean arena include British Gas, BP, ENI and RWE, Ciszuk noted.

Cairo, which has realized the downside of its traditional approach, is in the midst of negotiating better compensation for companies to make deepwater production viable, he said. The Egyptian government offered BP improved terms for offshore development in the Nile Delta, wrote Ciszuk last month in a research note. He described the move as a "groundbreaking deal" with Egypt, giving it full production rights in its Mediterranean North Alexandria block and guaranteeing it a "significantly higher oil-indexed price for the gas produced for the government."

For several years, Egypt has enacted new laws to attract international, regional and domestic investments. The government has allowed flexibility in choosing the investment field, in transferring projects, and in product price and profits determination, the site states. The government notes that it has also nixed capital limits. After the survey was issued last month, Refat Khafagy, the Egyptian oil ministry undersecretary, said the estimated natural gas can be exploited using advanced technologies, according to media reports. He did not offer details.

While the study's lead author, geologist Mark Kirschbaum, does not know the specific costs of recovering the resources, he conceded that "a lot of rigs" are needed to "push the limits of what we assessed." The survey accounts for natural gas that can be recovered technically, "no matter how deep the water, no matter how thick the salt," Kirschbaum told OilPrice.com. "I just got an e-mail from a guy from British Gas and he wanted to know pretty much the same questions" regarding the expense associated with drawing up the gas, Kirschbaum said. The company "see[s] our number, but then they realize that a lot of that stuff isn't on their radar screen because it's not economic in their terms," he noted. British Gas has interests in the Nile Delta, specifically in the Rosetta and West Delta Deep Marine Concessions, and has operated in Egypt for about 20 years, a company spokesman said. He declined to comment on the U.S. government study.

Kirschbaum described the basin as having a "fairly immature" production history similar in scope to the Niger Delta, which has been much more actively explored and is more of an oil and gas region. The Nile Delta was probably not developed earlier because it is mainly a gas province, he added, and it was not economical to produce gas until a few decades ago. By Fawzia Sheikh for OilPrice.com (OilPrice.com 16.06)

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11.4 GREECE: Moody's Downgrades Greece to Ba1 from A3, Stable Outlook

On 14 June, Moody's Investors Service (http://www.moodys.com) downgraded Greece's government bond ratings by four notches to Ba1 from A3, reflecting its view of the country's medium-term credit fundamentals. This rating action concludes the review for possible downgrade, which Moody's initiated on 22 April 2010. Moody's has also downgraded Greece's short-term issuer rating to Not-Prime from Prime-1. Greece's country ceilings for bonds and bank deposits are unaffected by the review and remain at Aaa (in line with the Eurozone's rating). The outlook on all ratings is stable.

"The Ba1 rating reflects our analysis of the balance of the strengths and risks associated with the Eurozone/IMF support package. The package effectively eliminates any near-term risk of a liquidity-driven default and encourages the implementation of a credible, feasible, and incentive-compatible set of structural reforms, which have a high likelihood of stabilizing debt service requirements at manageable levels," says Sarah Carlson, Vice President-Senior Analyst in Moody's Sovereign Risk Group and lead analyst for Greece. "Nevertheless, the macroeconomic and implementation risks associated with the program are substantial and more consistent with a Ba1 rating."

Moody's believes that the Eurozone/IMF support package has sheltered the Greek government from the markets while it enacts the very ambitious fiscal austerity measures and structural economic reforms stipulated by the package. These have the potential to restore market confidence, depending on the effectiveness of the government's execution, and place the country on a more stable debt trajectory. The rating agency's base-case scenario envisions Greece implementing the policy changes it needs to stabilize its debt-to-GDP ratio at around 150% by 2013, and reduce its debt burden, defined as the interest payment/revenues ratio, gradually thereafter (expected at 20% in 2014). Should the economy respond positively to the competitiveness-enhancing structural reforms, debt stabilization could be achieved earlier.

"There is considerable uncertainty surrounding the timing and impact of these measures on the country's economic growth, particularly in a less supportive global economic environment," says Ms Carlson. "This uncertainty represents a risk that leads Moody's to believe that Greece's creditworthiness is now consistent with a Ba1 rating, a rating which incorporates a greater, albeit, low risk of default."

Moody's outlook on Greece's ratings is stable, reflecting the substantial probability that the rating will not change over the next 12 to 18 months. The key factors that will influence the rating agency's view will be the performance of the Greek economy, especially that of GDP and tax revenues. Information on these developments will take some time to accumulate and may prove to be either credit positive or negative.

Moody's previous rating action on Greece was implemented on 22 April 2010, when the rating agency downgraded Greece's rating to A3 and placed it under review for further downgrade. (Moody's 14.06)

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