TOP STORIES
- Answers Corp. to Acquire Dictionary.com for $100 Million
- Air Products Fuels New Hydrogen Submarine for Hellenic Navy
- Israel Leads Middle East in Battling Corruption
- Turkish Economy Makes People Vote for AKP
- ISRAEL: Capital Raised By Israeli VCs $473 Million In 2006
1.1 General Strike in Israel to Start Wednesday
1.2 "Historic" Pension Agreement Signed
1.3 Transport Minister Signs Parallel Auto Import Reform
1.4 Finance Ministry Foresees 4% Growth in 2008
2: ISRAEL MARKET & BUSINESS NEWS
2.1 Answers Corp. to Acquire Dictionary.com for $100 Million
2.2 Gennum Expands in Israel with BFi OPTiLAS
2.3 Elron Invests $1 Million in Web Content Innovator MuseStorm
2.4 Markstone Capital Partners Makes First Full Exit With Sale of Zeraim Gedera to Syngenta
2.5 Civil Aviation Authority Grants First Balloon License
2.6 Tower Announces Plan to Further Ramp Up Its Fab 2 Capacity
2.7 Optibase Announces Approval of the Filing of a Draft Prospectus With the Israel Securities Authority
2.8 Voltaire Files Registration Statement with the SEC for Proposed Initial Public Offering
2.9 ICX Technologies Launches ICX Cryogenics
2.10 Israeli Medical Devices Market Sees 5% Growth Despite Shaky Healthcare Sector
2.11 OpTier Receives Investment from Cisco
3: REGIONAL PRIVATE SECTOR NEWS
3.1 RJ Records 14% Increase In Passenger Traffic
3.2 Agthia To Launch Mother Parkers Products in UAE
3.3 Westcon Group Enters Turkey by Joint Venture with Index Group Subsidiary, Netex
3.4 Air Products Fuels New Hydrogen Submarine for Hellenic Navy
4.1 BDI Says 19 Families Control $59 Billion in Revenue
4.2 Israel Leads Middle East in Battling Corruption
4.3 Netanyahu Foresees $45,000 GDP Per Capita Within 10 Years
5: ARAB STATE & PAKISTANI DEVELOPMENTS
5.1 Jordan Medical Association Determined To Increase Doctors’ Fees
5.2 Rising Gulf Inflation to Keep Pressure On Exchange Rates
5.3 Kuwait Approves $10 Billion Deficit Budget
5.4 Kuwait Dinar Revalued
5.5 WTO Terms Bahrain Reforms a Huge Success
5.6 $1 Billion Qatar Power Plant
5.7 Food Retail in the UAE Annual Industry Sales are Estimated at $3.5 Billion
5.8 Saudi Arabia Upgraded to 'AA-/A-1+'
5.9 Fitch Assigns Egypt's Local Currency Bond 'BB+' Rating
5.10 Pakistan’s Trade Gap 2006-07 Widens to $13.49b
5.11 Pakistan’s CPI Increases To 7.77% In Last Fiscal Year
6: TURKISH & CYPRIOT DEVELOPMENTS:
6.1 Turkish Economy Makes People Vote for AKP
6.2 Turkey’s Unemployment Rate Is 9.8%
6.3 Moody’s Warns on Cyprus Fiscal Discipline
6.4 Cyprus Tourist Arrivals Rise For First Time In Almost A Year
*ISRAEL:
7.1 Tu B'Av - A Day of Love
7.2 Netanya Bars Sale of Pork and Ham in Residential Areas
7.3 Kosher Certification of a Different Kind for Israeli Shops
*REGIONAL:
7.4 Jordan to Observe a Holiday on July 31 for Municipal Elections
7.5 Burj Dubai Sets Global Records
7.6 Turkey’s Ruling AKP Wins Broad Victory
7.7 Independent Candidates Win After Following New Tack
8.1 Frutarom & Ramot Enter Into Exclusive Cooperation Agreement
8.2 Protalix BioTherapeutics Receives Special Approval from FDA for its Phase III Clinical Study of prGCD
8.3 Kamada Completes Factory Upgrade to FDA, EMEA standards
8.4 R.A.Erez Systems Ltd. Commences Study of the Automated CPR Device at Hadassah Hospital
8.5 Dune Medical Devices Honored With 2007 Frost & Sullivan European Technology Innovation Award
8.6 Alzheimer’s Diagnostic Company Nexsig Raises Nis 4m
9: ISRAEL PRODUCT & TECHNOLOGY NEWS
9.1 VocalTec Communications Enhances Network for Switchward & Trosmann AG
9.2 Invensys Selects NextNine Service Automation Platform for Remote Monitoring & Support
9.3 SatCom Networks Africa Chooses Gilat’s SkyEdge Broadband Satellite Network
9.4 Alvarion to Offer Bridgewater Systems AAA Service Controller as Part of Its Complete 4Motion Solution
9.5 Yoomba Launches First Open Communications Experience - Free, Instant Email Calling & Chat
9.6 Australia’s Child Support Agency to Implement NICE Perform Solutions in 14 Sites for 3,300 Agents
9.7 Metalink Receives First Production Order for 802.11n- WLANPlus From World-Class ODM
9.8 MaxxBass Featured in New Delphi Premium Audio System for XM Radio
9.9 MTN Uganda Selects Alvarion's WiMAX Solution for Nationwide Deployment
9.10 Orca Interactive Enters U.S. IPTV Market With W.T. Services
9.11 Camtek Receives Order for Over Forty AOI Systems
10: ISRAEL ECONOMIC STATISTICS
10.1 June CPI Surprises With 0.7% Gain
10.2 June State of The Economy Index Up Sharply
10.3 Israel’s Tourism Decrease Reversed As It Exceeds 2006 Levels
10.4 Israeli Airlines Carry 45% Of Ben Gurion Passengers
10.5 Israelis Spent $666 Million at Restaurants in First Quarter
11.1 ISRAEL: Capital Raised By Israeli VCs $473 Million In 2006
11.2 Jordanian Banking Sector Benefits From Growing Economy & Refocuses on Core Activities
11.3 Kuwait Upgraded to 'AA-' From 'A+'
11.4 KUWAIT: Sour Times
11.5 KUWAIT: Healthy Growth
11.6 Bahrain: Harbor of Finance
11.7 Qatar: Moving On Up
11.8 OMAN: Enhanced Oil Recovery
11.9 OMAN: Flying High
11.10 EGYPT: Investment Declaration
11.11 Fitch Upgrades Cyprus and Malta on Final Euro Decision
1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS
1.1 General Strike in Israel to Start Wednesday
At press time, Israel was poised to suffer a general strike starting on Wednesday, 25 July. Histadrut labor federation Chairman Eini announced on Tuesday evening that a general strike would begin the following morning, but would reach Ben Gurion international airport only 24 hours later. The strike will begin at 6 A.M. and will encompass all government ministries, local authorities (including garbage collection), government companies, ports, trains, outgoing flights at Ben-Gurion International Airport, the postal authority, the National Insurance Institute, the Israel Lands Administration, university administrations and outpatient clinics at public hospitals. Israel's border crossings with Egypt and Jordan will also close. Bus companies and the Israel Electric Corporation will continue operating. Eini convened union leaders Tuesday morning to determine the scope and date of the major strike, which Eini termed "inevitable" after he and Finance Minister Bar-On Sunday failed to resolve a dispute over public-sector wages. But from the substance of informal talks between senior officials of the Airports Authority and airline executives in Israel, it appears that efforts to assure that arrivals and departures continue and that only a few flights are adversely affected by the strike. In Bar-On and Eini's meeting, which was held Monday in Jerusalem, Bar-On offered a two-stage increase to public-sector wages, amounting to a one% addition by 2009. The treasury had previously been willing to offer only a 0.2% increase. Eini refused and termed the offer "insulting," adding it was "like offering to buy each worker two falafels." Histadrut officials said Eini decided against launching the strike on Tuesday, 24 July, in deference to the Jewish day of mourning of Tisha B'Av.
1.2 "Historic" Pension Agreement Signed
The "pension for every worker" agreement between the Histadrut (General Federation of Labor in Israel) and Manufacturers Association of Israel was signed at an official ceremony on 19 July. The agreement, which is considered historic, was supposed to have been signed two months ago, but was delayed due to various objections by self-employed groups. The new collective agreement, which will be passed into law in the near future, represents an agreed alternative to the legislation that the Finance Ministry had sought to introduce. The agreement is designed to ensure that the one million people currently employed in the private sector will able to live in dignity in their old age. The agreement, which covers principally people employed in trades and commerce, and the self-employed, will come into force on January 1, 2008, and will be implemented in stages among people that did not previously have any pension cover. Under the agreement, employers and employees will make a combined contribution amounting to 2.5% of employees' salaries. Within five years, the combined contributions will increase to reach 15%, as employees will pay 5%, and employers the remaining 10%. This is still lower the customary rate in the economy at present, which ranges from 17.5-20.5%. The agreement provides, however, that if a certain industry already has a proper pension arrangement in place, its employees will be entitled to the better of the two. The agreement also provides that employees who are members of a pension plan and move to a new job will be entitled to the full rate of pension contributions from January 2008, rather than the incremental increase set out by the new agreement. Those people who could still find themselves without any pension insurance are the hundreds of thousands of contractor and employment agency employees in the services sector, and external lecturers at higher education institutes. Many employees in the education sector are fired every June and then rehired in October. The Histadrut said that if it had insisted on a perfect agreement it would never have been signed at all. (Globes19.07)
1.3 Transport Minister Signs Parallel Auto Import Reform
Minister of Transport Mofaz has signed an ordinance which will allow the opening up of the vehicle import market to parallel imports. The ordinance will allow new vehicles to be imported commercially from overseas dealers and intermediaries, without direct contact with the manufacturers. This will be contingent on the importers meeting a series of conditions that will prove their ability to provide service and maintenance for the vehicles they import. The ordinance is the final stage in the reform process first launched in 1999 in the wake of the recommendations of an inter-ministerial committee, which aimed to remove the barriers from the vehicle import market. During the period that has elapsed since then, various barriers have been removed, such as the need to operate garages and spare parts dealerships in main cities, and the cancellation of exclusivity agreements between importers and manufacturers. Sources in the vehicle sector believe that the threshold conditions that the Ministry of Transport has set for the granting of a parallel import permit will open this track up initially for the big leasing and car rental firms, as well as major corporations and existing vehicle importers, interested in importing rival brands. (Globes 23.07)
1.4 Finance Ministry Foresees 4% Growth in 2008
Finance Minister Bar-On submitted to the government the Ministry of Finance's macro-economic forecast for this year and next, as well as a review of the state of the economy in 2006 and the first quarter of this year. The Ministry of Finance believes economic growth in Israel for 2008 and for the coming five years will average 4%, with an increase of 2.3% for GDP per capita in the same period, compared with more than 5% during the past three years. Business product growth will also slow to 4.2% annual growth, compared with more than 6% per year over the previous years. The Finance Ministry predicts 5% growth in 2007, as a result of the rise in the average wage, falling unemployment and the low interest rates. Unemployment will fall to 7.5% in 2007 while inflation will reach 2.1%. This is higher than the Bank of Israel forecast, which predicts 1.5% inflation only in 2007.
Cabinet discussions on the 2008 budget will center on the need to cut the budget by about $2b, and demands to increase the defense budget by at least $714m, in accordance with the Brodet Commission recommendations. The Finance Ministry assesses the main macro risks to the economy to be a renewal of security unrest, and a substantial slowdown of the global economy. On the other hand, there is a potential for higher than forecasted growth rates, if the government scrupulously maintains a responsible economic policy. (MoF11.07)
2: ISRAEL MARKET & BUSINESS NEWS
2.1 Answers Corp. to Acquire Dictionary.com for $100 Million
Answers Corporation has entered into a purchase agreement to acquire Lexico Publishing Group, owner of the popular Web properties Dictionary.com, Thesaurus.com and Reference.com, for $100m in cash. The transaction is subject to financing and customary closing conditions and is scheduled to be completed by fall of this year. Lexico is a leading online provider of reference products and services, which attracted approximately 11.5 million unique monthly users in the U.S. during the month of June 2007. This strategic acquisition drives Answers to a leadership position in online information publishing. Lexico's Web properties currently generate approximately three times the total page views of Answers.com. As well, Lexico's Web properties currently monetize at approximately one-third the rate of Answers.com, presenting material revenue upside and over 85% of Lexico's traffic is direct from end users or people searching specifically for the term "dictionary" in search engines. The resulting shift in traffic mix should significantly reduce Answers.com's current reliance on search engine algorithms. Answers Corporation (http://www.answers.com) of New York and Jerusalem, Israel operates the award-winning Answers.com information portal, delivering comprehensive content on over forum topics spanning health, finance, entertainment, business and more. (Answers16.07)
2.2 Gennum Expands in Israel with BFi OPTiLAS
Burlington, Ontario’s Gennum Corporation has broadened its sales and support efforts in Israel. Gennum has selected BFi OPTiLAS, a leading systems solutions distributor based in France, to represent the company’s broad data communications product portfolio. Gennum cited the growing demand across Europe and Israel for 10 Gigabit Ethernet (10GbE) data communications solutions as a key factor in today’s agreement with BFi OPTiLAS. BFi OPTiLAS will represent Gennum’s data communications product lines in Europe and Israel. The sales and support efforts of BFi OPTiLAS complement Gennum’s current European sales team that operates from the company’s UK headquarters located in Surrey, England. Leveraging its high-performance mixed-signal technology, Gennum offers a broad line of data communications products, including optical transceiver IC’s and serial backplane interconnects. (Gennum 11.07)
2.3 Elron Invests $1 Million in Web Content Innovator MuseStorm
Elron Electronic Industries completed a $1m investment in MuseStorm (http://www.musestorm.com), an Israeli company engaged in developing innovative technology for the distribution of a variety of content over the web. Following the investment, Elron holds approximately 23% of MuseStorm's outstanding shares. MuseStorm was established by two Israeli entrepreneurs. MuseStorm's technology enables media suppliers to easily distribute their content to many bloggers, social networks, internet sites, computers and mobile telephones with the ability to monitor effectiveness of the content after distribution. Users of MuseStorm's technology include Globes, a leading Israeli financial on-line and print newspaper, The Washington Post as well as record and media companies in the United States. Tel Aviv, Israel’s Elron Electronic Industries (http://www.elron.com), a member of the IDB Holding group, is a leading Israel-based technology holding company directly involved in the long-term performance of its group companies. Elron identifies potential technologies, creates strategic partnerships, secures financing, and recruits highly qualified management teams. Elron's group companies currently comprise a diverse range of publicly-traded and privately held companies primarily in the fields of medical devices, information & communications technology, clean technology and semiconductors. (Elron11.07)
2.4 Markstone Capital Partners Makes First Full Exit With Sale of Zeraim Gedera to Syngenta
Markstone Capital Partners, a leading private equity fund, confirmed reports that Syngenta has agreed to acquire Markstone portfolio company Zeraim Gedera, a high quality Israeli vegetable seed company. Gedera, Israel’s Zeraim (http://www.zeraim.com) focuses primarily on high-value crops, including tomato, pepper and melon. Syngenta will acquire all outstanding shares in the company from Markstone for consideration of approximately $95m, subject to closing adjustments. Tel Aviv, Israel’s Markstone Capital Partners (http://www.markstonecapital.com) is an $800m private equity fund dedicated to investments in Israel's old economy. Syngenta, based in Basel, Switzerland, is considered the leading agribusiness company in the world. (Markstone 12.07)
2.5 Civil Aviation Authority Grants First Balloon License
It was announced that the Israel Civil Aviation Authority (ICAA) has approved the first license in the country for flying hot-air balloons after a test flight recently in the Negev. The license was awarded to Hot Air - Balloons Over Israel, the only company specializing in ballooning in Israel. As part of the approval process, the owner built a test facility in Arad, which the ICAA has approved for maintaining the balloons. Plans are to fly in the Negev Desert, and Dead Sea and Arava regions, where weather conditions are considered excellent for ballooning. The price for a one-hour flight, with all the preparations, a breakfast and an after-flight celebration that all together take about four hours, is $285 per person. The trips start at sunrise. (Marker16.07)
2.6 Tower Announces Plan to Further Ramp Up Its Fab 2 Capacity
Migdal Ha’Emek, Israel’s Tower Semiconductor (http://www.towersemi.com), a pure-play independent specialty foundry, announced that the Company is exploring unique tool acquisition opportunities which would significantly expand Fab2 capacity beyond 24,000 wafers per month, primarily in advanced technologies (0.13u and below), in a cost effective manner. Further to the recently announced raising of $40m in long term-bonds, Tower concluded the signatures of letters of intent (LOIs) with its lender banks, Bank Leumi and Bank Hapoalim, and with Israel Corporation, a major shareholder, to provide credit lines totaling up to $60m, in order to secure the funding of the equipment required for the ramp up. Loans borrowed under the credit lines will bear interest at an annual rate of LIBOR plus 3% and will be repayable by no later than March 2010. The LOIs are subject to the signing and closing of definitive agreements and the receipt of corporate approvals. They also contemplate that the Company will pay the banks and TIC customary fees, including issuing warrants for an aggregate amount of approximately 1.5% of the Company’s fully diluted share capital with an exercise price of $2.04. (Tower 16.07)
2.7 Optibase Announces Approval of the Filing of a Draft Prospectus With the Israel Securities Authority
Optibase announced that its Board of Directors had authorized the filing of a draft prospectus with the Israel Securities Authority and the Tel Aviv Stock Exchange (TASE) in connection with an underwritten offering to the public in Israel of a series of notes convertible into ordinary shares. The offering would be made by Optibase only, and not by any selling shareholder. Prior to the offering of such series of notes, Optibase intends to list its ordinary shares for trade on the TASE. If the offering is completed, Optibase currently intends to raise up to a maximum amount of approximately $50m, depending on market conditions. No final decision on an offering has been made and any offering is subject to the final approval of Optibase's Board of Directors, the publishing of a final prospectus with the approval of the Israel Securities Authority and to the listing approval of the TASE. Herzliya, Israel’s Optibase (http://www.optibase.com) provides professional encoding, decoding, video server upload and streaming solutions for telecom operators, service providers, broadcasters and content creators. The company’s platforms enable the creation, broadband streaming and playback of high quality digital video. Optibase’s breadth of product offerings are used in applications, such as: video over DSL/Fiber networks, post production for the broadcast and cables industries, archiving; high-end surveillance, distance learning; and business television. (Optibase 12.07)
2.8 Voltaire Files Registration Statement with the SEC for Proposed Initial Public Offering
Voltaire has filed a registration statement with the U.S. SEC relating to a proposed initial public offering of 7,693,000 of its ordinary shares. Voltaire is offering 5,770,000 shares and the selling shareholders are offering 1,923,000 ordinary shares. J.P. Morgan Securities and Merrill Lynch, Pierce, Fenner & Smith are acting as joint book-running managers for the offering and Thomas Weisel Partners and RBC Capital Markets are acting as co-managers. Voltaire designs and develops server and storage switching and software solutions that enable high-performance grid computing within the data center. Voltaire refers to its server and storage switching and software solutions as the Voltaire Grid Backbone. Voltaire’s products leverage InfiniBand technology and include director-class switches, multi-service switches, fixed-port configuration switches, Ethernet and Fibre Channel routers and standards-based driver and management software. Founded in 1997, Voltaire (http://www.voltaire.com) is headquartered in Herzliya, Israel, and has its U.S. headquarters in Billerica, Massachusetts. (Voltaire10.07)
2.9 ICX Technologies Launches ICX Cryogenics
Washington, D.C.’s ICx Technologies, a provider of advanced technology solutions for homeland and military security, announced the formation of ICx Cryogenics. The new business unit is founded upon an exclusive distributor sales agreement with RICOR Cryogenic & Vacuum Systems, headquartered in En-Harod Ihud, Israel (http://www.ricor.com). In partnership with RICOR, ICx Cryogenics will serve as the U.S. based merchant supplier of critical components for infrared, industrial, and detection systems to ICx customers. The move further extends the position of ICx as a premier provider of technology solutions for security applications. RICOR is an established leader in the design and development of Sterling cycle tactical cryogenic coolers that include rotary, linear, and pulse tube coolers for infrared applications. RICOR will continue developing novel, dynamic solutions and applications in tactical cooler products, assuring that ICx Cryogenics customers will have access to state-of-art technology to maintain a leadership edge with their systems. ICx develops advanced technologies for effective security solutions. ICx sensors detect and identify chemical, biological, radiological, nuclear and explosive (CBRNE) materials. (ICx Technologies 16.07)
2.10 Israeli Medical Devices Market Sees 5% Growth Despite Shaky Healthcare Sector
Dublin, Ireland’s Research and Markets feels that Israel’s healthcare sector remains amid a period of uncertainty. The continual political instability of recent years has been a marked factor in this malaise; healthcare policy has changed frequently and often faced widespread opposition. Progress within the sector is unlikely in the short term while government efforts are concentrated around the current dark state of ongoing Palestinian terror attacks. Fluctuations in healthcare budgets, where heavy cutbacks were reversed by the government in the face of widespread opposition by many industry professionals in 2003, have caused additional concern over the future of national healthcare after 2002 saw the first ever decrease of healthcare spending in local currency terms since 1998. Allocations for the health basket are seemingly in a constant state of uncertainty. The Israeli medical device market is the largest in the Middle East and is valued at an estimated $589m in 2006. Imports represent much of the market, which is dominated by ‘high-end’ products such as electromedical and X-ray equipment. Domestic manufacturing is solid and exports of medical equipment continue to rise steadily. Market growth is currently estimated at around 5%, and per capita spending places Israel among the leading 20 countries in the world. (R&M18.07)
2.11 OpTier Receives Investment from Cisco
OpTier announced a strategic investment by Cisco, the worldwide leader in networking that transforms how people connect, communicate and collaborate. The investment adds an undisclosed amount to OpTier's recent $15m third round of funding from Gemini Israel Funds, Pitango Venture Capital, Carmel Ventures and Lightspeed Venture Partners. The relationship with Cisco strengthens and accelerates OpTier's focus on delivering solutions that provide a business context to the management of networks and data centers - enabling end-to-end, consistent, business aligned quality of experience (QoE) and service levels. OpTier's flagship product, CoreFirst, dynamically links business services to IT infrastructure, assuring service delivery and optimizing IT resources. Its unique Business Transaction Management technology delivers end-to-end visibility and control of all business transactions, all the time. CoreFirst automatically discovers, tracks, monitors and profiles all transactions -- across all tiers - to clearly map IT business service topology. This improves collaboration among different stakeholders by providing them with a common transactional context, reducing the cost and time to resolve application and platform performance issues.
Ramat Gan, Israel’s OpTier (http://www.optier.com) provides software solutions that dynamically link business services to underlying IT infrastructure, assuring service delivery and optimizing IT resources. Its unique Business Transaction Management technology -- which delivers end-to-end visibility and control of all business transactions -- makes effective Business Service Management a reality. OpTier tracks and monitors all business transactions -- across all tiers, all the time. (OpTier23.07)
3: REGIONAL PRIVATE SECTOR NEWS
3.1 RJ Records 14% Increase In Passenger Traffic
Royal Jordanian transported 204,000 passengers last month, marking a 14% increase over the same period in 2006. The seat factor rose by 4.8 points in June this year, reaching 72.2%, against 67.4% during the corresponding period last year. Flying hours also increased by 15%, from 6,379 in June last year to 7,324 in the same month this year. In June 2007, the airline operated 2,454 departures, a 9% rise over the same month in 2006 when RJ operated 2,257 departures. Moreover, aircraft utilization increased from 10.6 hours per day to 11.1 hours per day for the month compared, representing a 4% increase. The on-time performance also rose from 81.8% to 82.2%, an internationally high record. Since 2006, six Airbus A320s and A321s and three Embraer 195s, offering RJ passengers world-class service, have joined the fleet. The airline is also paving the way to replace the currently operating aircraft with newly manufactured Embraer planes for short-haul destinations, with aircraft from the Airbus A320 family for medium-haul routes and with Boeing 787-8 Dreamliner for the long-haul routes. In May, RJ launched a nonstop flight between Amman and Montreal. The airline expects to complete its privatization process by the end of this year. RJ has already passed through several phases towards privatization, the first being its incorporation as a public shareholding company in 2001, with its entire shares owned by the government. (JT16.07)
3.2 Agthia To Launch Mother Parkers Products in UAE
Emirates Foodstuff and Mineral Water Company (Agthia) has signed an agreement with Mother Parkers Tea & Coffee Inc. and its international business partner, aQmen Inc., to launch Canadian brand Mothers Parkers products throughout the UAE. Agthia currently controls Al Ain Mineral Water Company and Grand Mills for Flour and Animal Feed Company, and will add Mother Parkers to its portfolio as a stand-alone division managed and distributed by Al Ain Mineral Water. Mother Parkers Tea & Coffee Inc. is the leading tea and coffee manufacturer and distributor in Canada, and was founded in Toronto in 1912. The company markets brands including Higgins & Burke, Mother Parkers, Martinson, Brown Gold, Savarin, and Beech Nut and are experts in mainstream and specialty coffee, tea and complementary beverages. (GN17.07)
3.3 Westcon Group Enters Turkey by Joint Venture with Index Group Subsidiary, Netex
Tarrytown, N.Y.’s Westcon Group, the leading specialty distributor in networking, convergence, security, and mobility, announced that it has entered into a joint venture with Index Group, an Istanbul-based distributor of IT equipment. As a result of the joint venture, Westcon Group, through Netex, becomes the leading networking and security distributor carrying Cisco and Nortel products in that region. By partnering with an established, locally based distribution operation, Westcon Group is able to apply its solutions-based model while leveraging the local back office and logistics capabilities of Netex. In addition, Netex will be able to leverage the inventory position from Westcon Group’s warehouses in the Middle East and Europe. To further support the local reseller community, the Company will also launch Westcon Group’s targeted solutions programs during the next few months. With a GDP of $358.5b and population of over 71 million, Turkey is an important emerging market where Westcon Group believes networking technology will play an increasingly vital role. Following Westcon’s recent successful entry in the Gulf region, this joint venture further strengthens its presence in emerging markets. (Westcon Group24.07)
3.4 Air Products Fuels New Hydrogen Submarine for Hellenic Navy
Allentown, Pennsylvania’s Air Products, in partnership with Hellas Air Pro, recently supplied a new state of the art submarine of the Hellenic Navy with hydrogen. This is the first fueling of this kind in Greece and took place in Skaramanga, near Athens. Prior to this event, Air Products had supplied the integral components of the hydrogen fueling station to Howaldtswerke - Deutsche Werft, who owns the design of the submarine and who supplied the fueling station to Greece. The fueling technology is based on Air Products' unique cryogenic hydrogen compressors (CHCs), which are used in conventional hydrogen supplies, as well as in bus fueling applications. Air Products is an industry leader in hydrogen safety and engineering, and a global leader in hydrogen production and distribution, as well as the industry leader in hydrogen fueling stations for clean transportation applications. Air Products also supplies industrial gases and associated equipment to a variety of other industries, including metals processing, refining, chemical production, fat and oils production and electronics processing, as well as supplying hydrogen purification equipment. (Air Products12.07)
4: ISRAEL MACRO-DEVELOPMENTS
4.1 BDI Says 19 Families Control $59 Billion in Revenue
Business Data Israel (BDI) reports that Israel’s 19 wealthiest families controlled an aggregate $59b in revenue in 2006, 34% of the $172b earned by the country’s 500 largest companies altogether. BDI adds that the aggregate income controlled by the 19 families equaled 88% of the government budget of $67.38b, and over half of the business product of $108.8b. The 19 families include the Dankner, Ofer, Tshuva, Weissman, Saban, Arison, Bino, Federmann, Borovich, Leviev, Hamburger, Azrieli, Fishman, Strauss, Wertheim, Alovich, Zisapel, Shahar, Kass, and Schmelzer families. Three changes appear in the 2006 list, compared with 2005: Steff and Eitan Wertheimer were taken off the list following the sale of 80% of Iscar to Warren Buffett’s Berkshire Hathaway and the Alovich and Azrieli families were added. Nochi Dankner, the chairman and CEO of IDB Holding Corp., headed the 2006 list, and his share of the 19 families’ aggregate income rose to 18.7% from 16.3% in 2005. His income rose by 15% thanks to acquisition of 31% of Koor Industries in 2006 for $394m. The BDI concentration index examines the controlling shareholders in influential Israeli companies, effectively running them. The index does not examine the families’ wealth; therefore, families with similar wealth, but with little economic influence and/or whose wealth is derived from business overseas, are not included. (Globes 19.01)
4.2 Israel Leads Middle East in Battling Corruption
According to a World Bank Worldwide Governance study released on 10 July, Israel and the United Arab Emirates lead Middle Eastern countries in the fight against corruption and enacting laws that benefit business. The study measures factors such as controlling corruption, government accountability, political stability, press freedom and the absence of violence. However, the bank's study of 212 countries from 1996 through 2006 shows little overall improvement in governance worldwide despite the increasing focus on the issue. On all the measures except for political stability Israel received high marks, though still significantly lower than other developed countries. In corruption control, Israel had a 79.6% score. This ranks below a fifth of the countries rated. High-scoring nations were Australia, 95.1%, Canada, 94.2%, Germany, 93.2%, France, 91.7% and the U.S., 89.3%. In 2005 Israel received a 75% score on corruption control.
On the good governance scale, Israel received a reasonable score, 70%, which put it far ahead of its neighbors such as Syria, 36.2%, or Iran, 23.3%. However, the Emirates scored 69%, and Israel was again far behind Western nations such as Belgium, 91%, Germany, 94.3%, and the U.S., 91.9%. In 2005 Israel actually scored higher, 74%. Israel's worst ranking came in political stability, 14.4%, which was also down from 19% in 2005. Israel thus ranks among African regimes such as Kenya, 15.4%, and Liberia, 12.5%. (WB10.07)
4.3 Netanyahu Foresees $45,000 GDP Per Capita Within 10 Years
Likud chairman MK Netanyahu says, “Tax cuts are the primary growth engine. People want to make money.” He made the comment at an Interdisciplinary Center Herzliya conference on “The structure of the Israeli economy - holdings and ownership.” Netanyahu added, “We were on the brink in 2003. 57% of GDP went to the public sector; the percentage is now 43%.” He reiterated that when he was finance minister, he worked on three things: a “diet” for the public sector, tax cuts, and reforms. “We can achieve GDP per capita of $45,000 within ten years, a growth rate of 8% a year. This will put is among the top ten wealthiest countries in the world, and will make money available for both social needs and defense.” (Globes 19.07)
5: ARAB STATE & PAKISTANI DEVELOPMENTS
5.1 Jordan Medical Association Determined To Increase Doctors’ Fees
The Jordan Medical Association (JMA) on reiterated its “legal right” to raise fees of private sector doctors despite calls by the Consumer Protection Society (CPS) for the decision to be reversed. Under the decision, which is expected to come into effect in the coming weeks, the top fee of a general physician will rise to $9.88 from the current $4.23. For specialists, the fee will increase from the current $14 - 21 to a maximum of $28. The official said once the decision is endorsed by the association’s council, it will automatically be endorsed by the minister of health, in accordance with the syndicate’s law. The decision was taken in light of the increase in living costs and high inflation, which leaped to 6.25% in 2006 from 1.6% in 2003. The CPS said the decision would have a negative impact on a large proportion of Jordanian society who are already struggling to make ends meet. He also criticized the association’s law, which gives it the authority to determine the level of fees charged. The CPS added that it is unfair to increase the fees in light of the harsh economic situation citizens are living in. Some 30% of the population are not covered by medical insurance and the majority of them go to private sector doctors. The majority of these are poor and cannot afford any hike in prices. (JT17.07)
5.2 Rising Gulf Inflation to Keep Pressure On Exchange Rates
Inflation in Gulf Arab countries will keep rising as regional economies grow, raising pressure on governments in the world's top oil-exporting region to revalue their currencies, Morgan Stanley said on 16 July. The US currency's slide to record lows against the euro this month has left dollar-pegged currencies around the Gulf weaker than they should be, the investment bank said. Inflation in Gulf Arab countries, which averaged 4.5% last year, will only get worse, fuelled by dollar weakness and excess liquidity created by a tripling of oil prices since 2002 driving growth in domestic demand. Given the state of domestic economies and an incredible pipeline of investment projects over the next five years, inflation pressures will likely intensify, in Morgan Stanley’s view, not recede as many expect. Kuwait allowed its dinar to appreciate against the dollar twice this year, saying it wanted to contain the impact of the dollar's slide on imports, which helped drive up inflation to 5.15% in March. The United Arab Emirates and Qatar, the other candidates for a revaluation according to analysts polled by Reuters in March, have the region's highest inflation rates, at 13.5% and 15%, respectively. In Saudi Arabia, where inflation in May was 2.96% compared with 2.9% in April, the riyal has depreciated by more than 24% since the beginning of 2002. The economy of the world's biggest oil exporter should grow 6.4% this year, forecasts from 11 analysts in a Reuters survey in December showed. Morgan Stanley said currency misalignment in Saudi Arabia is basically the result of the fixed exchange rate regime pegged to the US dollar. (Reuters16.07)
5.3 Kuwait Approves $10 Billion Deficit Budget
Kuwait's parliament approved the 2007/08 state budget with a projected deficit of around $10.3b. The world's seventh largest oil exporter based its budget on an oil price forecast of $36 per barrel and output of 2.2 million barrels per day. GCC oil exporters usually use conservative crude price estimates in their budgets. Kuwaiti crude, which trades at a discount to benchmark US light sweet crude, was around $67 a barrel in early July. Kuwait produced 2.42 million barrels per day in June. Kuwaiti Finance Minister Al Humaidhi said expenditure would rise 5.2% to $39.39b in 2007/08, while income was projected at $29b. Kuwait posted a budget surplus of $19.695b in the fiscal year ending in March, 2007, its second-largest ever. Kuwait's surplus oil wealth is invested by Kuwait Investment Authority (KIA), which had at least $213b in assets under management on March 31, according official figures. KIA, which is the biggest shareholder in German car maker DaimlerChrysler, is looking to invest more in Eastern Europe, Australia, Russia and Asian markets such as China and Vietnam. (Reuters11.07)
5.4 Kuwait Dinar Revalued
Kuwait allowed its dinar to appreciate 0.4% against the dollar in its second revaluation this year, as the US currency tumbled to a record low against the euro. The dinar would trade at 0.28690 per dollar against the previous rate of 0.28806 set on 20 May when the world's seventh-largest oil exporter abandoned its dollar peg and adopted a basket of currencies, the central bank said. The dinar has now appreciated around 0.77% from its level on 19 May. The central bank said on 20 May it wanted to contain the impact of the dollar's slide on imports, which was driving up inflation. Analysts, including those at HSBC, Deutsche Bank and Standard Chartered, had expected Kuwait to move again this year, especially if the dollar continued to weaken. On 11 July, a Kuwait parliament committee urged the government to allow the dinar currency to reflect the real value of the US dollar, which hit a fresh low against the euro and a 26-year trough against sterling. Kuwait had pegged its dinar to a currency basket until it adopted a dollar peg in 2003 to prepare for regional monetary union by 2010. The basket used by Kuwait until then was 85% in dollars, 10% in euros and 5% in sterling. The central bank has not disclosed the composition of the new basket, saying only that it consisted of the currencies Kuwait uses for imports and investment. The timetable for monetary union has been in doubt since Oman said last year it would not meet the deadline. (Reuters12.07)
5.5 WTO Terms Bahrain Reforms a Huge Success
Bahrain's economic reforms are proving a huge success as revealed in the latest World Trade Organization (WTO) trade policy review. The report shows that before 2000 Foreign Direct Investment (FDI) to Bahrain was an average of $460m, but this almost doubled to $941m during the period from 2001 to last year. By the end of last year FDI had reached $2.915 billion, which is partly because of the government's strategies and the progress in privatization. The political and economic reforms that were started by King Hamad in 2000 and the policies that have been established by the Economic Development Board (EDB) from 2001 onwards, led by the Crown Prince, and the excellent implementation done by the government, has resulted in very impressive figures. The average gross domestic product (GDP) for Bahrain between 1989 and 1998 was 4.8% and this rose to 6.2% between 2000 and last year. Bahrain has kept inflation at an average of 0.3% between 2000 and last year. Bahrain has increased its GDP and per capita. It is now estimated at $18,460, which is considered amongst the highest in the world. Bahrain has also established one of the most diversified economies in the region, in which the services sector is about 70%, manufacturing 13.5% and oil and gas almost 12%. (TradeArabia 22.07)
5.6 $1 Billion Qatar Power Plant
General Electric's energy unit and South Korea's Doosan Heavy Industries have won a $1b order to build a power plant for aluminum smelting in Qatar. The consortium will build the 1,250 MW combined cycle power plant in Mesaeed Industrial City, located 40 km south of the capital Doha, for Hydro Aluminum AS and Qatar Petroleum. Doosan's portion of the deal is $501m, South Korean firm announced. The planned power plant, scheduled for completion by July 2010, will supply electricity to Qatar's largest aluminum smelting plant. (Reuters12.07)
5.7 Food Retail in the UAE Annual Industry Sales are Estimated at $3.5 Billion
Dublin, Ireland’s Research and Markets released a report, “Analyzing Food Retail in the UAE.” The UAE retail sector continues to grow, supported by the upgrading of existing retail stores and the addition of state of the art new mega retail stores. The UAE market presents retailers with diverse relatively high-income consumers. Exporters who are willing to establish personal relationships, consolidate shipments and meet the labeling requirements of the UAE market will find a rapidly growing sector in which to sell a wide range or products. Annual sales in the industry are estimated at $3.5b. The UAE food retail sector continues its aggressive growth. More large type stores are being built. Value of retailed products are currently estimated by trades at about $2.5 billion. The French Retail Giant, Carrefour, has moved aggressively into the retail of food and non-food products in the United Arab Emirates and is expected to open at more locations across the UAE. Other Arabian Peninsula markets are definitely in the cards for this retailer as consumers go more and more for low prices and everything under one roof. (R&M20.07)
5.8 Saudi Arabia Upgraded to 'AA-/A-1+'
Standard & Poor's Ratings Services (http://www.standardandpoors.com) said that it raised its foreign and local currency long-term sovereign credit ratings on the Kingdom of Saudi Arabia to 'AA-' from 'A+'. At the same time, the local and foreign currency short-term ratings were raised to 'A-1+' from 'A-1'. The outlook is stable. Standard & Poor's also raised the transfer and convertibility (T&C) assessment on Saudi Arabia to 'AA+' from 'AA'. The upgrade primarily reflects Saudi Arabia's extremely strong and rapidly improving external and fiscal positions. Driven by record oil receipts, foreign reserves and liquid foreign assets managed by the Saudi Arabian Monetary Agency (SAMA) have increased sharply in recent years, and are expected to top $330 billion by year-end 2007 (versus $136 billion in 2004). This will be sufficient to cover about 26 months of current account payments (including private transfers). Overall, Saudi Arabia stands to have a net external asset position of 115% of GDP by year-end 2007. The stable outlook reflects the balance between Saudi Arabia's prospects for continued strong oil revenues and the government's success with its ambitious and broad-based reform effort, on the one hand, and high regional geopolitical risks, on the other. The ratings are likely to be raised if regional geopolitical risks abate, or if progress is made in addressing social concerns, particularly unemployment. Conversely, the sovereign's creditworthiness could come under downward pressure if there is a reversal in the fiscal discipline adhered to by the government so far, the debt burden increases significantly, external liquidity is impaired, or domestic and regional political risks increase. (S&P17.07)
5.9 Fitch Assigns Egypt's Local Currency Bond 'BB+' Rating
On 11 July, Fitch Ratings (http://www.fitchratings.com) assigned the Arab Republic of Egypt's forthcoming EGP-denominated 5-year benchmark bond a 'BB+' rating. The bond is payable in US dollars. The rating is in line with Egypt's 'BB+' Long-term foreign currency Issuer Default rating (IDR), on which the Outlook is Positive. "Egypt's creditworthiness is improving gradually, thanks to ongoing economic reforms that address many of the areas that still weigh on Egypt's ratings," said Richard Fox, Head of Fitch's Middle East and Africa Sovereign rating team. "The budget deficit and debt ratio will fall appreciably this year and have clearly turned a corner. Banking system restructuring is nearing completion and further reforms are planned to improve the business environment. Growing confidence in the policy framework has brought increased investment and accelerated economic growth. A current account surplus, coupled with strong capital inflows, has increased reserves and helped Egypt attain net external creditor status last year - unusual in the 'BB' rating category," Mr. Fox said. Fitch affirmed Egypt's Long-term foreign currency IDR at 'BB+' on 18 June 2007 and revised the Outlook to Positive from Stable. (Fitch 11.07)
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5.10 Pakistan’s Trade Gap 2006-07 Widens to $13.49b
Pakistan's trade deficit in the fiscal year ended on June 30 widened to $13.49b, an increase of 11.4% over the previous year, owing to slower growth in exports. The trade deficit in 2005-06 was $12.11b. Exports grew by 3.6% to $17.01b against the target of $18.6b, while imports were worth $30.5b as against the projection of around $28.0b. Commerce Minister Akhtar Khan, outlining the country's new trade policy in a televised address, said export growth had fallen from 14.4% in 2005-6, with growth hindered by low competitiveness and lack of productive capacity. Khan said high prices of crude oil created inflationary pressure and added to the cost of production and the cost of doing business. "Another challenge is lack of productive capacity, as a result of relatively low investment in new machinery and technology leading to lower productivity," he added. Khan set an export target of $19.2b for the fiscal year 2007-08 (July-June) and hoped it would be achieved through gaining increased market access for Pakistani goods, skill development for quality products and modern infrastructure for promoting trade. (FBS18.07)
5.11 Pakistan’s CPI Increases To 7.77% In Last Fiscal Year
Pakistan’s Consumer Price Index (CPI) has increased to 7.77% for the fiscal year ending 2006-07 over the same period of last year, showing the food inflation jump to 9.68%. The CPI based food inflation increased to 9.68% in June 2007 over the same period of last years, Federal Bureau of Statistics (FBS) said on 11 July. The inflation, based on consumer price index (CPI), Sensitive Price Index (SPI) and Whole Sale Price Index (WPI) increased by 7.77%, 10.82% and 6.94% respectively, in fiscal 2006-07 over the same period of 2005-06. Further analyses of the data showed that both the CPI and WPI have recorded 9.68% and 11.16% food inflation in June 2007 over the same period last year. However, overall inflation rates based on CPI, SPI and WPI increased by 0.20%, 1.48% and 1.10% in June 2007 over May 2007. The CPI was increased 7% in June 2007 over the same period last year and 0.20% over May 2007. It showed that the prices of food and beverages increased by 9.68% in June 2007 over the same period of last year, apparel, textile and footwear by 7.25%, house rent 6.73%, fuel and lighting 6.07%, household furniture and equipment 5.80%, medicare 9.85% and education 6.41%. Among the food items, prices of potatoes, eggs, rice, milk powder, vegetable ghee, spices, mustard oil, beverages, milk fresh, milk products, pulses masoor, cooking oil, wheat flour, wheat, pulses moong and ready made food have gone up, revealed CPI indicator. (BR12.07)
6: TURKISH & CYPRIOT DEVELOPMENTS:
6.1 Turkish Economy Makes People Vote for AKP
The Turkish Daily News wrote that it was not in reaction to an April “e-memorandum” by the army that carried the ruling Justice and Development Party (AKP) to a historical victory in the elections, but rather the economic concerns of the people, said sociologists and political scientists. In response to the heated political environment in April regarding the conflict over the presidential elections, Turkey went to early general elections this Sunday after more than four years of a single party government credited by many as having brought economic stability after a very serious crisis in 2001. The success of the AKP in increasing its votes by more than 10% compared to the 2002 elections, was regarded as the “people's warning” against the :e-memorandum,” which was posted on the Web site of the General Staff in the middle of the presidential elections process.
Many feel that AKP had a positive performance in that economically difficult time when compared to the Republican People's Party (CHP) and the Nationalist Movement Party (MHP). The AKP made people believe that it can contribute even if just slightly with policies such as financial support to SMEs or distributing presents in poor regions. The worries that people have about their future made them choose stability, according to comments. The public wishes for a prosperous future, peace and a promising future for their children and believes that the AKP government meets most of their expectations. The results of the democratic elections unveiled that the public wants a solution to political problems. Economic stability was decisive since the people thought that they are becoming richer.
Another massive factor in the AKP's success is the failure of the opposition to lay claim to values of social democracy but instead it creates policies of fear. The CHP thought it could benefit from drawing the society into a conflict of values. But there are more important things in Turkey, which is attached to the global world. The opposition was unable to pursue effective policies and instead based their campaign on ideological strategies, which were not enough to convince voters. Others feel the discourse of the CHP and MHP based on fear and perceived dangers could not convince the electorate. The main criticism of the CHP is its policies based on nationalism. The CHP lost its potential because they played on nationalism rather than social policies. (TDN24.07)
6.2 Turkey’s Unemployment Rate Is 9.8%
Turkish Board of Statistics (TUIK) announced that the unemployment rate dropped to 9.8% in Turkey in March-April-May 2007 period as compared to the same period last year. The figure was 9.9% in the same period in 2006. According to the results, labor force participation rate was calculated as 47.9%. The number of jobless people was 2,450,000 in the period of March-April-May 2007, TUIK announced. TUIK said that the number of employed rose to 22,638,000 during March-April-May 2007. Rate of unemployment became 11.6% in urban areas and 6.9% in rural areas. Rate of unemployment was 11% in January, 11.4 in February and 10.4% in March 2007. (TUIK15.07)
6.3 Moody’s Warns on Cyprus Fiscal Discipline
Moody's Investors Service warned the Cyprus government regarding its fiscal policy ahead of the 2008 presidential elections, as any deviations from the stated budget would result in a lower rating of its credit outlook. However, Moody’s recent positive rating action, that followed EU's decision to allow Cyprus to adopt the euro on 1 January 2008, is viewed as a credit positive because it will eliminate the risk of a currency crisis and thereby isolate the economy from external financial shocks. Moody’s refers to the strengthening of economic fundamentals of Cyprus, pointing to its high per capita GDP, the lower inflation and unemployment rates, as well as the resilience of the Cypriot economy which would be further benefited from euro adoption and the continuous fiscal discipline. Moody’s analysts anticipate that fiscal deficit for 2007 and 2008 would reach 1.4% of GDP in both years, with public debt estimated at 61.5% and 54.8% of GDP respectively. As far as GDP growth is concerned, the analysts forecast a 3.8% and 3.9% growth in 2007 and 2008 respectively, whilst inflation is forecasted at 1.7% in 2007 and 2.0% in 2008. Finally, Moody’s report cites the challenges faced by the Cypriot economy which include the possibility of a worsening public debt, issues on local competitiveness, the uncertainty of Cyprus’ reunification, and geopolitical unrest in the area. (Moody’s23.07)
6.4 Cyprus Tourist Arrivals Rise For First Time In Almost A Year
Tourism arrivals in Cyprus rose for the first time for almost a year in June. On the basis of the results of the passengers' survey, arrivals of tourists reached 282,465 in June 2007 compared with 280,164 in June 2006, recording an increase of 0.8%. This was the first year-on-year increase since July 2006. The tourism sector in 2007 has been marked by sharp differences in different markets. On the positive side, in June an increase of 16.9% was recorded in tourist arrivals from Russia (from 21,114 in June 2006 to 24,672 in June 2007); a 35.2% increase from Sweden (from 11,785 to 15,933); and a 26.7% increase from Greece (from 9,837 to 12,466 this year). On the negative side, a decrease of 5.4% was recorded in tourist arrivals from the biggest market, the UK (148,941 in June 2007 compared with 157,503 in June 2006). Similarly, 19.5% decrease was recorded from Germany (11,145 compared with 13,842 last year). For the period January-June 2007 arrivals of tourists totaled 964,097 compared with 998,325 in the corresponding period of 2006, recording a decrease of 3.4%. (Cystat18.07)
7: GENERAL NEWS AND INTEREST
*ISRAEL:
Tu B'Av, the 15th Day of Av (which falls this year on 30 July) is both an ancient and modern Jewish holiday. Originally a post-biblical day of joy, it served as a matchmaking day for unmarried women in the second Temple period (before the fall of Jerusalem in 70 C.E.). Tu B'Av was almost unnoticed in the Jewish calendar for many centuries but it has been rejuvenated in recent decades, especially in the modern state of Israel. In its modern incarnation it is gradually becoming a Hebrew-Jewish Day of Love, slightly resembling Valentine's Day in English-speaking countries. The first mention of this date is in the Mishna, (compiled and edited in the end of the second century), where Rabban Shimon ben Gamliel is quoted saying, "There were no better (i.e. happier) days for the people of Israel than the Fifteenth of Av and Yom Kippur, since on these days the daughters of Israel/Jerusalem go out dressed in white and dance in the vineyards. What were they saying: Young man, consider whom you choose (to be your wife)…"
For almost 19 centuries- between the destruction of Jerusalem and the re-establishment of Jewish independence in the state of Israel in 1948 - the only commemoration of Tu B'Av was that the morning prayer service did not include the penitence prayer. In recent decades Israeli civil culture promotes festivals of singing and dancing on the night of Tu B'Av. The entertainment and beauty industries work overtime on this date. It has no formal legal status as a holiday; it is a regular workday, nor has the Israeli rabbinate initiated any addition to the liturgy or called for the introduction of any ancient religious practices. The cultural gap between Israeli secular society and the Orthodox rabbinate makes it unlikely that these two will find a common denominator in the celebration of this ancient/modern holiday in the foreseeable future.
7.2 Netanya Bars Sale of Pork and Ham in Residential Areas
The seaside municipality of Netanya, Israel's 8th largest city, has banned the sale of pig meat in residential and tourist areas. Pork may be sold only in two outlying industrial zones. The Netanya City Council convened on 17 July, in light of sharp protests against the opening of a giant supermarket that planned to sell pork. Between 50 and 70 stores sell pork products in the city center and most of their customers are new immigrants from the former Soviet Union. Some 40% of those immigrants brought to Israel by the Jewish Agency are not considered Jewish according to Jewish Law. The opening of the latest store sparked particularly strong opposition and some religious Jews even chained themselves to the store's doors on 15 July. In a quickly called session, the City Council voted 12-3 to forbid the opening of new pork-selling stores and close down existing ones. Half of the council members are religiously observant. Mayor Miriam Feierberg, who did not object to the bill, said that the issue is actually one for the Knesset, not city councils. She called upon the national legislature to pass a law forbidding the sale of non-kosher meat in Israel. (INN19.07)
7.3 Kosher Certification of a Different Kind for Israeli Shops
An Israeli social justice movement has established a certification system to award restaurants for “kosher” treatment of employees and the disabled. Bema’aglei Tzedek, a Jerusalem based non-profit organization, has established a system for altering consumers to positive employment practices and accessibility for the disabled through a system resembling that with which Kosher certification is displayed. Called the Social Seal (Tav Chevrati in Hebrew), the certificate is now being prominently displayed in over 300 Israeli eateries from Jerusalem to Tel Aviv and various other locales. While the campaign began locally in Jerusalem with organization representatives using the seal as a means to promote the good labor practices of shop owners, it has quickly spread across the country. In order for an eatery to receive the seal, representatives of the organization will visit the restaurant and observe overall conditions as well as speak with the workers. Several seals have been revoked after it was reported that workers’ rights were being repeatedly violated. Violations include cases where workers are being denied breaks or being paid below the legal minimum wage or where the restaurant is lacking appropriate access for the handicapped. (INN12.07)
*REGIONAL:
7.4 Jordan to Observe a Holiday on July 31 for Municipal Elections
Jordan will observe a holiday on July 31, the date for municipal elections, to enable as many people as possible to participate in the upcoming nationwide elections. All ministries, government departments and public institutions will be closed on that date, according to a communiqué issues by Prime Minister Bakhit. The government endorsed earlier this year, the new Municipalities Law, which aims at enhancing the participation of young people and women in the elections. The age of eligible voters has been reduced from 19 to 18 years to expand the voter base. The new law also allocates a minimum of 220 out of the 965 municipal council seats for women. More than 1.9 million Jordanians have registered to take part in the elections. (Petra18.07)
7.5 Burj Dubai Sets Global Records
At 512.1 meters (1,680 feet), Burj Dubai has become the world's tallest tower. Burj Dubai, being developed by Emaar Properties, is now taller than Taipei 101 in Taiwan, which at 508 meters had been the tallest building in the world since it opened in 2004. Burj Dubai has now reached 141 levels - more stories than any other building in the world. On schedule for completion in 2008, Burj Dubai will be the tallest structure in the world in all four criteria listed by the Council on Tall Buildings and Urban Habitat. The council measures height to the structural top, the highest occupied floor, to the top of the roof, and to the tip of the spire, pinnacle, antenna, mast or flag pole. During its construction, Burj Dubai has left behind the skyscrapers that previously defined tall tower architecture around the world such as Petronas Towers in Malaysia (452 meters); Sears Tower in Chicago (442 meters); Jin Mao Building in Shanghai (421 meters) and the Empire State Building in New York (381 meters). The company has yet to reveal the final height and number of stories. When completed, Burj Dubai will have consumed 330,000 cubic meters of concrete, 39,000 metric tons of steel rebar, 142,000 square meters of glass and 22 million man hours. The tower will have 56 elevators traveling at 1.75 to 10 meters per second and double-decker observatory elevators that can carry 42 people at a time.
Burj Dubai has been designed to manage the effect of wind and seismic movements. High-strength concrete makes up the tower's superstructure, which is supported by reinforced concrete mats and piles. The 80,000 square foot foundation slab and 50-meter deep piling are waterproofed. Burj Dubai became the tallest building in the world in just 1,276 days; excavation work started in January 2004. More than 5,000 consultants and skilled construction workers are employed onsite, and the world's fastest high-capacity construction hoists, with a speed of up to two meters per second, move men and materials. (GN21.07)
7.6 Turkey’s Ruling AKP Wins Broad Victory
Following national elections on Sunday, 22 July, the AKP - Justice and Development Party of Prime Minister Erdogan won a larger-than-expected victory in nationwide parliamentary elections, taking close to half the total vote in a stinging rebuke to Turkey’s old guard. The Islamic-inspired governing party won 46.6% of the vote, according to Turkish election officials, far more than the 34% the party garnered in the last election, in 2002. The secular state establishment had expected that voters would punish Mr. Erdogan’s party for promoting an Islamic agenda. But the main secular party, the Republican People’s Party (CHP), received just 20.9%, compared with 19% in the last election. The Nationalist Action Party (MHP), which played on fears of ethnic Kurdish separatism, won 14.3%. The results were a mandate for Mr. Erdogan’s party, with large numbers of voters sending the message that they did not feel it is a threat to Turkish democracy. It fell short of the two-thirds majority needed to amend the Constitution, a blank check that secular Turks fear. According to the preliminary results, Mr. Erdogan’s party will have at least 341 seats in the 550 seat Parliament. The main secular party will have at least 111; the nationalists at least 71, and independents an unusually large 28 or more.
It was unclear how Turkey’s powerful military would react, if at all. It issued a sharp warning to Mr. Erdogan’s party in April, saying it had strayed from secularism. It has deposed four elected governments since Turkey was founded in 1923.
Mr. Erdogan’s party has pushed for European Union membership, rewriting laws to meet European standards and meeting requirements in an IMF economic program. It has improved economic ties with Israel and broached the topic of Turkey’s problems with its Kurdish minority. But secular, urban Turks are suspicious. The party comes from a religious, merchant class in rural Turkey, and the view of the senior leaders differs substantially from their own. But since an economic boom in the 1980s, large numbers of rural Turks moved to the cities, forming a new Islamic middle class with its own wealthy elite. That religious class, in the form of Mr. Erdogan’s party, pushed to the upper reaches of the state’s power in April, when it tried to capture the presidency, a post that is at the very heart of the network of judges, military officers and bureaucrats that form the state elite. The party proposed Turkey’s foreign minister, Abdullah Gul, whose wife wears a head scarf.
7.7 Independent Candidates Win After Following New Tack
A striking aspect of the July 22, 2007 general elections is the success of independent candidates. The issue of independent candidates dominates the agenda this time. The 24 deputies coming from the pro- Kurdish Democratic Society Party (DTP), who hold a unique place in Turkey's political history, will form a parliamentary group having circumvented the 10% national threshold for political parties. In addition, independent candidates with no apparent ties to any of the political parties will bring diverse and unusual voices into Parliament.
This wave of independent candidates is a first in Turkish history and reflects on the salient and now disputed role of the 10% national threshold. Indeed, if the threshold was 5% – or less, as in many European countries – the Democrat Party (DP), which got 5.39% of the vote, or even the Young Party (GP) with 3%, would have been represented in Parliament. In a country with more than 42 million voters, the total votes for these two parties amount to nearly 1.9 million. That amounts to a population almost exactly equal to Slovenia's that have been disenfranchised, left without parliamentary representation.
The situation would have been direr if the DTP had not opted for independent candidates. The party, in the 2002 elections, won 6.2% of all votes – more than two million voters – but was left out in the cold. This time, though, the balance has shifted considerably and based on unofficial results, at least 23 lawmakers will be affiliated to the DTP – plus the former leader of the socialist Freedom and Solidarity Party (ÖDP), who was carried to Parliament with the DTP’s support. (Various23.07)
8: ISRAEL LIFE SCIENCE NEWS
8.1 Frutarom & Ramot Enter Into Exclusive Cooperation Agreement
Frutarom Industries and Ramot at Tel Aviv University signed an exclusive agreement to commercialize unique know-how (patent pending) developed by Professor Ovadia of Tel Aviv University, to produce an innovative extract from cinnamon with anti viral properties. The comprehensive research performed in Professor Ovadia's laboratory demonstrated the extract's ability to rapidly neutralize a broad range of viruses that cause infectious diseases in both humans and animal, such as human and avian influenza, herpes (HSV-1) and human immunodeficiency virus (HIV-1). Another unique activity of this innovative extract is its ability to boost the immune system against viruses, demonstrated by the ability to serve as a vaccination agent in chicken embryos infected with Newcastle disease virus (NDV). Trials performed together with a veterinary company showed that chicken embryos can be vaccinated against the NDV virus while they are still in the egg and in so doing, significantly improve the efficiency of the vaccine's administration, increase success rates and reduce mortality.
The agreement with Ramot gives Frutarom an exclusive global license to commercialize the know-how in order to manufacture and market the unique natural extract, based on know-how currently being patented. Frutarom intends to market this unique product to the nutraceutical, functional food, health food and animal feed industries and to further develop the know-how as a drug for humans and animals as part of the Company's unique natural product offering. Frutarom will invest in further research and development of this unique product and additional applications within Frutarom's fields of activity.
Haifa, Israel’s Frutarom (http://www.frutarom.com) is a multinational company operating in the global flavor extracts and fine ingredients markets. Frutarom's products are intended for the food and beverage, flavor and fragrance, pharmaceutical, nutraceutical, health food, functional food, food supplement and cosmetic industries. Founded in 1963, Tel Aviv University (http://www.tau.ac.il) is one of Israel's foremost research and teaching universities. Located in Israel's cultural, financial and industrial heartland, Tel Aviv University is at the forefront of basic and applied research in a wide variety of scientific research disciplines, including engineering, exact sciences, life sciences, medicine, social sciences, management, law, humanities and the arts. Ramot (http://www.ramot.org) is the technology transfer company of Tel Aviv University. Ramot fosters, initiates, leads, and manages the transfer of new technologies from the university laboratories to the marketplace, by performing all activities relating to the protection and commercialization of inventions and discoveries made by faculty, students and other researchers of Tel Aviv University. (Frutarom Industries 11.07)
8.2 Protalix BioTherapeutics Receives Special Approval from FDA for its Phase III Clinical Study of prGCD
Protalix BioTherapeutics has reached an agreement with the US FDA on the final design of its pivotal phase III clinical trial for its lead product candidate, prGCD, through the FDA's Special Protocol Assessment (SPA) process. The Company expects to initiate enrollment of patients for its phase III clinical trials during the Q3/07. prGCD is a proprietary plant cell expressed recombinant form of human Glucocerebrosidase (GCD), for the treatment of Gaucher disease, a lysosomal storage disorder in humans. The phase III clinical trial will take place in leading medical centers in the United States, Israel, where approval from the Israeli Ministry of Health has been received, and other locations worldwide. The clinical trial will initially consist of male and female adult patients with Gaucher disease. Carmiel, Israel’s Protalix (http://www.protalix.com) is a clinical stage biopharmaceutical company. Its goal is to become a fully integrated biopharmaceutical company focused on focused on the development and commercialization of proprietary recombinant therapeutic proteins to be expressed through its proprietary plant cell based expression system. Protalix's ProCellEx presents a proprietary method for the expression of recombinant proteins that Protalix believes is safe and scalable and will allow for the cost-effective, industrial-scale production of recombinant therapeutic proteins. Protalix is also advancing additional recombinant biopharmaceutical drug development programs. (Protalix13.07)
8.3 Kamada Completes Factory Upgrade to FDA, EMEA standards
Kamada has completed the upgrade of its factory at Beit Kama to comply with US FDA and European Medicines Agency (EMEA) Good Manufacture Practice (GMP) standards at a cost of $5.48m. The factory will therefore be able to produce drugs for the company’s clinical trials, and later, assuming the trials are successful, for marketing. Kamada is undergoing a change in strategy, which includes registering some of its products with the highest added value for marketing in both Europe and the US, where the sale price will be higher. Until now, the company has marketed its products in many countries, but not in the US or EU member states. The upgrade of the Beit Kama factory and its approval by the FDA and EMEA are critical steps in the implementation of the new strategy. Kamada (http://www.kamada.com) manufactures a line of highly-safe specific immunoglobulins and other plasma-derived therapeutics, using sophisticated chromatographic purification technology. Licensed and marketed in more than 15 countries, several of these specialty biopharmaceuticals hold registered and pending patents and are in advanced clinical trials. Kamada is a public company based in Ness Ziona, Israel. (Kamada16.07)
8.4 R.A.Erez Systems Ltd. Commences Study of the Automated CPR Device at Hadassah Hospital
R.A.Erez Systems has commenced a study of its flagship product, an automated CPR device, at Hadassah Hospital in Ein Kerem, Jerusalem, Israel. The mechanized device enables continuous compressions, at pressure and rate levels based on the real time physiological state of a patient. It also monitors the performance of the device and the progress of the patient. Several clinical studies have shown that applying an interposed compression cycle to both the chest and abdominal areas has significant hemodynamic advantages to the resuscitation process and may increase chances of patient survival. In addition, The American Heart Association guidelines published in November 2005 call for rapid, minimally interrupted chest compressions. The pre-clinical study will be conducted at the Heart Institute at Hadassah and will test the electrodynamic parameters of the second prototype of the Automated CPR device. The results will serve as a basis for the third prototype that the company plans to develop in line with FDA guidelines and intends to submit for a 510K approval. The R.A.Erez management is open to discussions with potential partners. (R.A.Erez17.07)
8.5 Dune Medical Devices Honored With 2007 Frost & Sullivan European Technology Innovation Award
Dune Medical Devices (http://www.dunemedical.com) of Caesarea, Israel has been honored with the 2007 Frost & Sullivan European Technology Innovation of the Year Award in surgical oncology for its novel intraoperative breast cancer probe. Using Radio Frequency (RF) Spectroscopy, the innovative device provides physicians during surgeries with the malignancy status of breast cancer margins in real-time. Following lumpectomy, cancer patients found to have positive (malignant) surgical margins typically require a second surgery, with added expense and trauma, to reshave tumor sites for additional tissue removal. The Dune handheld probe holds significant promise to reduce re-excision procedures, improve patient outcomes and minimize surgical expenses. A recent study found that the Dune probe detected 86% of positive tumor margins that were otherwise missed by current standard of care, potentially allowing surgeons to reshave the tumor cavity and eliminate an additional surgery. In a second recent study, the device identified 2O out of 21 DCIS sites as verified by post-operative pathology reports. DCIS is a hard-to-detect non-invasive form of breast cancer. Venture capital investments from Apax Partners and other investors have allowed Dune Medical to advance its technology development and obtain regulatory certifications such as the CE mark for marketing in Europe. In addition, the funding has allowed the company to conduct ongoing clinical studies in US. The investments have also advanced Dune Medical's efforts to initiate development of additional products for the Dune RF platform, aimed at other important surgical applications. Frost & Sullivan's Technology Innovation Award is bestowed upon a company (or individual) that has carried out new research, which has resulted in innovation(s) that have or are expected to bring significant contributions to the industry in terms of adoption, change and competitive posture. (F&S18.07)
8.6 Alzheimer’s Diagnostic Company Nexsig Raises Nis 4m
Xenia Venture Capital) portfolio company Nexsig Neurological Examination Technologies has raised NIS 4 million from a group of investors led by Kadima Hi-Tech, Rosenram Business Development, Altshuler Shaham and other investors. Kiryat Gat, Israel's NexSig (http://www.nexsig.com) develops adaptive diagnostic systems for early detection of neurological disorders. The company products are advanced Experts Systems that measure and analyze in real time biometric signals through self administered computerized tests. Nexsig has developed software for diagnosing Alzheimer’s disease, which does not require human intervention. The company says that its system measure and analyze in real time biometric signals though self-administered computer tests to give more accurate and earlier diagnoses. The system has been tested on 1,500 persons, and has been sold to Dikla Insurance Co. and Macabbi Healthcare Services in Israel, Brigham and Women’s Hospital in Boston, and a geriatric institute in Manchester, UK. (Globes22.07)
9: ISRAEL PRODUCT & TECHNOLOGY NEWS
9.1 VocalTec Communications Enhances Network for Switchward & Trosmann AG
VocalTec Communications announced that Switchward a leading Swiss carrier, has deployed VocalTec’s Essentra VoIP Peering and Trunking Media Gateway Controller solutions. Using VocalTec’s VoIP solutions, Switchward will provide secure and seamless interconnection of IP networks necessary for the delivery of high quality trunking and PSTN termination services throughout Italy and to service providers worldwide, while reducing service costs, enhancing service flexibility and enabling the rapid addition of new services and applications. Herzliya, Israel’s VocalTec Communications (http://www.vocaltec.com) is a leading global provider of carrier-class multimedia and voice-over-IP solutions for communication service providers. A pioneer in VoIP technology since 1994, VocalTec provides proven trunking, peering, access gateway and service delivery solutions that enable flexible deployment of next-generation networks (NGNs). (VocalTec11.07)
9.2 Invensys Selects NextNine Service Automation Platform for Remote Monitoring & Support
Fortifying its position as the market leader in innovative support automation solutions, Tel Aviv, Israel’s NextNine (http://www.nextnine.com) announced that Foxboro, Massachusetts’ Invensys Process Systems is leveraging the award-winning NextNine Service Automation platform to enhance current support mechanisms. Seamlessly integrated into Invensys Process Systems’ Sentinel Monitoring System, NextNine Service Automation is a scalable, innovative support automation platform designed for the entire service ecosystem, including vendors, system integrators, enterprises and support providers. At the core of NextNine’s software platform is its patented Virtual Support Engineer. A small footprint Java software that can be downloaded when needed or installed permanently at the customer site, the Virtual Support Engineer functions as an automated on-site support engineer for all support communications, automating data collection, remote diagnostics, resolution and maintenance. The NextNine Service Automation platform empowers organizations to deliver dramatically higher service levels and scalability to support more customers without increasing staff. Invensys chose NextNine's platform for its ease of use, support of multiple protocols (including Telnet, SSH, Web, Desktop) and secure communications especially when delivering remote support to mission critical customer sites worldwide. A key target for Invensys is to deliver efficient, secure, 24X7 support to its global client base. The NextNine Service Automation platform plays a significant role in helping Invensys achieve that goal. NextNine, founded in 1998, is the leading global provider of innovative support automation solutions. NextNine Service Automation Ecosystem Edition automates support processes for the entire service ecosystem to ensure efficient, superior services while maintaining low OPEX. (NextNine11.07)
9.3 SatCom Networks Africa Chooses Gilat’s SkyEdge Broadband Satellite Network
Gilat Satellite Networks is providing a SkyEdge broadband satellite network to SatCom Networks Africa, one of Tanzania’s leading public data communications operators. SatCoNet will use the SkyEdge network to provide major corporations and government institutions across hundreds of sites with broadband connectivity, videoconferencing, IP multicasting and VoIP services. One of the prime uses of the network will be to serve banking and financial customers. SatCoNet has been successfully deploying Gilat VSAT networks throughout East Africa since 2002. Gilat’s SkyEdge is a satellite communications system that delivers high-quality voice, broadband data and video services over a powerful unified system. SkyEdge represents Gilat’s extensive knowledge base and field-proven product offering, acquired through two decades of experience. Petah Tikva, Israel’s Gilat Satellite Networks (http://www.gilat.com) is a leading provider of products and services for satellite-based communications networks. The Company operates under three business units: (i) Gilat Network Systems, which is a provider of network systems and associated professional services to service providers and operators worldwide; (ii) Spacenet Inc., which provides managed services in North America for businesses and governments through its Connexstar service brand and for consumers through its StarBand service brand; (iii) Spacenet Rural Communications, which offers rural telephony and Internet access solutions to remote areas primarily in Latin America. (Gilat11.07)
9.4 Alvarion to Offer Bridgewater Systems AAA Service Controller as Part of Its Complete 4Motion Solution
Alvarion and Ottawa, Ontario’s Bridgewater Systems announced that Bridgewater has joined Alvarion’s OPEN WiMAX ecosystem to provide subscriber-centric policy management solutions for WiMAX deployments. With the signing of a worldwide reseller agreement, Alvarion will offer Bridgewater’s proven AAA Service Controller as part of its all-IP 4MotionTM WiMAX solution which provides an end-to-end solution for broadband network operators. Designed as open, standard, and interoperable, OPEN WiMAX is a complete ecosystem that encompasses network equipment, consumer electronics, service offerings, and even the end-users’ experience. OPEN WiMAX is the ecosystem of partners behind Alvarion’s highly scalable 4Motion solution, which combines BreezeMAX and best-of-breed systems to create an operator-centric network solution for WiMAX. 4Motion is designed to enable service providers to offer subscribers fixed and mobile personal broadband services anytime, anywhere. The complete all-IP Mobile WiMAX solution is designed to be compliant with 802.16e-2005 and WiMAX Forum Network Working Group specifications.
With more than 3 million units deployed in 150 countries, Tel Aviv, Israel’s Alvarion (http://www.alvarion.com) is the world’s leading provider of innovative wireless broadband network solutions enabling Personal Broadband to improve lifestyles and productivity with portable and mobile data, VoIP, video and other services. Alvarion is leading the market to Open WiMAX solutions with the most extensive deployments and proven product portfolio in the industry covering the full range of frequency bands with both fixed and mobile solutions. Alvarion’s products enable the delivery of personal mobile broadband, business and residential broadband access, corporate VPNs, toll quality telephony, mobile base station feeding, hotspot coverage extension, community interconnection, public safety communications, and mobile voice and data. (Alvarion 11.07)
9.5 Yoomba Launches First Open Communications Experience - Free, Instant Email Calling & Chat
Yoomba has invited the world to be part of a new open communications experience. Yoomba's open peer-to-peer application sits on top of every email network and turns any email address into a phone or messenger, allowing users to talk to friends, family or colleagues around the world for free. For the first time with Yoomba, users can now simply and instantly talk to all email addresses at the touch of a button. Yoomba uniquely integrates into email applications, adding buttons next to contact details in all of the major webmails, Outlook and Outlook Express. These buttons provide users with one- click access to all their contacts using voice or instant messaging. Before Yoomba, online communications offerings existed as part of closed networks. To communicate with friends, family or colleagues, users were required to join the network, register, create a new online identity, then search and add contacts one by one to each individual network. During activation Yoomba seamlessly loads all email contacts, giving users instant access at a glance, and more importantly, in order of popularity. The top 20 people in each user's Yoomba contact list will be the top 20 people they most frequently email. Yoomba (http://www.yoomba.com) is the world's first peer-to-peer open communications experience. Inspired by the vision to enable the world to simply and instantly communicate for free, Yoomba has developed proprietary technology which turns any email address into a phone or instant messenger. Yoomba is jointly headquartered in Tel Aviv, Israel and in the USA. (Yoomba 12.07)
9.6 Australia’s Child Support Agency to Implement NICE Perform Solutions in 14 Sites for 3,300 Agents
NICE Systems announced that Australia’s Child Support Agency (CSA) has selected NICE Perform Adaptive Interaction Analytics and will implement it in 14 sites with 3,300 agents. The solutions will be used to improve customer service levels, dispute resolution and operational efficiency. The CSA, an agency of Australia’s Department of Human Services, supports separated parents in transferring payments for the benefit of their children. NICE solution was chosen by the CSA to improve quality of service for parents, and to improve dispute resolution capabilities. Through its adaptive interaction analytics capabilities NICE Perform will enable CSA to identify the reasons for calls and the topics covered. It will also provide the ability to identify high-risk scenarios for improving dispute resolution. NICE Perform’s Adaptive Interaction Analytics harness the power of interaction analytics with an automated, iterative, system self-learning solution. Adaptive Interaction Analytics provides a very high degree of accuracy and efficiency in a scalable solution that analyzes 100% of the interactions in a cost-effective manner. This capability leverages customer interactions to proactively identify trends, anticipate opportunities, adjust processes to meet business objectives and take action at the right time. Ra'anana, Israel’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 Systems 17.07)
9.7 Metalink Receives First Production Order for 802.11n- WLANPlus From World-Class ODM
Metalink has received the first production order for its second-generation 802.11n-compatible WLANPlus MtW8151/MtW8171 chipset. This initial production order, valued at approximately $200,000, was submitted by a major ODM (Original Design Manufacturer) for delivery within the next three months. Since its introduction in 2006, Metalink's WLANPlus has gained broad industry recognition as the best performing 802.11n technology, and has recently received the Wi-Fi Alliance's 802.11n draft 2.0 Certification. The cutting-edge WLANPlus chipset family enables a new level of performance for data, VoIP, gaming and HD video streaming applications, providing complete, reliable high-speed coverage throughout the home. WLANPlus completely fulfills the requirements for video-grade wireless home networks, supporting up to 300Mbps transmission speeds at both the 2.4GHz and 5GHz frequency bands. In addition, Metalink's implementation of a Maximum Likelihood (ML) decoder, combined with its advanced Forward Error Correction (FEC) scheme using Low Density Parity Check (LDPC) technology, enables the WLANPlus to offer more than twice the reach of competing 802.11n solutions. Yakum, Israel’s Metalink (http://www.MTLK.com) is a leading provider of high performance wireless and wireline broadband communication silicon solutions. Metalink's WLAN and DSL technologies are designed to enable true broadband connectivity in every home, and its products revolutionize the broadband experience by facilitating the convergence of telecommunication, networking and entertainment. (Metalink 16.07)
9.8 MaxxBass Featured in New Delphi Premium Audio System for XM Radio
Waves Audio announced that Delphi's new Premium Audio System is utilizing its MaxxBass technology. MaxxBass and other technical advancements enable the Premium Audio System to bring unmatched audio quality to XM Radio customers who want the flexibility of a portable system. Tel Aviv, Israel’s Waves (http://www.waves.com) is the world's leading developer and provider of professional digital audio processing tools. Waves technologies are used to improve sound quality in the creation of hit records, major motion pictures, popular gaming and multimedia titles the world over. With more than a decade of leadership in the development of psycho-acoustic algorithms, Waves now offers a variety of solutions under the Maxx brand. Manufacturers of consumer electronics are dramatically improving performance and reducing system costs using Maxx technologies. These solutions include custom semiconductor devices and licensing Waves proprietary algorithms to DSP and computer platforms. (Waves Audio16.07)
9.9 MTN Uganda Selects Alvarion's WiMAX Solution for Nationwide Deployment
Alvarion announced that MTN Uganda, the leading mobile telecommunications operator in Uganda, has chosen its award-winning BreezeMAX for the 3.5 GHz frequency, as part of a nationwide deployment for providing extended data services to corporate, business and residential users. The main deployment project launched in the capital and largest urban settlement of Uganda – Kampala, is planned to be followed by additional network deployments in 30 other cities across the country. Providing a turn-key solution, Alvarion is working in cooperation with its leading African partners Dimension Data, an IT services and solutions provider, and Plessey, a leading pan-African telecommunications solutions supplier, to provide MTN Uganda with the BreezeMAX platform’s versatile and self-installable indoor CPE capabilities. BreezeMAX, Alvarion’s award winning WiMAX platform, complies with IEEE 802.16 standards and uses OFDM technology for advanced non-line-of-sight functionality. Its carrier-class design supports broadband speeds and quality of service, enabling carriers to offer triple play broadband services to thousands of subscribers via a single base station. Since its launch in mid-2004, BreezeMAX has been successfully deployed in over 350 networks, in more than 100 countries around the world.
With more than 3 million units deployed in 150 countries, Tel Aviv, Israel’s Alvarion (http://www.alvarion.com) is the world’s leading provider of innovative wireless broadband network solutions enabling Personal Broadband to improve lifestyles and productivity with portable and mobile data, VoIP, video and other services. Alvarion is leading the market to Open WiMAX solutions with the most extensive deployments and proven product portfolio in the industry covering the full range of frequency bands with both fixed and mobile solutions. Alvarion’s products enable the delivery of personal mobile broadband, business and residential broadband access, corporate VPNs, toll quality telephony, mobile base station feeding, hotspot coverage extension, community interconnection, public safety communications, and mobile voice and data. (Alvarion18.07)
9.10 Orca Interactive Enters U.S. IPTV Market With W.T. Services
Orca Interactive announced its entry into the U.S. market and first U.S. customer win with W.T. Services, a wholly owned subsidiary of West Texas Rural Telephone Cooperative. The solution provides W.T. Services with integrated, carrier-grade IPTV services including live television broadcast, pay-per-view and video on demand (VOD). Marking its entrance into the U.S. market, Orca Interactive is also announcing the opening of a U.S. office. W.T. Services’ advanced new IPTV services, powered by Orca’s RiGHTv middleware, also include Caller ID over television, enabling W.T. Services’ triple play subscribers to conveniently identify incoming calls on their TV screens, and Emergency Alert System (EAS) notification for advance warnings and immediate, direct alerts about critical events in the region. Ra'anana, Israel’s Orca Interactive (http://www.orcainteractive.com), a member of the Emblaze Group, is a leading provider of middleware solution to enable xDSL and FTTx operators to offer enhanced entertainment services such as broadcast TV, video-on-demand and interactive services. Their applications deliver compelling and differentiated services to maximize the revenue stream of the operators. Orca's user-friendly, end-to-end applications enable delivery and management of VOD, TV channels, EPG, NVOD, Pay-Per-View and e-commerce for related merchandise. (Orca 18.07)
9.11 Camtek Receives Order for Over Forty AOI Systems
Camtek received a multi-million dollar order for automated optical inspection (AOI) systems from a leading PCB manufacturer based in Taiwan. The order includes forty four of the new 3G family Dragon and Orion AOI systems recently presented to the market. In addition, the order includes upgrading thirty two of existing systems to 3G performance and more than 20 units of new CVR100 verification systems. The new systems will be installed at the customer's new plant in China. "3G" denotes the new generation of our Dragon and Orion product lines. In addition to enhanced optics and new firmware, "3G" models are powered by Camtek's proprietary EyeQ technology - a totally new approach to the entire operation of AOI system. EyeQ embeds Camtek's inspection expertise into each system, enabling any operator to achieve top performance without prior experience. But unlike "quick setup" tools that apply one predefined template to any situation, EyeQ optimizes and adapts detection parameters to user preferences for each individual application. With headquarters in Migdal Ha'Emek Israel, Camtek (http://www.camtek.co.il) designs, develops, manufactures, and markets automatic optical inspection systems and related products. Camtek's automatic inspection systems are used to enhance both production processes and yield for manufacturers in the printed circuit board industry, the high density interconnect substrate industry and the semiconductor manufacturing and packaging industry. (Camtek24.07)
10: ISRAEL ECONOMIC STATISTICS
10.1 June CPI Surprises With 0.7% Gain
Israel’s Consumer Price Index (CPI) for the month of June made an unexpected rise of 0.7% to 100.1 basis points. This was the largest CPI rise in the month of June in 5 years. According to the CBS statistics, inflation from the start of 2007 is now at 1.0%, which is at the bottom of the range of the government's 2007 inflation target of 1 to 3%. Economists, including those at the central bank, are forecasting that prices will reach the middle of the target range in the last quarter of the year. Over the past 12 months, the index has dropped 0.7%. The Central Bureau of Statistics noted that the 4.5% depreciation of the shekel against the dollar during the month of June contributed 0.3% to the gain. The CPI's sharp rise also stemmed from increases of over 1% in housing prices, transportation and communications - all of which have a large impact on the index. Clothing and shoe prices rose 15.1%, though over the last 12 months as a whole, they have dropped 2.7%. Seasonal price increases also added 0.3% and rising fuel costs provided the final 0.1%. One product that saw lower prices was books, which were down 21.8% due to the Hebrew Book Week sale in June. Produce prices were down 5% overall, with the decline primarily due to fresh fruit prices, which dropped 11.8%. (CBS15.07)
10.2 June State of The Economy Index Up Sharply
The Bank of Israel announced that the State of the Economy Index rose 0.7% in June 2007, the same rate of increase as that of the Consumer Price Index (CPI) for June. The figures show rapid and strong growth in the economy, which expanded by 1.9% in the second quarter of 2007, after expanding by a similar rate in the first quarter of the year. Israel’s economic activity expanded by an annualized 5.5-6% in H1/07, a rate of growth that reflects the increase in business sector product. Changes in other components of the State of the Economy Index were as follows: industrial output rose by a seasonally adjusted 2.3% in May (the latest reported figure); trade and services proceeds rose by a seasonally adjusted 1.2%; exports of goods fell 8% in June, after rising sharply in May; imports fell 1%; and export of services fell 0.9%. Bank of Israel figures indicate continued high growth and rapid economic expansion for the fourth consecutive year. The State of the Economy Index rose by 7.6% in 2006, 6.7% in 2005 and 6.8% in 2004. (BoI23.07)
10.3 Israel’s Tourism Decrease Reversed As It Exceeds 2006 Levels
The ebb in the number of incoming tourists has been halted for the first time since July 2006, after 175,000 tourists entered Israel this month, surpassing the level of June 2006, when 174,000 visitors arrived. In addition, 4,200 tourists stopped over on cruise ships, compared with 2,800 in June of last year, all in all adding up to a 1% increase since June last year. Of the incoming tourists, 145,200 arrived by air, which is 5% less than last year, and 30,200 tourists entered by land, an increase of 32%. The increase is mainly from crossings via the Egyptian border, including Polish and Russian tourists on a trip of a day or two, according to figures released by the Central Bureau of Statistics (CBS) and Ministry of Tourism. Nevertheless, the plummeting of direct tourism to Eilat continues - of the 145,200 tourists who arrived via air, only 600 flew directly to Eilat, compared with 1,000 tourists in June of 2006. During January-June of this year, more than one million tourists entered Israel on cruise stop-overs, down by 4% compared with the same period last year. If forecasts are correct, Israel will welcome 2.1 million tourists in 2007, compared with 1.8 million in 2006, and 1.92 million tourists that visited in 2005. (Globes 17.07)
10.4 Israeli Airlines Carry 45% Of Ben Gurion Passengers
The Ministry of Transportation announced that the number of passengers passing through Ben Gurion Airport was 6.4% higher in H1/07, compared with H1/06. El Al Israel Airlines, Arkia Airlines, and Israir carried 45% of all passengers, while foreign scheduled and charter airlines carried the rest. El Al carried 1.67 million passengers during H1, 4.2% fewer than during H1/06. The decline was mainly because the airline has eliminated some destinations for financial reasons, including routes to Turkish resorts, because of their high security costs. Lufthansa carried the most passengers of all the foreign airlines at Ben Gurion. The German carrier carried 198,000 passengers during H1, 10% more than during H1/06. Continental Airlines was in second place, carrying 187,000 passengers, up 7.3%. Israir carried 158,000 passengers during H1/07, up 12.5% on H1/06, and Arkia carried 123,000 passengers, down 2.4%. The three Israeli airlines carried two million passengers altogether during H1/07, down 2.5% on H1/06. (MoT15.07)
10.5 Israelis Spent $666 Million at Restaurants in First Quarter
Israelis, especially the young and educated, like restaurants. Israelis spent $666m at restaurants during Q1/07, according to a survey by food company Osem Investments. Most diners are under 40, have higher education, are secular and are native-born. For the 830,000 Israelis that ate at restaurants every day during Q1, they spent an average of $8.80 per meal. Cafes are flourishing and are Israelis’ preferred places to eat out. Some 21.5% of respondents said that their preferred eating place was a cafe, 17% said they preferred falafel or shwarma and 14.5% preferred fast food outlets. Despite Israelis clear preference for cafes, grilled meat restaurants accounted for more than a fifth of total expenditure on restaurants - $104.7m. The reason for the discrepancy is the difference in average price per meal: $7.85 at cafes, compared with $13.33 at a grill meat joint. (Globes 16.07)
In Depth
11.1 ISRAEL: Capital Raised By Israeli VCs $473 Million In 2006
The following are findings from the Annual Survey of Israeli Venture Capital Fund Raising, conducted by the IVC Research Center, which for more than ten years has been at the forefront of venture capital and private equity research in Israel. Survey data for 2006 will be published in detail in the IVC 2007 Yearbook to be published in April.
In 2006, Israeli venture capital funds raised a total of $473 million by vintage year*, a 67% decline from the $1.46 billion raised in 2005. The drop was anticipated since most large Israeli VC funds completed their efforts in the previous two years, having raised a total of $2.52 billion in the 2004-2006 period.
Funds that raised capital in 2006 included Evergreen V (first closing, $135 million), Magnum II ($105 million) and Greylock Partners’ first Israel-focused fund ($150 million), which followed the firm’s re-launching of its local office. Seven other venture capital funds announced first closings during 2006 for a total of $83 million. These included Infinity III, Peregrine II, Evolution Fund I (focused on bootstrapped startups), two new cleantech funds – H2Tech and Terra – and a new Web 2.0 fund, Jerusalem Capital.
According to IVC estimates, $1.5 billion in capital is currently available for investment by Israeli VCs, of which $0.9 billion is intended for First investments in high-tech companies. The remainder is reserved for Follow-on investments. An additional $700 million is expected to be raised in 2007 by Israeli VCs for investment in Israeli high technology.
Zeev Holtzman, Chairman of IVC Research Center and Giza Venture Capital, said, “It is expected that the next capital raising cycle of the leading Israeli VC funds – the fifth cycle since 1992 – will start later this year and will reach its peak in 2008. It is expected too that all the remaining VC funds – those that last raised capital in 2000 and 2001 – will also try to raise follow-on funds. Therefore, capital raised in vintage 2007 is most likely to be higher than in 2006. Currently, capital available for investment by Israeli funds equals two years investment, a markedly shorter period than in the US, indicating that there is no oversupply of capital in the Israeli market.”
Top funds capital raising 1992-2006
Between 1992 and 2006, Israeli venture capital funds raised approximately $11.07 billion that was exclusively allocated to investments in Israeli technology companies. Of this amount, approximately $6.82 billion (62%) was raised between 2000 and 2006. The top 20 Israeli venture capital funds shown in the table below accounted for $7.68 billion of capital raised between 1992 and 2006.
Largest Israeli Venture Capital Funds Ranked by Capital Raised 1992-2006 ($m)
| Rank |
Management |
Capital Managed 1992-2006 | Capital Raised 2000-2006 |
| 1 | Pitango | 9451 | 800 |
| 2 | Evergreen | 5632 | 448 |
| 3 | Gemini | 546 | 400 |
| 4 | Genesis | 523 | 160 |
| 5 | Star | 4973 | 206 |
| 6 | Benchmark Israel | 4904 | 490 |
| 7 | JVP | 4815 | 225 |
| 8 | Giza | 4666 | 361 |
| 9 | Vertex | 4467 | 360 |
| 10 | Sequoia Israel | 3804 | 350 |
| 11 | Carmel | 373 | 373 |
| 12 | Israel Seed | 2628.9 | 204 |
| 13 | Concord | 2609 | 185 |
| 14 | Infinity | 25510 | 165 |
| 15 | Cedar | 225 | 175 |
| 16 | Israel Healthcare | 21011 | 210 |
| 17 | Challenge - Etgar | 20112 | 120 |
| 18 | Medica | 19513 | 180 |
| 19 | Walden Israel | 184 | 90 |
| 20 | Magnum | 180 | 105 |
| Total | 7,682 | 5,607 |
IVC Research Center (http://www.ivc-online.com) is Israel’s leading research center providing business leaders with an unmatched wealth of data on Israeli venture capital, private equity and high-tech industries. IVC products and services are used regularly by venture capital funds, private investors, high-tech companies, financial investors and institutions, as well as public entities such as the Office of the Prime Minister, the Central Bureau of Statistics, the Bank of Israel and the Office of the Chief Scientist. (IVC13.07)
11.2 Jordanian Banking Sector Benefits From Growing Economy & Refocuses on Core Activities The importance of the Jordanian banking sector surpasses its position as a main contributor to the Kingdom's Gross Domestic Product, a chief employer in the private sector and the one with the largest capitalization on the Amman Stock Exchange and extends to its role as a main driver of the economy and one of its longstanding pillars. Jordan’s lack of substantial natural resources and absence of viable agricultural and industrial sectors, along with a comparably well-educated workforce dictated that the services sector assume an important standing in the local economy, with financial services taking the lead.
A new sector report, “The Jordanian Banking Sector” was released by the Arab Advisors Group’s Financial Markets Strategic Research Service on 4 July 2007. The 44-page report provides a comprehensive background on the Jordanian Banking Sector, a brief on listed banks and key stakeholders, a comparison of the bank’s Key Performance Indicators and the sector’s outlook.
“The Jordanian economy witnessed exceptionally high levels of growth in recent years due to booming regional economies, a surge in foreign capital inflows, expatriates and their remittances, an expansionary monetary policy and the rise (and subsequent fall) of the Amman Stock Exchange.” Mr. Shadi Nino, Arab Advisors Research Analyst, wrote in the report. “The Central Bank of Jordan, which controls and regulates banking operations in compliance with new international banking practices, plays a vital role in ensuring a robust sector with sustainable growth”.
Owing to those reasons, licensed banks’ total assets reached a new record level and reached $34.24b by 2006 year-end, up 14.9% over the corresponding figure of 2005. Credit facilities extended to the public reached $14.16b by the end of December 2006, while those extended to the Jordanian government reached $2.36b. Nonetheless, the Jordanian banking sector remains pinned against a number of key challenges, not the least of which are the issues of consolidation and service diversification. The Central Bank has been exerting efforts aimed towards consolidating licensed banks through raising capital requirements although this has seen little effect towards that outcome. (Mena Report 09.07)
11.3 Kuwait Upgraded to 'AA-' From 'A+'
Standard & Poor's Ratings Services (http://www.standardandpoors.com) said on 17 July that it raised its long-term sovereign credit rating on the State of Kuwait to 'AA-' from 'A+'. At the same time, the short-term 'A-1+' sovereign credit rating was also affirmed. The outlook is stable. In addition, Standard & Poor's raised its transfer and convertibility assessment on Kuwait to 'AA+' from 'AA'.
"The upgrade reflects the increase in the financial strength of the country and the government over the past few years," said Standard & Poor's credit analyst Luc Marchand. "The country's net external asset position is forecast to reach 276% of current account receipts in 2007, and the government is expected to have a net asset position of 288% of GDP by the end of 2007. These levels are significantly higher than those of 'AA' rated peers, and partially offset the still-high regional geopolitical risk."
The ratings are also supported by a track record of prudent macroeconomic policies. Based on a very conservative oil price assumption, the central government budget should again record a substantial surplus of about 29% of GDP in fiscal 2007/2008. Moreover, the government debt burden is light, and paper is issued mainly for monetary policy purposes.
The ratings on Kuwait are constrained by an economic structure dominated by the government through its ownership of the oil sector. Despite the government's aim of enhancing economic efficiency and ensuring social equality, its role in the economy has resulted in a large public administration, a limited private sector, and an overall dependence of economic activity on oil receipts and government spending.
Geopolitical risks remain high and act as a constraint on the ratings on the sovereign. These risks are mitigated, however, by good international alliances, relative social stability, and substantial government assets. "The considerable strength of Kuwait's public finances is counterbalanced by the high geopolitical risks and the lack of diversification in the economy outside oil and the public sector," said Mr. Marchand. "Although the geopolitical risk remains high, we expect the strength of Kuwait's finances to help the country navigate potential periods of geopolitical turbulence."
Progress on diversifying the economic structure is possible in the medium term, but future upward revisions to the ratings are more likely to depend on a positive reassessment of the political and geopolitical risks affecting the country. (S&P17.07)
In its drive to boost its oil production capacity from 2.6m barrels-per-day (bpd) to 4m bpd by 2020, Kuwait is turning to increasingly novel uses of new technologies to maximize both extraction and production. Over the past twelve months, state-owned Kuwait Oil Company (KOC) has launched a series of new tenders and pilot projects to augment production capacity of heavy and sour crude throughout both new and existing onshore oilfields. To meet the target, heavy crude output, which is currently minimal, could be increased to 50,000 bpd by 2011, 250,000 bpd by 2015 and 700,000 bpd by 2020.
Last month, deputy managing director for administrative and financial affairs at KOC, Ali al-Shammari, announced that the company is focusing on raising its production of heavy oil, by adopting the most advanced technologies available. The increase in heavy crude will come from a variety of shallow sources, including both existing fields and new locations, with the largest output expected from the northern fields. The conditions in the fields, al-Shammari said, presented greater challenges to production, with high temperatures and pressure. As a result, KOC is looking to use enhanced oil recovery (EOR) techniques to maximize efficiency.
Service agreements have been signed with Chevron, ExxonMobil and Japan National Oil Corporation to provide technical expertise in implementing the EOR projects and EOR technology is already slated to build up heavy capacity at Minagish field by an additional 100,000 bpd, to 250,000 bpd. KOC is also looking to begin testing for heavy oil in the shallow end of the Rutga field sometime next year.
One of the centerpieces of KOC's drive to overhaul its heavy crude production is the development of early production facilities (EPFs). EPFs, which are a key component of KOC's heavy sour crude development program, will boost the processing of sour, sulphur-rich crude from existing fields. The facilities will be short-term projects, designed as a stopgap to increase production while long-term project upgrades are carried out.
The first EPF was awarded last year to Kuwait-based Safwan Petroleum Technologies Company (SPETCO) and will be carried out on a five-year build-operate contact. The new $239m plant will have a capacity of 50,000 bpd and is due to begin servicing the Sabriyah and Raudhatain fields at the end of 2007.
In conversations with OBG, Cherian Paul, general manager of SPETCO, said, "The EPFs are key to boosting Kuwait's oil production, by rehabilitating operations that had been beset by processing problems and by dramatically increasing the sour crude capacity of Kuwait's oil facilities." Production forecasts for the planned projects are so optimistic that other Gulf Co-operation Council countries are looking to introduce similar operations.
The second phase of the EPFs is due to begin soon, following the pre-qualification last month of eight contractors. This stage calls for an $800m plant with a capacity of 120,000 bpd from the northern Ratqa and Abdali fields. A third phase is planned for a later date, with a capacity of 160,000 bpd.
KOC is also hoping to begin the Lower Fars Pilot Project (LFPP) at the Rutga field, which will test new heavy sand oil processing. Sand oil is a mixture of extra-heavy crude oil and solid particulates like sand or clay. Four companies have been invited to submit bids for the estimated $100m project, including SPETCO, US-based Schlumberger, Saudi Arabia's Al-Khorayef Commercial and Kuwait-based Raith Engineering and Manufacturing. The LFPP has a projected capacity of between 200 and 500 bpd. The project, which will be operated for two years on a design-build-operate contract, will test cold heavy oil production technologies, which produces the sand with the oil, rather than filtering it at the well. Cold heavy production, which maximizes the amount of sand oil that can be extracted, is currently used in Canada and Venezuela, where sand oil is prevalent.
Estimates of heavy oil reserves worldwide are up to six times greater than those of light oils, and, as increased consumption depletes light crude reserves, heavy and sour crude are becoming increasingly sought-after. Currently, Kuwait's oil fields are largely tapped through conventional means and KOC's operations have historically focused on the capture of light oils. Light crude is significantly cheaper to process than its heavy counterpart, as its lower viscosity and density means that less energy is needed to extract impurities such as sulphur. According to Nader al-Awadhi, deputy director general of the Kuwait Institute for Scientific Research, "most production, if not all, is being produced through traditional methods". This poses a problem, he added, as Kuwait turns to heavier crude and sand oil, since "production of heavy crude is a difficult process that requires fresh techniques". (OBG20.07)
The healthcare sector in Kuwait, much as in the Gulf Co-operation Council (GCC) states as a whole, remains largely underdeveloped. However, as observed by the Oxford Business Group, it is showing signs of strong growth as the government pours its budget surplus into new public projects and encourages further private sector development.
Despite the small size of the market, Kuwait's healthcare sector has been expanding rapidly, and, according to industry reports, is worth an estimated $1.05bn. This expansion is due, at least in part, on a high rate of growth, currently hovering around 4.5% and high levels of oil-fuelled liquidity.
Given that healthcare is provided free of charge to Kuwaiti nationals, it is the public sector that is the leading player in the market. Speaking with OBG, Anwar al-Mudhaf, chairman and CEO of the Kuwaiti Al-Razzi Holding Company, a firm that specializes in health sector investment, said that in spite of moves towards privatization, the ministry of health still dominates the market, largely due to its unrivalled coverage and catchment area.
In the service provision sector, less than 1,000 of the over 7,000 beds currently available in Kuwait are located in private facilities, while private specialist clinics are dependent on referrals from larger government facilities. However, the growth in consumer demand for new types of services, such as elective surgery and cosmetic care, has increased the opportunities for niche providers, which private companies have been quick to take advantage of. Robert Hipkins, group communications director at Kuwait Projects Company, told OBG that with the regional healthcare sector growing rapidly, there is an increased demand for high quality service providers in the local market, driven in large part by the high numbers of citizens who are treated overseas as the government has a longstanding practice of sending citizens abroad if it is believed they will receive better care in another country.
As a result, private clinics have begun to spring up, ranging from the general practice International Clinic, owned and operated by Kuwait-based United Medical Services, and the $100m Royal Hayat Hospital, a specialty maternity and paediatric facility, to Elysium Health Spa, a fitness and rehabilitation centre operated by Kuwaiti Al Nawadi Holding, which is expected to build and operate a branded network of fitness and recreational treatment centers in Kuwait and the region. Additionally, YIACO medical group recently implemented a contract for a radiology laboratory and nuclear medicine clinic. Kuwait hosts around 50 general practice medical centers, 25 dental clinics, 21 specialist laboratories and over 175 independent clinics - numbers that are only set to increase, should the growth trajectory continue. This is largely in line with the dramatic growth the GCC healthcare industry has been experiencing, with direct healthcare costs expected to grow by nearly $50bn regionally to over $60bn by 2025.
The number of patient visits is also expected to increase dramatically, jumping by 350% in Kuwait alone due to population growth, increasing health awareness, higher incomes and growing health risks. Lifestyle changes that have brought on an increase in health risks, including heart disease and diabetes, are also expected to fuel treatment costs. In the GCC region, cardiology treatment is expected to increase in cost from $1.5bn to nearly $15bn by 2025, accounting for nearly a quarter of all healthcare costs. In Kuwait, diabetes has become such a concern that nearly 28% of all Kuwaitis either suffer from the disease or are at high risk. It has become so prominent that in 2004, the Kuwait Foundation for the Advancement of Sciences opened a $38m diabetes research and treatment centre. Finally, there is a lot of room for further growth in medical staffing, with GCC countries averaging half the nurse-to-patient ratio of Organization for Economic Co-operation and Development countries.
However, the healthcare boom for Kuwait's private sector is leading to concerns over fragmentation. According to Hemant Pradhan, financial manager of YIACO medical group, "On almost every street you find new clinics, new medical centers and new hospitals going up in the private sector. I think there will be a major shake-out in the next two years." Industry insiders have also suggested that profit margins in the service provision sector are shrinking as increasingly larger players get involved.
The steady growth of the private healthcare sector in Kuwait has not extended to the pharmaceutical sector. According to recent estimates, the pharmaceutical market in Kuwait is worth around $450m and is expected to grow by another $75m over the next two years. However, privatization efforts in this area have been hindered by the tight grip the ministry of health holds on the distribution of drugs.
Drugs prices are fixed by the government, as are profit margins, which are limited to approximately 29% for wholesalers and 26% for retailers. As the government is the largest purchaser of drugs, it also often controls the market, supplying between 70% and 80% of the local market. The sector is one of the most expensive in the GCC region, marked by a strong preference for brand name products, which compose 85% of total drugs spending. This limits the local production opportunities for generic manufacturers. In fact, Kuwait currently has only one pharmaceutical manufacturer, compared to 27 in Saudi Arabia, 11 in Bahrain, eight in the UAE and five in Oman. While this might indicate an opportunity for foreign pharmaceutical companies, the lack of a strongly enforced intellectual property regime limits the attractiveness of the location.
However, there are some notes of optimism to be sounded. Should the government's cost-containment policy be fully implemented and regional harmonization properly executed, drug prices will likely drop and generic production opportunities increase. (OBG13.07)
11.6 Bahrain: Harbor of Finance
Bahrain is stepping up its campaign to retain its pre-eminence as the region's leading financial hub, seeking to fight off competition from states such as Dubai and Qatar in the race to attract Middle Eastern and global business houses. The Oxford Business Group reports that Bahrain, long dubbed "the gateway to the Gulf", is being pressed for poll position as the region's prime trading and business centre as its neighbors look to diversify their own economies ahead of the day that their energy resources start to dry up.
Having already had a first hand view of this future, with production on the decline, the kingdom has turned to its historic economic roots to sustain itself. Currently, according to the Central Bank of Bahrain (CBB), around 27% of the country's GDP comes from the financial sector, a total the country's leaders want to see protected from regional rivals and expanded in the future. To do so, the government is engineering a resurgence of the financial and business sector, opening up the economy and putting in place the infrastructure needed for local and overseas firms to set up shop.
The jewel in the crown of this policy is the Bahrain Financial Harbour (BFH), a $1.5bn development spread over 380,000 sq meters on the waterfront at Manama. The first stage of the project, opened by Sheikh Khalifa Bin Salman Al Khalifa, Bahrain's prime minister, on May 3, with the first tenant, virtual office company Servcorp, moving in on July 4. "The BFH is the most prestigious address in Bahrain and for Servcorp it has always been important to provide our clients with an advantage," reported Laudy Lahdo, senior manager of Servcorp, which supplies clients with offices and staff for firms that require office space and do not have their own administrative employees.
The initial stage, which includes 60,000 sq meters of office space in two towers that dominate the capital's skyline, will be complemented by luxury residential complex, retail outlets and recreational facilities. The BFH is already getting a favorable response internationally, with Kazunori Tanaka, Japan's deputy minister of finance, saying it would serve as a catalyst to attract more foreign investments to Bahrain. "We see the infrastructure developments in Bahrain as a commitment from the government to maintain Bahrain's status as financial centre," he said during a visit to the centre on July 6.
Bahrain already has one edge in the race against Dubai and other financial centers, quite apart from its long history. There are currently over 390 financial services firms licensed to operate in Bahrain, with more expected to follow as the BFH attracts more clientele.
Bahrain is hoping to capitalize on a number of factors to draw investors and corporations to its shores, not least of which is the liberal economic environment the kingdom offers. The 2007 index of economic freedom produced by the Heritage Foundation and the Wall Street Journal ranked Bahrain equal first alongside Israel in the Middle East in terms of a liberalized economy and 39th overall globally.
This compared well with the UAE, which rated seven places lower than Bahrain in the 2007 report. In two categories in particular, that of fiscal and of financial freedom, Bahrain rated far above any of its regional neighbors, 99.6 and 90% respectively. Combine this with a rating of 80.1% for monetary freedom and 80% for freedom of doing business and Bahrain comes across as a country where business can be done.
The one category that Bahrain was rated poorly in, is that of labor freedom, where it scored just 40%. Given the kingdom's expanding pool of skilled professionals, the low grade in the report is something that both the government, who wants to increase the number of Bahrainis in work, and foreign companies, which will eventually be able to get skilled staff without the expense of importing them, can happily live with.
The CBB has also been playing its part, strengthening business and banking codes and enhancing transparency with new regulations designed to maintain legislation at international standards. Rasheed Mohammed Al Maraj, the CBB's governor, said that while the financial sector in Bahrain and the region had been undergoing a dramatic transformation it is still being restricted by some limitations of infrastructure and regulation. "While, as the Central Bank of Bahrain, we are actively working on the regulation side in the kingdom, it is developments such as the Bahrain Financial Harbour that we believe would play a large role in addressing the issue of meeting the complex and constantly evolving infrastructure needs of the sector," he said on May 3. (OBG13.07)
The Qatari government must give more support to small- and medium-sized enterprises (SMEs), according to a United Nations Development Program (UNDP) report. The findings were released in late June at a workshop, called 'SMEs Development in Qatar', organized by Qatar's General Secretariat for Development Planning, in collaboration with the UNDP.
According to the report, cited by the Oxford Business group, SMEs have so far failed, especially in the oil and gas industry, to provide momentum to the country's diversification plan to reduce the country's reliance on oil and gas revenues. In addition to SMEs, the government has targeted the development of small- and medium-sized industries (SMEs) as a means of achieving its goal of economic diversification. Milford Bateman, one of the report's authors, said that the majority of SMEs are concentrated in low value-added sectors such as trade and retail, thus contributing insignificant amounts to the country's GDP. The UNDP report stated that this is despite the fact that Qatar has the potential to develop a meaningful SME sector.
Misnad al-Misnad, director of Ras Laffan Industrial City, told OBG there must be a shift to more lucrative sectors. "In a nutshell, we want to see SME investment in areas where there are premium returns. That's what interests Qatar. We've a small population so we don't need labor-intensive industries that are low on returns but good for employment." Al-Misnad said he agreed with the UNDP findings and that he feels SME development represents an area of great opportunity for the private sector. He told OBG, "There are vast requirements to supply products and services to larger companies, and those companies providing this also need services provided for them. So what starts with large companies works all the way though the economy, so the SMEs have a large impact on the country's overall development."
According to the UNDP report, Qatar needs to create a more encouraging business environment for SMEs. Suggestions include the promotion of entrepreneurship in key technical knowledge areas, improved funding access for start-up businesses and enhanced land access for industrial development purposes. The report also stated the government needs to bring together and coordinate the already existing and highly fragmented SME support initiatives. Additionally, there should be "pro-active sector orientated interventions by the government to support start-up SMEs in key growth potential areas - especially in oil and gas."
Despite Qatar's growing wealth, SMEs access to finance was another issue cited. Due to the country's current economic expansion, commercial banks have other very profitable avenues to explore, like project financing and property, making it harder for SMEs to get funding. On top of the funding issue there is also a lack of land access. The government is trying to allocate places where SMEs can thrive with the Qatar Science and Technology Park being one such idea for business development. However, only a few technology-based SMEs could locate there, while most others found it difficult to get started or expand, according to the report.
However, for SMEs, Qatar has a fairly transparent and clear-cut strategy, Mohammed al-Sada, minister of state for energy and industry affairs, told OBG that Qatar is looking to boost SMEs. He said that the government believes the best way for SMEs to flourish is for them to create joint ventures with international companies. "SMEs are best suited to provide specialist services to the bigger industrial ventures. We believe the private sector is best suited to develop the SMEs. For this purpose, the government encourages the private sector to enter into joint venture partnership with sound international companies," he told OBG.
These international companies bring knowledge and expertise that is expected to benefit Qatar's industrialization in the long run, said al-Sada. "We are aware that finding the right partner for the new projects to provide the technology, the required operations expertise as well as marketing experience, is extremely important to enhance and diversify Qatar's industrial base and industrial structure." (OBG11.07)
11.8 OMAN: Enhanced Oil Recovery
Extracting natural resources in Oman can be costly compared to other countries in the region. In Oman, extracting oil, with its complex geology and dense oil, can cost over $7 per barrel compared to Saudi Arabia and Kuwait where it is around $1.50 to $2 per barrel. The government of Oman has been awarding more foreign exploration firms concessions to find new supplies.
Rising prices have made exploration more attractive for foreign firms like Indago Petroleum, a Guernsey based oil and gas exploration company that is exploring onshore assets in Oman. The company announced a drilling update on July 11, saying it had reached a depth of 2605 meters out of a target depth of 5900 meters at the Al Jariya-1 well near the border with Abu Dhabi.
According to an Indago statement, tectonic movements created "stressed" rock formations, which have resulted in mechanical difficulties for the drilling. This highlights the complex nature of Oman's geology and the difficulties in exploring and extracting natural resources. The company said it did not expect such difficult drilling conditions at this depth but it is still confident that the geological conditions match its pre-drill prognosis. Once drilling restarts, after the operator conducts an overhaul and review of the rig, Indago estimates it will take 91 days to reach the target depth. The company estimates this will add an additional $8.2m to the project but will not affect the company's ability to complete its planned exploration program.
Indago, which is listed on London's Alternative Investment Market (AIM), has a 50% interest in the well while the operator, Ras al-Khaimah's RAK Petroleum, owns the rest.
Meanwhile, US-based Occidental Petroleum has one of the largest enhanced oil recovery (EOR) projects going in Oman. EOR techniques extract oil from Oman's tough geological environment with techniques using heat, chemicals or gas solvents to alter the way oil or injected water flows into a reservoir. Occidental and its partners plan to implement a large-scale steam flood project at the Mukhaizna field to increase production to approximately 150,000 barrels per day within the next few years and to recover approximately 1bn barrels of oil over the life of the project. This year, Occidental expects to invest between $400m and $450m in this project.
Another company taking on new approaches to oil recovery is Petroleum Development Oman (PDO). The company, which is owned by the government with a 60% interest, Royal Dutch Shell with 34%, France's Total with 4% and Brazil's Partex with a 2% interest, is undertaking several EOR projects to extract Omani oil.
Last year, PDO shareholders approved two major EOR projects. Steam injection will be used at the Fahud Thermally Assisted Gas-Oil Gravity Drainage project with the first steam expected to be injected into the reservoir by early 2008. The second plan that was approved aims to inject a water/polymer mix into the al-Khlata reservoir of the Marmul Field. The polymer additive makes the water more viscous which sweeps more oil to the producing well. This project is expected to increase the recovery factor at the Al Khlata reservoir by 10%.
In addition to these upcoming projects, PDO currently has an EOR miscible gas flood project at Harweel. In this, gas is dissolved into the oil making it lighter and easier to recover. PDO expects these projects will be its major capital investment over the next several years in the anticipation they will provide more and more of its total oil production in the future.
The expertise being used in Oman in advanced oil exploration and extraction techniques could prove to be valuable. As natural resources decline in other areas of the Gulf there should be increased demand for these techniques especially if prices remain high. As Oman's hydrocarbon reserves reduce, the export of these technologies and expertise could provide important revenue for the economy in the future.
The Omani government is actively encouraging the diversification of the economy to make it more sustainable as hydrocarbon reserves decline. The policy seems to be working as non-oil exports grew by 46.3% in 2006 compared to 2005. The past three years have seen non-oil exports grow by at least 30% each year. It is estimated that Oman will cross the $2.6bn threshold, of non-oil exports, in 2007. (OBG17.07)
The Oxford Business group reported that on 3 July, Oman Air announced ambitious plans for new routes, new aircraft and other plans to modernize the company. The announcement comes after the Omani government increased its shareholding in the company and withdrew from Gulf Air. The new board is largely made up of government officials. It includes Ahmed bin Abdulnabi Macki, minister of national economy, who was made the airline's chairman and Sheikh Mohammed bin Abdullah Al Harthy, minister of transport and communications, who is now the vice-chairman. According to Ziad Karim al-Haremi, Oman Air's CEO, this "shows the government's level of commitment to Oman Air".
In its first meeting, the board decided to buy additional Boeing 737s and Airbus A330s. The company fleet will consist of 10 Boeing 737-800 and nine Airbus A330s by the end of 2011. Al-Haremi said the airline will look to expand further, saying the "numbers of aircraft are not the end of it, but merely the beginning. The [company's] management is actively preparing a five-year plan while an international consultancy firm will be engaged to prepare a 20-year plan."
The CEO also explained that Oman Air is looking to open new long-haul routes to London and Bangkok by November and hinted they could start even earlier. It is thought by industry watchers that the airline will look to offer routes to Asian cities such as Singapore and Kuala Lumpur and European hubs such as Frankfurt in the near future. The government recently increased its shareholding in the company to 83% with a private placement of 36.7 million shares.
The airline's expansion plans come after the Omani government announced in May it was going to withdraw as a shareholder of Bahrain-based Gulf Air, giving Bahrain 100% ownership of the carrier. The governments of Abu Dhabi, Bahrain, Omani and Qatar bought Gulf Aviation in 1973 and re-branded it as Gulf Air. The airline operated multiple hubs in these countries until the Qatari and Abu Dhabi governments pulled out (in 2002 and 2006, respectively) and concentrated on their own airlines. Now the Omani shareholding is being withdrawn, the carrier will run from a single hub in Bahrain and it is expected to drop its long-haul routes from its former second hub, Muscat, in the next few months. As Oman Air expands, it is hoped it will fill the gap left by Gulf Air's departure from the country.
The Omani government is looking to diversify its economy as it looks to a sustainable future without the reliance on its reducing natural resources. Tourism is one of the main sectors that could drive the economy. By opening up direct long-haul routes, the government hopes it can attract tourists from new markets.
As the national carrier, Oman Air is of obvious importance to the tourism industry and the increased government ownership should make it even more so. According to the World Travel and Tourism Council, Oman's tourism industry, estimated to generate $5.4b this year, will grow 12.6% in 2007 and by 6.2% per annum, in real terms, between 2008 and 2017. For 2006, the World Travel and Tourism Committee estimated tourism provided 28,000 direct jobs and 83,000 indirect jobs in Oman.
To aid the rapid expansion of Oman Air, the company announced on June 18 that it signed an agreement with India's Spice Jet to provide the Omani carrier with pilots. The pilots will be hired on one-year contracts until Oman Air is ready to provide its own trained pilots. The government requires that companies in Oman hire a certain percentage, depending on the industry, of Omani nationals. As a government-controlled company, Oman Air is keen to train young Omani nationals and get them into the aviation industry. The airline currently sends pilot trainees to the UK for flight school. With a growing young population it is hoped that the changes to Oman Air will mean employment will be high.
According to Muscat's Seeb International Airport, passenger traffic was up 26% in 2006 compared to the previous year. There have been plans to expand the capacity at Seeb, although nothing has yet been announced, and this will become more important if the tourism sector grows as the government hopes. (OBG12.07)
11.10 EGYPT: Investment Declaration
On July 11 Egypt became the first Arab as well as the first African country to sign the Organization for Economic Cooperation and Development (OECD) Declaration on International Investment and Multinational Enterprises. The declaration, which was signed by the original OECD member states in 1976, has since been joined by outside nations, predominantly from South America and Eastern Europe. Signing it signals a policy commitment to improving the investment climate in the country and encouraging further participation from multinationals in the growth of the economy.
The Oxford Business group reported that prior to a signing ceremony in Paris with OECD Secretary-General Angel Gurria, Egyptian Minister for Investment Mahmoud Mohieldin said the invitation to join the declaration represented recognition of recent improvements in the country's investment climate. "This declaration is a way for governments to commit to improving their investment climates, ensuring equal treatment for foreign and domestic investors and encouraging the positive contribution that multinational companies can bring to economic and social progress," said Mohieldin.
A new OECD report on Egypt entitled 'Investment Policy Review of Egypt 2007' due for full release in September highlighted the rapid growth in foreign direct investment (FDI) in the country. According to the report, FDI increased twelve-fold between 2001 and 2006 from $500m to $6.1bn and diversified away from its traditional destination, the oil and gas sector. Mohieldin told OBG he expected to see "no less than $10b" in FDI in 2007. "In 2003, the composition of FDI was mainly dominated by the oil sector with 80%. Last year, [the breakdown of FDI] was 55% in expansion in greenfield projects, 30% in oil and 15% in acquisitions," he said.
The OECD report cited improved business registration procedures, a streamlined Customs policy and tax reform as drivers behind the growth in FDI. The waiting period for property registration has dropped from 193 days to under a week and the ministry of trade and industry is reducing import tariffs across the board. Of particular note was the decision to cap corporate tax at 20% and make the tax system more streamlined by eliminating around 3000 exemptions.
The report was not without its reservations. Existing restrictions on foreign ownership in the fields of construction, electricity and transport run contrary to the principles outlined in the declaration. In particular, it states that adhering countries must treat foreign-controlled businesses no less favorably than local enterprises. However, in the construction industry for example, foreign equity is limited to 49%. The OECD report said, "Removing these restrictions would increase competition and benefit consumers and business." Restrictions that prevent non-Egyptians from representing clients in a court of law were also suggested for review.
Simon Kitchen, an economist with Cairo-based CI Capital Holding, told OBG he was unsure "whether some of the OECD's recommended reforms - particularly those concerned with legal representation and arbitration - can be addressed by the government in the next few years. Legal changes fall outside the remit of the main reforming ministries, so change may be slow."
Despite the shortcomings highlighted by the OECD report, the signing of the declaration is a significant marker for Egypt's progress for attracting FDI. Kitchen said, "The declaration will help to cement some of the improvements made in the investment environment over the past five years. On a political level, it also represents something of a coup for Egypt as the first Arab and African country to sign the declaration."
Looking to the future, Mohieldin said that FDI would continue to diversify, both in its sources and its targeted sectors. He told OBG, "We are still getting FDI from OECD countries, including the US and EU, and more from the Gulf and some countries that were not investing heavily in Egypt in the past such as China, India and Turkey. We also have investments from neighboring countries in Africa. In terms of sectors it's no longer just oil, but manufacturing, tourism, real estate development and the agricultural sector. One of the things this ministry will always be associated with is the silent revolution which has led to the attraction of FDI." (OBG19.07)
11.11 Fitch Upgrades Cyprus and Malta on Final Euro Decision
On 12 July, Fitch Ratings (http://www.fitchratings.com) upgraded the ratings of Cyprus and Malta following the decision of the EU Council on 10 July 2007 that both countries have met the Maastricht criteria and will adopt the euro on 1 January 2008. Cyprus's Long-term foreign currency Issuer Default Rating (FCIDR) has been upgraded to 'AA-' (AA minus) from 'A+'. Malta's Long-term FCIDR has been upgraded to 'A+' from 'A'. Fitch is also aligning the foreign and local currency IDR's as both countries' currencies are assimilated to the euro. Cyprus's local currency IDR is revised to 'AA-' (AA minus) from 'AA' and Malta's local currency IDR is revised to 'A+' from 'AA-' (AA minus). Fitch has changed the LT IDR Outlooks for both countries to Stable from Positive, and their Country Ceilings are upgraded to 'AAA' from' AA+' for Cyprus and from 'AA' for Malta. Cyprus's Short-term FCIDR is upgraded to 'F1+' from 'F1' and Malta's Short-term FCIDR is affirmed at 'F1'.
"The European Council's acceptance of Cyprus and Malta into the euro area justifies an immediate upgrade in the ratings as Fitch judges that euro area membership enhances sovereign external creditworthiness. We are also satisfied that the Council's decision is the right one and that both countries have achieved a sufficiently high degree of sustainable economic convergence with their fellow member countries to be able to prosper within the euro area," says Chris Pryce, a Director in Fitch's European Sovereign Group in London. The main benefits of membership include access to the euro area's credit strengths, as reflected in the 'AAA' Country Ceiling for other entities within the monetary union. The extinction of the individual domestic currencies renders transfer and convertibility risk and the risk of balance-of-payments crises negligible. The benefits also include greater price transparency; lower transaction costs; increased investment, trade and capital flows and lower capital costs. There are some offsetting disadvantages, most noticeably the "one size fits all" nature of monetary policy within the union but Fitch sees these being outweighed by the positives from the perspective of sovereign external creditworthiness. Fitch's sovereign credit assessment for euro area members places greater weight on fiscal performance and economic flexibility, while external indicators play a much reduced role.
Despite the political problems associated with partition, Cyprus has experienced strong economic growth in recent years. Its income per capita on a purchasing power parity basis has also risen briskly. It was 84% of the euro area average in 2005, the latest year for which figures are available. Inflation has been running at around 2% pa, comfortably below the European Commission reference rate of 3%. Long-term interest rates were also well below the required level and the exchange rate easily met the two-year stability requirement within the ERM2 mechanism. Cyprus was subject to the excessive deficit procedures until July 2006 when this was abrogated, the government deficit having been below 3% of GDP in both 2005 and 2006 when it was 1.5%. Government debt also fell in these two years to 65.3% at end-2006 from a peak of 70.3% in 2004. The Commission expects it to fall to 61.5% and by end-2007 and to be well below the 60% formal Maastricht limit by end-2008. The pace of debt reduction partly reflects the use of financial assets in the government's sinking fund, which stood at over 7% of GDP at the end of 2006, thus reducing the debt on a net basis to 59%.
Malta's performance was similar in most respects. Its annual inflation rate was below the reference rate since 2001, although for a number of months in summer 2006 the 'short-term' measure (the 12-month rate) had risen well above 3%. Inflation then fell in late 2006 due partly to base effects. The final figure averaged 2.2% in the reference period. Interest rates were only fractionally higher than in Cyprus and the exchange rate experienced no severe tensions. Recent budgetary developments differed to the extent that Malta was still subject to the excessive deficit procedure until the formal decision to abrogate it last month. The government's deficit peaked at 10% in 2003 before being cut precipitately to 2.6% over three years to 2006. The Commission expects it to fall further to 1.6% by 2008. Debt peaked in 2004 at 73.9% of GDP and fell over two years to 66.5% with the assistance of additional privatization receipts. The Commission also expects modest further falls this year and next, which will still leave the ratio above the 60% of GDP target. Malta, like Cyprus, faces significant pressures in the medium to long term from population ageing, underscoring the importance of continued public debt reduction. (Fitch12.07)
- Israeli Shekel conversions done at a rate of NIS 4.00 = $1.00
- Turkish Lira conversions done at a rate of NTL 1.5 = $1.00
- Cypriot Pound conversions done at a rate of C£ 1.00 = $1.60
- Jordanian Dinar conversions done at a rate of JD 1.00 = $1.41
- UAE Dirham conversions done at a rate of Dh 3.66 = $1.00
- Omani Rial conversions done at a rate of OR 0.385 = $1.00
- Pakistani Rupee conversions done at a rate of Rs 60 = $1.00
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