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Israel at 60: Investing in Israel

Wednesday, 7 May 2008 | 6:58 AM ET

When Apple's Steve Job's picked Israeli Yael Naim's "New Soul" for the Mac Air commercial, it wasn't the first time Silicon Valley connected with Israel. In fact, Israel has more companies traded on the tech heavy Nasdaq than any other country outside the United States.

As Israel celebrates its 60th anniversary of statehood, here are some more facts and figures on the Israeli economy and markets thanks in part to Israel Opportunity Investor (http://israelnewsletter.com/).

Markets: The Tel Aviv Stock Exchange can trace its roots to trading by the Anglo-Palestine Bank in 1935 (now Bank Leumi and a constituent of the TA-25 Index). With the establisment of the state in 1948 there was a need to formalize securitues trading. By 1953, a number of banks and brokerages joined forces to form the Tel Aviv Stock Exchange (TASE).

TASE Stats (www.tase.co.il):

  • Market Cap = $232 billion in Equities and $169 billion in Bonds
  • ~$5B raised on the TASE in 2007 (1/2 of which came through 56 IPOs) with foreign investors injecting $900M
  • 651 Listed companies on the TASE
  • Flagship Tel Aviv 25 Index
    • Closed Tuesday at 1087, down 10.7% YTD
    • Was up approximately 32% in 2007, 14% in 2006 and 37% in 2005

    • Tel Aviv 100 Index
      • Closed Tuesday at 1009, down 12.6% YTD
      • Was up approximately 25% in 2007, 15% in 2006 and 33% in 2005

      More than 120 Israeli companies trade on US exchanges. Here are members of the TA25 that are listed on the NYSE or the Nasdaq and their performance YTD (as of Tuesday's close).

      • Cellcom Israel is up 7.1% YTD.
      • Perrigo is up 1.4% YTD.
      • Partner Communications is up 0.7% YTD.
      • Teva Pharmaceuticals is up 0.5% YTD.
      • Elbit Systems is down 5.3% YTD.
      • NICE Systems is down 8.8% YTD.
      • VeriFone is down 41.9% YTD.

      Economy

      • Forecast GDP growth in 2008 was recently cut to 3.2%. 2007 GDP growth was 5.3%.
      • The IMF ranks Israel 44th of its 181 members in terms of GDP.
      • With 7.2 million citizens, per capita income reached about $21,000 in 2007
      • The Central Bureau of Statistics announced last week that Israel's unemployment fell to a seasonally adjusted 6.7% in Q4/07, compared with 7.2% in the preceding quarter and 7.8% in Q4/06. This is the lowest rate of unemployment in Israel since the early 1990s
      • Spending by foreign tourists in Israel totaled $2.4 billion last year, 16.5% more than in 2006. (Central Bureau of Statistics)

      Investing in Israel

      • In a recent study, the IVC Research Center (http://www.ivc-online.com/) reports that the capital available for investment in the hands of Israeli VCs is now at $2 billion. In 2007, Israeli venture capital funds raised a total of $1.1 billion (including venture lending), 21% more than in 2006.
      • Berkshire Hathaway Chairman Warren Buffett said on Saturday that the company's acquisition last year of the Israeli firm Iscar has worked out better than expected. Buffett said that he had very high expectations when Berkshire struck the deal, and that the metal-cutting-tool maker has "exceeded that in every way." "It's been a dream acquisition," he said.

bythenumbers.cnbc.com

  Price   Change %Change
BRK.A
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CEL
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NASDAQ
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ESLT
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NICE
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PAY
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PRGO
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PTNR
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TEVA
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AAPL
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