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May.07

6:58 AM ET

Wednesday, 7 May 2008

Israel at 60: Investing in Israel

Posted By:Ariel Nelson

Topics:Economy (Global) | Warren Buffett | Nasdaq | Israel | Stock Market

When Apple's [AAPL Loading... () ] 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 [COMP Loading... () ] 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

Cellcom Israel [CEL Loading... ()

] is up 7.1% YTD.

Perrigo [PRGO Loading... ()

] is up 1.4% YTD.

Partner Communications [PTNR Loading... ()

] is up 0.7% YTD.

Teva Pharmaceuticals [TEVA Loading... ()

] is up 0.5% YTD.

Elbit Systems [ESLT Loading... ()

] is down 5.3% YTD.

NICE Systems [NICE Loading... ()

] is down 8.8% YTD.

VeriFone [PAY Loading... ()

] 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 [BRKA Loading... ()

] 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.

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