ISRAEL 
HIGH-TECH & INVESTMENT REPORT

from the October 2005 issue


Foreigners Power Local Market


Israeli Foreign Minister Silvan Shalom and his Pakistani counterpart Khursheed Mehmood Kasur, held their first public meeting in the Turkish city of Istanbul, despite a lack of official ties. Pakistan's Dawn newspaper said, that the decisive factor in the decision to engage was the Jewish state's pullout last month from the Gaza Strip. Prime Minister Arik Sharon received a warm reaction to his appearance in the UN. Israel welcomed these developments.

Most international observers consider the Israeli step as a door opener to the resumption of the political process that will hopefully lead to a new chapter of peace in the Middle East.

One of the barometers of local public opinion is the Tel-Aviv Stock Exchange. It has recently been setting new, all-time highs. However, market analysts have recommended to local investors to reduce their holdings on the local exchange.

By contrast foreigners are pouring money into Tel-Aviv, full of optimism as to a better future. One of our favorites Ormat Technologies has advanced by nearly 10% by mid month mostly due to foreign purchases.

We are reminded of the two brokers who meet on the street. What do you think about the market, one asked. "I am optimistic," replied the second broker. "In that case why do you look so worried? "I am just worried about my optimism," he replied. By nature we are optimists but indeed we are worried about our inherent optimism.

We do not question the withdrawal from Gaza, notwithstanding many reservations as to how it was carried out. However, the post-withdrawal situation is not "pares inter pares", "equals among equals".

The Palestinian Authority is lacking the ability to control terrorist organizations and its position is best described as fragile. Israel minimally insists on an end to terror. However, there is an element of unreality whereby Israel gives, but is unlikely to receive.

Israel has garnered Nobel Prizes and most recently the prestigious Goethe was presented to Amoz Oz yet the most coveted prize that of Peace has eluded it throughout its existence. We hope that the forthcoming Jewish New Year will bring us closer to that goal.


Reprinted from the Israel High-Tech & Investment Report October 2005

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