On ground zero level, during the current waves of violence, where deals take place, investors expressed some concern but no obstacles as
to where to put their money. An anomaly of the times was the little noticed item appearing in one of Israel's daily mass circulation
tabloids. Yokneam, Israel based BATM Advanced Communications Ltd., a maker of computer networking equipment, was quoted that
it is capable, within six hours, of moving all its Israel activities to Taiwan or the U.S. Upon further clarification a company spokesman
stated that BATM has no intention of moving. "The comment was a reply to questions asking how the current unrest affects the
high-tech sector. No one is blind to the process of slimming down of rich market capitalizations. It is happening to many American
Nasdaq shares. Many of the Israeli shares were trading at outrageous prices that were natural targets for a downside correction. As a
result, buying opportunities are emerging. Is there a brighter side as we look ahead to the near-term future? Current global market
activity suggests that changes are taking place in market sector leadership. Upward movement in share prices will be dependent on
reasonable energy prices and solid earnings. I am pleased to point out that the value of IHTIR Model Portfolio, (see page 11) advanced
by two per cent last month.
Venture capital investments in Israel have soared 74 percent in the third quarter of 2000, according to data compiled by IVC-Online.
Moreover, both Intel and Vishay have recently reconfirmed their intention to build additional manufacturing plants in Israel. These
investments will provide additional job opportunities in 100% export oriented industries. Intel, has stated that the profit warning it
issued last month reflected slower sales, but did not change the company's overall assessment that it needed to increase production
capacity. Intel plans for Israel are to invest $3-4 billion in "a single package" that will include construction of a new plant for the
production of 0.13 micron chips, and the expansion of the current Kiryat Gat facility manufacturing 0.18 micron chips.
Peace is a long term objective. The current unrest marked by violence, is unacceptable but will not affect the medium- to long-term
prospects of startups, established Israeli companies. The Israeli well entrenched entrepreneurial penchant to "innovate develop, and get
quickly to the market" should not be suspect. It is firmly in place and capable of providing what is sought by the global high-tech
investor. Forbes Magazine, one of the most respected business magazines said it well: "Hours before a cease-fire was announced in the
Middle East, Israelis had other good news as Marvell Technology Group, a U.S. designer of high-speed communications technology,
bought its Israeli rival and recent partner Galileo Technology for $2.7 billion in stock". The deal provides further confirmation of
Israel's status as a worldwide technology power".
Oslo, Geneva, Paris, Beirut, Jerusalem and Sharm al-Sheikh are cities, which I visited. Some I visited as a tourist and others as a
journalist. The stories were published - one became front-page news. Over decades filled with travel, for me, the above cities became
linked to the elusive peacemaking efforts in the Middle East. The current Arab-Israeli violence will abate but the Arab-Israeli problem
is old, deep-seated and marred by memories whose roots are embedded in spilled blood.
Pessimism, not all! Just a smidgeon of pessimism casting a shadow over my fundamental optimism. October 12th will be associated, for
many years as a watershed low point in the history of modern Israel. The date was also the second day of the Tamir-Fishman/Dain
Raucher Wessels, 4th annual Growth Conference held in Tel-Aviv. Investment bankers from the United States, venture capitalists from
the Europe and India were on hand. As word of the Ramallah "lynching", when two Israeli soldiers died at the hands of an Arab mob,
spread among participants, in private meetings, these investors, responsible for billions of capital spoke of their unflagging commitment
to maintain investing in Israel's high-tech companies.