InvestorsHub Logo
Boards
News
Market Data
Markets
Discover
Discover
Subscribe Login/Register
S&P 500
5,071.63
(
0.02%
)
US TECH 100
16,867.60
(
-0.80%
)
Dow Jones
38,460.92
(
-0.11%
)
Brent Oil
87.31
(
0.10%
)
Bitcoin
64,181.04
(
-0.16%
)
Post# of 3562
Next 10
Reply Private New
Public Reply Private Reply New Post
Keep Last Read
Keep Next 10 Report Keyboard Shortcuts
Next 10 Prev Next

midastouch017

Send PM Follow Ignore
Followers 145
Posts 27556
Boards Moderated 3
Alias Born 02/07/2004

midastouch017

Re: None

Tuesday, 06/12/2007 6:48:37 AM

Tuesday, June 12, 2007 6:48:37 AM

Post# of 3562
Israeli stocks ring the bells in the US and UK
By Laura Goldman June 10, 2007

Israeli companies are the belle of the ball on the world's stock exchanges. With 90 Israeli-related companies on NASDAQ, the country is the number one foreign issuer on the US exchange, ahead of countries with stronger economies like China, Canada, and the United Kingdom.

Cliff Goldstein, the president of Amidex 35 Israel Mutual Fund, has made it his life's mission to promote investment in stocks of Israeli companies. The Amidex-35 fund is the only US registered index mutual fund investing exclusively in Israeli companies. This index, consisting of the 35 largest companies in Israel rebalanced each year has appreciated 120% in the last five years. By way of comparison, the NASDAQ index has only returned 72% during the same time period. Buying blue and white (the colors of the Israeli flag) would have increased the returns of your portfolio by 50%.

"All investments have some risk. But there is no additional risk to investing in Israeli companies," Goldstein told ISRAEL21c. "That may have been truer in the earliest day of the country but definitely not now. There is currently over $200 billion of market capitalization in Israeli stocks."

According to investment professionals like Goldstein, stocks of Israeli companies have defied gravity and earned stratospheric returns for their investors. These stocks, they say, are now analyzed on the basis of their own individual economic and technology reality not their country of origin. There is no longer an Israel discount in the marketplace.

This is especially true after the Second Lebanon War. Despite dire predictions that the war would paralyze industry in the country, business in Israel even if forced to be conducted in bomb shelters or remote locations did not miss a beat during the war.

"This is something we have proved over and over again," said Gadi Beer, manager of the Amidex35. "There is no correlation between the political and economic events in Israel. Israelis (companies) on US exchanges initially reacted to the breaking news and bounced right back. For example, two weeks before the Lebanon war last July, Teva dropped from $36 to $31 a share. By the end of the war Teva closed again at $36. Another good example is Amdocs. The billing company was trading at $34 a share on July 12, by the end of the war it closed close to $40. And finally, companies like Elbit Systems actually do better in this environment just because of their focus on the military."

There are six companies included on NASDAQ with market capitalizations of over $1 billion. In descending order, they are Teva Pharmaceuticals, Checkpoint, Partner Communications, Nice Systems, Elbit Systems, and Elbit Medical. The total market capitalization of Israeli companies on NASDAQ is $50 billion.

Forbes highlighted Teva's achievements by listing it as one of its 130 global superstars for the year 2007. Since the company went public in 1982, it has appreciated 4,000%. But that's not the only impressive Israeli investment.

* Investors in defense contractor Elbit Systems have earned 10 times their initial investment.

* Software firms Checkpoint and Nice Systems have returned about 700% to their investors since their IPOs during the '90s.

* Mobile phone operator Partner doubled this year, and Partner's major investor Hutchinson Whampoa is more than satisfied.

"American investors appreciate the ambition, technology, management and experience of Israeli companies. They no longer see them as foreign companies. They evaluate them like they would an American company," said Asaf Homossany, managing director of NASDAQ Israel.

So many investors were clamoring for the initial public offering of mobile phone operator Cellcom in February that the underwriters had to add one million shares to the offering and priced it significantly above the original price range to meet all the demand.

Since this was not a technology company but a pure play on the Israel consumer economy, the huge appetite by institutional investors for the stock was a vote of confidence in the Israeli economy. The stock has appreciated another 20% since the offering.

International stock exchanges and investment banks are clamoring for listings of Israeli companies, and most of the major investment banks like Merrill Lynch, Jeffries, William Blair, UBS, and Lehman Brothers have set up shop in Tel Aviv or visit frequently. Goldman Sachs is even having its next board of directors meeting in Jerusalem.

"The high level of science taught at the universities has transformed Israeli companies into some of the worlds' most profitable," said Ranan Lachman, an investment banker from Oppenheimer who visits Israel frequently to scout for companies.

In the US, the competition is intense between the New York Stock Exchange and the NASDAQ for Israeli companies. Catherine McKinney, the president and co-chief operating officer of the New York Stock Exchange, Euronext, visited Tel Aviv in January and rang the opening bell of the Tel Aviv Exchange.

One official of the New York Stock Exchange said: "There is an appetite from American investors for Israeli companies. There is enormous respect for what Israel has achieved. Warren Buffett of Berkshire Hathaway with his $4 billion purchase of an Israeli company certainly raised Israel's profile. In conjunction with Dubai, the Middle East is now recognized as a financial center."

The companies listed on the New York Stock Exchange include gas refiners Delek and Alon, clothing manufacturer Tefron, mobile phone operator Cellcom, grocery chain Blue Square, geothermal power plant builder Ormat Technologies and software company Amdocs. The wide variety of industries represented here express the diversity of the Israeli economy.

Late last year, the NASDAQ held an Israel Company Day to highlight many of the Israeli companies that trade on its exchange. Since the crowd was standing room only, the NASDAQ has decided to make it an annual event. Israeli stocks like Magal Security, Teva, Checkpoint, Syneron and Perrigo are more than 50% owned by American institutions.

More Israeli companies are also finding their way on to the London Stock Exchange (LSE). The initial public offering of Africa Israel's Russian subsidiary, AFI Development, is the fifth largest real estate company on the LSE. It will probably be added to one of the LSE's indexes this year. Fishman holdings subsidiary, Mirland Development is also in the top 20.

There are 52 Israeli associated companies on the London Exchange. Eleven are on the main exchange and 41 are on the Alternative Market known as AIM. Richard Webster Smith from the London Stock Exchange said: "For the small size of the economy of Israel, Israeli companies are certainly well represented on the London Exchanges."

After the United States, Canada, and Australia, Israel is the fourth largest foreign issuer on the London Exchanges. In 2006, Israel listed 15 companies vs. 26 for the United States. The 15 Israeli companies raised more money in total than the American ones.

Graham Dallas, head of business development for the London Stock Exchange, said: "Israeli companies are embraced by the London institutional community." Some of the big players on the London Exchange are the mutual fund giants Fidelity and AMVESCAP and the insurance company AXA.

Some of the most astute investors on the world's exchanges are clamoring for Israeli companies. There is only one reason for that. Israeli companies make investors money.

http://www.israel21c.org/bin/en.jsp?enDispWho=Articles%5El1678&enPage=BlankPage&enDisplay=vi...
Public Reply Private Reply New Post
Keep Last Read
Keep Last Read Next 10 Report Keyboard Shortcuts
Next 10 Prev Next

Join the InvestorsHub Community

Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.

Sign Up