Lloyd,
Sorry it's taken me so long to get back to you - am preparing for a business trip to Israel (my third in less than 3 months), and have been terribly busy.
First of all, your decision to stick with Wall St. for now makes sense. As to opening a shekel-linked account, I regret to say that I really can't offer an informed opinion. I only have run-of-the-mill shekel accounts in Israel and dollar accounts in the U.S. As an Israeli citizen, I've never had the luxury of exploring this issue from a foreign investor's perspective.
As you'll note in today's edition of the Globes Arena, the Bank of Israel has further reduced interest rates by 0.5%, and foreign capital supply is up. On the other hand, the govt. is seriously considering raising real estate taxes, so I'm not inclined to agree with your comment re the heavy focus of Israeli investment in this area. Moreover, I doubt that the Arab community will become active players in the Israeli stock market, and they definitely won't assume a greater role in this arena than Israelis do. I think this holds true for the immediate future and long-term. In a word, while the Arab world's economy and industry are in such straits, I doubt they'll do anything that would benefit Israeli companies or the economy as a whole. Still, it was an interesting speculation.
I don't expect any changes in the capital gains laws any time soon. The Finance Ministry and the Prime Minister's office are engaged in serious controversies these days, and even though I agree that some change will be necessary to improve the economy, this is one issue that won't be resolved in the foreseeable future, as far as I can tell. The taxes proposed by the Brodet Report might have some validity, but Netanyahu knows that this could cost him -- and the party -- the next elections. The upper-middle to upper-class voters will not respond favorably to such changes, as they will be most affected by them.
FYI: An Israeli company called Perio is now completing its U.S. road- show. The company, which is jointly owned by Israel Chemicals & DEG, has developed a medication to treat gum disease, called Perio Chip (it will be marketed in the US by Astra and, in Europe, by Proctor & Gamble). Their hope is to raise approximately $35 million in a 20% share issue, at $10-$12 per share. Smith Barney & Solomon Brothers are underwriting the IPO, and I think you should take a look at it. I expect good things from the company (it's got an exceptional management team at the helm).
All the best,
Timna |
