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To: Dorine Essey who wrote (119)	2/24/2000 5:15:00 PM
From: the dodger	Read Replies (2) \| Respond to of 141

worldlyinvestor.com Region of the Day Up, Up and Away with Israeli Tech Stocks By Peter Marber, Emerging Markets Columnist Investing opportunities abound in hot Israeli tech stocks. And the party should continue. Forget about the seesawing peace talks in Israel. The real action is in the country's technology companies. Israel's high-tech sector drove the Tel Aviv 100 up 61% in 1999, and it's maintaining its stride in 2000, dazzling emerging market investors. Companies like Check Point Software (Nasdaq:CHKP - news) and Gilat Satellite (Nasdaq:GILTF - news) are defying the laws of gravity as their stocks have skyrocketed 200% in just three months of trading. Israel's been an EMI favorite for more than a year and it's not hard to find a Tel Aviv tech play that has made money. And there seems to be no end in sight. There is still upside in the stocks, as market dynamics fuel the companies to richer valuations. Of course, there continues to be concern the country's ADRs have reached a peak. But given Israel's current economic climate, there may be more room at the top and analyst ratings continue to rise. Investors should think about buying into the market on dips, or to gradually ease in through a dollar-cost-averaging strategy. Feeding the Growth Israel's economy is expected to expand 4% in 2000. Adding to this momentum is the government's effort to promote research and development as well as to privatize utilities. In recent months, $5 billion in foreign direct investment (FDI) has poured into Israel - funding a massive outcropping of technology start-ups. Add to this a highly educated workforce and average per capita income $17,000, which is a potent mix for both consumption and innovation. Not surprisingly, Wall Street analysts are bullish on Israel well into the new millennium. And - fortunately -- there are a number of Israeli-American depositary receipts (ADRs) available for US investors to capture this high-growth potential. EMI Favorites Gilat Satellite Networks is just one Israeli telecom that analysts have rated a ``strong buy.' With a recent agreement to provide Microsoft (Nasdaq:MSFT - news) with antennas for broadband access, Gilat's ADRs have edged up over 35% this year. But, the ADRs still have room to run. Another of EMI's favorites has been Elbit (Nasdaq:ELBTF - news), which has been riding the tails of enthusiasm for global telecom stock. Elbit, a manufacturer of networking products and communication services, clocked a one-year return of 375%. And it is still going up. Elbit has already climbed 20% in 2000. Also riding the telecom mania are a handful of Israeli software companies that create systems to support telephony. Silicom (Nasdaq:SILCF - news) provides high-performance connectivity and advanced enabling technologies. Silicom has recently entered into a number of agreements in order to become the time-to-market leader for broadband Internet access. Its efforts have paid off. The stock is up 245% for the first six weeks of 2000 and 922% since last February. Analysts are also looking at Amdocs (Nasdaq:DOX - news), which makes software for customer service, billing and sales for global telecom companies. The stock has nearly doubled in 2000 following news of increased revenues and new initiatives to seize a leading position in the business infrastructure market. More Options There are many more top-performers in Israel's high-growth hardware and software industries. Check Point Software, for instance, continues to provide much-needed security firewall systems. It was given a boost this month with the launch of its new Cyber Attack Defense System, which almost perfectly timed with the recent denial-of-service assaults on Yahoo! (Nasdaq:YHOO - news), eBay (Nasdaq:EBAY - news) and other e-commerce websites. The ADR is up over 80% this year and almost 200% since we reported on the stock three months ago. Another early-year performer has been M-Systems Flash Disk Pioneers (Nasdaq:FLSH - news), a data storage technology company. The stock has jumped 46% this year following the ``strong buy' recommendations from some key sector analysts. Orbotech (Nasdaq:ORBK - news) finished 1999 up 160% and has managed to grind up another 10% this year. Israeli Issues There is no question that Israel's market is driven by the dynamic high-tech sector. Continual innovation and positive economic forecasts only add to this trend. However, whenever considering Israel it is impossible to ignore Middle East tensions. Should peace talks fail, investors may get shaky and Israel's economy could falter. In addition, a downturn in the Nasdsaq - where many Israeli ADRs are listed - would certainly be felt hard in Tel Aviv. For those worried about the greater volatility in individual stocks, the relatively new AMIDEX35 Mutual Fund (Nasdaq:AMDEX - news) is the only Israeli index product available to US investors. In its first sixth months of operation, share prices rose from $10 to $14.29, and is up more than 25% in 2000. The index fund captures Israel's high-growth potential by investing in 35 of the country's largest publicly traded companies. Among its most weighty holdings are Check Point Software, Orbotech, Gilat, and TEVA Pharmaceutical (Nasdaq:TEVA - news), all stocks recommended by EMI in the last year. But the depth and breadth of the stocks available here warrants serious attention by all technology investors.