Investing In Israel

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Investing In Israel

• Elah Alkalay
• VP Business Development
• IBI
• 4/6/07

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Israels duality
Interest Rates Disparities
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An Apolitical Market
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GDP growth is accelerating The rate of
unemployment is declining
Source Central Bureau of Statistics IBI
elaboration
5
Israels inflation environment has improved
dramatically over the past 22 years
Inflation
Source Central Bureau of Statistics IBI
elaboration
6
Since the beginning of 2006 ILS/USD has
appreciated by 11.56 to 4.071 Shekels for 1 US.
Strong Shekel (ILS)
Source Central Bureau of Statistics IBI
elaboration
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Trends in Equity Market
Market Capitalization (NIS billion)
Average Daily Turnover (NIS million)
Source TASE
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Investment profile and growth potential
620 stocks listed 30/4/2007

• New companies
• IPO's on the TASE 37 new companies in 2006
• Dual listing from U.S. markets and LSE (main
  list) 50 companies
• New market for RD companies
• Privatization (BAZAN-Oil Refineries)

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The financial Sector- under major transformation

• Increased mobility of long term investments
• Banks - neutral financial advisers
• Increased competition after divestment of
  financial instruments (mutual and provident
  funds)
• Increased competition over credit market

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Growth in local Mutual fund industry
Mutual Funds - Total Assets 2000 Throughout
Present
Source Bank of Israel IBI elaboration
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When the economy does well the financial sector
does well

• Insurance companies became financial strongholds.
• Cross sale has only just begun.
• Banks fear of dramatic decline have not
  materialized.
• In a growing economy and strong financial market
  its difficult for them not to do well

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Pharma Tevas success is a major growth driver
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A lead player a big advantage
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A lead player in future US generic market
B
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A new original product every year 2009-2015
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Innovation and break through Technology
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Hard work and innovative business model
NA
one phase I to cover all indic.
NA
NA
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New Life Science Companies In TASE
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Energy entrepreneurship and reform

• Refinery Privatization
• Gas is becoming an option
• Over seas investments in gas stations and
  refineries but also power stations
• Ormat In the right place at the right time

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Oil was a good investment, ORA was better
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Global presence
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Ormat specializes in Geothermal Energy
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Regulation, federal funding the need of new
modern reliable facilities
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Over seeing old Jerusalem, Over seeing the Van
gauche Museum
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Real estate stocks did great
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In Israel the sector still has high potential

• 2007 Economic growth is expected to be 4.5-5
• Shortage in new apartments
• Low interest rates
• Real Estate Investment Trusts

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first they took Moscow, then Mumbai?
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AF performance around AFID IPO
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The Wight of corporate bonds rose dramatically
2003
April 2007
Value of registered Bonds, Billion NIS
Source TASE
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The surplus redemption generated downward
pressure on yields
Fixed Rate Unindexed Government Bonds
Source Triple-A software
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Israel
Population 6.9 M
Households 1.8 M
Urban Population 91.5
GDP US 124.0 B
GDP Per
Capita US 18.0 K
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Israel a land of entrepreneurs
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Thank You !
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Israels Fixed income market
Total Market Share 122.6bn, Update to March
2007
Source Bank of Israel IBI elaboration
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Israel RD in first place with 4.7 of GDP
Total annual new bachelors degree or higher
Business Week Oct 11 2004
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Foreign Investments, bn
Source Bank of Israel IBI elaboration
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Budget deficit expected to meet target in 2007
(NIS Millions)
Budget Deficit as of GDP
Source Ministry of Finance IBI elaboration
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Financial stability continues to improve
Source Bank of Israel, CBS IBI elaboration
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Asset Breakdown of Gross Domestic Savings
Publics Financial Portfolio (update to March
2007)
Total Assets 455.5bn
Source Bank of Israel
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Financial assets held by the public (update to
March 2007)
Total Assets 468.9bn
Source Bank of Israel
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Trends of Domestic ILS Denominated Government
Bonds
Average Size of Series (NIS billion)
Bond Series Reduction
Average Daily Turnover (NIS million)
Source MOF, TASE
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Strong credit rating with positive outlooks from
Moodys, SP and Fitch
Credit ProfileState of Israel
Source Credit Rating Agencies, Bloomberg
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TASE was a good investment
International Stock Indices US Terms,
2004-1/2007