By Yoram Ettinger
1. According to TopForeignStocks.com (May 2, 2010), Some of the reasons to invest in Israel are:
*The banking sector remained stable during the global credit crisis and emerged strong last year. Unlike many banks in the West, none of the banks had any large sub-prime exposure and needed to be bailed out by the state. The five largest banks - Hapoalim group, Bank Leumi Bank, Discount Bank, Mizrahi-Tfahot Bank group and First International Bank - are all well capitalized and their capital adequacy ratio is much higher than the minimum required by Basel standards.
*Israel runs a current account surplus. In 2009, the current account soared 243% to $7.2 billion.
*By the end of this month MSCI will upgrade Israel to a developed market [OECD]. Hence Israel will join this select group of 23 other developed countries in the index.
*The high-tech industry forms a large part of the Israeli economy. While Germany is known for engineering, Israel can be called as a high-tech powerhouse. Some have called the incredible growth of the hi-tech industry in a short period of time as a hi-tech miracle. The country is a global leader in many hi-tech sectors such as electronics, generic pharmaceuticals, biotechnology and aeronautics. Export of products by the hi-tech industry has grown at an annual rate of 8.5% in the last five years. In March 2010, the sector brought in $2.1B in export revenue. In the manufacturing sector, sale of hi-tech products forms the largest source of export revenue as the chart for 2008 shows below.
*Israel has the largest number of companies listed on the NASDAQ than any other country except Canada. This is very significant considering the country’s population is relatively small compared to many other countries such as India, China, Brazil, UK, France, etc.
*A December, 2009 Bank of America Merrill Lynch report titled “Playing Defense” recommended Israel as an attractive investment destination and recommended companies especially in the banks and telecom sector.
According to Merrill Lynch, some of the reasons for investing in Israel were the strong currency vs. the US dollar, the resilient economic performance among other emerging markets and the strong leadership performance shown by The Bank of Israel and Israel’s Ministry of Finance in handling the economy.
*The rate of investment in research and development as percentage of GDP in Israel is the highest in the world. High R&D spending coupled with a highly skilled and educated workforce spawns hundreds of start-ups producing many successful commercial products. Israel has the highest number of scientists and engineers per capita in the world. Hence one of the areas where Israel excels compared to other OECD countries is the Information and Communication Technologies (ICT) sector which forms a considerable portion of exports. Little wonder that after Silicon Valley, Israel has the highest concentration of start-ups anywhere in the world.
*Many of Israel’s leading multinational companies weathered the credit crisis and continue to expand both domestically and abroad. Companies like Teva Pharmaceuticals (TEVA), the world’s largest generic drug maker, generate most of their earnings from overseas markets. The Top 25 Israeli multinationals had over US $40B in foreign sales including exports) in 2008. The top five firms in this category are Israel Corporation, Elco Holdings, Teva, Amdocs (DOX) and Ormat (ORA).
*Some of the other factors that make Israel an attractive destination for investment are: general government consumption accounts for a small portion of the total GDP, relative low unemployment rate, stable and growing housing market, very low growth in debt to GDP during 2009, the Tel-Aviv 25 Index beating the S&P 500 over the last five years, etc.
2. The $1.8BN NY-based private equity fund, Pegasus Capital Advisors, has increased its Israel-dedicated fund by $150MN, focusing on water technologies, alternative energy and homeland security technologies. Pegasus invested $100MN in Israeli companies during 2005-8, acquiring controlling interest in 5 companies (Globes business daily, April 5, 2010).
3. The European Union’s Seventh Framework Programme (FP7), which supports exceptional R&D projects, awarded 17MN Euros to 34 Israeli companies and researchers. The total received by Israeli companies and academic researchers, from the FP7 amounts to 290MN Euros (Globes, May 3).
4. Canada’s Enablence has acquired Israel’s Teledata for $50MN (Globes, April 16). Google made its 1st Israeli acquisition - LabPixies for $25MN (April 28).


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State to State: New Mexico and Israel
Categories: General Commentary, Uncategorized
From: AIPAC
http://www.aipac.org/NearEastReport/20100510/New_Mexico.html
The people of New Mexico face the same challenge confronting all desert communities—too many people and too little water. With an average annual rainfall of only 8.9 inches and limited natural resources, New Mexico struggles to meet the water demand required by its two million residents.
The state has found a natural ally in a tiny desert country in the Middle East: Israel. The Jewish state is a world leader in water conservation. It recycles a staggering 80 percent of its water. By comparison, New Mexico, a U.S. state on the forefront of water management, recycles only four percent of its water.
While the two states are more than 7,000 miles apart, Israeli and New Mexican government and business leaders came together last February in Albuquerque for a symposium on clean water and natural resource management.
Roee Madai, Israel’s Consul for Economic Affairs, praised his country’s relationship with New Mexico. “We have natural synergy and great similarity in vital and immediate need for clean energy and water technology,” Madai said. He added that New Mexico is a “prime location for collaboration and cooperative ventures.”
New Mexico is home to a tiny Jewish community—less than one percent of the state’s total population. It is common interests and goals, rather than family or cultural ties, that have brought the two states together.
A Trading Partner
In 2008, New Mexican businesses exported over $27 million in goods to Israel; the total value of exports since 1996 exceeds $490 million. In recent years, New Mexico has also expanded its direct investment in Israel, purchasing a combined total of $15 million in Israel bonds. Israel is now New Mexico’s 11th leading international trading partner—a remarkable ranking given that Israel only has about seven million people.
“I’m proud that my state has invested heavily in Israel’s economy,” said then-New Mexico Governor Bill Richardson during his presidential run. The state’s investments have paid dividends.
New Mexico businesses and institutions have profited from their state’s expanded trading partnership with Israel. For example, the Albuquerque-based Lumidigm Inc., a multi-spectral imaging biometrics company, and the Israel-based BioGuard Components and Technologies Ltd. have inked a multi-million dollar contract to produce biometric security sensors. The devices include fingerprinting and other scanning devices used to protect and secure government and commercial facilities around the world.
New Mexico education centers have also benefitted by receiving millions of dollars for joint U.S.-Israeli agriculture and technology research grants.
Formalizing New Mexico-Israel Ties
During a 2008 trip to Israel, Gov. Richardson signed a letter of agreement formalizing efforts to promote trade between his state and Israel. New Mexico is one of 20 states with a trade office in Israel.
The deep ties extend to New Mexico’s urban centers. The state’s largest city, Albuquerque, is a sister city with Rehovot, an Israeli city of more than 100,000 people.
Both cities are home to major academic and research institutions and stand at the center of their respective state’s technology booms. The partnership between them expands opportunities for business-to-business contacts and, ultimately, could provide a platform for additional investment and trade between Israel and New Mexico.
For more information on the relationship between Israel and New Mexico, visit the Jewish Virtual Library.