ECONOMIC SURVEY - 01-Feb-96

1 February 1996

(Communicated by GPO Economics Desk)

GOVERNMENT SECTOR:

* LIMITATIONS ON SHARE OFFERINGS OF FOREIGN CONCERNS ON TEL AVIV STOCK EXCHANGE LIFTED.
The Bank of Israel has announced that limitations placed on foreign firms offering their shares on the Tel Aviv Stock Market especially those concerning the repatriation of the foreign currency have been lifted. All public offerings of shares on the TASE will now be under the aegis of the Israel Securities Authority regulations and other legal strictures which also apply to Israeli firms on the bourse. Until now, offerings made by foreign firms needed individual permission and the concerns were only permitted to repatriate 20% of the proceeds from the offering. The Bank of Israel reported it was taking this move because opening Israeli capital markets to foreign firms is a key element for integrating Israel's economy within the world financial system.
Bank of Israel - Ohad Bar-Efrat, 972-2-6552712

MACRO-ECONOMIC SECTOR:

* BANK OF ISRAEL: ECONOMY EXPANDS DURING SECOND HALF OF 1995.
Israel's economy continued to expand from July-December 1995, according to a Bank of Israel survey. During the third quarter, the country's GDP grew quickly, led by public consumption and sectoral investments, while exports and private consumption remained stable. During the third quarter, public sector wages increased by 5.3%, while during the first half of the year public wages rose by 9.4% in comparison to the corresponding periods in 1994. Industrial growth continued in the third quarter, though at a slower pace than during the first two quarters of the year.
Bank of Israel - Ohad Bar-Efrat, 972-2-6552712

PRIVATE SECTOR:

* STRAUSS FAMILY ACQUIRES 15% OF ELITE FROM SHARES SOLD BY ENGLAND'S MAN CORPORATION.
The Strauss Family, which owns Strauss Dairies of Nahariya, has been brought into Elite by David Federman, Elite's major shareholder, as a partner in acquiring the 24% of Elite's shares being sold by England's MAN Corporation. The Strauss Family acquired 15% of the shares for approximately $25 million. Strauss joined the deal following a falling out between Federman and Clal Israel, which had accompanied Federman last week when he originally bought the shares from MAN. (Globes, 30.01.96, p.1)

FOREIGN TRADE:

* TEVA ACQUIRES U.S. GENERIC DRUG PRODUCER BIOCRAFT FOR $296 MILLION THROUGH SHARE MERGER.
Teva Pharmaceuticals has reported that it is acquiring Biocraft Laboratories, a U.S. producer of generic pharmaceuticals, in a stock merger worth $296 million. With this deal, Teva will acquire another generic drug maker in the U.S., to join its Lemmon Pharmaceutical subsidiary. Biocraft share owners will receive 10.7% of Teva's stock with Biocraft's primary shareholders, the Schneider family, receiving between 6-7% of Teva stock. The deal is contingent upon receiving approval from the proper authorities in both Israel and the United States.
Teva/Gitam - 972-3-5752885

* CITIBANK TO OPEN ISRAELI OFFICE NEXT WEEK.
Citibank, one of America's largest banks, will officially open an office in Israel next week. Citibank Deputy Chairman William Rhodes will open the office, which will be for commercial banking. (Globes, 31.01.96, p.24)

* INCREASE OF 18.3% IN EXPORT OF COMMERCIAL SAMPLES IN 1995.
There was an increase of 18.3% to $64.5 million, in the number of commercial samples sent abroad during 1995, the Federation of Israeli Chambers of Commerce reported. The samples, which are free of customs, duties, and VAT, and are primarily used by exporters in sending their goods to shows and exhibitions.
Federation of Israeli Chambers of Commerce - Linda Shimon, 972-3-5631010

PRIVATIZATION:

* LAPIDOT ISRAEL OIL EXPLORATION PRIVATIZED TO SWISS BUSINESSMAN BRUCE RAPPAPORT'S PETROTRADE.
Lapidot, Israel Oil Exploration, was privatized by the Government this week when the Government's remaining 58.9% holdings were sold to Petrotrade, a company controlled by Swiss businessman Bruce Rappaport. Petrotrade offered NIS 25.9 million, the highest bid representing a share price 14% higher than the market value for the oil exploration firm. The sale is tentative, pending approval of regulatory bodies including the Knesset Finance Committee and the Supervisor of Monopolies and Cartels.
Finance Ministry - Eli Yosef, 972-2-317201

ENERGY SECTOR: