ECONOMIC SURVEY - 24-Sep-96

(COMMUNICATED BY GPO ECONOMICS DESK) September 24, 1996

GOVERNMENT SECTOR:

* BANK HAPOALIM TO ORGANIZE INTERNATIONAL BANKING CONSORTIUM TO RAISE $200 MILLION FOR ISRAEL.
Bank Hapoalim has been chosen by the Finance Ministry to lead and organize an international banking consortium in order to raise $200 million for the State of Israel. The group led by Bank Hapoalim, which competed against four other groups, includes NatWest Markets from England, BNP from France, Bayerische Landesbank from Germany, and Dai Ichi Kangyo Bank from Japan. Last year, a group led by Bank Leumi raised DM350 million for Israel.
Finance Ministry - Eli Yosef, 972-2-317201

* BANK OF ISRAEL LOWERS INTEREST RATE BY 0.3%.
On 24.09.96, the Bank of Israel announced that it was lowering the interest rate on funds it provides to the commercial banking sector. The central bank reported that since August 1996, it has reduced interest rates by 1.5%. The bank reported it was taking the move because of the lower consumer price indices of the past few months and the increase in the money supply, which is continuing to grow as planned. The bank also noted that the inflation rate and inflationary expectations remain greater than planned, as they are reflected in the capital markets, which have stabilized and even risen, following a drop which has occurred over the past few months.
Bank of Israel - Ohad Bar-Efrat, 972-2-6552712

MACRO-ECONOMIC SECTOR:

* BALANCE OF PAYMENTS DEFICITS RISES TO $3.1 BILLION FOR FIRST HALF OF 1996.
Israel's balance of payments deficit rose to $3.1 billion during the first half of 1996, as compared to a deficit of $2.4 billion for the corresponding period in 1995, the Central Bureau of Statistics reported. During the first half of the year, Israel's overseas debts rose by $700 million, reaching $20.5 billion. Foreign investment in Israel rose during the first half of the year to $1.2 billion, compared to $1 billion during the same period in 1995, while Israeli investments abroad rose to $600 million, compared to $200 million in the first half of 1995.
Central Bureau of Statistics - David Neumann, 972-2-6553400

* MONEY SUPPLY UP BY 0.1% IN AUGUST.
Israel's M1 or money supply rose by 0.1% in August the Bank of Israel reported. This follows an increase of 4.1% in July, while decreases occurred in both June and May. For the first eight months of the year, the M1 rose by 9.4%.
Bank of Israel - Ohad Bar-Efrat, 972-2-6552712

PRIVATE SECTOR:

* TEVA RECEIVES AMERICAN FDA APPROVAL FOR ITS MULTIPLE SCLEROSIS DRUG.
On 19.09.96, Teva Pharmaceuticals received a positive recommendation from a U.S. Food and Drug Administration advisory panel regarding its multiple sclerosis drug, Copaxone. The panel unanimously recommended the drug and ruled that it is both safe and effective. The market for the Teva drug is estimated at between $150-400 million annually. Copaxone is Teva's first original or "ethical" drug developed by the company from research done at the Weizman Institute. (Yediot Ahronot, 20.09.96, p.A10)
Teva Pharmaceuticals - 972-3-9267267

* NESTLE IN NEGOTIATIONS WITH NEVIOT MINERAL WATER FOR STRATEGIC COOPERATION.
The global food conglomerate Nestle is negotiating with Neviot, one of Israel's leading mineral water producers, Neviot's owners have confirmed. Nestle is examining the possibility of strategic cooperation with the concern, following a strategic decision by the international firm to enter into Israel's mineral water market as a main component of its entry into the Israeli and regional markets. (Ha'aretz, 19.09.96, p.C1)

PEACE ECONOMICS:

* ISRAELI SOFTWARE HOUSES PARTICIPATE IN CONFERENCE IN JORDAN.
Representatives from a number of Israeli software houses visited Jordan last week in order to meet their Jordanian counterparts and participate at a conference sponsored by Hewlett Packard's regional office. Among the Israeli firms represented at the conference were Kivun, Microsoft

(Israel), Autopoint, Karmon, ASI, and Dvir, as well as HP (Israel).

(Ma'ariv, 17.09.96, p. C4)

DEFENSE INDUSTRIES SECTOR: