ECONOMIC SURVEY - 28-Nov-96

28 November 1996

(COMMUNICATED BY GPO ECONOMICS DESK)

MACRO-ECONOMIC SECTOR:

* BANK OF ISRAEL MAINTAINS INTEREST RATES.
The Bank of Israel announced on 25.11.96, that interest rates on resources made available to commercial banks would be maintained at the current rate. The bank reported it was holding rates steady because economic indicators had not substantively changed during the past month. Over the past four months the central bank has reduced interest rates by close to 2% to reach 15.2%
Bank of Israel - Ohad Bar-Efrat, 972-2-6552712

* FOREIGN INVESTORS HOLD 10% OF ALL SHARES TRADED ON TEL AVIV STOCK EXCHANGE.
A new study released by the research department of the Tel Aviv Stock Exchange concluded that foreign investors held approximately 10% of all shares traded on the exchange at the end of September 1996. Foreign investors who are major shareholders (holding 5% or more of a traded firm's shares) equal 7.5% of all shares, while the Bank of Israel's statistics show that foreign investors who are not major shareholders hold another 2.3% of the shares on the TASE. Foreign investors who are major shareholders appear in approximately 130 firms, about 20% of all firms traded in Tel Aviv, and their total investments equal about NIS 7.4 billion.
Tel Aviv Stock Exchange - Etti Tuttnaur, 972-3-5677405

GOVERNMENT SECTOR:

* ECONOMIC TALKS RESUME WITH PALESTINIANS.
Economic talks resumed this week between representatives of the Finance Ministry and the Palestinian Authority. Topics to be covered by working groups during the talks include: commerce restrictions, transfer of taxes, and Palestinian Authority debts to Israeli bodies. Finance Minister Dan Meridor expressed satisfaction that the two sides are meeting following weeks during which the representatives from the Palestinian Authority avoided meeting the Israelis.
Finance Ministry - Eli Yosef, 972-2-5317201

* ISRAEL RAISES $216 MILLION ON EUROBONDS MARKET.
On 24.11.96, Israel completed the raising of FF1.1 billion ($216 million) on the Eurobonds market via a consortium of 21 European, American, and Asian banks. The consortium was led by Bank Hapoalim, Banque Nationale de Paris, NatWest Markets, Bayerische Landesbank, and the Dai-Ichi Kangyo Bank and included banks from Italy, Japan, Singapore, England, Germany, the United States, France, and Austria. The Finance Ministry noted that due to an increase in demand, which was only partially answered, the government agreed to increase the tranche from $200 million to $216 million. The loans are for seven years with a five year grace with an interest rate of 0.25% above the LIBOR and the final two years at 0.3% above the LIBOR.
Finance Ministry - Eli Yosef, 972-2-5317201

* FREE TRADE AGREEMENT WITH CZECH REPUBLIC AND SLOVAKIA TO GO INTO EFFECT ON 01.01.97.
During its weekly cabinet meeting on 22.11.96, the government ratified the free trade agreements signed with Slovakia and the Czech Republic which will go into effect on 01.01.97. These are the first free trade agreements between Israel and Central European countries and will enable Israeli firms to compete more fairly against European firms. Trade with the two countries is approximately $100 million, with exports of about $40 million, an increase of 25% compared to 1994.
Industry and Trade Ministry - Haya Peri, 972-2-220340

PRIVATE SECTOR:

* SUBWAY SANDWICHES OPEN BRANCHES IN PALESTINIAN AUTONOMY.
The international sandwich chain, Subway, announced it has signed an agreement to open two more stores within the Palestinian Authority one in Bethlehem and the other in Beit Hanina. Subway has already opened its first branch in El Bireh. (Globes, 27.11.96, p.60)

FOREIGN TRADE:

* U.S.'S APPLIED MATERIALS ACQUIRES ORBOT INSTRUMENTS AND OPAL.
Applied Materials, one of the world's largest providers of semiconductor equipment, acquired Orbot Instrumentation for approximately $110 million and Opal for approximately $175 million on 24.11.96. Orbot Instrumentation develops, produces, and markets semiconductor inspection equipment while Opal, whose shares are traded in New York, develops, produces, and markets electron microscopes for the semiconductor industry.
Orbot Instrumentation - Avner Hermani 972-8-9425692
Opal Technologies - Rafi Izhar, 972-8-9383521