ECONOMIC SURVEY
4 February 1998
(Communicated GPO Economics Desk)
MACRO-ECONOMIC SECTOR:
* 15% DECREASE IN INDUSTRIAL INVESTMENTS IN 1997
Investments carried out in Israel's industrial sector dropped 15% to NIS
13.3 billion during 1997, the Israel Manufacturers Association reported.
During the first three quarters of the year, investments in imported
machinery and equipment which represent 60% of all investments in fixed
assets fell by 17% compared with the same period the year before.
Investments in the chemical sector fell by 8% while investment in the
textiles and clothing sector fell by 26%.
Israel Manufacturers Association - Danny Laish, 972-3-5198755
*FOREIGN CURRENCY RESERVES ROSE TO $21.62 BILLION IN JANUARY
Israel's foreign currency reserves rose by $1.55 billion, to reach $21.62
billion at the end of January, the Bank of Israel announced. The increase
was primarily due to the government's raising $1.4 billion through the
U.S. loan guarantee program, of which this was the final tranche. At the
end of 1997, foreign currency reserves were $20.07 billion, while at the
end of 1996 they were $11.42 billion.
Bank of Israel - Gabi Fishman, 972-2-6552712
*MARKET VALUE OF PUBLICLY TRADED COMPANIES ON TEL AVIV STOCK EXCHANGE WAS
NIS 160 BILLION AT END OF 1997
The market value of publicly traded companies on the Tel Aviv Stock
Exchange rose by approximately 30% during 1997 to reach NIS 160 billion,
the exchange announced. Most of the increase was due a 26% rise in share
prices during the year. Bank Hapoalim had the highest market value, NIS
10.5 billion, and its shares rose 59% during the year. Teva, which held
the top position in 1995 and 1996, fell to second place with a market
value of NIS 10.4 billion, following a 3% drop in its share price in 1997.
The largest ten companies on the exchange represent 39% of the total
market's value. During 1997, 13 new companies joined the exchange, adding
2.5% to the market's total value. Of the 648 listed concerns, 35 had
market values of at least NIS 1 billion, and 54 had market values of at
least NIS 500 million each.
Tel Aviv Stock Exchange - 972-3-5677405
* SOFTWARE EXPORTS INCREASE BY 25% TO $500 MILLION IN 1997
Israel's software industry recorded exports of $500 million, an increase
of 25% compared to a year earlier, the Israel Manufacturers Association
reported. The North American market represents close to 40% of these
exports with Western Europe close behind with 37%, followed by Japan and
South East Asia with 13%. The industry's value added is approximately 90%,
according to the association.
Israel Manufacturers Association - Danny Laish, 972-3-5198755
GOVERNMENT SECTOR:
* GOVERNMENT TRANSFERS NIS 240 MILLION FOR EMERGENCY PREPARATION BUDGET
On 3.2.98, the government approved the transfer of NIS 240 million to be
used for upgrading the country's civil emergency services in accordance
with a joint request made by the Prime Minister and the Finance, Defense
and Health Ministers. The funds are to be used to complete Home Front
preparations and to purchase necessary medicines and gas masks. The
request has been transferred to the Knesset Finance Committee for
approval. The Finance Ministry reported that the money will be funded from
the general reserve.
Finance Ministry - Eli Yosef, 972-2-5317201
* GEMINI VENTURE CAPITAL FUND BUYS GOVERNMENT'S INTEREST IN FUND FOR $9.2
MILLION
On 27.1.98, the Gemini Capital Fund Management purchased the government's
interest in its Gemini Venture Capital Fund for $9.2 million (NIS 33
million). The government's stake in Gemini had been conducted through the
Yozma Venture Capital Fund. Yozma itself, was sold last March to Israel's
Ofer Brothers group of companies for NIS 51 million. During 1997, two of
nine funds in which Yozma had investments (JPV and Nitzanim) exercised
their rights to purchase the government's portions, and along with Gemini
have brought a total of NIS 107 million (excluding the sale of Yozma
itself) to government coffers. The funds in which the government still
holds stakes include: Inventech, Walden, Polaris, Medica, Eurofund and
Veritas.
Finance Ministry - Eli Yosef, 972-2-5317201