"The losses of Israeli companies will only become clear when we know how the Lehman Brothers' bankruptcy will be handled." Sharon Baider
"Israeli financial institutions can expect to record losses as a result of the crisis at Lehman Brothers," says Africa-Israel Investments House investments manager Eldad Barak in response to the bankruptcy of Lehman Brothers Holdings Inc. (NYSE: LEH).
Barak added, "The direct impact of Lehman Brothers' problems is on companies that own Lehman Brothers' securities. These companies can be expected to record losses on their investments. We can estimate that quite a few Israeli companies hold Lehman Brothers' securities, including banks and insurance companies.
"The extent of the losses of Israeli companies will only become clear when we know how the Lehman Brothers' bankruptcy will be handled. In view of the failure to find a buyer for the investment bank, there is a high probability that Israeli financial institutions will record losses because of Lehman Brothers' problems. Under these circumstances, investors in provident funds will probably also lose some money, though probably not too much. On the positive side, the acquisition of Merrill Lynch by Bank of America, assuming it goes ahead, will prevent additional losses by Israeli financial institutions."
Published by Globes [online], Israel business news - www.globes-online.com - on September 15, 2008
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