Foreign media report that Deutsche Bank AG (NYSE: DB; XETRA: DBG) has joined the Palestinian boycott and sold its stake in Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT). At the same time, the bank gives Elbit Systems a "Buy" recommendation.
Elbit System is a defense electronics firm that supplies, among other things, equipment for the separation fence between Israel and the Palestinian Authority. The fence is controversial among some parties in the world because sections of it run east of the Green Line. Israel began building the separation fence after a terror campaign claimed hundreds of Israeli lives in 2002 and 2003.
This is not the first time that a foreign investor has sold its shares in Elbit Systems under political pressure; a few months ago some Scandinavian pension funds and banks did the same.
At an investors conference in Frankfurt on Thursday, Deutsche Bank president and CEO Josef Ackermann said that the bank had sold all its shares in Elbit Systems. He declined to cite a reason for the divestment, but foreign media attribute the sale to pressure from pro-Palestinian groups.
Two pro-Palestinian NGOs, which oppose the fence, had called on Deutsche Bank to divest from Elbit Systems: International Physicians for the Prevention of Nuclear War and Pax Christi, a Catholic NGO, which describes itself as a human rights and peace movement, issued a joint statement Friday calling their divestiture campaign “a major success".
Deutsche Bank owned 50,000 shares in Elbit Systems, about 0.1% of the company, at the end of March.
Elbit Systems' share price fell 0.6% on Friday on Nasdaq to $51.90, giving a market cap of $2.21 billion. The share price fell 0.6% at the opening on the TASE today to NIS 196.
Published by Globes [online], Israel business news - www.globes-online.com - on May 30, 2010
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