"I believe that foreign investors will review their investments [in Israel], due to the allegations against Prime Minister Ariel Sharon. Foreign investors are likely to reduce their investments in Israeli stocks, especially those not denominated in dollars," Excellence-Nessuah chief economist Shlomo Maoz told "Globes".
Maoz finds it difficult to quantify the reduction in foreign investment, but emphasizes that there is a "tendency to reevaluate". He says foreign investors know about Israeli political developments in great detail, and their perceptions of these developments are critical.
"Foreign investors make precise analyses and have a different perspective. They were the first to enter the Tel Aviv Stock Exchange (TASE) in April, and those who give also take away," he said.
Nevertheless, Maoz believes that political developments will have few repercussion on dollar trading, Israel's credit rating, or on capital raising.
Excellence-Nessuah predicts that the Bank of Israel will cut the interest rate by 0.3-0.4% today, and that the shekel-dollar exchange rate will be NIS 4.43-4.49/$ this week.
Published by Globes [online] - www.globes.co.il - on January 26, 2004