Last week, I wrote that the Israeli economy was different from many of its neighbours in Europe and North America. And the Tel Aviv stock exchange has been fortunate to have missed many of the massive swings recently due to national holidays.

No doubt that today, Sunday, will be “catch up time”. The market will suffer heavily. However, Sever Plotsker, a leading financial commentator, has noted 8 points why the local commercial system bears reason for cautious optimism. Writing in Hebrew in the paper Yediot Ahronot, he observes that: –

1. Israel has not seen inflationary real estate prices.
2. The mortgage market has remained manageable.
3. Bank debt remains reasonable.
4. Relative to other countries, Israelis save their extra earnings.
5. The Israel stock exchange is less sophisticated than many of its rivals, lacking manipulative techniques that exist elsewhere.
6. Due to government restrictions, Israeli banks since 2003 have (reluctantly) allowed for relatively high rates of bad debts.
7. The budget remains balanced.
8. Israel has experience in nationalising banks, and getting out quickly.

Plotsker does recall that Israel’s stock exchange has seen fantastic growth over the past 6 years – 270% at its peak – and so a correction will not be a bad thing in the short run.

Overall, a sensible, planned central approach, led by Stanley Fisher, should see Israel through the world crisis. Another tense week ahead for all, but we can remain hopeful.