Some positive news from the Israeli finance sector.

Ok, so the Tel Aviv stock exchange has lost “just” 17% of its value, while the FTSE world index is about 35% off since May 2008.

But what about the banking sector, where the credit crunch began? We know about Lehmans and Lloyds and even Icelandic savings schemes. We know that Gordon Brown and others are going round the Gulf States with their begging bowls.

In Israel, the situation looks encouragingly healthier. Here are just 3 of the latest positive recommendations.

• Merrill Lynch added Tefahot Mizrahi Bank to its most preferred list for financials in emeging EMEA region. With phrases such as “a relatively safe haven” and “almost zero exposure to toxic wastes”, the bank is seen as a good short term option for safety.
• A few days previously, on 22nd October, Deutsche Bank described the Israeli banking system as “in good shape, despite the challenges”. Hapoalim and Leumi were not seen as possessing assets that would create a threat to their future. It even upgraded Mizrahi shares to “buy”, as it was not dependent on cyclical issues.
• These findings had already been echoed by a local investment house, Leader and Co back in mid September. It detailed the exposure levels of the 5 leading Israeli banks. For example, it noted that Leumi and Discount had some investments in Freddie Mac and Fannie Mae, but they were manageable. Again, Mizrahi was seen as a “bank of choice”.

Life is not all rosy in the Israeli economy. The high tech sector has announced approximately 1,000 lay offs in the past 2 weeks. Purchases of “white household goods” were markedly down in October.

What remains true is how the fundamentals of the economy continue to remain stable. That will serve Israel well as it fights its way through the next few months of world financial turmoil.