Business Archives - Page 65 of 67 - Michael Horesh Business Coach and Mentor

23 March 2009

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Categories: Business, Israel

Over a 10 month period, the shekel depreciated by around 30% against the dollar. Since the peak of 13th March, the shekel has clawed back around 5% of its value. What’s up?

Fact 1: The Bank of Israel had an open policy of buying dollars over a year or so, a policy that ended with the onset of 2009.

Fact 2: Israel has always maintained a “competitive” rate of interest against the dollar. However, this policy has been blown apart by the recent fluctuations of the international banking system.

Fact 3: And when Obama and his team move, anything can happen. Today with the release of the policy on toxic assets, the shekel began to revalue, then devalued, and has finished its trip almost back where it started – about 4.04 shekels to the dollar. Are speculators cashing in?

I was intrigued by what Michael Eisenberg had to write.

For those of you who were optimistic on the dollar and budgeted anything above 3.7 Shekels to the Dollar, do yourself a favor and re-budget ASAP so you do not delude yourself into losses. And for those Israeli public companies who experienced some extra profitability last quarter due to the rise in the dollar, be aware that the profits may evaporate.

Where to next? Globes quotes Prico, an on-line foreign exchange broker. Internal USA policy will keep the dollar weak. Back in Israel,

In the short term, Prico advises keeping an eye on the shekel 4/$ level, which can be expected to provide a support level for the shekel-dollar exchange rate. The next support level below this psychological level, shekel 3.95/$, is very important, because support at this level could support an upward correction, possibly to as high as shekel 4.15/$.

Confused? It gets better. “The Economist” magazine has just described Israel as one of the “lands of opportunity”.

21 March 2009

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Categories: Business, Israel

Over the past 3 months, the Tel Aviv Stock Exchange has more or less held its value, despite sharp daily fluctuations. compared to the 10% losses in London or on the Dow, that is good news.

The past few days have seen another mark of confidence in the Israeli financial system. The International Organization of the Securities Commissions has agreed to host its next conference in Tel Aviv, commencing 8th June 2009.

There is a list of financial heavyweights due to attend. The current program includes: –

Mr. Lloyd C. Blankfein, Chairman and CEO, Goldman Sachs Group, Inc.; Mr. Deven Sharma, President, Standard & Poor’s; Prof. Eddy Wymeersch, Chairman, IOSCO Regional Committee, Chairman, Committee of European Securities Regulators; Prof. Stanley Fischer, Governor, Bank of Israel; Prof. Zohar Goshen, Chairman, Israel Securities Authority; Mr. William Brodsky, CEO of the Chicago Mercantile Exchange

A couple of weeks back, I commented on the excellent report Israel received from the IMF visiting committee. I still tend to agree with the Governor of the Bank of Israel. This recession may be tough, and it is not ignoring Israel. However, the country has a good chance to come through in a strong position.

10 March 2009

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Categories: Business, Israel, Jerusalem, Palestinians

Tourism in Israel had a brilliant year in 2008. Around 3 million visitors arrived, two thirds of whom were Christians. A significant increase on previous years.

As the Tourism Ministry has reported: –

During the last decade, the ministry has invested tens of millions of shekels in developing sites including, among others, the Mount of Olives Promenade, Via Dolorosa and Christian trails in Jerusalem, Nazareth and around the Sea of Galilee.

Going forward, in less than two months from now, Pope Benedict XVI will visit the Holy Land. Although accepted that he will not be accompanied by tens of thousands of “well wishers” as his predecessor was in 2000, his entourage will still be very heavy indeed. Jerusalem hotels are already reporting full capacity for the period.

It goes further. This week, a large delegation of Israelis, representing the full spectrum of the tourism industry, visited Bethlehem.

With the cooperation of the Civil Administration, the city has been part of the boom since late 2007. In parallel, the Tourism Minister of the Palestinian Authority, Khouloud D’eibes, has given his open support to the initiatives and enhanced cooperation.

The net uplift: Welcome income for two economies, showing what can be done together. A model for economists. A slap in the face for detractors.

6 March 2009

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Categories: Blog, Business, Israel, Jerusalem

This week, I attended an economic briefing at UBS. The Swiss banking giant is predicting global growth in 2009 at a miserly 0.2%.

This is what many see happening in Israel – although that is a giant positive mark when compared to several other Western economies.

Don’t get me wrong. The Israeli economic press is full of depressing reading. This week, the Tel Aviv Stock Market matched the loses in Europe and on Wall Street. High tech lay offs continue in quantity. The local bank news is still edgy.

And yet. And yet. There is still gold in dem Judean hills.

I am associated with a start up that has embedded a software on a smart card with a UBS application – enhanced content data management. It recently raised approx US$1m, with sales commencing in Spring 09. Another client’s software has made significant sales in the UK this quarter, despite the dire economy in Britain.

These are not isolated stories. the latest bulleting from Israel’s Investment Promotion Centre is extremely positive.

FDI in 2008 hit US$10 billion
Since December 2008, 3 Israeli medical device companies have been bought out for a combined value of over US1 billion.
GAP, Banana Republic and H&M will begin to open outlets in Israel over the next 12 months.
Solel, BrightSource Energy and other cleantech companies are striking large deals in Spain, California and elsewhere.

The UBS representative noted that the clever people are those who plan carefully at the end of a recession. 2009 will not be pretty. But for Israel there will still be several bright spots worth tagging. early on.

3 March 2009

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Categories: Blog, Business, Israel, Palestinian Society, Palestinians

With hindsight there were many people warning over Madoff, years before he was forced to tell the truth about his Ponzi scheme.

Now turn to the Middle East. Since the Oslo Accords of 1993, roughly 25% of revenue of the Palestinian Authority comes from taxpayers in Europe, America and other donor groups. For example, in a statement released from Brussels last week, the commission observed that:

The EU is the largest donor to the Palestinians. In recent years, the combined contribution of the European Commission and EU Member States has reached €1 billion per year, which is not sustainable.

The question is: Do we know where the money is going to? Are the transfers accountable and transparent?

Just look at the work from the pressure group, Funding for Peace Coalition. With reports dating back to 2003, 2004 and 2005, the team has warned that large amounts of foreign taxpayers investment in the Palestinian Authority has simply disappeared.

What makes this a Ponzi scheme?

A combination of political correctness, goodwill and pressure from the Arab League has encouraged Europeans to support the Palestinians financially, just as America is perceived to help Israel.

It is no secret that the Arab countries have rarely delivered on their promises. The Europeans are finally wondering what they are getting for their Euro.

Benita Ferrero-Walder, European Commissioner for External Relations and Neighbourhood Policy, intended to pledge on 2 March in Sharm El Sheikh (Egypt) €436 million ($554 million) to the Palestinian people for 2009 at the “Conference in Support of the Palestinian Economy for the Reconstruction of Gaza”.

This will be on top of a similar amount of direct aid alone delivered in 2008, much of which went to pay for Hamas civil servants in Gaza. The new gold is supposed to be used for rebuilding Gaza. However, it is to be handed over to Abbas of Fatah, who has no control in Gaza!

So here comes the sting! The Europeans have opened the door as widely as possible for Barak and Hilary from the new-can-do White House. The Yanks have promised US$900 million extra bucks. But to whom and why?

To Fatah? Er, remember that Arafat died as one of the richest men in the world. To Gaza? But again Abbas does not rule Gaza. To UNRWA, whose stores are openly ransacked by Hamas operatives? Etc etc.

So what we have is: A bottomless pot, designed to feed aid to the Palestinians. European taxpayers, who have poured in loads of wealth but seen little in return. Americans, who are used to parting with money without conducting due diligence.

This week’s confrence in Egypt has promised US$4.5b to 3m Palestinians. Will they get it? Would some of this be better used in Darfur, Zimbabwe or elsewhere? Learning the truth about Gaza and the Palestinians is often more complex than unravelling a Ponzi scheme.

25 February 2009

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Categories: Business, Israel, Jerusalem

A stream of bad economic data has been released in Jerusalem in the past few days. GDP shrank by 0.5% in 4Q08. 18% fewer tourist nights were recorded in January 09 compared to 12 months previously. Intel announced a sharp drop in exports.

The Economist Intelligence Unit recently updated its predictions for 2009. The current forecast highlights a 1.9% real drop in global GDP. Taking the USA as an example, it explained that:

The US economy is in freefall. The 3.8% contraction in fourth-quarter GDP was the worst showing since the opening months of 1982, when the economy contracted by more than 6%. Business spending dropped by a stunning 19.1% at an annual rate in the three months to December.

So Israel is better placed? Well, I have long argued that Israel entered the recession with numerous structural positives, which are still true today. Naturally, that does not make the country immune, especially when the political system is neutered due to post-election coalition gamesmanship.

There is one stunning major bonus, clearly identifiable on the horizon. About a month ago, commercial quantities of gas were discovered in the Tamar field just off Israel’s coastline. This week, two hugely important pieces of information were released to the press.

First, it is very likely that the find is larger than initially thought. Second, spurred on by the American partner, Noble, the gas will brought to the market within 3 years, and not 5 as originally thought.

The knock on effect here – increased revenue for the treasury, employment, export possibilities, etc – will have a substantial and positive effect on the Israeli economy.

The Economist concluded its report with a “subdued outlook for the global economy in 2011- 2013”. Israel has a chance to be a special exception to that forecast.

20 February 2009

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Categories: Business, Israel, Palestinian Society, Palestinians

The Western media has concluded that Israel’s air force and artillery flattened the Gaza Strip. Many are homeless. And Hamas, yes they are naughty for firing rockets at Israel, but it needs to be helped in order that the population at large does not suffer further.

According to a debate in the British Parliament, “the Muslim community in Blackburn raised £150,000 for a Palestinian charity in just one week.” Praiseworthy indeed, and let us hope that transparency has improved since the days when the Arafat and Dahlan team pocketed much of such donations.

In the past few months, there has been growing evidence to suggest that Hamas is in fact far wealthier than it wants to admit.

1) Khaled Abu Toameh is one of a rare breed. An investigative Palestinian journalist, he has eyes and ears in many parts of the territories. In a recent interview, he noted that:

Hamas could not have taken control of the Gaza Strip in 2007 had it not been for support from Iran and Syria. They had logistical and financial support, which means weapons. Most of the weapons coming into Gaza are being financed by Iran and facilitated by Syria.

2) Hamas is also not burdened with having to provide over a million people with education and welfare. Much of that role has been taken on by UNRWA. In a recent report, UNRWA was slammed for becoming a political institution, managed by Palestinians for Palestinians, even open to abuse by terrorists. Ironically, on at least 3 separate occasions since early January, Hamas members have stolen UN property, including UNRWA supplies.

3) It is the smuggling tunnels that have historically been the financial lifeblood of Hamas. Speak to any journalist, like Matt Rees, who has covered the Gaza Strip over the years. During the Intifada, cease fires with Israel were broken because gangs could not bring in their contraband. Toameh notes that the tunnels have existed for decades.

And new evidence is emerging that Hamas has actively encouraged the tunnel industry since 2007. The tunnels provided a way to bring in weapons and raw materials. Hamas sold “licenses” for the building of some tunnels, raking in a fortune in undisclosed taxes in a poor economy. Individuals made a fortune out of commissions, just like Dahlan of Fatah in the past.

To quote Hamas Finance Minister Ziyad Thatha:

A number of investors collected millions of dollars in a way that is against sharia (Islamic law) and we will operate against them.

At least now we know why Muslims around the world have to collect money for their brothers and sisters in Gaza. No wonder, national appeals have been started for them. it will be interesting to see if that includes donations from governemnt ministries.

19 February 2009

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Categories: Business, Israel

On the surface, Israel’s economy is heading the same way as America, the UK and others.

Initial figures show unemployment doubling to 20,000 people between October 2008 to February 2009. The two largest banks, Hapoalim and Leumi, have reported large losses. In fact, Leumi’s share price has now lost over half its value. High tech companies are looking at a 4-day working week.

And yet, as I keep stressing, Israel does not need to panic. For the moment, I am not alone in that view, as reflected by the stock market, still on the up in fits and starts.

Just as encouraging is the latest report from the IMF on Israel. It predicts a small but positive growth of 0.5% for 2009. This is down from its previous analysis but still higher than the 0.2% as suggested by the Bank of Israel.

The IMF went on to praise the monetary and fiscal policies of Israel. It did find that there was room for selected budget stimulus and an even lower interest rate. However, the general picture is encouraging, hopefully leading to a major pick up in 2010.

12 February 2009

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Categories: Business, Israel

Israel has voted. The results are in. And the financiers reacted by causing a 2.6% drop in the Tel Aviv Stock Exchange (TASE). They don’t like change, especially when political uncertainty remains in the air.

Now look again.

Despite the fall, the TASE has still risen 5.36% since the beginning of the year. And there was a war going on as well for much of the time.

Some of the Israeli companies listed overseas are also being sought after. In the healthcare sector, Teva’s continuing success is well documented. Card Guard is located in Rehovot and has a strong reputation for devising remote patient monitoring systems.

On the internet front, Michael Eisenberg recently identified 3 Israeli companies that may be well positioned to take off financially; Incredimail (MAIL), Answers.com (ANSW) and Babylon (traded on TASE: BBYL).

On more fundamental issues, the local papers remain full of pessimistic news about high tech companies going on to a 4-day working week. Yet on a rainy election day itself, most of the shopping malls were packed. Many reported a 200 – 400% increase in normal trading volumes. That spending power came from somewhere.

I don’t hold positions in the companies mentioned. I was not shopping on election day. Yet, while I recognise that 2009 will not be a pretty year for everyone commercially, there is still a lot of business out there in Israel.

6 February 2009

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Categories: Business, Israel

This week, Bank Hapoalim posted a massive 4th quarter loss. Deutsche Bank is concerned that Israeli banks are hiding too much bad debt, whose significance has yet to be fully appreciated. And in a troubling conversation, a private banking analyst told me that the Israeli public has yet to internalise fully the depth of the world recession.

Crisis? Well, the jury is still out. Yoram Ariav, the DG at the Finance Ministry, has gone on record saying that he knows of no Israeli bank in trouble. Good! And most banks have yet to cut the pay packets of the humble board members, as is happening in other countries.

This week, I spent some time with a specialist in private banking, who occupies most of his time in European financial centres. Having conducted several days of back-to-back meetings in Israel, he finished his visit totally confused. Why aren’t the Israelis worried, he pondered.

To paraphrase his comments: There is a financial downpour soaking the global economy. Yet, Israelis are not reaching for an umbrella and waiting under a bus stop. They are running forward to get to the next stage in the economic cycle.

They want to know how to invest anything, somewhere, in order to be ready for the next sunny day. He may not have understood the pysche, but I felt that he had had a successful trip.

It is not all rosy in Israel. But this story is more than simply anecdotal inference. Shimon Peres, the President of Israel, believes that Dell will consider a large investment in the Jerusalem region. Daniel Vasella, the CEO of health giant Novartis, will raise their presence in the Holy Land.

Israel entered this recession with a fine economy. Since the mid 1980s, the banking system has been reformed consistently and sensibly. Wise and measured domestic policy will see the country through the rough. These factors indicate why there is cause for cautious optimism.

5 February 2009

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Categories: Business, Israel

This week, I attended a get-together with reps of Israel’s defence industry under the auspices of the Israeli Export Institute.

Surprise no’ 1: An introductory talk was given by the head of the Defence Ministry’s licensing team. The rules are clear and getting tighter by the day. Israeli companies need approval before signing contracts.

Opponents of Israeli arm exports beware – many of your complaints are without justification de facto. Israel does not export the naughty countries of the world.

It turns out that there are around 900 companies involved in this sector. The number of licenses have trebled in the past 4 years, but they are only given out once due diligence has been thoroughly completed.

Actually, the speech drew the wrath of manufacturers present in the room. They complained of a long drawn out process. And here’s the joke – for all the country’s high tech capabilities, the ministry is working with a software over a decade old. No wonder approvals often come through after competitors have overtaken their Israeli counterparts.

Surprise no’ 2: Most of the companies in this sector are not related to weapons manufacture. For example, ZAG Industries is entering the fray of RFID tech. Whitewater Security has a comprehensive platform to prevent terrorist penetration of water works.

I was very impressed by the capabilities of R.K. Diagostics. they provide a tailor-made solution for manufacturers, particularly for heavy vehicles.

And the irony: After the successes of previous Olympic games, 150 licenses were issued in 2008 for Israeli firms to submit tenders to Beijing. But none of them won a contract. Meanwhile, the UK, which is clamping down again on arms exports to Israel, has just signed a massive trade deal with the lovers of human rights in Red Square.

2 February 2009

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Categories: Business, Israel, Jerusalem

Several of my recent postings relate to the great tech available in the Jerusalem region re solar power, clean water and green heating capabilities.

You have to conclude that if there was a touch more investment available, Israel would suffer very little from water shortages, waste or even expensive fuel.

Cleantech is not the only area where Jerusalem excels. I have just received the latest issue of the Jerusalem Life Science Bulletin. The Holy City is full of modern miracles.

The briefing commences with details of the most recent breakthroughs in research . Israeli scientists reversing brain birth defects using stem cells. The identification of genes of a rare skin disease. And many more.

In terms of building strategies, the Kaiser Foundation Health Plan and BioOhio have signed agreements with local teams.

In academia, the “scientist” magazine ranks Israeli academic institutions in first, second places in its annual search ‘the best places to work in academia’ outside the US.

And all this news is wrapped by the International Nanotechnology Conference taking place at the end of March 2009 in Jerusalem.

Recession, maybe. But there are several Israeli enterprises pressing ahead for all that. Overseas investors take note of what is happening in Jerusalem.

26 January 2009

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Categories: Business, Israel

Last Friday, Britain fell into recession. Today, it was the turn of Israel to accept reality. In 2009, the economy is expected to retreat by 0.2% – not much compared to the UK et al. There again, Israel had been charging along at 5.0% on average for several years.

Most of us already know it. The employment service has reported that over 17,000 new people were looking for work in December 08, compared to 10,000 12 months previously. Microsoft and IBM’s r&d centres in Israel will lay off workers next month.

Why? Global recession is now hitting Israel’s exports. VCs are choosing their next high tech conquests carefully. And a 22-day war has to be paid for, putting a strain on the budget.

Significantly, the Tel Aviv Stock Exchange took a different view. It rose over half a percent today. One reason is the next expected drop in interest rates, already down to 1.75%. But the investors are more savvy than that.

I suggest that there is another for optimism. And it also points to route out of the recession, which a bold new Israeli government must consider.

In the past week alone, I have visited 3 Israeli companies in the cleantech sector. Each possesses a simple but disruptive, patented technology, which will add significantly to Israel’s future wealth.

Now, I have written previously about Israel’s strength in this sector. Jerusalem alone contains many of the world’s new techs. in solar heating. Globes has reported about investment opportunities in water technology.

The companies I met – water purification, biofuels and alternative heating – are linked by a key feature. They require investment capital. Within a year this will be converted into hundreds of jobs and valuable export revenue.

Currently, Israel’s government is paralysed by the forthcoming general election. And the “Sir Humpreys” are still caught up in redundant concepts for promoting high tech. It will be months before a plan of action is approved and then implemented! As the Neros pluck their fiddles in Jerusalem, the country is calling out for action.

Take a risk. Hand out some short term loans. Give these companies a chance, and then sell out quickly as the venture capitalists return to play in 18-36 months.

Who benefits? The people; the environment, the treasury. Sometimes, the simplest solutions are the most effective ones.

23 January 2009

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Categories: Business, Israel

Creating wealth in a spiralling global recession ain’t just a mathematical conundrum. In the UK, retail chains are folding. In Israel, the high tech sector is feeling the heat – actually the cold. The implosion at Nortel HQ will impact on Israel, employees, clients and suppliers. Microsoft’s retrenchment will not bypass its r&d centre in Israel. Money is tight.

“Building Wealth – Lessons From The British Aristocracy” is tongue-in-cheek, yet fascinating attempt to enable us to learn some lessons from history. The author, Nadav Manham, asks how could so many astute and wealthy people of influence in Nineteenth Century Britan lose so much money and so quickly.

His answer rests with “poverty of imagination”. You need to realise that the fundamentals have changed and act accordingly.

In Israel, we could rest on our laurels. This week, Moody’s did not downgrade Israel’s credit rating. Intel’s Israel plants will not be part of the company’s workforce cutbacks. Teva, the world’s largest manufacturer of generic drugs is recruiting 100 more employees. Etc.

All very encouraging, but not enough. The banks are not lending. The credit crunch has arrved, and thus even the most successful companies will be choked away from customary sources of liquidity.

I myself came across 2 examples of the squeeze this week. On Wednesday, I sat down with a serial entrepreneur, embarking on his next cleantech enterprise. A sold track record – his previous ventures is selling in the tens of millions annually – he now requires new venture capital. The uplift will be absolute to the economy in terms of employment and saved resources. Mega and in a short period of time. However, currently, the money tap is closed tight.

And I have been approached by an established hightech outfit. With pre-orders on their books, they need a credit line in order to launch a sales campaign of a new product. Their regular bank is not an option at this stage. No lending means less sales, which means less money to pay employees, which……

“In order to meet the minimum capital adequacy mandated by the Bank of Israel’s Supervisor of Banks Rony Hizkiyahu, the banks need to find an extra NIS 4 billion.”And the finance ministry is worringly quiet on the issue. Why?

Israel has a general election in less than 3 weeks. When a new governement is eventually sworn in, let us hope and pray that it brings with it a monetary policy that reaches out beyond Economic 101, as laid out in 1945.

19 January 2009

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Categories: Business, Israel, Palestinians

The Gaza war may have cost Israel around US$3b, but the economy has not collapsed. And yesterday, it was announced that commercial quantities of gas have been found off the coast of Haifa. It could be enough to meet Israel’s needs for decades, as well as help to further a greener energy policy.

So what’s the connection to the Gaza economy?

Step back. Since 1993 and the Oslo Accords, the Palestinian economy has been bolstered by overseas support, particularly from Europe. On average, 25% of the revenue of the Palestinian Authority has come from taxpayers from overseas governments. Although the World Bank has called this the largest support per capita of a population since World War II, there has been little effective accountability and transparency.

The Gaza economy in particular is heavily dependent on agriculture and the public sctor. Unfortunately, the quality greenhouses left behind after the Israeli evacuation in 2005 were soon ruined and became training grounds for military recruits.

Interestingly, despite opposition from the World Bank and Hamas’s animosity with Fatah, it is the civil service payroll that has risen significantly in the past two years. How? Dr Rachel Ehrenfeld, an expert on the funding in international terror, provides some answers. She notes that:

Despite Fatah-Hamas disagreements, the Palestinian Authority’s Fatah-led government announced on Jan. 15, 2008, its intentions to give Hamas 40% ($3.1 billion) of the $7.4 billion pledged in December 2007 by international donors. In October 2008, despite the crackdown on Fatah members in Gaza, the Palestinian Authority was paying the salaries of 77,000 “employees.” In December 2008, under U.S. and international pressure, Israel delivered between $64 million and $77 million in cash to Gaza.

In the past 2 weeks, Gulf States and UNRWA have promised around US$200m to repair Gaza. Yes, it is needed, desperately so. But will all the money go the the proper destinations? Given past experiences, that must be doubted.

There is an alternative to this economic waste. Step forward and recall what is now known about new gas fields near Haifa. In the summer of 2007, British Gas tried to reach an agreement with the Palestinian Authority to develop proven gas reserves in Gaza. The value to the local economy could be at least US$1 billion.

Since then, Hamas has invested in drilling and digging ……..tunnels, tunnels that smuggle weapons and contraband in order to satisfy their hatred against their enemies.

17 January 2009

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Categories: Business, Israel, Jerusalem

Last Thursday, I was co-moderator of a fantastic networking event. It linked the Jerusalem Business Networking Forum with the CleanIsrael Network, the Association of Renewable Energy Industries, and the Movement for a Stronger Israel.

11 new cleantech companies presented themselves in front of a strong audience, led by Naomi Zur. She is deputy mayor of Jerusalem and has a direct mandate to push this sector in the new administration.

What makes this so impressive? Well, in the midst of a global recession, a war and a new drought in this part of the Middle East, these 11 companies are seeking to make a difference. And not just wishful thinking. Glen Schwaber, with 15 years of experience in VCs and General Partner at Israel Cleantech Ventures noted that 3 years ago, nobody put their money in cleantech. Last year, around US$200m was committed to 20 projects in Israel.

The details. Jerusalem is already known as the world leader in developing solar energy tech. Papers delivered by enertglobal, G3Solar and others rammed home that message. Wind energy, biofuel, watertech etc are all fully represented in the Holy City. Cequesta Ltd is already delivering wastewater devices to Europe.

Essentially, these companies have struggles to find their way through “the system”. The activity is finally being acknowledged by central government. Sigal Admoni of the Industry Ministry, who presented for the first time in public a US$100 million national Renewable Energy Programme. Unlike many of the other politicians, she sat through all the company discussions.

On a cold winter’s night, there were a 100 + people in the room. They represented the interested and curious, biz dev types, and investors. The truth is that the IP content on show was worthy of a global audience.

It showed the way forward to a new wealth of commercial potential. I have generated 3 very key and exciting meetings as a result of the event.

13 January 2009

2 Comments

Categories: Business, Israel, Palestinian Society, Palestinians

If Israel has to fight a war,it must be doing so for two reasons – to protect its citizens and to ensure that the real military threat of Hamas does not resurface in the future.

Israel was established as a pluralistic society. For all the social and military constraints of its past and present, Israel is a vibrant centre for at least 4 global religions (and their internal frictions). It has 3 offical national languages. Non-Jews enter politics through their own party or with others. And thus Israel has built a firm basis for internal fusion.

That is a unique set of circumstances in the Middle East, a democracy worthy of protection. In fact, even as Israel fights its war with Hamas, on the ground, there are numerous coexistence projects moving forward – genuinely working towards a stronger society for all. Here are some brief examples: –

Just recently, under the auspices of the US-Israel Binational Science, 20 researchers, Israeli-Jew, Israeli non-Jew, and Palestinians met in Haifa to discuss potential routes of academic cooperation.

I-Rox is a software company, operated by ultra-orthodox Jewish women. It is currently developing a medical administration programme for the Palestinian Authority in Ramallah. One off? No – look at g.ho.st, co-owned by an Israeli and Palestinian partnership. As my good friend Lisa Damast has recorded, this shows how two politically diverse groups can successfully cooperate and coexist.

Personnel of the national ambulance brigade, Magen David Adom, come from all sectors of society. My daughter volunteers once a week, works with Muslims and enters their villages. And this last month was typical of that scenario.

These anecdotes, commercial or otherwise, are just a few of the large pile of detail that I come across every month. One of the main reasons for their existence is the basic wish of Israel to live with all.

It is that desire and opportunity that Hamas opposes. Through its charter, its hatred and its weapons, Hamas seeks to crush this progress and success.

9 January 2009

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Categories: Business, Israel

Global recession? War in Gaza? Yet again, more poor international press. The Israeli economy has faced all this in the past and still delivers to its trading partners.

The Israeli Ministry of Industry has just released its latest newsletter. It describes some of the leading M&As from the past few weeks, valued at over US$400. They include industry leaders, such as St Judes Medical from the USA and Thales from France.

In the other direction, Israeli internet giant, Checkpoint, has bought out Nokia’s security appliance business.

The newsletter leads wit a quote from international banker and Governor of the Bank of Israel, Stanley Fischer

“If there is a significant improvement in the security situation following the military operation, it will have a positive effect on the economy, and in particular on the scope of investments, both local and foreign.”

“My experience with crises over time has taught me to be optimistic. It takes a long time for a crisis to start off. We have known since mid-2007 that a crisis was on its way. In the end a crisis breaks out suddenly, but from my experience crises tend to end faster than expected.”

Not just the words of an optimistic senior civil servant. Despite some profit taking, the Tel Aviv Stock exchange rose 4% this week. In parallel, a special report from Moody’s has noted that:

“Israel’s present political and financial shocks do not pose an immediate threat to the country’s risk profile, including its A1 rating and stable outlook.”

Recession or war – there is smart investment money still around, and now you know why some of it is heading towards Israel.

7 January 2009

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Categories: Business, Israel, Kassam

As many colleagues overseas return to their desks, you can hear the unasked question in the conversation: “So how are you managing, whilst 20% of the country is at war?”

Today represents a typical day.

I had an early morning meeting in Jerusalem. On the way, I made a condolence call to my neighbour, whose nephew was killed in the fighting. Down the road is another mourning family, close friends of my kids. And opposite us, the parents are camped at a Tel Aviv hospital with their wounded son.

Go to a meeting with a smile they say. Actually, I was pleased to meet up with Cupron. Their CEO and I have a few bits of common past. It is wonderful to see a new tech coming through into Europe and America.

Next stop – income tax department. You think a war is going to stop them from working! Now, if you were to stop the flow of coffee to their staff…..

More seriously, my second investment call for the day, took me to the North West of Jerusalem, a family company with a small food empire, profitable and looking for a new injection of cash. One thing about Israelis – always rushing around but rarely 2 minutes away from their next bite to eat. A good industry to be in. So hopefully, this deal will work its through over the next few months.

Next up is a skype call linking a disruptive tech in the homeland security field to the UK. This is something that I have had my eye on for some time, and all sides sound keen. Very exciting and with some applications to the war in Gaza.

If there is any time left, I shall be working on the Jerusalem Cleantech Meet Up next Thursday, where I am the moderator. This is pitching 10 start ups in front of a large audience, including city hall bigwigs.

What’s the point? It’s fun and varied, but you cannot escape the fact that what is happening down south is terrible. Even today, Hamas sent over 10 Kassam rockets, which landed in Israeli population centres and cities. Not one was targeted at Israeli troops on the border. Equally, those in Gaza should not have to suffer.

What Israel is defending is her pluralistic society. Part of its strength is an economy, based on openess and trade with others. I try to carry on as normal, but I do not ignore the efforts of others less safe. Yes, you mention the war and you think of others less fortunate where ever they may be.

5 January 2009

1 Comment

Categories: Business, Israel, Kassam, Palestinians

Israel has spent much of her 60 years fighting wars to protect its existence. Despite these adversities, it is become a global high tech power and has recently joined the OECD.

The war with Hamas provides another example of how Israel’s economy continues to seek growth, despite thousands being conscripted and vast parts of the country under on-going rocket attack.

Here are 4 examples of what I mean: –

The Tel Aviv Stock Exchange has risen 6% during the first 9 days of hostilities. It accepts that the country is being run by strong team of economists, dedicated to long term financial stability.
In the same period, the shekel has not suffered any major devaluation against the major currencies, primarily for similar reasons to the above.
The Office of the Chief Scientist has just allocated another 225 m shekels ( US$60M) of government money to new high tech projects. Or look at LiveU, which has raised US$9 m, and whose TV tech is now helping live news to be broadcast into homes throughout the world.
Yesterday, I participated in a networking meeting, where the names of 6 Israeli companies were mentioned, all signing new agreements with overseas partners, specifically in the UK and in Romania.

The point: Invest in peace and growth, not in war machines. The result – optimistic predictions from overseas pundits.

Now contrast this to the economy of Gaza. The Palestinian Authority took over in 1993 under the Oslo Accords. Israel withdrew in 2005, and Hamas came to power over a year ago.

The successful greenhouses left behind by Israel and which received a US$15m from the World Bank are now dust bowls. Hamas has built hundreds of smuggling tunnels, but few houses and there are no bunkers for citizens (as in Israel). Ad-hoc factories for producing Kassam rockets have emerged throughout the region, but there is no attempt to create a civilian manufacturing base.

And so the Gaza tragedy goes on.

War is terrible for all sides. Israel should be recognised for taking the courageous decision to defend her citizens. Its economy will probably emerge from this period of turmoil without too many battle scars.

And here is a central lesson here for Israel’s neighbours in society building. Wealth creation does not come via exporting hatred.

Pages

US Dollar takes on the Israeli shekel

Israeli Securities – a vote of confidence

Tourism boom during Israel’s recession

Beyond the economic gloom – Israel’s model

Ponzi schemes in the Middle East

Israel’s economy – future prospects

Gaza’s economy and the feeding of Hamas

Economic news from the Holy Land

Israeli economy and general elections

Israeli financial system: When bad weather is a sign to invest

Israel’s Defence Industry – surprising changes

Cleantech to Biotech in Jerusalem

Israel in recession…and so?

Creating wealth in a recession – suggestions for Israel

Israel and Gaza – gas economies

Cleantech in Israel – Jerusalem model

Why Israel has to fight (1) – pluralism

Look who’s investing in Israel

Running an Israeli company – don’t mention the….

Economics at war: Israel-Hamas comparison

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