Israel Matzav

If you didn't invest in Israel, you should have

I have an old friend who used to do institutional trading in New York via online access from Israel back in the '90's. The joke in that office used to be that someone would ask "What's going on with the Tel Aviv Stock Exchange?" and someone (usually my friend) would answer "Who cares?" Well, not anymore.

For the past ten years, the Tel Aviv Stock Exchange has produced the best risk-adjusted returns (that means that if you take more risk, you should get more return) of any stock exchange in the developed world. Really. And I remember when we were considered an emerging market.

The Bloomberg Riskless Return Ranking shows the Tel Aviv TA-25 Index (TA-25) returned 7.6 percent in the 10 years ended February 17, after adjusting for volatility, the highest among 24 developed- nation benchmark indexes. Israel beat Hong Kong’s Hang Seng Index (HSI), the next-best market with a risk-adjusted gain of 6.7%, and Norway, which had the highest total return.

Israel outperformed as it fought a month-long battle against Hezbollah in 2006, was involved in a similar conflict with Hamas two years later and is now threatened by Iran’s nuclear program. International investors including Warren Buffett bought local companies and the economy, steered by Bank of Israel Governor Stanley Fischer, grew more than twice as fast as the US last year. Israel’s stocks may extend gains as Apple Inc. and IBM acquire the country’s technology startups.

“Israel is an exciting place to invest,” Michael Steinhardt, the former hedge fund manager who produced returns averaging 24% a year over almost three decades until he retired in 1995, said in a telephone interview from Fisher Island, Florida. “The country is surrounded by enemies, it’s always on the edge of extinction, but it expands and prospers.”

...

The Israeli gauge returned 161% including dividends over the last decade, the third-best performance among developed markets after Norway’s OBX Index and the Hang Seng.

“This is a great achievement,” Israeli Prime Minister Benjamin Netanyahu said in response to the article in the Knesset yesterday.

Read the whole thing. And if you want to acquire a company here, I know a good lawyer :-)

Labels: Israeli high tech, Tel Aviv Stock Exchange

posted by Carl in Jerusalem @ 8:11 AM