Finance- Israel Stock Exchange - Essay Example

Finance- Israeli Stock Exchange The following brief discussion covers three substantive articles that relate to significant events or issues in the country of Israel that may influence business conditions and hence the stock market. Each article will be briefly summarized and its implications for the stock market will be considered. The three articles will be presented in chronological order.Yeshayahu, Kobi (July 15, 2010). “Israel no longer attractive for venture capital – survey”. Globes, Israel Business Arena. Web. http://www.globes.co.

il/serveen/globes/docview.asp?did=1000574876.Globes, Israel Business Arena is one of the leading business publications in Israel. This article reports on a the Deloitte 2010 Global Venture Capital Survey, carried out in conjunction with venture capital associations around the world. The headline captures the negative results of the survey and the bad news for the Israeli stock market. The survey found that the majority of venture capital firms were looking first and foremost to increase their foreign investment in China (27%) and then India (14%).

The article does not contain the precise numbers for Israel but notes that interest has fallen since 2009.Commenting on the results, Igal Brightman CPA, chairman and CEO of Deloitte Brightman Almagor Zohar & Co.and managing partner of the TMT group in Deloitte, said, "The migration of venture capital eastward indicates that the global high-tech industry is seeking new growth opportunities. The main indicators in the Israeli economy, among them accession to the OECD, the fall in the shekel-dollar exchange rate and the rise in salary levels, make Israel less attractive in comparison with the alternatives.

" This is very bad news for the Israeli economy as foreign venture capital investment, particularly in the hi-tech sector has been a key engine of growth in the Israeli economy and stock market in the past.Daniel, Robert, (November 8, 2010) “Market Watch: Israel stocks fall; gas firms hit by tax reports”. The Wall Street Journal Digital Network. Web. http://www.marketwatch.com/story/israel-stocks-fall-tax-reports-hit-gas-firms-2010-11-08.This article reports on a slight decline in the Israeli stock market on Monday, November 8, 2010.

However, more substantively it identifies factors underlying the drop in, and poor prospects for the future in the natural gas sector and the telecom sector. The article reports that the Israeli government is considering a new financial arrangements with natural gas producers. “A government committee is planning to recommend a special tax on profits from gas fields.. And the panel may propose to cancel the depletion allowance — a tax deduction allotted to resource developers — in a move that would effectively raise the government’s royalties” While these changes would increase government revenues from natural gas producers they would have a negative impact on the earnings and stock prices of Israeli natural gas producers.

The article also includes bad news for telecoms in Israel. It notes that Leader Capital Markets is reporting, “ average revenue per user is declining due to price competition and more use of data instead of voice services. This trend could sharpen as the government is encouraging new competitors to enter the market.” This report will have a negative impact on the earnings and stock prices of Israeli telecoms. Daniel, Robert. (November 14, 2010). “Market Watch: Israel stocks off; energy firms’ reporting eyed”.

The Wall Street Journal Digital Network. Web. http://www.marketwatch.com/story/israel-stocks-off-energy-firms-reporting-eyed-2010-11-14?reflink=MW_news_stmp.This article is from the same publication and written by the same journalist as the preceding one. Also, it contains more negative news for the Israeli stock market, specifically the energy sector. Daniel reports that, “the Israel Securities Authority is developing new rules governing how energy companies must report their results to investors.

” He also opines that this will place further downward pressure on energy companies active in Israel and listed on the Israeli stock exchange. Together, these three articles all contain negative news for the Israeli stock markets.ReferencesDaniel, Robert, (November 8, 2010) “Market Watch: Israel stocks fall; gas firms hit by tax reports”. The Wall Street Journal Digital Network. Web. http://www.marketwatch.com/story/israel-stocks-fall-tax-reports-hit-gas-firms-2010-11-08. Daniel, Robert.

(November 14, 2010). “Market Watch: Israel stocks off; energy firms’ reporting eyed”. The Wall Street Journal Digital Network. Web. http://www.marketwatch.com/story/israel-stocks-off-energy-firms-reporting-eyed-2010-11-14?reflink=MW_news_stmp. Yeshayahu, Kobi (July 15, 2010). “Israel no longer attractive for venture capital – survey”. Globes, Israel Business Arena. Web. http://www.globes.co.il/serveen/globes/docview.asp?did=1000574876.