BUSINESS
The Israeli Ilarliet's Buzzing
American
investors
are enjoying
sweet returns
from Israel
stocks.
AARON HALABE
Special to The Jewish News
L
ike speculators in 19th
century California,
modern-day investors
are looking for gold in
Israeli securities.
Over the past two
years, many of the 32
Israel-based securities that
are traded on U.S. stock ex-
changes have flourished, often
outpacing the performances of
their larger, more established
competitors.
Hottest among them is
Scitex Corp., a leading pro-
ducer of imaging work sta-
tions, software and peripheral
equipment used by commer-
cial printers. Its stock split 2
for 1 last year.
Analysts and private in-
vestors cite Scitex as an exam-
ple of the resurgence of Israeli
securities. Other high-
technology firms such as Elbit
Computers, ECI Telcom, In-
telligent Information Systems
and Fibronix experienced a 25
percent average increase in
their share prices in 1990.
Securities experts are nor-
mally cautious about recom-
mending foreign investments,
particularly in Israel. But
they agree that Israeli
securities have rebounded
from sluggish performances
that marked the early and
mid-1980s — a slump that
snowballed in 1983 — when
an insider trading scandal in
the Tel Aviv stock exchange
sent stock prices and investor
confidence plummeting.
After surging in the late
1980s, Israeli securities now
are maintaining and even in-
creasing their value despite
political and economic in-
stability in Israel, worldwide
financial turmoil and the Gulf
War. Analysts say this in-
dicates the re-emergence of
Israeli stocks.
"We think there are some
significant opportunities in
some of these stocks," says
Martha Siefman, a financial
consultant with Shearson
Lehman Brothers in Birm-
ingham. "The volatility ob-
viously will come from con-
tinued problems in the Middle
East. But if we are truly on
our way to peace, or at least
opening up some trade bar-
riers, there could be some very
exciting opportunities in some
of the stocks. These companies
really have some excellent
technical know-how and are
expanding into the U.S. and
other markets throughout the
world fairly rapidly."
"From the market point of
view," says Ira Lutzky, a retail
broker and certified financial
planner with Shearson in
Detroit, "both the Israeli equi-
ty market and the Israeli
equities traded in the United
States have had an extraor-
dinary run this year. In the
first six months of the year,
they're up well above the
American market averages."
Mr. Lutzky believes Israeli
companies are attracting in-
vestors because they are pro-
Morris Baker believes Israel is on
its way to financial independence.
ducing quality products for
niche markets.
"They're not trying to be
everything to everybody," Mr.
Lutsky says. "What they're
trying to do is to find some-
thing, be the best in the world
at it and then market the hell
out of it.
"Their products work. They
are top of the line products, so
the entire world is the market-
place. It's not just the United
States out of charity buying
something from an Israeli
company. The entire world is
now buying Israeli products
because their products are un-
surpassed. And that is a ma-
jor change from the past."
Morris Baker, a member of
the Michigan/Israel Invest-
ment Club (MIIC), believes
future investments in Israeli
companies will invigorate the
nation's economy, allowing it
to be more self-sufficient.
"Israel lives on the concept
of being a financially troubl-
ed nation," Mr. Baker says.
"Everybody rises to help her.
Most of the support that
Israel has received over the
past 42 years is because of
negative publicity that she's
financially in trouble,
militarily in trouble.
"She has the intifida and
the Arabs on her back, so we
have to support her and give
her more aid. But the truth
of the matter is that some of
those things were more rele-
vant 15 or 20 years ago. Now
slowly, but surely, she's not
only become independent
militarily, but also financial-
ly," Mr. Baker says.
In his three years of club
involvement, Mr. Baker has
invested $900 which
represents the club-
mandated minimum invest-
ment of $25 per month.
"That $900 is worth close to
$4,000 now We bought Scitex
at $1 15/16 years ago, and
that stock is up to $32 now.
But there are a number of
other stocks like that."
The investment club relies
on an executive research
committee which analyzes
various Israeli offerings and
THE DETROIT JEWISH NEWS
57