Israel’s stock market – what next?
Take a world credit crunch. Add in the local holiday season. Mix in a relatively high rate of interest. And what would you expect the Tel Aviv stock market to move?
Well, you are unlikely to expect it to jump 5%, which is exactly what it did today, Sunday.
The reasons are not clear. it has emerged that the pension funds are actively buying. And again, I stress that the fundamentals of the economy are sound – eg, unemployment has yet to rise. There is a tourist boom, which is likely to continue into 2009.
I have spent the past few days in shopping malls with my kids. Parking was a problem, as people flocked to empty their wallets in the shops. Yesterday, we went touring in the lower Galilee region, visiting a herbs and spices centre. We left at nightfall and the crowds were still flocking in.
Yes, the government has revised downwards its growth forecast for 2009. And “Israel is likely to face a credit crunch in 2009,” a senior regulator predicts, as reported in Globes newspaper.
The truth is that so far Israel is coping well. The authorities have reacted calmly and solidly. The internal economy is operating solidly. The country is prepared to face any winter storms, even if they are not just full of pretty white snows.