Teva Pharmaceuticals (TEVA) out with earnings late last night.  Globes reports this morning that Copazone sales rose 29% year over year while overall sales increased 18% over 2007.  Reporting $2.82 billion over analysts’ expectations of $2.68, TEVA beat on the top line.  TEVA also beat with $.65 on EPS.  According to Globes, “As of July 23, 2008, Teva had 149 product applications awaiting final FDA approval, including 41 tentative approvals.”

Bank of Israel raises interest rates to 4%.  Read more.

Zoran (ZRAN) reported disappointing earnings last night.  Transcript here.

Just eight months after its launch, Sheldon Adelson’s free Hebrew daily, Yisrael Hayom, has become the second most widely circulated newspaper in Israel, edging out Maariv.

Scopus Video (SCOP) moves into black and according to the company, things look even better in the second half of 2008.

Here’s an interesting interview with VC Cafe’s Eze Vidra pitting Israel against Sand Hill Road.

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What to do about the strong Shekel? That is a question I hear about 10 times a day form my clients. Everyone has been talking about the impact the strong local currency has had on the economy. The Bank of Israel has even attempted intervening in the currency markets, mostly with little success. So what to do? Let the free market work its magic.

Once again we see how market forces are able to correct short-term imbalances. Over the last week the US Dollar has surged more than 6% against the Shekel. Part of this was due to BOI intervention, but most of the impact has come from two large Israeli companies taking advantage of a strong currency to make very large foreign acquisitions.

Teva Pharmaceuticals (TEVA) $7.5 billion acquisition of Barr (BRL) and Koor Industries $900 million investment into Credit Suisse (CS) has sparked Dollar buying by these acquiring firms to complete the deals. According to a Globes article: ” Bank Leumi will provide Teva with $1.8 billion in financing, is expected to boost domestic demand for foreign currency. Capital market sources say that Teva has been buying dollars on a large scale in the past few days for the acquisition. In addition, IDB Holding Corp. Ltd.  subsidiary Koor Industries Ltd.’s announced that it plans to double its investment in Credit Suisse Group to NIS 3 billion, and has also been buying foreign currency for this purpose.”

We have also recently seen European companies buying up American firms, for the same reason. They also have a strong currency and want to get good deals. Be it Genentech (DNA) or Anheuser-Busch (BUD) while their price tags were massive, the acquiring firm actually bought these companies for a 20-30% discount in local currency. Now they need to go out and get the Dollars to complete the deal. This should help the greenback as well.

The lesson we can learn: leave markets alone, and let them do their thing, and ultimately, aberrations will work themselves out.

Aaron Katsman, IsraelNewsletter.com

Disclosure: Author’s fund has a position in TEVA as of 7/23/08.

Please see our Disclaimer HERE.

NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.

Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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Aaron Katsman
IsraelNewsletter.com

In what has been an extremely volatile trading session, which has seen the shekel trade near the 3.21 level against the US dollar, news that Bank of Israel Governor Stanley Fischer has increased the level of BOI intervention in the currency market has sent the dollar surging by more than 2.25%. The BOI announced that it will increase it’s buy-up of the greenback to a $100 million a day.

The continued rise in the Shekel has defied all logic. Even yesterday, the shekel strengthened by more than 1%, as Iran announced the testing of missiles that have the range to hit Israel. Under normal market conditions that news would have sent the Shekel reeling, but it just didn’t happen.

Let’s see if fundamental reasoning returns to the local currency market on the heels of the BOI move, or if this move is just a knee-jerk reaction that will reverse in the next few days.

Please see our Disclaimer HERE.

NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.

Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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Aaron Katsman
IsraelNewsletter.com

With global financial markets in turmoil and investors losing trillions of dollars of wealth, who would imagine that in Israel, investors’ financial assets are growing?  In a surprising report issued by the Bank of Israel reported  by Globes: “Despite global market turmoil and the shekel’s appreciation against the dollar and euro, Israelis’ financial assets grew by an additional NIS 16.5 billion in May 2008 to NIS 2.08 trillion, an all-time high.” This marks an increase of more than 6.5% through the end of May. Giddy up!

This just goes to show how strong the Israeli economy is. I don’t think that this number includes home ownership, and most Israelis are homeowners, so the real amount of wealth, not just financial assets, being created is very impressive. Even as local stock markets get hit, Israelis are just making more money and for a change, saving it. Alongside the US, Israel has a low savings level, so this number points to a potential behavioral change. If markets drop yet financial assets rise it must mean that more and more money is being invested. That increase in savings is a great sign moving forward.

Disclosure: Author’s fund has no position in any stock mentioned as of 7/07/08.

Please see our Disclaimer HERE.

NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.

Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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