The Israeli trade deficit continued to widen in June as a strong Shekel and the cost of fuel imports rose more than the growth in exports. As reported in the Jpost, “The deficit, excluding diamonds, ships and aircraft, increased to a seasonally adjusted $1.27 billion from $1.04b. a year ago, the Central Bureau of Statistics said in a preliminary report Sunday.” I have never thought trade balances mean a whole lot. So what if you run a trade deficit? As colleague Zack ‘check out our new website redesign‘ Miller said to me over a cup of coffee, ” Isn’t it obvious that Israel will become a net importer, as the country becomes wealthier?” Giddy up!

Microsoft (MSFT) is at it again. The Redmond based software giant has agreed to purchase another Israeli company. This time it’s data quality start-up Zoomix. According to unnamed sources in Globes, purchase price is between $20-30 million. Hey Softie, can you spare a million or two?

Hey, anyone know what’s going on at Fundtech (FNDT)? The stock has surged over the last month by more than 15% on heavy volume, in the face of strong headwinds provided by the general market. Fundtech, which provides financial transaction processing software solutions for financial institutions all over the world, has managed to continue to sign deals even as IT spending in the financial sector remains sluggish.

Part of the puzzle as to the dramatic fall in shares of BluePhoenix (BPHX) has been revealed (aside from declining revenues, foggy outlook…). It turns out that US investment group Gilder Gagnon Howe & Co. sold off most of their holdings in the company. Globes reports that according to SEC filings, GGHC held 354,000 BluePhoenix shares at the end of June down from more than 2.2 million shares held at the end of Q1 ‘08. That’s a huge amount of stock hitting the market for such a thinly traded share.

Aaron Katsman, IsraelNewsletter.com

Disclosure: Author’s fund has a position in FNDT, BPHX. He has no position in any other stock mentioned as of 7/14/08.

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
www.IsraelNewsletter.com  

With 2007 about to finish, it’s time to look forward to 2008. Here are a few of my predictions for the new year. Before I start I just want to make clear I don’t expect anyone to hold me to what I say, but of course if I actually get something right, rest assured I will let you know about it.

1- At some point during the year the price of crude oil will trade below $75 a barrel. This will be great for the consumer as they save a lot of money at the pump, and will cause a crashing of many alternative energy stocks, especially the Solar plays like First Solar(FSLR).

2- There will be no recession in the US economy, despite the best efforts of the media to “will” one. While the economy should slow somewhat during the first half of ‘08, the economy will grow enough to stay out of a recession, and the second half of ‘08 should bring back 4+% GDP growth.

3- The Rudy Giuliani/John McCain ticket will surprisingly win the US presidential election. With Republicans given virtually no chance to hang on to the White House, with a strong economy and the continued  new-found success of the war in Iraq, they not only win but win back control of Congress as well.

4- Late in the summer the current Israeli government headed by PM Ehud Olmert will fall, and new elections will be called.

5- Picking up from a lackluster ‘07, with regard to M&A of Israeli publicly traded companies in the US, ‘08 will have no less than 6 major deals. Look for Gilat(GILT), Retalix(RTLX), Commtouch(CTCH), Comverse Technology(CMVT.pk), CEVA(CEVA), and Fundtech(FNDT) to be acquired.

6- The earth will cool, there will be no global warming.

7- After completing an undefeated season and winning the Super Bowl, the New England Patriots’ winning streak is snapped in week 3 of the ‘08 NFL season.

8- As much as I would like, most of these predictions will not come true.

We should all have a year of health, and happiness.

Disclosure: Author’s fund holds a position in GILT,CMVT.pk,CTCH,RTLX and FNDT. He has no position in any other stock mentioned as of 12/31/07.

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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