Swiss banking giant, UBS, put out a call that was negative on the Shekel. The bank said that while they believe Israel wont slip into a recession, and will continue with positive GDP growth, that growth will be much slower than in previous years, and that will adversely impact the Israeli currency.
According to a Jpost report: “The shekel traded near a one-month low against the dollar after Roderick Ngotho, a UBS strategist in London, wrote that Israel is “facing both internal and external pressures,” and may feel the “most pain during this year’s global recession. We expect the US to register a recession this year and though we do not expect Israel to be in recession, we anticipate very low growth at 1 percent this year, the lowest in seven years,” he wrote in a note to clients. “We remain negative on
the shekel.”
Maybe so, but positive growth sure looks good these days.
Has the massive shekel run finally come to an end? Deutsche Bank thinks so. Globes reports today that DB analysts think that the recently-announced 4-fold increase of dollar purchases (up to $100 million/day) by the Bank of Israel may be the proverbial top for the Israeli shekel, which has enjoyed a huge run against most of the world’s top currencies over the past couple of years. We’ve written voluminously on the shekel’s rise that’s even prompted certain Israeli hi-tech firms to offshore engineering work to the U.S.Globes also recently reported that wages of senior Israeli high tech managers are beginning to come under pressure.
With gas station managers in the U.S. rumaging through storage units due to a shortage of ‘4’s’ to display on their pumps, I wonder if Israeli gas station managers are having the same problem with ‘8’s’? Brutal.
The large multinational tech firms (and now consumer products firms) continue to use Israel as a R&D hub. Interesting historical view/story of Sun Microsystems Israel here. It’s part of a larger series done by Ayelet Noff on Israeli High Tech. Om Malik also shared his thoughts on a recent trip to Israel for the Israel 2008 conference here. VC Cafe’s Eze Vidra has a good article about Israeli firms receiving funding but fighting for survival here.
Tel Aviv Stock Exchange mulls change in market hours here.
Written by: Israel Investor Newsletter | May 7, 2008
IOI’s Zack Miller and Aaron Katsman were interviewed by CNBC’s Squawk Box. CNBC is here in Israel celebrating Israel’s 60th Birthday. See the video here.
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