The entire interview with Xenia’s Anat Segal is part of our new subscription newsletter, Israel Opportunity Investor. You can find out more about the product and the opportunities we cover at www.israelnewsletter.com.

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Please tell us about Xenia?
Anat Segal, CEO: Xenia is an investment firm founded in mid-2003 by a group of entrepreneurs with the vision of being an incubation powerhouse, engaged in the initiation and building of successful high-tech companies in the areas of IT and medical devices. I would say that there are two main similarities we share with traditional Venture Capital (VC) firms.  We invest in startups in return for equity, and the terms of our deals are similar.

What are the differences?
AS: One of the differences is that our investments are in really, really early stage companies. What are   typically referred to as seed and pre-seed stage deals. We establish the company alongside the entrepreneur. Our money is typically the first money in the firm. Sometimes there is friend-and-family round.  We are first and foremost an investment firm. We base ourselves on the unique structure of the Israeli incubator model. (Continue »)

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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.

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June was a tough month for the market in general and Israel stocks were hit with a double whammy: tech stocks proved they were no longer immune to the weakening economy and the shekel continued its march higher versus the dollar.

Both EIS, the iShares MSCI Israel Capped Investable Market Index Fund, and the TAV, the NETS TA-25 Index Fund, were down about 3-4% with the overall Nasdaq down about 8%.

If you look closer at the chart, you’ll see that the TAV just recently outperformed the EIS.  TEVA Pharmaceuticals (TEVA) was recently hit hard off of news of more imminent generic competition to Teva’s Copaxone (tables turned, eh?) in spite of some incrementally positive news on progress on a drug to treat Parkinsons.

We’ve written about the EIS’s extreme exposure to the generic pharma giant (weighing in at almost 25% of EIS) and this in turn, makes iShares’ Israel ETF more susceptible to fluctuations in TEVA’s stock price and ultimately, not as good a proxy for the entire Israeli market (of which TEVA constitutes less than 10% of market cap and which the TAV attempts to mimic).

Some additional reading:

• Introducing the First ‘Real’ Israel ETF
• Bulling up for some real TA-25 exposure for US Investors
• Dave Fry’s ETF Digest discusses existing Israeli ETFs

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Jacada (JCDA) signs another material deal — this time it’s a follow-on deal with Nationwide Insurance.  According to the release, “This most recent contract extends the use of the Jacada solution to the Property and Casualty Direct Sales and Service group, to further automate and simplify access to customer, policy and billing information.”

Defense contractor Elbit Systems (ESLT) signed a $20 million deal to supply its Hermes unmanned air vehicles (UAV) to an unnamed European country.  The agreement is for air vehicles and ground systems to be delivered in 2009, according to Reuters.

Motorola, a strategic partner of NICE Systems (NICE), announced the receipt of an order on behalf of Denmark’s Interior Ministry.  The order is for an integration of NICE Inform, the firm’s multi-media incident information management solution in an effort to consolidate radio-over-IP content from the Danish public safety network.

Speaking of NICE, NICE’s Actimize division also announced a deal with partner Unisys in Singapore which would have Actimize’s transaction surveillance system installed at Singapore’s largest financial institution, DBS.  Actimize’s system analyzes transactions and recognizes potentially suspicious patterns across a bank’s product channels.  DBS is the first bank in Asia to install such a system on an end-to-end, cross-border, and bank-wide basis.

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