Even with predictions of crude oil hitting $200-300 per barrel, the current drop in crude has it moving very quickly down to the $100 level. While investors have been focused on how the drop in oil will impact oil related stocks, I think they need to take a bit more of a Macro view and look at the impact on emerging market investing. The first country that comes to mind is Brazil. Brazil has been one of the world’s best performing markets so far this year, but a drop in crude prices may severely impact their market going forward as so much market weighting is given to companies in the oil industry.  To a lesser extant this applies to Latin America as a whole.

With crude prices dropping it wouldn’t be too surprising for other commodity prices to follow suit. So much emerging market economic growth has centered around the huge run up in commodity prices, as many of these countries are blessed with rich supplies of raw materials. Russia and other natural resource based economies like Australia, and even Canada could be in for a rude awakening if we get a continued drop off in commodity prices.

So which emerging markets will benefit? I think Israel is one. Blessed with little in the way of natural resources, but with an abundance of creative and entrepreneurial people, Israel will continue to produce cutting edge innovation that powers the technological revolution that we are in the midst of. I wouldn’t be surprised to see rotation in emerging market investments with natural resource based economies being under-weighted and countries that produce value added goods, be over-weighted.

Aaron Katsman, IsraelNewsletter.com

Disclosure: Author’s fund has no positions in any stock mentioned 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

Once again Israel has demonstrated that what it lacks in natural resources it more than makes up for in brainpower. Lucky for the world that it’s a renewable resource. News that Azilect, a drug that is co-developed by Teva Pharmaceuticals (TEVA), has been successful in the treatment of Parkinson’s Disease, is another in the long-line of cutting edge innovations produced in Israel, and exported to the the rest of the world.

According to a report in Haaretz: “Azilect, which is the brand name for rasagiline, was tested in 1 milligram tablets as a treatment for Parkinson’s Disease. Teva said yesterday that the drug can actually slow the disease’s progression, which can’t be said for any other therapy for the so-far incurable nervous system condition.”

For Teva, this drug has the potential to generate $1billion is sales, and be a mega-drug. Teva, biggest generic drug company in the world, has also turned into a R&D powerhouse focusing on neurological diseases. Copaxone, another Teva product which treats Multiple Sclerosis, has turned into the number 1 global treatment in the fight against MS.

For the more than 4 million Parkinson’s sufferers, this breakthrough could be life changing. Teva hopes to get regulatory permits to sell the drug not only as a treatment of the disease but also as a way to slow down the progression of the disease. They are shooting for the end of ‘09 to get the permits. For both investors and Parkinson’s sufferers, let’s hope they get the permits sooner rather than later.

Disclosure: Author’s fund has a position in TEVA as of 6/17/08.

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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