TASE seen as a 'defensive haven,' Citigroup says

By SUSAN LERNER
June 13, 2006 05:32
2 minute read.

 
X

Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief

UPGRADE YOUR JPOST EXPERIENCE FOR 5$ PER MONTH Show me later

Emerging markets continue to take a bruising just one month after reaching an alltime high, but Israel continues to garner praise as a bright spot in the gloom. "The past month is starting to take on some of the characteristics of the 'great' emerging markets sell-offs of the past," Citigroup strategist Andrew Howell told clients over the weekend in a research report on the CEEMEA, or Central Eastern Europe Middle East and Africa. Although he said it was not yet clear whether markets were still in a correction phase or whether the 2003-2006 bull market was over, Howell noted that the selling of the past month has been sharper than the losses seen from 1994-1995, though the sell-offs of 1997-1998 and 2000-2002 were far worse in both magnitude and duration. So far, however, Howell said the damage to fundamentals looks modest in most markets and, despite expectations that markets will rebound later this year, he believes caution is warranted for now. To ride out the storm, Howell recommended Israel as a "defensive haven," upgrading his weighting to "neutral" from "underweight" and adding Teva Pharmaceutical Industries Ltd., the world's largest generic drugmaker, to the firm's "Focus List." "The market looks relatively inexpensive, offers an attractive dividend yield and has been considerably less volatile than the choppier environments in emerging Europe and South Africa," Howell said. "The global exposure of Teva and the Israeli technology stocks should provide a decent cushion in the near-term." At the same time, Howell reiterated his "overweight" recommendation on Egypt but cut his rating on Turkey to "underweight" from "neutral." Citigroup joins Deutsche Bank, which late last month called Israel a "safe haven" for those looking to invest in emerging markets, and HSBC Holdings, which last week also dubbed Tel Aviv a "defensive" market. Israel's benchmark index, the TA-25, has declined about 10% over the past month. "Israel is considered one of the stronger markets in the emerging markets group... [but] it does still belong to this group," chimed in Bank Hapoalim analyst Yaron Fridman. "This means that when foreigners take funds home, the local market suffers from funds leaving as well." Despite the turmoil in global markets, Fridman reiterated his belief that the domestic economy still looks good and will support the equity markets in the long-term. In the nearterm, however, he said international market forces will be stronger than traditional economic forces, so that the risk level in the domestic equity market is very high, reducing its attractiveness in the next few weeks.

Join Jerusalem Post Premium Plus now for just $5 and upgrade your experience with an ads-free website and exclusive content. Click here>>

Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection

By GLOBES, NIV ELIS