Record investments in Israel see fall-off in last quarter
Foreign investments in Israel hit a record $11.4 billion last year against $9 billion in 1999, but fell sharply in the last quarter, partly due to the Palestinian uprising, the central bank said Thursday, February 1.
The Bank of Israel, the country's central bank, said the uprising or intifada made itself felt most in October, the conflict's peak month, when $160 million of Israeli stocks were cashed in. Foreign investment averaged $3.3 billion for the first three quarters but sank to $1.6 billion during the final three months of 2000.
Investors also withdrew $160 million in deposits in October but in the following two months put back $1.08 billion. The Bank of Israel said the dip in the final quarter could not be explained fully by the intifada which started September 28, saying the bumpy US financial markets were also to blame. The bank said foreign investors made their decisions based on "long term strategy" and not simply the intifada, which has left nearly 400 dead.
Nonetheless, the central bank called the year a success for foreign investment, much of it directly in Israeli companies. Whereas foreign investments averaged only $2.2 billion per year from 1997 to 1999, direct investment averaged $5 billion in 2000.
Share purchases in Israeli companies rose to $4 billion on the Israeli stock exchange and on foreign bourses, most notably in the United States. The figures were up from an average of $3 billion annually between 1997 and 1999.—(AFP)
© Agence France Presse 2000
© 2001 Mena Report (www.menareport.com)