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Moody’s Investors Service upgrades Israel’s credit rating

1.  Moody’s Investors Service has upgraded Israel’s credit rating from A2 to A1, the highest since 1948, reflecting the growing confidence in the long-term viability of Israel’s economy, and its capability to withstand global and regional economic, political and security uncertainties. Moody’s follows in the footsteps of Fitch and Standard & Poor, who have upgraded Israel’s credit rating to A+ (equal to A1) earlier in 2008 (Ynet, April 17, 2008).

 

2IBM’s third acquisition of an Israeli company in 2008 (The Marker, April 18, 2008): Diligent ($165MN), following FilesX ($80MN) and XIV ($250MN). Symantec acquired Israel’s AppStream for $55MN (Globes, April 17). GE Healthcare acquired Israel’s VersaMed for $40MN (Globes, March 28).

 

3.  Japan’s SBI led a $27MN round by Israel’s Quark Pharma (Globes, April 9). Meritech Capital led a $20MN 4th round by Israel’s Imperva, joined by Accel Partners, Greylock Partners and US Ventures (Globes, April 9). Sequoia, Bessmer and Lehman Bros invested $19MN in a 3rd round by Israel’s StoreWize (The Marker, April 10). Draper, Fisher Jurvetson (DFJ) co-led a $12MN 1st round of private placement by Israel’s Siklu.  Argonut VC fund participated as well (The Marker, April 17). Sequoia, TL Ventures and ABS Venture invested $8MN in Israel’s ScaleMP (The Marker, April 3).

 

4.  HP has followed in the footsteps of Microsoft, IBM, EMC and SAP, establishing its International Technology District (ITD), which examines potential joint ventures with Israel’s high tech industries. This is the first ITD of HP, which has invested some $6BN in acquiring Israeli companies (Mercury, Scitex Vision, Indigo and Noor Microprinters (Globes April 15).

 

5.  London Economist, April 3, 2008: For a country with so many wars, Israel still has an economy with the power to astonish…despite the costs of the 2005 Gaza pull-out and the 2006 Lebanon War. Israel has spent years peeling back layers of its once-socialist economy…It now has the most NASDAQ-listed companies after Canada and the US. More recently privatizations, pension reforms and deregulation have contributed their bit… A capital-markets reform in 2005 reduced the banks’ dominance and boosted national savings.  The government has introduced commercial budget-management systems, put a 1.7% cap on budget growth and committed itself to gradual cuts in taxes, thus providing a cushion against Israel’s chronic political instability… Businesses have confidence that even if the leaders change, basic policy doesn’t.  Last year Israel was invited to join the Organization for Economic Cooperation and Development (OECD), official confirmation of its status as a developed country… Global technology giants such as Intel have long been putting advanced production facilities like chip-wafer fabrication plants in Israel… Israel leads the world in R&D spending as a proportion of GDP, but this is heavily concentrated in high-tech. In more traditional industries the rate is just a quarter of America’s… The proportion of the population in the labor market is 56%, considerably lower than in America, though almost the same as in the first 15 European Union members…The country’s bureaucrats still have a lot of catching up to do… Credit and investor protection are excellent, but bureaucracy is overweening…The unions’ powers of disruption are another socialist legacy…Today unions are far weaker, but still hold a lot of sway in the public sector, ports, airports and other essential services, all suffer periodic strikes…Israel’s income inequality has also climbed steadily to reach one of the highest levels in the developed world…Public sector debt, which reached over 100% of GDP in 2003, is still a hefty 80% today…”

 

 




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Straight from the Jerusalem Boardroom #248
https://bit.ly/3u29k9g

Foreign investment in Israel’s high-tech companies surged to new heights in the 1st quarter of 2021 – $5.7bn in 172 deals – which is up 89% over the impressive 4th quarter of 2020 and double the volume of the 1st quarter of 2020.

2020 was the first year of surpassing $10bn in capital raised by the Israeli high-tech sector from investors in the US, Asia and Europe, who trust the maturity of Israel’s brain power. Investments in Israeli companies more than tripled in six years, reflecting the effective response by Israeli startups to the technological, medical, pharmaceutical, educational, social and digital challenges posed by Covid-19.

Israel’s economic performance in defiance of Covid-19 is presented by Dr. Adam Reuter, the Chairman and Founder of “Financial Immunities,” Israel’s largest financial-risk management firm, and the co-author of Israel – Island of Success:

  1. Israel has led the globe in the rapid administration of Covid-19 vaccinations due to effective negotiations with Pfizer and an efficient, country-wide medical infrastructure.
  2. Israel is the second lowest among OECD countries in the number of Covid-19 deaths per number of Covid-19 cases: 0.7% compared to the 2.3% OECD average. Israel features a young population (median age of 30 compared to the OECD’s 42) and an effective country-wide medical infrastructure, including top level HMOs and hospitals.
  3. Israel is ranked 12th from the bottom among the 37 OECD countries in the number of deaths per million inhabitants: 645 compared to 1,145 OECD average.
  4. The International Monetary Fund’s 2025 GDP growth forecast for OECD countries: Israel – 4%, OECD average – 2.2%, US – 1.8%, Australia – 2.5%, Ireland – 2.6%, France and Canada – 1.7%, the UK – 1.6%, Germany – 1.2%, etc.
  5. Israel’s 2020 GDP was reduced by 2.5%, compared to the OECD average reduction of 4.1%, South Korea – 1%, Norway – 0.8%, Australia – 2.6%, US – 3.5%, Japan – 4.8%, Germany – 5%, France – 8%, the UK – 10% reduction, etc. GDP growth was recorded in New Zealand – 2.4% and Ireland – 3.5%.
  6. In 2020, Israel was ranked 20th among the 37 members of the OECD in terms of GDP per capita, featuring $43,000 (GDP – $408bn), ahead of Japan, Italy and Spain, and very close behind the UK ($44,000) and France ($45,000).
  7. Israel’s debt-to-GDP ratio increased from 60% in 2019 to 72% in 2020, compared to the OECD’s average increase from 66% to 82%. The 2020’s debt-to-GDP ratio was 266% in Japan, Italy – 161%, the US – 131%, Germany – 73%, etc.
  8. Israel’s foreign exchange reserves-to-GDP ratio of 41% (3rd among the OECD countries) attests to its financial stability, and Israel’s capability to raise foreign credit promptly in a cost-effective manner. Israel’s foreign exchange reserves in March 2021 – $186bn.
  9. During the past decade, Standard and Poor (S&P) accorded Israel a positive credit rating trend, unlike the negative trend for the G-7 countries. In 2020, notwithstanding Covid-19, Israel’s credit rating (S&P) remained at AA.
  10. Some 380 global high-tech giants operate in Israel, including Microsoft, Amazon, IBM, Intel, Cisco, Apple, Verizon, Applied Materials, Dell, HP, Kodak, Oracle, Philips, SAP, Medtronics, GM, eBay, GE, etc. Israel leads the world in the ratio of research and development investment to GDP: 4.9%. 85% of this investment comes from the business sector.

 




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