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Yoram Ettinger
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Yoram Ettinger
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Optimistic state of Israel’s economy

Straight from the Jerusalem Boardroom #232
https://bit.ly/2ORgFaB
(previous issues: https://bit.ly/2NB51fk)

  1. The international credit rating agency, Standard & Poor (S&P), upgraded Israel’s credit rating to AA- with a stable outlook, the highest ever for Israel. S&P highlighted Israel’s fiscal discipline, higher than expected economic growth rate, the reduction of debt-to-GDP-ratio from 70% (ten years ago) to 60% in 2018, enhanced competitiveness and evolving from a global net-borrower into a global net-lender. Moody’s credit rating agency just updated its rating outlook for Israel from “stable” to “positive” (Globes, Aug. 5).
  2. According to Adam Reuter, chairman and founder of Financial Immunities, Israel’s largest financial risk-management firm and author of Israel – Island of Success, Israel’s demography – compared to other OECD countries – bodes well for its economic future. Israel’s median age – which is the key to economic innovations and growth when accompanied by sound educational infrastructure – is 30, significantly younger than the US (38), Europe (44) and Japan (48).  Moreover, while Israel’s labor participation rate is growing, the percentage of the public sector employees is declining: 18%, compared to the USA’s 16%, Norway’s 38%, Denmark’s 31%, Sweden’s 26%, France’s 25%, Britain’s 21%, etc. Unlike Europe, Israel does not require the importation of labor force, in order to sustain economic growth (Globes Business Daily, Sept. 17, 2018).
  3. Israel’s estimated 2018 economic growth is 3.3%, compared to the USA – 3%, China – 6.6%, Germany – 2.5%, Britain – 1.5% and Japan – 1.2%. Israel’s estimated 2018 inflation rate is 1%, compared to the USA – 2.5%, Germany – 1.6%, Britain – 4.4% and Japan – 1.1%. Israel’s estimated 2018 unemployment rate is 4.2%, compared to the US – 3.9%, Germany – 5.1%, Britain – 4.4% and Japan – 2.9% (Globes, Oct. 8).
  4. PepsiCo acquired the Israeli countertop carbonated water machine maker, SodaStream, for $3.2BN, adding healthier products to its portfolio and pushing a more environmentally friendly agenda. SodaStream will be run as an independent division, maintaining its current management team, in order to sustain its entrepreneurial culture (Fortune Magazine, Aug. 20).
  5. The US Dublin-based Medtronic acquired Israel’s Mazor Robotics for $1.6BN, the largest amount ever paid for an Israeli medical company, exceeding the July 2017 $1.1BN acquisition of Neuroderm by Mitsubishi Tanabe Pharma and the $1BN acquisition of Given Imaging by Covidien, which is owned by Medtronics (Globes, Sept. 26)).
  6. Previous major “exits” by Israeli companies (acquired by non-Israeli giants): Intel acquired Mobileye – $15.2BN (2017), Gilead Sciences acquired Kite Pharma – $11.9BN (2017), International Flavors and Fragrances (IFF) acquired Frutarom – $7.1BN (August, 2018), Cisco acquired NDS – $5BN (2012), Lucent acquired Chromatis – $4.75BN (2000), HP acquired Mercury – $4.5BN (2006), KLA-Tencor acquired Orbotech – $3.4BN (March, 2018), SanDisc acquired MSystems – $1.6BN (2006) and Google acquired Waze – $1.3BN (2013).
  7. Dozens of Intel’s top executives are holding Intel’s first ever annual management strategic deliberations in Israel. According to Intel’s interim CEO, Bob Swan, “the visit highlights our belief that Israel is a catalyst in promoting the technology, which will drive the coming era. Israel will become a global center for autonomous driving technology, Artificial Intelligence (AI) and quantum core computing.”  Intel’s plant in Kiryat Gat, Israel was named Intel’s most outstanding fab.  Intel – which employs 12,000 persons in Israel – has enhanced ties with Israel’s leading technological institute, the Haifa Technion, highlighting the inauguration of a joint Intel-Technion venture in the area of Artificial Intelligence (Globes, Oct. 8).
  8. China’s Sanan Optoelectronics negotiates a $300MN acquisition of Israel’s ColorChip (Globes, Aug. 28). The Minneapolis-based Perforce Software acquired Israel’s Perfecto for $200MN (Globes, Oct. 8). The US BlackRock acquired 7% of Israel’s Plus500 – an international online trading service company – for $160MN (Globes, Sept. 27).  China’s Venus Medtech, a heart valve-maker, acquired Israel’s Keystone Heart, a cerebral embolic protection device maker for $100MN (Globes, Sept. 27).  The Austin-based Vista Equity Partners acquired Israel’s Starhome Mach, a fraud prevention technology company, for $100MN (Globes, Oct. 3). The leading email and data security Lexington, MA-based Mimecast acquired Israel’s security software developer, Solebit, for $100MN (Globes, Aug. 1).
  9. Israel’s eToro – one of Israel’s 480 fin-tech companies – raised $100MN from investors led by China’s Minsheng Financial Holding, joined by Japan’s SBI Group and the (South) Korea Investment Partners. Israeli fin-tech companies raised a record-breaking $422MN during the first half of 2018 – a record breaking total, 33% more than the previous six months. 16 additional multinational financial firms have invested – and concluded strategic partnership agreements – in Israel. The newcomers include MasterCard, AmTrust Financial Services, TDBank, Bank of Montreal, China’s Fosun Investment Group and France’s insurance giant, AXA (Calcalist’s CTech, Sept. 5).
  10. Israeli innovations are changing the lives of billions: https://bit.ly/2y5t9ll

 




Videos

The post-1967 turning point of US-Israel cooperation

Israeli benefits to the US taxpayer exceed US foreign aid to Israel

Iran - A Clear And Present Danger To The USA

Exposing the myth of the Arab demographic time bomb

Israel’s Covid-19 Economic Trends

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.

 




Videos

The post-1967 turning point of US-Israel cooperation

Israeli benefits to the US taxpayer exceed US foreign aid to Israel

Iran - A Clear And Present Danger To The USA

Exposing the myth of the Arab demographic time bomb