"We believe that in the short-term the dollar will continue to strengthen but over the long-term it will fall. The shekel-dollar rate is likely to be in the range of NIS 3.932-4.065/$," writes Union Bank in its weekly review.
Union Bank believes that the Bank of Israel will take a timeout from interest rate cuts this month, in order to review the current shekel-dollar level and assess whether the current fiscal policy should be retained.
Union Bank also believes that the current price levels on the Tel Aviv Stock Exchange (TASE) are high, while it notes the existence of surplus cash on the market that is looking for better investment instruments than bank deposits and bonds, in light of the continuing fall in the interest rate.
However, the possibility of an escalation in the current security crisis, the difference in yields between long bonds in Israel and the US, and between the various corporate bonds in Israel, as well as the multitude of offerings on the TASE are indicators of the growing risk that the local market faces.
Published by Globes [online], Israel business news - www.globes.co.il - on June 3, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007