"It's a market for investors with nerves of steel"

The Tel Aviv Stock Exchange (TASE) fell sharply at the opening today following Friday's falls on Wall Street and in Asian markets. Analysts told "Globes" this morning that they were not surprised by these developments, and some even recommend buying shares.

Harel Pia Mutual Funds general manager Uri Rabinovich told "Globes", "This is a market for investors with nerves of steel. We predicted that 2008 would be stormy, and the storm has already hit. However, in my opinion the market has overshot, and the rest of the month will probably be better."

Rabinovich added, "Israel's market resembles the US market in terms of direction though not in strength. Twice in recent years poor US employment figures caused a sharp short-term market response, in 2000 and in 2005. The recovery took longer the first time, but the correction was rapid in 2005, and this, I believe, will be the case this time round.

Rabinovich predicts that both the Israeli and US markets will perform better later this month than they have in first days of the new year. He says that it is worthwhile for TASE investors to consider today's market drop as an opportunity and to buy shares towards the end of the session. He cautioned, however, "I advise waiting until the end of the day before making any changes."

IBI Investment House managing director Zeev Milbauer said, "Unquestionably, what is happening in the US is worrying, Friday's falls on Wall Street, like today's falls on the TASE are characterized by their lack of selectivity."

Psagot Ofek Investment House analyst Amichay Bombach said, "The downward direction in the US is clear. We're seeing it in all recently published economic indices. Added to the fact that oil has hit $100 a barrel these data suggest that a recession is coming in the US."

Bombach suggests a more moderate scenario for the impact of US developments on the TASE. "We believe that the slowdown in the US will continue over the coming months, which means that the falls on the stock markets to some extent reflect the coming slowdown," he said.

Published by Globes [online], Israel business news - www.globes-online.com - on January 6, 2008

"It's a market for investors with nerves of steel"

Analysts respond to the market drop.