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BlueStar Indexes: Shekel Weakness Masks Equity Gains

Published on Dec 09 2014 // Business and Financial News, Market, The Daily Pick

Israeli equity benchmark performance was directed primarily by the foreign exchange market in November: The shekel-denominated TA-
100 index gained nearly as much as the S&P 500 index – despite flat to down months in most other Emerging and Developed Markets –
while the BlueStar Israel Global Index and the MSCI Israel Index both declined by more than 50 bps. Israeli Global Technology stocks as
defined by the BlueStar Israel Global Technology IndexTM (“BIGITechTM”) on the other hand, rose by 45 bps in November. When the Israeli
shekel weakens against the dollar shekel-denominated TASE-listed shares decline in dollar terms. The shekel weakened primarily because
demand for dollar-denominated assets continues to increase but also because of the call for government elections in Israel which creates
uncertainty around the government’s budget for 2015 and weakens consumer and business confidence. However, the OECD’s November
Economic Outlook stated that it expects Israeli economic growth to rebound sharply in 2015 and 2016 from its recent slump while the lack
of further monetary easing by the Bank of Israel suggests the economy will stabilize without further monetary stimulus and that it does not
want the shekel to weaken further. We can extrapolate two investment themes from Israeli equity performance in November…Read More>>

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