Global stock market tempest batters Tel Aviv exchange, too

JERUSALEM, Aug. 30 (JTA) — As the world markets go, so goes the Tel Aviv Stock Exchange. The gloom plaguing the world financial markets caused the Tel Aviv exchange to drop by more than 2 percent Sunday. For the month of August, the value of stocks traded on the exchange fell by nearly 10 percent. The shekel has lost 4 percent of its value in recent days and is now trading at 3.87 to the dollar. While the declines were linked to economic woes in Russia and the Far East, there were indications that Israel’s economy is also troubled. According to figures issued Sunday by the Central Bureau of Statistics, Israel’s economic slowdown is continuing. Israeli exports are declining for the first time in years, the bureau said, adding that there are some 215,00 people unemployed — which is 9.4 percent of the labor force. Meanwhile, opposition leader Ehud Barak of the Labor Party called for early elections, citing the state of the economy. The leader of the Gesher Party, David Levy, issued a similar call and attacked the government’s economic and social policies. “It seems as if there is no government in Israel,” said Levy, who resigned in January as foreign minister in a dispute with Prime Minister Benjamin Netanyahu over social funding. Finance Minister Ya’acov Ne’eman assured the Israeli public this week that the nation’s economy would regain its footing, but there also were less optimistic voices to be heard. Hannan Achsaf, president of Motorola Israel, suggested that countries with sharply devalued currencies would soon begin making cheaper exports available on the world — and Israeli — markets. He said this could reduce local sales by Israeli firms and thereby increase unemployment. Ofra Strauss-Lahat, vice president of the Elite-Strauss Group, predicted that foreign investors would regard Israel as part of the world’s developing economies and would divest their holdings on the Tel Aviv Stock Exchange. Danny Fishman, director general of the investment bank Tamir-Fishman, worried that Israeli high-tech firms would be adversely affected because they rely heavily on emerging markets for their exports.