Tel Aviv Stock Market Up

The Tel Aviv Stock Exchange bounced back again Thursday in brisk trading, recovering 5-7 percent of the 18-20 percent it lost in share prices this week. But observers said it was still too early to forecast how the exchange would behave in the coming days.

The Bank of Israel reported that conversion to cash orders for some 66 percent of the commercial bank shares which had been frozen totalled 1.4 billion shekels ($875 million) out of 2 billion shekels ($1.25 billion) held by the public. The funds will be deposited in the investors’ accounts on Oct. 30.

Capital markets commissioner Yehuda Drori said he expected no dramatic effects on the economy from the large amounts of cash that will be injected by the end of the month with the share payments.

He estimated that half of the sums cashed in will be deposited almost immediately in savings plans or be invested. The balance would not necessarily be used to finance consumption, he added.

Dan Halperin, formerly Israel’s economic affairs minister in Washington, wrote in Maariv Wednesday that since the U.S. government’s fiscal year is just beginning, the Wall Street decline will have no effect on U.S. aid to Israel.

It is reasonable to assume, however, that the ability of Jewish philanthropists to fulfill their donation pledges will be affected, since most of them have a great deal of their money invested in the stock market, he wrote.

Yediot Aharonot quoted Deputy Finance Minister Adiel Amorai as saying that the entire $1.2 billion in U.S. non-military aid for this year will be transferred to Israel in another 10 days, and will not be affected by the American financial crisis.

The aid money will put Israel’s foreign currency reserves at some $5.7 billion, the largest sum in years, and Israel is likely to consider early repayment of debts to the United States, especially those with high interest and less desirable terms.