Sometime in 2009 or 2010, Israel should be granted membership with the Organisation for Economic Cooperation and Development (OECD), an organization that brings together the governments of countries committed to democracy and the market economy. The government has said that achieving membership is “a matter of strategic importance.”
Because Israel wants membership in the organization, the country has already implemented reforms, including pro-market and pro-competition reform and legal reform.
Israel’s economy is being challenged by the rising inflation that has hit many countries in recent months, reports Amotz Asa-El for MarketWatch. In the year ending June, prices rose 4.8%. On the bright side, it’s a far cry from the 415% inflation the country grappled with in 1984.
One of the largest industries in Israel is the pharmaceutical, as it’s home to the world’s largest generic drug maker, Teva (TEVA). In the second quarter of 2008, it was one of only two of the country’s industries to increase exports; pharmaceuticals were up by 44%, while mineral and quarry industry exports went up 26%, reports Yael Gross-Englander for Globes Online.
This year, two funds with differing constructions have been launched to give investors a chance to access this growing and changing area of the world. They feature similar top holdings, but very different weightings:
- NETS TA-25 (TAV): The TA-25 is Israel’s flagship index of the largest companies listed on the Tel Aviv Stock Exchange. The index is 26% financials, 26% telecommunications and technology, 21% chemicals and industry and 10% pharmaceuticals and health care. TAV launched on May 21 of this year. Teva is 8.8% of the fund and is the third-largest holding. The top two holdings are Israel Chemicals Limited (9.2%) and Bank Leumi (8.8%).
- iShares MSCI Israel Cap Investable Market Index (EIS): The pharmaceutical industry is given a much heavier weighting in this fund, with 40.6% of the assets. That’s followed by 21.8% in chemicals and industry; 15.4% in financials and 14.6% in telecommunications and technology. Teva is the top holding, with 22.5% of the assets, followed by Israel Chemicals at 14.6% and Bank Leumi at 4.7%. The fund launched on March 26 of this year.