Citigroup rates Israeli market Underweight"

The report cites disappointing performance from the banks, and the unstable government.

Citigroup Global Markets has published a review on expected Central and Eastern Europe, the Middle East and Africa (CEEMEA) market performance in 2007. The investment bank is generally upbeat on these markets, saying Although four consecutive years of gains are already unusual in emerging markets, we expect to see a fifth in 2007 (and a sixth in CEEMEA). This is largely thanks to a supportive global environment of decent growth and ample liquidity.

Citigroup also gives Israel an Underweight rating, saying. Disappointing performance of the banks in the third quarter indicates that the decent economic growth profile is not benefiting key sectors in the equity market as much as hoped for. We see upside in Teva, but not for the technology sector, and we continue to see this defensive market as an appropriate funding vehicle for other positions in the region. The bank also cites the countrys unstable government.

Citigroups 2007 macroeconomic predictions for Israel include a budget surplus of 3.5% of GDP, a current accounts deficit of 2.3% of GDP and a fiscal balance deficit of 1.4% of GDP, 4.4% GDP growth, and 0.8% inflation. It also predicts that the current 5% interest rate will remain unchanged over the next 12 months.

Citigroups Israeli stock pick is Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA), with a target price of $46 and return of 43% over the next 12 months.

Published by Globes [online], Israel business news - - on December 6, 2006

Copyright of Globes Publisher Itonut (1983) Ltd. 2006

View comments in rows
Update by email about comments talkback

Twitter Facebook Linkedin RSS Newsletters Israel Business Conference 2018