"There is potential for further rises"
Zvi Stepak, chairman, The Meitav Group
"The rises we have seen in the Israeli market are certainly justified. They stemmed from a combination of cheap share prices, zero interest rates, and an improvement in the economic climate and in company financials. In the course of the rises there were three corrections, but they were deluxe corrections of just 6-8%, because there were not many sellers. Today, stock prices in Israel are neither cheap nor expensive, and certainly not a bubble. There is potential for further rises, but with profit taking and technical corrections at levels we have seen recently.
"A change in direction come could from two sources. One is a crisis like Dubai but much bigger, and there are quite a few such possibilities, mainly in countries like Greece, Turkey, and Hungary. The market is highly sensitive at this time, because of the steep rises. If something happens to raise sensitivity even higher, last year's trauma, of which the scars are still fresh, will return.
"The second factor is liable to come in March-April next year, when it will be possible to gauge the direction of the US economy, and to know whether it will breathe independently after it is removed from artificial respiration. 2010 will be a positive year if we get past March-April intact."
"Stock market rises have run out of steam"
Rafi Gozlan, macro strategist at Leader Capital Markets
"We are at the stage where the rises on the stock market have run out of steam. Portfolios need to be balanced and the risk level reduced. If a portfolio has a large exposure to shares, this should be cut. When you look at next year's growth, it's possible to be optimistic up to the half-year point, because the economy is still at the stage of replenishment of inventory. By contrast, uncertainty is still high about the second half of 2010. If we see an additional energy injection from the fiscal side, this will not go down well with the markets, because it means the economy is still very dependent on government support. It also means a further rise in deficits, and then there could be a less than peasant reaction in the bond market.
"On the other hand, there is till high liquidity because of the zero interest rate environment. This is a dangerous market of a lack of alternatives, and it is not clear that price levels are justified, but since the alternative is investment at zero interest, the markets could till go higher. The bottom line is that an investor who goes into the stock market today needs to understand that the risk level is very high.
"Growth is still not stable"
Gili Cohen, chief investment manager, Excellence
"It wouldn't be right to try and guess market trends, since in principle the stock market is still good. There's no need to get in or out. The lack of an investment alternative is the most influential factor.
"The rises have an economic basis, but it's hard to believe that these price levels will remain so strong. The burden of proof is on the market, it needs to justify the rises.
"The global economy is still not in a situation of stable, long-term growth. The improvement in the economic situation depends on many factors, which must be kept constantly under review."
"Raising interest rates won't harm the market"
Eldad Tamir, CEO, Tamir Fishman
"We are in a period in which the statistics and the macro figures will continue to be better, and that's not such a big surprise. People are constantly surprised, but it makes a great deal of sense. The period of hysteria saw negative figures, whereas now good figures will start to be released, and so the psychological background for rises on the markets will continue to be positive.
"From that to an assumption that markets will continue to rise strongly is a long way. In some sectors there will be rises, and in some not. This is a period for being selective and cautious. Not everything we buy will go up. There are still problematic sectors like real estate, which in general suffers from high leverage and a problem in demand. I estimate that interest rates will continue to rise, but that won’t weigh on the markets, because the mood and general perceptions are stronger than anything"
Published by Globes [online], Israel business news - www.globes-online.com - on December 2, 2009
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