Harvard University denies that it is divesting from Israel. Harvard spokesman John Longbrake said that the changes in the portfolio of Harvard Management Company were not politically motivated, but based purely on economic considerations, which were actually the result of the strength of Israel's economy.
The story that Harvard Management Company's second quarter 13-F statement to the US Securities and Exchange Commission (SEC) did not include a number of Israeli companies has been widely reported, including by "Globes". No reason for the sale was given in the F13 form.
On the basis of Harvard Management Company's 13-F form "Globes" reported that stated in it sold 483,590 shares in Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) for $30.5 million; 52,360 shares in NICE Systems Ltd. (Nasdaq: NICE; TASE: NICE) for $1.67 million; 102,940 shares in Check Point Software Technologies Ltd. (Nasdaq: CHKP) for $3.6 million; 32,400 shares in Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) for $1.1 million, and 80,000 Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) shares for $1.8 million.
Longbrake told "Foreign Policy" blog "The Cable" that the filing showed only a change in holdings, not a change in policy. "The University has not divested from Israel. Israel was moved from the MSCI, our benchmark in emerging markets, to the EAFE index in May due to its successful growth. Our emerging markets holdings were rebalanced accordingly," he said.
Longbrake added that Harvard was still invested in Israel, but did not go into specifics. He said the filing in question only represents a small portion of Harvard's total portfolio, which reach $26 billion. In other words, Israel's growth and development resulted in a status change whereby the stocks could no longer be considered "emerging market" holdings, requiring Harvard to rebalance its emerging market portfolio.
"The Media Line", which specializes in coverage of the Middle East, quotes analysts as saying that Harvard's actions were business, not political, decisions.
"This is pure economics and I don’t think it was because of the Arab boycott. Harvard did not liquidate its investments in Israeli shares," Info-Prod Research (Middle East) Ltd. managing director Gil Feiler, and director of the Middle East Business and Economic Research Institute at Interdisciplinary Center Herzliya, told "The Media Line". "They didn’t eliminate their investments in Israeli stocks. They still have tens of millions of dollars invested, and if you are going to boycott Israel you sell all your stocks."
Cellcom CFO Yaacov Heen told "The Media Line", "There are some funds which invest only in emerging markets. So Harvard had to sell our stock because Israel is no longer classified as an emerging market and they no longer have the ability to hold this stock within the emerging markets fund." He added, "It’s more technical than strategic or an issue against Israel. I have asked my international relations people to check it and we believe it’s because Israel was reclassified as a MSCI developed country in May 2010."
Nonetheless, even though analysts declare unequivocally that Harvard's move purely business, the reports about so-called "divestment" from Israel ignited an online uproar, both for and against.
Israeli spokespeople told "Globes" that the sale caused unease among Israeli companies and organizations, who knew perfectly well that Harvard had no intention of boycotting Israel.
However, groups that favor a boycott of Israel over its policies in the territories praised the news. Boycott, Divestment, and Sanctions (BDS) for Palestine national committee coordinate Hind Awwad told "The Media Line", "We welcome Harvard's decision."
"The Media Line" notes "There is an active campaign to convince administrators at Harvard, the oldest US institution of higher learning, to divest from Israel."
Published by Globes [online], Israel business news - www.globes-online.com - on August 17, 2010
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