Bank Leumi believes that the government may decide to permit a lower level of gas exports than recommeded by the Tzemach Commitee. "We believe that, despite the update in the gas reserves at Leviathan, it cannot be ruled out that the government will further reduce the original Tzemach Committee recommendations, in view of the disappointments at the Myra and Sarah wells, which were the basis of the committee's original recommendations," says Bank Leumi today in its weekly capital market review.
Bank Leumi believes that trading on the TASE will mainly be affected by trends on foreign markets, as well as by financial statements for the first quarter, the economic policy that the government is drawing up, the budget for the next two years, and the austerity measures, which are liable to affect companies' profits and private consumption.
As for the foreign currency market, Bank Leumi says, "It cannot be ruled out that the Bank of Israel's intervention in the foreign currency market is liable to attract speculators, by putting a floor under the shekel-dollar exchange rate and renewing the currency war of 2011, when the Bank of Israel bought large amounts of dollars in the market."
The banks says that capital inflows and the start of gas production from Tamar will cause the shekel to strengthen, but that, on the other hand, the Bank of Israel's intervention in foreign currency trading indicates its commitment to prevent a further substantial strengthening of the shekel. Bank Leumi therefore predicts that the shekel will continue to be traded at around its current levels.
Published by Globes [online], Israel business news - www.globes-online.com - on May 5, 2013
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