January
9th
Intel Launches New Israeli-Developed Pentium Chip; $100 Mln Investment
The Pentium MMX processor developed at Intel’s Haifa research centre became standard for PCs. It offers enhanced multimedia capabilities.
28th
Frenkel Lowers Interest Rate by 0.5% to 14.2%
The rate was reduced to 12.7% in June’s shenanigans, but rose again to 13.4% in September, remaining at that level for the rest of the year. By December, the real interest rate was a record 6%.
February
3rd
Economic Expectations Soar
A "Globes"-Smith Institute survey found that 30% of Israelis expected their economic situation to be better in six months, while 11% expected it to be worse. In a similar survey in September, the expectations were: better - 25%; worse - 22%.
13th
Job Seekers Up 6% in Jan - 3 Development Towns Added to Unemployment Centers List
Counterpointing high-tech success, rising unemployment was the main theme of 1997, as traditional industries shed jobs and economic activity declined. By the end of the year, over 150,000 people were registered unemployed, and the number of acute unemployment centers (towns with a jobless rate over 10%) was 15.
March
4th Restraint of Trade Commissioner Approves Generali-Migdal Deal
Bank Leumi sold the Migdal insurance company to the Italian insurance giant to comply with legislation requiring banks to reduce non-financial assets. The sale became controversial because of claims Generali concealed insurance policies of Holocaust victims.
6th Court Convicts 6 Insurance Companies’ Managers of Cartel in Plea Bargain
The convictions related to a cartel the managers conspired to set up in 1992, and led to calls for their dismissal, but the companies resisted.
11th
Israeli Job Fairs to Take Place in New York and San Francisco
A shortage of appropriately skilled workers emerged as the limiting factor on the growth of Israel’s high-tech industries.
28th
Dead at 75 - Israeli Billionaire Shoul Eisenberg
Through his Israel Corporation, Eisenberg controlled a large chunk of the Israeli economy. His death sparked a bitter, and as yet unresolved, family feud over the inheritance.
April
8th Alex. Brown In Israel: Orckit Underwriter and Scitex Consultant
This was part of an important trend in 1997 - the increasing involvement of US finance houses in Israel. Merrill Lynch, Goldman Sachs, BancAmerica Robertson Stephens, Bankers Trust, Smith Barney, Morgan Stanley, Brean Murray, Hambrecht & Quist, Lehman Brothers, were other names we conjured with during the year.
16th
Discount Bank Share Offer Closes Successfully; State Raises NIS 210 Mln
Privatisation gathers momentum. The public offering was five times oversubscribed.
May
7th Strauss: Partners for Elite Will Be Considered in Future
After a protracted struggle, the Strauss family bought out the Federman family shares in coffee and confectionery manufacturer Elite. Ice-cream and dairy foods company Strauss, in which French food company Danone bought a 20% stake for $56 million in February, became the challenger to Osem-Nestle.
15th Indigo Q1 ’97 Losses: $21.6 Mln
Indigo continued to be in trouble, though its results improved as the year wore on. Later talk of a merger with Scitex, which reported a quarterly profit in the second quarter for the first time in a year, came to nothing.
29th State Raises NIS 630 Mln; Bank Leumi Share Bloc Closes 12% Above Minimum Price
This was the biggest share offering in Israel’s history. The State is expected to offer more of the bank’s shares in 1998.
June
18th Minister of Finance Dan Meridor Resigns; Allied Sources: Netanyahu, Lieberman Took Steps to Remove Him
Bank of Israel governor Frenkel demanded a wider exchange rate fluctuation band. Meridor said this would mean revaluation and higher unemployment, and demanded lower interest rates. Netanyahu ganged up with Frenkel, and saw off his political rival.
18th $500 Mln Surplus Supply in Foreign Currency Trading; Bank of Israel Bought Every Penny
The Bank of Israel’s year-to-date foreign currency purchases to counter demand for the high interest shekel and keep the exchange rate within the fluctuation band were $6.5 billion. After the band was widened the next day, Bank of Israel intervention ceased - until December. The shekel devalued 5.7% by the end of the month.
19th US Transfers $100 Mln to Jordan from Israeli, Egyptian Aid Budgets"
A drop in the ocean in terms of total US aid to Israel and Egypt, US Secretary of State Madeleine Albright called it a token of esteem for Jordan’s role in the Middle East peace process.
July
9th
Comfy, Rogosin and ILD Issues Successful
The Comfy IPO was 1.62 times oversubscribed, and raised NIS 102 million. The company then bombed, and earned the title of the year’s worst issue.
10th Ne’eman Enters Ministry of Finance
After being acquitted of charges which caused his resignation as Minister of Justice, lawyer Ya’akov Ne’eman returned to the government, putting the nose of touted favourite for the Finance hot seat Ariel Sharon temporarily out of joint.
17th
Int’l Call War Begins: Barak Invests $1.5 Mln in Initial Campaign
Barak and Golden Lines entered the ring, taking much larger market shares from Bezeq International than were predicted. Israel became one of the cheapest places in the world from which to make an overseas call, though the companies’ losses mean the party might not last.
23rd Claridge Buys 10% of Koor From Shamrock; Receives Option to Buy Further 10%
Stanley Gold was disappointed with the return on his investment, and upset by the Conversion Bill. His Shamrock group made a $100 million capital gain. Confounding speculation at the time, Claridge left Benny Gaon, who took Koor from rags to riches, in charge.
23rd ’97 First Half Hotel Overnights Drop 5%
It was a miserable year for incoming tourism. Prime Minister Benjamin Netanyahu blamed overpriced hotels, to the hoteliers outrage. A "Globes"-Maalot study , published in September, concluded that peace and security were the main requirements for Israel’s tourist industry to thrive.
24th New Israeli Hit on Wall Street
Carmiel-based Galileo Technologies, founded in 1993, raised $51 million on $334 million company value. The company designs processors for embedded systems. The issue price was $17. The stock jumped to $26.40 on its first day of trading, peaked at $45 in October, but was back to $25.50 at the year end.
August
7th New Record Indices, NIS 290 Mln Index-Linked Demand
The Mishtanim index hit 311.76 points, and the Maof 317.66 points, marking rises of 48% and 45% since the start of the year. But things went downhill from there, and, at the year end, the indices had still not regained these levels.
11th
Easing of Foreign Exchange Controls: Bank of Israel to Allow Israeli Holding Cos. to Buy Real
Estate Overseas
Part of a process of foreign currency deregulation aimed at making the shekel a hard currency.
15th Non-Stop TASE
The Tel Aviv Stock Exchange inaugurated computerised continuous trading. By the end of the year, all shares on the main stock list, the Mishtanim list, transferred to the new method, and the Mishtanim index was replaced by the Tel Aviv 100.
31st
Deutsche Telekom to Buy 21% of VocalTec for $48 Mln
Israeli company VocalTec is a pioneer in Internet telephony. The deal was completed in December.
September
5th Africa-Israel: All Stores in Ramat Aviv Mall Will Be Closed Saturday
Bank Leumi sold Africa-Israel to the orthodox Lev Levayev in 1996. Levayev’s refusal to operate the company’s prestigious new shopping mall on Saturdays was controversial, but there was still a waiting list of would-be tenants.
8th Arison Group Wins Bank Hapoalim Tender, Will Pay $1.37 Bln in Cash to State
The biggest privatisation prize of them all. Hapoalim is Israel’s largest bank, with ramified industrial holdings. Ted Arison beat the consortium led by Eliezer Fishman, one of the owners of "Globes".
12th Kitan Management Decides to Close Israeli Sewing Factories, Transfer Sewing to Jordan
A by-product of the peace process has been imported unemployment. The closure of Kitan’s factory in Nazareth, and the placing of Clal’s Gibor-Sabrina factory in receivership, were newsworthy examples of the decline of Israel’s once proud clothing and textiles industry.
19th Study: US Jewry’s Donations to Israel Show Steady Decline
The Conversion Bill, which would make Reform and Conservative conversions to Judaism invalid in Israel, was seen as the main cause of US Jews’ alienation. Then again, some politicians, like Yossi Beilin, say Israel should wean itself off donations anyway, and promote investment instead.
25th Fishman, Bar-On Purchase Zeev Mozes’s Shares in Yediot Aharonot
A stake for "Globes’" owners in the prosperous but dispute ridden newspaper and communications group which produces Israel’s most popular daily by far.
29th Johnson & Johnson Buys Biosense For $400 Mln in Shares
Biosense, of Tel Hacarmel, develops body mapping and diagnosis technology. Its annual sales were under $1 million. The purchasers estimated the market at $2 billion. In November, Johnson & Johnson chairman Ralph Larson visited Israel to look for further opportunities in medical technology.
October
17th Negative CPI of -0.1% for September; Annual Inflation Rate Down to 9%
The feat was repeated in November, when the Consumer Prices Index fell 0.3%, making the 12 month inflation rate 8.2%. Hopes of an interest rate reduction were disappointed however.
20th Check Point Skyrockets to Market Value of Koor, More Than $1.6 Bln
Check Point’s Q3 $12 million profit was 50% above the most optimistic analysts’ expectations. The communications security company’s stock market value is the highest for any Israeli company.
20th Agreement For Laying Israel-Cyprus-Italy Undersea Cable Signed
The $80 million project will mean improved international communications.
27th
TASE Drops 3%-4% Following Sharp Falls World-Wide
The local market did not escape the Asian flu. It fell about another 12% in the following two days. The crash showed how closely Tel Aviv had become linked to world markets.
November
2nd Partner Bids NIS 1.28 Bln For Third Cellular Operator Licence
The bids to become Israel’s first GSM operator were much higher than the government expected, even given the national mobile phone addiction. The tender involves criteria other than the financial bid, and the result is yet to be announced. The Partner and Tapuz consortia are the front runners. Aurec seems to have missed out.
3rd
Tadiran, Telrad Agreed in 1987 to Share Market, Avoid Competition, Standardise Pricing
A "Globes" expose. Tadiran and Telrad are both Koor subsidiaries. Bezeq was estimated to have overpaid the companies $15 million for telephone equipment. Former and current company officials denied all. The authorities are investigating.
10th ESC, Laser Industries Merge To Form World’s Leading Laser Firm
The Israeli merger created a cosmetic and medical laser company with a market value of $1.1 billion.
12th
EU Warns Against Import of Israeli Products
The storm in an orange juice glass. Israeli footdragging over resolving rules of origin violations in orange juice exports to the European Union provoked the latter into imposing sanctions. Minister of Trade and Industry Natan Sharansky claimed the move was politically motivated.
12th First Stage of Israeli Involvement In 5th EU R&D Programme Approved
Better news on the European front. Israel is seeking partial participation in the programme. Membership is costly, but potentially valuable in both commercial and diplomatic terms.
18th
JETRO Opens Tel Aviv Office: Expects Expanded Japan-Israel Trade
Total Israeli exports to Japan in 1996 were $1.2 billion, but fell in 1997. By opening the Japanese trade organisation’s office in Israel, the Japanese government fulfilled a promise to the late Yitzhak Rabin.
19th Israel Criticized in Doha Summary Statement
Most Arab countries boycotted the Middle East and North Africa Economic Conference in Qatar in protest at the slowdown in the peace process.
30th
EU to Sue Canada on Patent Law; "We’ll Sue Israel Too"
The US and the European Union are doing their utmost to deter Israel from amending its law, so that drug companies can prepare to market a drug before the drug’s patent runs out.
December
2nd Marks & Spencer Closes Israeli Stores Due to Losses
Hamashbir Lazarchan couldn’t adapt the plum franchise to local tastes, or compete with a trip to London and the real thing.
3rd
Azorim Purchases Israel Corporation, Renaissance Fund Shikun U’Pituach Shares For NIS 300 Mln The deal created the largest construction company in Israel.
3rd Histadrut Calls 700,000 Workers to Strike Wednesday
The general strike over pension rights, precipitated by Minister of Finance Ya'akov Ne'eman’s
remark about workers being time bombs, put the financially troubled Histadrut union federation back on the industrial and political map. It lasted 3 days, during which the Histadrut defied court back to work orders, cost an estimated $200 million, and, in most people’s eyes, ended in victory for the strikers.
16th
Labor Minister: Social Time-bomb About to Explode
The number of jobseekers rose 1.2% to 151,600 in November, as textile mills shed workers. Tyre burning demonstrators in the Negev town of Ofakim, where unemployment is particularly high, drew national attention, and visits from both the prime minister and the leader of the opposition.
28th Some Bank Internet Activity Authorised by Bank of Israel
Customers can look at their accounts, but not touch.
28th Housing Prices Are Down: Fact
It was a poor year for real estate companies, as the slump continued.
30th Gov't Again Defeated in Arrangements Law Vote; Netanyahu Considering Withdrawing Bill, Using Provisional Budget
As the year draws to a close, Prime Minister Benjamin Netanyahu is still trying to persuade, or bribe, the coalition parties to pass a budget for 1998. The budget was meant to reduce government expenditure, but political considerations may largely frustrate that aim.
31st $3.04 Bln Foreign Investments in Israeli Cos in ’97
The final score. Foreign investment was three times the 1996 level. But Central Bureau of Statistics estimates showed that, in 1997, overall investment in industry declined 6.2%, GDP grew 2.1%, and GDP per capita declined 0.3%. The balance of payments deficit fell $1.8 billion to $3.5 billion.