The rise in share prices on the Tel Aviv Stock Exchange in the past months, especially that posted in the three or four trading days prior to the survey taken early this week, have certainly influenced the results of this survey. Whether, and to what extent, this positive influence will continue, will of course depend on what happens in the next few days.
In the meantime, as of Sunday evening (January 5th) the public forecasts concerning market behavior in the new year are reflected in the following questions and answers:
Q: "In your opinion, how will the market behave in 1997 - will share prices rise or fall?"
A: Share prices will: rise sharply - 13%; rise moderately - 24%; remain the same - 21%; fall moderately - 9%; fall sharply - 3%; no opinion - 30%. Totals: rise - 37%; fall - 12%; tread water - 21%.
In comparison, the same question was asked at the onset of 1996 eliciting the following answers: Share prices will: rise - 32%; fall - 27%; tread water - 24%. At the beginning of 1995 the results were: rise - 2%; fall - 39%; tread water - 23%.
In other words, as far as the stock market is concerned, the general public has begun the new year optimistically, not only in comparison to the gloomy forecast two years ago, but even in comparison to the relatively positive forecast in the past year.
In addition, and without any connection, the survey checked the public’s forecast on inflation for the new year. Here the results were less optimistic, as the following shows:
Q: "Inflation in 1996 was approximately 10.5%. In your opinion will inflation be higher or lower in 1997?"
A: Inflation will be: much higher - 25%; moderately higher - 24%; remain the same - 23%; moderately lower - 20%; much lower - 1%; no answer - 7%. Totals: higher - 49%; lower - 21%; the same - 23%.
In other words, only about a quarter of the 93% answering the question believe that the declared goal of 7%-10% inflation for 1997 will indeed be achieved. In comparison, more than half of those answering believe that inflation will be worse in 1997 than in 1996.