Six Reasons Current Gaza Strip Fighting Could Boost Israeli ETFs

Israel continues its bombing of the Gaza strip and it looks like it may not be as threatening to its economy as previous hostile situations and may actually benefit their economy and the exchange traded funds (ETFs) that track the market. How?

• For starters, an increase in government spending will most likely boost the economy which has been engulfed by the global recession. The country plans on beefing up spending on small and medium-size businesses and pour money into bridges and roads.
• Secondly, the topography that is being blasted is mainly desert and uninhabited, unlike during the Lebanon war, which hit a major port and tourist destinations.
• Third, the Israeli government has allowed the reopening of all factories with adequate security and protection near the Gaza Strip.
• Fourthly, the border crossings have been opened to allow the delivery of food, and other staples into the Strip
• Fifth, the casualty toll has been minuscule; only four Israelis have died since the inception of the bombings, states David Rosenberg of Bloomberg.
• Lastly, in an effort to deter air bombings and move the fighting on the ground, the Israeli government has increased its ground troops on the Gaza border and the cabinet has openly announced the recruitment of 6,500 reserves, reports the Economist.

This should enable the Israelis to contain the fighting in a specific region and prevent destruction of key economic targets, resulting in not so devastating of an effect on its economy.

Wars and hostile environments generally cause volatility and instability in economies, but in this case, it appears that the effects will not be as devastating to the Israeli economy as previous hostile encounters. An ETF that will most likely be influenced by this fighting is the iShares MSCI Israel Cap Invest Mkt Index (EIS), which is down 58.2% since its inception in March of this year.

Comments

[americanstu...:]

How about the ensuing retaliatory terrorist attacks having a 9/11 effect on Israeli ETFs?

The idea that this conflict "will not be as devastating to the Israeli economy as previous hostile encounters" is unsubstantiated. We are in the middle of a global financial crisis and the most volatile markets in living history. Of course pro-longed conflict, especially with Israeli casualties will bring panic to the markets.

Are you long EIS by the way?

Jan 02 04:43 AM

[Short Trade...:]

Since when are casualties only counted in Israeli's? I think that it is distasteful to discuss where ETF's are going when innocent people are being bombed. Just doesn't seem right.

Jan 02 05:24 AM

[bernie 1:]

Dear short trader
Hammas fired 300 rockets into Israel,I spoke to a friend who lives in Tel-Aviv who said they only count the ones that go off. Don't you think that one of those innocents should have said something? Like what are all these strangers useing our homes & mosques & Children as shields to protect themselves? Nobody in the entire world said anything until Israel started fireing back!

Jan 02 08:47 AM

[NOWHEREMAN:]

Hannibal: while you are right about the International Law aspect, Israel has been recognized by the UN as a valid country for decades also.

As such, a cease fire had been in effect for 6 months, Israel did not break it, Hamas did.

If Hamas is the Ruling Party in Palestine, then they have declared War. If they are not, then they are a Terrorist faction acting independently and the Palestinians are harboring them.

Your choice. IMHO

Jan 02 01:57 PM

[Urbane Gori...:]

Short Trader 67.... The title of the article refers to the effect of the conflict on **Israel**.... Not Palestine..... And, you might save your sympathy for the Israelis. There seems to be a groundswell of comments in support of Palestine. Hamas has been the constant instigator in these issues, not Israel. Further, you might have mentioned our own 'Dunba's War', which most Americans applauded. Aside from the death of about 5000 of our own troops, it's been suggested by outside sources that our war has caused the death of 100,000 Iraqis... Not to mention an expected 4X that number maimed.

I for one will be glad to be finished with this Bush League Administration.

jegan

Jan 02 02:55 PM

[Tedy:]

innocent ?
Israel army telephone 10 min before launching attack on known terrorist to there home to worn them and the neighborers,
no army ever did that.

if they decide to stay and die, they are not innocent.

On Jan 02 05:24 AM Short Trader 67 wrote:

> Since when are casualties only counted in Israeli's? I think that
> it is distasteful to discuss where ETF's are going when innocent
> people are being bombed. Just doesn't seem right.

Jan 02 04:43 PM

[Hannibal_Barca:]

Aitvaras,

Since Israel is recognized by the U.N. they should be subject to international law, however, they along with the U.S. and other nations choose to their benefit when to recognize international law. Further, during the so called truce you vouch for Isreal as honoring, they in fact continued an illegal occupation via; settlers illegally occupying land, the Israeli Forces prohibiting the delivery of essentials to the Gaza Strip and Palestine in general via land or sea. These act of war comitted by Israel consistently over the past 4 decades, give the people of Palestine the right to defend themselves. The land which Israel illegally occupies is over and beyond that granted to them under International Law! The Palestinians have been egregiously wronged and have every right to expel the terrorist on their land.


On Jan 02 01:57 PM aitvaras wrote:

> Hannibal: while you are right about the International Law aspect,
> Israel has been recognized by the UN as a valid country for decades
> also.
>
> As such, a cease fire had been in effect for 6 months, Israel did
> not break it, Hamas did.
>
> If Hamas is the Ruling Party in Palestine, then they have declared
> War. If they are not, then they are a Terrorist faction acting independently
> and the Palestinians are harboring them.
>
> Your choice. IMHO

Jan 03 06:07 AM

[Smee:]

Just out of curiosity, and so we can better consider the source, are you, Tom Lydon, Jewish?

Jan 03 09:54 PM

[Yankee Runn...:]

"Secondly, the topography that is being blasted is mainly desert and uninhabited, unlike during the Lebanon war, which hit a major port and tourist destinations"

Wow, the author cannot count! 1.5 million human beings live in Gaza and the author thinks it is uninhabited.

How can you take anything seriously from this author. It looks like he really does not know what he talks about

Jan 27 05:16 PM