Daily roundup / The middle class is pretty poor
Idan Ofer expanding his Chinese car manufacturing business as the shekel shrinks.
Israel's middle class, well, isn't that middle: The average wage in Israel is almost NIS 9,000, yet it turns out that the median wage – what half of all Israelis gross – is less than NIS 5,812 a month. A quarter of all Israelis gross less than NIS 3,451 a month, and when the stat is narrowed to women alone, the figures are even lower. The median wage is a barometer for the state of the middle class. And that state is? "Israel's middle class is nearer the lower class than the higher class," observes labor expert Momi Dahan, head of the Public Policy school at the Hebrew University.
Israeli tycoon expanding holdings in Chinese carmaking: Qoros, an investments firm co-owned by Israeli businessman Idan Ofer and the Chinese car company Quantum Chery, is borrowing $470 million to build a plant with the capacity to make 150,000 cars a year. They expect it to be up and running in the third quarter of 2013, in the city of Changshu. By year-end 2016 they anticipate ramping up capacity to 500,000 cars a year, assuming the Chinese authorities smile on the idea.
Migdal unfazed by parent company's downgrade: At the end of last week, Moody's downgraded the Italian insurance company Generali by three notches, from A1 to Baa1. That didn't discourage Migdal, which is owned by Generali, from closing new deals with its parent company. The Migdal board approved a series of new contracts with Generali, including deals in which Generali's share as reinsurer is 50% or more, although Migdal's stated policy has been to choose reinsurers ranking AA or higher. Migdal commented that following Generali's downgrade it will be gradually reducing its exposure to reinsurance in the Italian group, and any new deals will be studied very closely.
The shekel weakened against the U.S. dollar to a 3-year low of NIS 4.064on Wednesday, when the greenback appreciated by 0.6 percent against the shekel. The day before the dollar appreciated 1.1 percent against the Israeli currency. One reason for the shekel's feebleness may be growing concern about the government deficit. The government had planned to cap its deficit in 2013 at 1.5 percent of GDP, in principle. In practice it looks like it will be 3 percent, possibly more. Analysts broadly expect the Bank of Israel to lower its benchmark rate further during the year, which would narrow the interest gap, playing against the shekel too.
Haifa planning new neighborhood: The local planning council of the city of Haifa has approved a plan for 3,174 apartments on the western slope of Mt. Carmel. The plan, called "Lincoln Slopes" (yes, after the late American president), is the brainchild of the city itself.
With reporting by Lior Dattel, Yoram Gabison, Nimrod Bousso and Ram Ozeri