Egypt protests - AFP
Protestors celebrating in Tahrir Square after the overthrow of Mubarak. Photo by AFP
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Israeli businessmen with interests in Egypt stood by and hoped for the best as Egyptian President Hosni Mubarak announced Friday he was stepping down and ceding his powers to the military.

Egypt will respect all international agreements, including the peace treaty with Israel, the top brass announced yesterday.

Israelis with business interests in the neighboring country have been idled since the protests began on January 25.

"We're waiting to see where things go," said one this weekend. "If the army sets up a new technocracy in order to improve the economy, that would be a good thing. Ultimately, economically speaking Egypt needs peace just as much as we do. Maybe the revolution will be an opportunity for it to improve relations with Israel."

According to Israel Manufacturers Association chairman Shraga Brosh, some Israeli businessmen had returned to Israel during the crisis: "Life needs to get back on track, but the question is which track."

Economists were split over the anticipated global and local financial implications of Mubarak's resignation.

Clal Finance Batucha Investment & Development VP Tamir Porat said the effect was positive. He pointed to rallies in markets around the world, including in the United States and the euro bloc.

"This is because uncertainty has decreased a bit," Porat said. Investors had been concerned that the Suez canal could be blocked or that unrest would spread to other countries. "Now the totalitarian regime is gone and the feeling is that we're starting a new era," he said.

Bank consultant Jonathan Katz and Leader Capital Markets energy analyst Oz Levy, however, noted that Mubarak's resignation raised the uncertainty facing Israel and would depress share prices and the shekel.

"The events raise Israel's risk, since when there's uncertainty, investments become riskier," said Katz, who noted that returns on Israel's long-term bonds had increased 1.3% to 1.6% since the unrest began, due to the increased risk premium.

The risk is connected to the chance that Egypt could back out of its peace agreement with Israel and the Muslim Brotherhood could take control of the government, even though these scenarios are looking increasingly unlikely, Katz said.

Levy noted that even if Egypt were to renew its natural gas exports to Israel, they had become less attractive. Exports were halted last weekend following an explosion in a pipeline in Sinai.