Subscribe to Print Edition | Wed., March 12, 2008 Adar2 6, 5768 | | Israel Time: 12:12 (EST+7) web haaretz.com   Back to Homepage Rosner's Domain Diplomacy Defense Jewish World Opinion National Print Edition Advertising Books Arts & Leisure Business Real Estate Easy Start Travel Week's End Anglo File

Real estate stocks hit 2-year low as credit crisis reaches Tel Aviv By Michael Rochvarger Tags: Tel Aviv Stock Exchange  "There is no doubt, the wild credit excess where everyone took part and anyone who could took out loans in the past two or three years, is over. Today fear has taken hold of the markets and paralyzed many financial areas," said Chaim Katzman a week ago. Katzman, the controlling owner of the Gazit real estate group, described the depressing mood in financial markets in general, and the real estate market in particular. Only a year ago the situation on the Tel Aviv Stock Exchange was the exact opposite. Real estate shares were rising daily and the companies continued to leverage their balance sheets with hundreds of millions of shekels in bonds. Some of them used the cash to buy up property in all sorts of remote corners of Eastern Europe. But in July 2007 the subprime mortgage crisis exploded in the U.S. and financial institutions decided to write down tens of billions of dollars. Credit became much tighter, and liquidity dried up. This turned into a global credit crunch, which is refusing to disappear, and the biggest victims are the real estate and financial sectors. The crisis has not ignored Tel Aviv. After chasing real estate stocks blindly in expectation that the party would never end, investors are now scared. The fall of developer Heftsiba last August, and the financial chaos in its wake, had its effect. True, in the real estate sector they never stopped trying to convince us that Heftsiba was a one-off, specific problem - mostly criminal and not economic. But it certainly should have set off a warning light. Advertisement The Real Estate-15 is now 46% below its record high of last May. Many of the index's firms are now trading at a value below its shareholder equity. For now, the crisis has hit the smaller firms worst, but as the proverb goes: "When there's a flood, everyone gets wet." The losses certainly have not missed the big real estate firms that operate globally either. Africa Israel, Gazit Globe, Delek Real Estate and Alony Hetz have all dropped dozens of percentage points, even though they all have cash-filled kitties and years of proven experience. Even tycoons such as Nochi Dankner and Yitzhak Tshuva are not immune. The two leveraged their huge Las Vegas project with hundreds of millions of dollars in loans, and are expected to have to take out more. But these new loans will be under tougher terms. Dankner and Tshuva may be careful to say at every opportunity that the project is spread out over many years and by then the crisis will have ended - but sooner or later the day will come: they will have to repay the loans. It is clear today that the bankers who provided these loans are not sleeping well. Examples include Eliezer Fishman's Jerusalem Economic Corporation, which is down 49% from its high and is valued by the market at only NIS 3 billion, 39% below its shareholder equity at the end of last September. Tshuva's Delek Real Estate has fallen 70% from its high. What Israeli investors seem to be looking for at the moment are companies with most of their operations in Israel - companies invested in income-producing properties and residential construction such as British Israel and Melisron. Such firms have lost little value in recent months. Bookmark to del.icio.us   Bring down the house Knesset speaker calls for wrecking of yeshiva killer's family home. Frum and fabulous Beauty salons offer Haredi women a unique brand of modest glamour.   1.   Credit crisis 06:56  |  Millicent 12/03/08

Today Online Hamas-Israel deal would put Abbas' men at Gaza crossings Responses: 37 Qureia to Livni: PA 'shocked' at plan to expand settlement Responses: 42 Pro-Palestinian graffiti found inside El Al plane in Italy Responses: 27 Peres sees 'unparalleled' French-Israel relationship Responses: 14 Uzi Benziman: Wishing for a leader like Ronald Reagan Responses: 4 Israel Harel: The third Intifadfa is already here Responses: 1 More Headlines 09:38 Hamas-Israel deal would put Abbas' men at Gaza crossings 11:46 Australian parliament lauds Israel as 'custodian of freedom' 11:20 Israel to ban Al-Jazeera TV over alleged incitement to terror 11:35 Jihad vows 'deep retaliation' after militant killed in W. Bank raid 06:38 At state dinner with Sarkozy, Peres sees 'unparalleled' French-Israel relationship 09:45 U.S. Mideast army chief quits after 'opposing attack on Iran' 08:11 Qureia to Livni: PA 'shocked' at Israeli plan to expand settlement 11:52 The Bard behind bars 11:38 Dollar falls to 10-year low against shekel, trading at NIS 3.515 09:55 Obama snags black vote in Mississippi, beating out Clinton 10:02 Pro-Palestinian graffiti found inside El Al plane in Italy 08:44 Police officers slam Jerusalem chief's ignorance about yeshiva attack 09:42 MK Orlev: Reports of yeshiva revenge plot 'malicious slander' 11:22 Police detain 30 suspects in alleged nation-wide pedophile ring 11:49 Calls mount for N.Y. Governor Spitzer to resign over sex scandal Previous Editions Select Day 11 mar 10 mar 09 mar 07 mar 06 mar 05 mar 04 mar 03 mar 02 mar 29 feb 28 feb 27 feb

Special Offers Advertisement FAREWELL ISRAEL New Film The Coming War for Islamic Revival - View Movie Trailer READY FOR PURIM? BUT - Who Will Guard The Hamentasch? Free the Palestinians from: Corrupt Kleptocracy, Tyrannical Theocracy, Abysmal Anarchy Long-term Israel programs MASA is your gateway. More programs. More grants. NEW! Dan Boutique Jerusalem Hotel Hip Dan Hotel in Jerusalem. Attractive Introductory Rates 7589 rockets fired so far HELP US TO HELP THEM FREE JEWISH HISTORY COURSE Berel Wein's best selling lectures. 5000 Years in Five hours /CD/MP3 Marina Royale Herzelia Pituach Your Luxurious Suite While Staying in Israel Fattal Hotel Chain Perfectly located hotels on best resorts of Israel. ISRAEL BONDS Build Israel Israel bonds - a multi-purpose way to celebrate Israel's 60th Eldan Rent a Car Israel's leading car rental company offers you a 20% discount on all online reservations Junkyard Junk a car - get free towing nationwide and a tax-deductible receipt

Home | TV | Print Edition | Diplomacy | Opinion | Arts & Leisure | Sports | Jewish World | Underground | Site rules |

Haaretz.com, the online edition of Haaretz Newspaper in Israel, offers real-time breaking news, opinions and analysis from Israel and the Middle East. Haaretz.com provides extensive and in-depth coverage of Israel, the Jewish World and the Middle East, including defense, diplomacy, the Arab-Israeli conflict, the peace process, Israeli politics, Jerusalem affairs, international relations, Iran, Iraq, Syria, Lebanon, the Palestinian Authority, the West Bank and the Gaza Strip, the Israeli business world and Jewish life in Israel and the Diaspora.

© Copyright  Haaretz. All rights reserved