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Barely attracting any attention, Israeli capital markets have rebounded to new price and turnover highs.

The Maof 25-blue chip index crossed the 550 line to 551.3 points, its highest level since October 2000 and just 26 points shy of its all-time high. The broader TA-100 index gained 1.05 percent to close at a record 589.1, besting the March 2000 mark of 585.99 points. What is remarkable is that, at the time, the Nasdaq was also at its historic high of 5000 points, but today stands just above 1990.

Turnover was also high, amounting to NIS 810 million, close to the NIS 837 million figure in January, the last time the TA-100 challenged the March 2000 peak.

The market indexes have risen 8-9 percent since January 2004, though they have been rather topsy-turvy. Early gains were wiped out in February, and another climb was undone by early May. The markets have since recovered, surging more than 7 percent since early May.

In contrast to the euphoria of late 2003 and early 2004, it is harder to find experts forecasting sustained rises in the near future. Among the few expressing a clear direction for the market is Meitav CEO Zvi Stepak. Two days ago, Stepak publicized an economic analysis projecting 8-12 percent gains in the coming months because of positive company results, less attractive investment alternatives, increases in foreign investment, and the political situation. In the past few days, uncertainty about the economy has decreased, and that is a good reason for a breakout, he said.

The shekel has also continued to strengthen, trading at NIS 4.49 to the dollar. At the market's previous dip in May, the exchange rate had risen to NIS 4.63. The bond market also rose Monday in very high turnover. Long-term Shahar shekel bonds rose 0.3 percent, providing a yield of 7.46 percent. Just a few weeks ago, they stood at 7.84 percent.

Following moderate market gains it is possible to say that investors have registered nominal returns of 42 percent and a real return of 30 percent dating back to 1999, or 6 percent annually. Nominal returns in the U.S. markets for the same period were 8.4 percent. Despite this optimistic figure, many investors who entered during the 2000 peak are hurting from significant real losses.