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Is AllianceBernstein (formerly known as Alliance Capital Management) withdrawing as a significant shareholder in Bank Hapoalim? Over the past three months Alliance has sold around NIS 200 million worth of Hapoalim shares, about a 1% stake in the bank.

Its pace of selling has picked up, too. From the beginning of the credit crisis in July 2007 until June 2008, Alliance had sold about 1.6% of the bank's shares. In the past two weeks alone, Alliance cashed in 6.8 million Hapoalim shares, taking in NIS 92 million. Now Alliance owns about 5.5% of the bank, down from 6.5% this past June and 8.1% in June 2007.

There could be several reasons for this aggressive offloading, one being Alliance's desire to reduce its exposure to foreign financial companies - in Israel and around the world - due to the pessimistic forecasts for the sector and the slowdown in the U.S. economy.

In Israel, investors are worried that the slowdown in the United States is already making its way across the ocean, and economic slumps by definition hit banks first - that sector being the first to be affected by clients' thinner wallets. Hapoalim's shares may also be suffering from the decline in the bank's overseas operations.

Alliance's unloading of shares and the negative sentiment toward Hapoalim here and abroad have stung the bank's share price. After recovering from Hapoalim's sale of its mortgage-backed securities portfolio at a heavy loss of about $1.3 billion, and climbing from NIS 12.3 in March to NIS 16 in mid-June, Hapoalim's stock has again lost ground to just NIS 13.45, a 16% decline in the past three months. This reflects erosion of 30% since the beginning of the year and a market cap of under NIS 18 billion.