Ultra-Orthodox men near Jerusalem
Ultra-Orthodox men. Photo by Reuters
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Will the Haredi (ultra-Orthodox ) community stop making direct investments in the Tel Aviv Stock Exchange? According to a new ruling by the Badatz - a rabbinical court whose rulings are observed by a significant portion of the Haredi community - ultra-Orthodox Jews must not invest in the shares of Israeli companies, even in those owned by Orthodox businessmen such as Lev Leviev, Shaya Boymelgreen and Motti Zisser.

The ruling explained that buying shares makes the investor a partner in the company. But most publicly-traded companies, it said, are involved in some way in violating halakha (Jewish law ) - for instance, by violating the Sabbath or by inappropriate advertising - and a Haredi Jew must not be a partner in such an enterprise.

"The various investment instruments, especially the pension and provident [funds], are full partners in investments that involve Torah prohibitions: that earn yields from profits [generated] by selling on Shabbat, which the malls run roughshod over; from the products of factories that operate on Shabbat and Yom Kippur; from [television] channels that are full of filth; and from obscene advertising," explained a booklet put out by the Badatz. "You and I are unwitting partners in all of these."

The booklet offers Nochi Dankner's IDB Holdings as an example.

"If you invested in this holding company, which may appear to be a worthy holding company that promises a handsome yield, you have become partners in several hundred of its subsidiaries, which produce its hefty profits. These include the Nesher cement company, which officially operates and manufactures mountains of cement on Shabbat - and even on Yom Kippur, heaven preserve us; the Maman cargo terminal at Ben-Gurion Airport, which operates on Shabbat as if it were a weekday ... Even 'innocent' shares such as the Darban land development company owns a mall that operates on Shabbat, and Bank Leumi is a partner in the Fox fashion chain. Even Strauss shares include branches of the Coffee ToGo cafe chain, which operates on Shabbat."

The Badatz also forbade its adherents to invest in what have been the hottest shares on the bourse over the past two months - the gas and oil exploration companies - because they continue drilling on Shabbat.

The Badatz's financial investment supervisory committee was set up about two years ago to grant ultra-Orthodox "kashrut" certificates to financial instruments. The committee's rabbis sat down and tried to find a formula that would permit investments in the shares of companies that operate according to halakha.

But now, the rabbis have reached the radical, sweeping conclusion that there can be no investment whatsoever in shares, because almost every publicly-traded company has halakhic problems.

However, the Badatz does permit investments in exchange-traded funds that track the indexes, or bonds that receive halakhic approval. The Harel, Ayalon and Phoenix insurance groups and the Excellence Nessuah investment house, among others, are already devising such investment instruments.

According to a survey conducted by the ultra-Orthodox department of the McCann-Erickson advertising agency, 42% of Israel's 50,000 Haredi households deposit an average of NIS 825 a month in savings plans. That means the community's total investable savings come to some NIS 500 million a year.