This site uses cookies to ensure the best viewing experience for our readers.
The U.S. response to Covid-19 affects Israeli businesses, say Israeli investors

The U.S. response to Covid-19 affects Israeli businesses, say Israeli investors

Speaking at The Israeli Business Forum of New York, Israeli business leaders discuss all the ways the U.S. is helping - or hindering - the Israeli economy

James Spiro | 10:34  19.07.2020
The relationship between Israel and the U.S. has always remained strong, but America’s response to the coronavirus (Covid-19) pandemic has left many Israeli businesses unsure of their futures. Speaking at a virtual panel hosted by the Israeli Business Forum of New York, Israeli business leaders and market experts shared insights into what we can expect in the upcoming months.

“There is a disconnect between Main Street and Wall Street,” explained Inon Elroy, economic attaché at the Israel Economic Mission to the East Coast. “Certain segments of tech companies are working well - the others face a challenge in the economy. Companies engaged in business continuity are probably the winners, since virtual is the new normal.”

Inon Elroy, Israeli Economic Minister to North America. Photo: Gideon Sharon Inon Elroy, Israeli Economic Minister to North America. Photo: Gideon Sharon Inon Elroy, Israeli Economic Minister to North America. Photo: Gideon Sharon

Elroy works at the Israeli Foreign Trade Administration at the Ministry of the Economy to ensure that strong economic and social partnerships are formed between the U.S. and Israel. Its mission is to assist the Israeli industry by deepening existing markets, raising investment, and improving Israel’s reputation abroad. While he runs the New York station, there are three others in Washington DC, Houston, Texas, and San Francisco, California.

“The American economy is the most important partner to Israeli businesses,” Inon Elroy told CTech moments before chairing a talk on U.S. capital markets and how they’ve been impacted by Covid-19. He was joined by Yossi Vebman, Partner at Skadden Arps LLP; Miri Segal-Scharia, CEO of MS-IR- LLC; Sass Darwish, Managing Director of RBC Capital Markets; and Oded Har-Even, Managing Director and Partner at ZAG S&W.

Despite rising Covid-19 cases across the U.S., the markets continue to climb, the speakers all agreed during the talk. Generally, there is positive sentiment coming out of the U.S. sparked by the government stimulus, as well as general American optimism towards economic recovery - which, in turn, has bolstered investor confidence.

Elroy explained there are many variables that drive markets, ultimately affecting Israeli businesses. Macro dynamics such as state reopenings, fiscal and monetary policy, as well as changes in trade policies all play a role in how Israeli and American companies perform and collaborate.

However, all of this is made more unpredictable since 2020 is an election year and might end with a change in leadership. Even though Democratic nominee Joe Biden has not yet revealed his running mate, he announced his ‘Build Back Better’ economic program helping revitalize American manufacturing.

Overall, “2020 is a lost year,” believed Sass Darwish, Managing Director and Head of Converging Technologies, Head of Israel Country Coverage at RBC Capital Markets. The global investment bank provides services in banking, finance and capital markets to corporations, institutional investors, asset managers, and governments. Whereas initially investors thought that Covid-19 would last a few months, many have agreed that the recovery will last years.

Related Stories

Regardless of a tougher business environment, there were still some notable Israeli milestones during the Covid-19 era. In May 2020, Intel announced its acquisition of the Israeli mobility service Moovit for $1 billion. In July, Israeli-founded insurance company Lemonade, Inc. went public on the New York Stock Exchange (LMND) reaching a $3 billion market cap on its first day.

It is important to consider that acquisitions and IPOs likely started pre-lockdown, so we will understand more of Covid-19’s impact once Q3 reports are announced.

Markets don’t like uncertainty - and as 2020 looms on, everyone agrees that the only thing that remains the constant is to expect the unexpected. Regardless of a tough pivot that required innovation and cooperation, Israeli tech markets are set to level out and find their path.

share on facebook share on twitter share on linkedin share on whatsapp share on mail

TAGS