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Sunday, August 15, 2010

Please people. It's one story about Harvard selling its shares in Israeli stocks: Harvard University fund sells all Israel holdings

In another blow to Israeli shares, the Harvard Management Company notified the US Securities and Exchange Commission (SEC) on Friday that it had sold all its holdings in Israeli companies during the second quarter of 2010. No reason for the sale was mentioned. The Harvard Management Company manages Harvard University's endowment...[Etc...]

People. Never go off the deep end on these things without waiting for an explanation or a statement. I find it highly unlikely that a fund like Harvard is going to divest from Israeli stocks -- all Israeli stocks -- for political purposes. You don't think Dershowitz is picking up the phone right now for answers?

Indeed, I've received the following email while waiting for the explanations to trickle in:

Non-event. Israel no longer an"emerging market"- now in a developed market index. These sales were part of a rebalancing- new holdings not reflected.

In other words, Israel's economy is so good it's no longer considered "developing," it's just a category shift...which sounds plausible to me. How much do you want to bet that that's pretty close to what it's going to be all about when we start hearing from on the record sources?

Update Monday 10:33am: The truth is starting to come out, and it is as predicted. Though the BDS'rs are, as usual, trying to take credit, The Media Line has this:

...Industry analysts, however, say the move was economic, not political.

"This is pure economics and I don't think it was because of the Arab boycott," Dr. Gil Feiler, founder of Info-Prod Research (Middle East) Ltd and director of the Middle East Business and Economic Research Institute at Interdisciplinary Center Herzliya told The Media Line. "They didn't eliminate their investments in Israeli stocks," he claimed. "They still have tens of millions of dollars invested, and if you are going to boycott Israel you sell all your stocks."

Shirley Adler, Investor Relations Coordinator at Cellcom, Israel's leading mobile communications firm, told The Media Line that the company had no official indication from Harvard as to the reasoning behind the decision.

Yaacov Heen, Cellcom's Chief Financial Officer, said the divestment is in response to Israel's recent reclassification as a developed economy.

"It's more technical than strategic or an issue against Israel," he told The Media Line. "I have asked my international relations people to check it and we believe it's because Israel was reclassified as a MSCI developed country in May 2010."

Formerly the Morgan Stanley Capital International, MSCI World, is an international index of 1,500 stocks from a couple dozen 'developed' countries and is often used as a benchmark by global stock funds. In May MSCI upgraded Israel from an 'emerging' economy to a 'developed' economy.

"There are some funds which invest only in emerging markets," continued Heen, the Cellcom CFO. "So Harvard had to sell our stock because Israel is no longer classified as an emerging market and they no longer have the ability to hold this stock within the emerging markets fund."

"We have seen a real change in the volume of trade since they reclassified us," he said. "In the longterm this is good news for us because there is now more money that can be invested in Israel, but in the short-term it means we need to work to find new investors."

"The problem is that Israel is very small compared to other developed countries so we have to compete on a much higher level," Heen added. "When we traded against emerging countries it was very easy to compete for investors."...

Also: Professor Bainbridge has an interesting look at the numbers and also speculates that this decision was pure business.

[Welcome Power Line, Michelle Malkin, Betsy's Page, Memeorandum readers!]

Update, and this should settle it: The following is the email that people are receiving in response to inquiries from John Longbrake, Senior Communications manager at the Harvard Management Company:

Thank you for taking the time to write.

The Management Company's most recent SEC filing details changes in holdings, as is routine, but no change in policy. The University has not divested from Israel. Israel was moved from the MSCI, our benchmark in emerging markets, to the EAFE index in May due to its successful growth. Our emerging markets holdings were rebalanced accordingly. We have holdings in developed markets, including Israel, through outside managers in commingled accounts and indexes, which are not reported in the filing in question.

I hope that this is helpful.

Sincerely,

John

Listed below are links to blogs that reference this entry: Is Harvard Divesting from Israel? Not So Fast! (Monday Update: Settled).

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8 Comments

I seriously doubt that this is the reason for the sales. Endowments will typically have fairly conservative portfolios, not laden up at all in emerging markets stocks or debt. Not to mention that it has been ages since anyone considered Israel an "emerging market." So I am very skeptical about this explanation. If Harvard has, in fact, just dumped all of their Israel holdings, I would guess that the reason is political; at the very least, its very unlikely that it had anything to do with finance.

"Never go off the deep end on these things without waiting for an explanation or a statement."

Is that a joke or something? If the rightwing blogosphere didn't go off the deep end with wild and crazy, and inaccurate, charges, then there would be a huge silence emenating from right field.

Aren't you paying attention? The memeverse is pretty much defined these days by the huge mass of RW blogs churning out one false story after another.

Its just what y'all do.

"If the rightwing blogosphere didn't go off "

Those words brought to us by those brainwashed by leftist propaganda promoters who use so called (reporters?) like Walter (Never met a Stalin story he didn't like) Duranty in the 30s, Walter (Claim every story is a Viet Cong Victory) in the 60s/70s and now have the entire leftist MSM at their command. If it came from the MSM on can be sure it is leftist propaganda.

C'mon, the story of Israel's upgrade from an emerging market index was in the news back in May: "Analysts: Israel to be attractive developed market" As that May 19, 2010 Reuters story explained, "Israel will be an attractive investment after its upgrade from an emerging to a developed market this month in the MSCI Index, analysts say. ... When the May 27 reclassification takes effect, passive investors [like Harvard] in emerging markets will have to sell Israel holdings. It may take time for developed market funds to take their place... UBS and Merrill Lynch also view the move as a short-term negative with a more positive long term. "

Interesting that BDSers picked Harvard U. SEC report to put out as a bait for their [non]story.

The CAMERA piece was quite interesting. Some of the Harvard BDS types seem to be quite bigoted.

On the other hand this is encouraging (via Martin Kramer):

http://www.spme.net/cgi-bin/articles.cgi?ID=7078

Hm, still smells a bit fishy to me. Read that statement carefully. It says that they now have no actual holdings of Israeli securities, but they do have shares of mutual funds that do invest in Israel. So they can have their cake (no Israeli stocks) and eat it too (say for PR sake that they have (indirect) investments in Israel. Their hands are not sullied.

Yes, Ahmed Moustafa's story is quite revealing.

Do you have a link to the CAMERA story you mentioned? (It wasn't in Sol's post or the update unless Nappy had another senior moment and missed it.)

Nappy-,

There is this from their blog Camera Snapshots
Harvard Not Divesting from Israel

Funny it mentions Sabeel activist Hilary Rantisi in connection with BDS but does not expand, unfortunately, on Sabeel's true goal of Ateek and Tutu using that time worn "Replacement Theology" in their antisemitic crusade.

"Syme: It's a beautiful thing, the destruction of words. You wouldn't have seen the [Newspeak] Dictionary 10th edition, would you Smith? It's that thick. [illustrates thickness with fingers] The 11th Edition will be that [narrows fingers] thick. Winston Smith: So, The Revolution will be complete when the language is perfect? Syme: The secret is to move from translation, to direct thought, to automatic response. No need for self-discipline. Language coming from here [the larynx], not from here [the brain]" -1984 (film)


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