May Edition 2020

6 Nevertheless, there is the feeling that more could have been done. “While I believe there is a consensus in Israel that the crisis was handled well from the medical point of view, the economic crisis was poorly handled,” sai d Doni Toledano is the Head of the M&A and Banking and Finance Departments of Erdinast, Ben Nathan, Toledano & Co. (“EBN”). “The private sector and particularly small and medium businesses are in distress due to regulatory uncertainty, slow response of governmental agencies to changing conditions and lack of a clear strategy regarding the reopening of the economy.” Alon Pomeranc , H ead of Litigation & Dispute Resolution department at Lipa Meir & Co. agrees: “Even though the numbers of people infected with COVID-19 and deaths in Israel are not high relative to other countries, I am not sure the crisis was handled that well. I believe we could have done better and concerned that there might be a severe economic impact.” “Obviously the Corona restrictions have forced entire sectors to shut, ” HFN’s Phillips added – “retail (other than food), tourism, airlines and entertainment have been especially hard hit and this has had a knock on effect on other sectors such as real estate. Other sectors have been affected far less - the energy and infrastructure sectors are showing almost no effects at this stage (and in fact several large scale infrastructure tenders have been announced in the past few weeks) and the banking sector has continued to operate (at least at the branch level) although interest rates have in some cases gone up as a result of increased risk. What is hard to assess at this stage is the intangible effect - how many companies have put off investments to generate growth? Howmany hi-tech investments that would have happened have been postponed or cancelled?” Toledano points out: “At this stage, it appears that hi-tech sector, which is a leading force in the Israeli economy, has not been significantly impacted. Despite a slowdown in investments in early stage companies and cost reduction steps undertaken across the board, most major hi-tech companies continue to operate in full force and VC funds remain active in the market, albeit in a more cautious manner and taking into account the potential to need to support existing portfolio companies.” In fact, in April, Israeli start-ups raised a record USD 8.3 billion in the first four months of 2020, according to a report by IVC-ZAG, with Intel announcing in May it has acquired Israel’s Moovit, a mobility-as-a-service (MaaS) solutions The Impact on Sectors