Trump’s wall helps Israeli barrier-builder scale new heights

Magal Security Systems’ stock price has surged since US election, as investors believe it will cash in during tenure of president-elect

In this Feb. 15, 2012 file photo, an Israeli bulldozer works at the site where Israel built a barrier along the border with Egypt in southern Israel. (AP Photo/Diaa Hadid, File)
In this Feb. 15, 2012 file photo, an Israeli bulldozer works at the site where Israel built a barrier along the border with Egypt in southern Israel. (AP Photo/Diaa Hadid, File)

The Israeli company that has built high-tech fences along the country’s volatile borders is now trying to build a bridge to the Trump administration, hoping to use its experience to cash in on the president-elect’s plan to seal the border with Mexico.

Magal Security Systems has been a major player in building high-tech fences and walls along Israel’s volatile northern and southern borders, as well as the massive security barrier that snakes along the frontier with the West Bank. Its products include cameras, sophisticated sensors, robots and software to operate the systems.

“We believe that the US government is going to increase its security budgets in the upcoming years and definitely we look forward to take part in it,” the company’s chief executive, Saar Koursh, told The Associated Press.

Investors seem to agree.

Despite a mixed record of profitability and a historically volatile stock, the company’s shares have surged on the Nasdaq Stock Market since Donald Trump was elected president on November 8, while trading volume has soared in some cases by more than 150 times the pre-election levels. Its shares were trading at $5.53 apiece on Wednesday, up 24 percent from its $4.45 closing price on November 8.

Magal was established in 1965 as a branch of the state-owned Israel Aerospace Industries. It was privatized 15 years later and has traded on the Nasdaq since 1993. Magal has served customers in over 80 countries, including airports, the seaport in Mombasa, Kenya, and sporting events and utilities.

With market capitalization below $100 million, the company is much smaller than potential competitors, which could include major global electronics and construction firms. But it’s a leader in a country that is in turn a global leader in the building of barriers.

Israeli machines and workers build parts of the Israeli security barrier near the West Bank city of Beit Jala, outside Jerusalem, on April 17, 2016. (Wisam Hashlamoun/FLASH90)
Israeli machines and workers build parts of the Israeli security barrier near the West Bank city of Beit Jala, outside Jerusalem, on April 17, 2016. (Wisam Hashlamoun/FLASH90)

Israeli defense officials confirmed Magal’s projects have included not only the West Bank security fence but a 150-mile structure that has halted an influx of African migrants across the Egyptian border as well as a high-tech fence separating the Hamas-ruled Gaza Strip from Israel.

Victor Bar-Gil, a former Israeli Defense Ministry official who worked with Magal on a project to fortify the border with Lebanon, said the company did “very thorough and precise work.”

“It was work that had to be done really urgently. The military was withdrawing from Lebanon and a fence needed to be built very quickly and this fence was built,” he said.

Koursh believes that if the Mexico barrier is built, it will be similar to Israeli structures that include a combination of fences and walls equipped with cutting edge technology.

Illustrative: Israeli forces next to the security fence on the border between Israel and southern Gaza Strip. (Abed Rahim Khatib/Flash90)
Illustrative: Israeli forces next to the security fence on the border between Israel and southern Gaza Strip. (Abed Rahim Khatib/Flash90)

“It is dependent on so many factors, including the type of wall, the type of fence, [and] the type of sensors that you want to put on the fence [that] it’s hard for me to estimate but for sure this will be a mega project,” he said.

David Holtzman, a financial analyst at Israel’s First International Bank, said Magal is considered a world leader in the construction of security barriers but cautioned that the run-up in its stock price is speculative.

“It is important to remember that currently we still do not know yet whether everything that Trump has promised prior to the election he will in fact carry out,” he said.

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