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<SEC-DOCUMENT>0000910662-09-000481.txt : 20100201
<SEC-HEADER>0000910662-09-000481.hdr.sgml : 20100201
<ACCEPTANCE-DATETIME>20091207102508
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000910662-09-000481
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20091207

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MAGIC SOFTWARE ENTERPRISES LTD
		CENTRAL INDEX KEY:			0000876779
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				330477418
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		5 HAPLADA STREET
		CITY:			OR YEHUDA ISRAEL
		STATE:			L3
		ZIP:			602
		BUSINESS PHONE:		97235389322

	MAIL ADDRESS:	
		STREET 1:		5 HAPLADA STREET
		CITY:			OR YEHUDA ISRAEL
		STATE:			L3
		ZIP:			602
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

                 [Letterhead of Magic Software Enterprise Ltd.]



                                December 4, 2009

VIA EDGAR
- ---------

Mr. Mark P. Shuman
Branch Chief - Legal
United States Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549


                      Re: Magic Software Enterprises Ltd.
                          Form 20-F for Fiscal Year Ended December 31, 2008
                          Filed April 2, 2009
                          File No. 000-19415
                          -------------------------------------------------

Dear Mr. Shuman:

         We are submitting this letter in response to the written comments of
the Staff of the Securities and Exchange Commission, in a letter to Mr. Guy
Bernstein, Chairman of the Board of Directors of Magic Software Enterprises Ltd.
(the "Company"), dated November 18, 2009 (the "Comment Letter"), with respect to
the Company's Annual Report on Form 20-F for the fiscal year ended December 31,
2008. We have repeated the comment below and have provided a response.


ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK, PAGE 74
- ----------------------------------------------------------------------------

         1. You disclose that your "financial results may be negatively impacted
by foreign currency fluctuations." We note also the disclosure relating to your
exposure to currency fluctuations in risk factors and in the discussion of your
operating and financial review and prospects. We note further that your
management has publicly stated that the euro/dollar exchange rate was a
significant factor in the decline in your revenues for the fourth quarter of
fiscal 2008 as compared to the fourth quarter of fiscal 2007, because it reduced
your European sales as expressed in dollars. In light of the foregoing, please
tell us what consideration you gave to providing quantitative disclosure for the
foreign currency exchange rate market risks pursuant to one of the three
prescribed formats in Item 11(a)(1) of Form 20-F, or tell us why you believe
such disclosure is not necessary.

Response:

         While we are exposed to a variety of market risks, primarily foreign
currency fluctuations which had a definite impact on our fourth quarter results,
such risks did not have a material impact on our results for the year ended
December 31, 2008, taken as a whole. Although half of the Company's revenues in
2008 were generated in currencies other than the U.S. dollar, the impact of the
change in the U.S. dollar currency rate with respect to the Company's annual
revenues was 3% of total revenues.



<PAGE>




Furthermore, all of the Company's cash investments are in U.S. dollars
(including cash investments in foreign banks and government debentures) and
therefore were not exposed to foreign currency exchange rate fluctuations. The
Company also had little exposure to changes in interest rates, as it debt was
minimal.

         Based on the foregoing, we did not believe that further qualitative
analysis was warranted and such disclosure was not necessary. Nevertheless, we
intend to amend the Company's 2008 Annual Report on Form 20-F to include the
following quantitative disclosure:

INTEREST RATE RISK

Except for our exposure to market risk for changes in interest rates relating to
our investments in marketable securities, which are principally denominated in
U.S. dollars, we do not have any substantial risk which is derived from a change
in interest rates. The net increase in earnings and cash flow for the next year
resulting from a ten percent interest rate increase would be negligible.

FOREIGN CURRENCY EXCHANGE RISK

Our financial results may be negatively impacted by foreign currency
fluctuations. Our foreign operations are transacted through a global network of
subsidiaries. These sales and related expenses are generally denominated in
currencies other than the U.S. dollar, except in Israel, where our sales are
denominated in U.S. dollars and our expenses are denominated in New Israeli
Shekel. Because our financial results are reported in U.S. dollars, our results
of operations may be adversely impacted by fluctuations in the rates of exchange
between the U.S. dollar and such other currencies as the financial results of
our foreign subsidiaries are converted into U.S. dollars in consolidation. Our
earnings are predominantly affected by fluctuations in the value of the U.S.
dollar as compared to the New Israeli Shekel, the U.S. dollar as compared to the
Euro and to the Japanese Yen. An increase of 10% in the value of the New Israeli
Shekel relative to the U.S. dollar in 2008 would have resulted in a decrease in
the U.S. dollar reporting value of our operating income of $2 million for that
year, while a decrease of 10% in the value of the New Israeli Shekel relative to
the U.S. dollar in 2008 would have resulted in an increase in the U.S. dollar
reporting value of our operating income of $1.7 million for the year. An
increase of 10% in the value of the Euro and in the value of the Japanese yen
relative to the U.S. dollar in 2008 would have resulted in an increase in the
U.S. dollar reporting value of our operating income of $0.6 million and $0.4
million respectively for that year, while a decrease of 10% in the value of the
Euro and in the value of the Japanese Yen relative to the U.S. dollar in 2008
would have resulted in a decrease in the U.S. dollar reporting value of our
operating income of $0.6 million and $0.3 million respectively for the year.



<PAGE>


EQUITY PRICE RISK

The Company had $3.5 million of trading securities that are classified as
available for sale. Those securities have exposure to equity price risk. The
estimated potential loss in fair value resulting from a hypothetical ten percent
decrease in prices quoted on stock exchanges is approximately $350,000.


We acknowledge that:

        o     the Company is responsible for the adequacy and accuracy of the
              disclosure in the filing;

        o     Staff comments or changes to disclosure in response to Staff
              comments do not foreclose the Commission from taking any action
              with respect to the filing; and

        o     the Company may not assert Staff comments as a defense in any
              proceeding initiated by the Commission or any person under the
              federal securities laws of the United States.

        Thank you again for your consideration.

                                           Very truly yours,

                                           /s/Amit Birk
                                           Amit Birk, Adv.
                                           General Counsel & Corporate Secretary
                                           Magic Software Enterprises Ltd.


cc:  Katherine Wray, Staff Attorney



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