Tel Aviv Stock Exchange (archives)
Photo: Yariv Katz
Foreign investors fleeing Israel?
Central bank reports sharp drop in foreign nationals' investments in Israeli companies' shares, likely due to concerns over economy's strength following recent Mideast developments
The Bank of Israel last week reported of a sharp drop in foreign nationals' investments in Israeli companies' shares. The decline appears to result from concerns over the Israeli economy's strength following recent developments in the Middle East.
Foreign nationals' gross investments in Israeli debentures in the Tel Aviv Stock Exchange totaled some $430 million, particularly in zero-coupon bonds, compared to $2.6 billion investments in January. The remainder of foreign nationals' holdings of debentures and zero-coupon bonds totaled some $16.7 billion at the end of February.
According to data collected by the central bank, the gross investments of foreign nationals in Tel Aviv Stock Exchange shares were very small compared to gross investments of some $420 million in January. The realization of Israeli shares traded abroad totaled some $100 million in February.
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Bank of Israel officials note that the figures do not reflect an "escape" of foreign investors from Israel due to the recent events in Arab countries. According to a source in the bank, the volume of foreign investments in Israeli shares is subject to many fluctuations and the drop is not a drastic one.
Bank officials hope, however, that the drop in investments in Israeli debentures and zero-coupon bonds, are proof that the governor's action against foreign currency speculators are working, but they are waiting for the coming months' figures before saying it wholeheartedly.
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