Accelerated globalization, the removal of regulatory barriers and evolving technology have in recent years enabled Israeli investors, both private and institutional, to choose where to put their money, even outside the Tel Aviv Stock Exchange. The institutional bodies, the managers of the public savings, took the opportunity with both hands and significantly increased the volume of investments of all of us abroad.
In a discussion held at the Finance Committee in July 2021, the Commissioner of the Capital Market, Dr. Moshe Barkat, said that about 30% of the money managed in pension savings is invested abroad. “About 50% of every new shekel raised goes abroad, and in the future it could even reach 70%,” Barkat said.
According to data from Smartball, which has developed a system for capital market analysis, long-term savings funds (pension funds, provident funds and insurance) hold shares abroad in the amount of NIS 150 billion ($ 45 billion). This is compared to holding shares. In Israel, worth NIS 233 billion. 43.6% of the shares abroad are concentrated in the technology sector, 12.7% in shares of financial entities, 9.3% in the consumer sectors (media, restaurants and hotels), 9% in industry and 6.2% in medicine.
The company’s data also shows that as of the end of 2021, Microsoft Was the preferred stock by Israeli institutions as a long-term investment, with holdings worth about $ 2 billion. Other notable technology giants in the investment portfolios managed by the institutional institutions in Israel are the Taiwanese chip maker TSMC (holdings of over $ 1.8 billion), Samsung (holdings of $ 1.5 billion), Alphabet andAmazon (About $ 1.4 billion each), Dark ($ 1.3 billion) andFacebook ($ 891 million).
Bnature The Israeli, for comparison, has Israeli institutional holdings of “only” $ 707 million on the New York Stock Exchange (along with a holding worth NIS 2.8 billion on the Tel Aviv Stock Exchange).
“Cheaper here, but there is also room for investment abroad”
Yaniv Pagot, Director of the Trading, Derivatives and Indices Department at the stock exchange, notes approxי There are differences that Israelis should take into account when considering whether to invest in Israel or abroad. “There is the issue of currency. “Looking at 5 or 20 years, there is no doubt that in an investment portfolio that combines investing in the dollar, the investor pays a high price of appreciation and loses a few percent each year on the currency holding,” he says.
“There is also a difference in pricing. The local market has less money and liquidity, so pricing is more modest than on Wall Street. At the same time, investors and analysts here have the ability to better analyze a local bank, for example, or invest in Shufersal versus Walmart. “It is much cheaper to trade in Israel. There is no cost of currency exchange, and there are much more favorable prices here, at least in theory, because stock exchange fees are relatively cheap. But in the end it is not black and white, and there is room for both trends.”
Pagot mentions that high inflation and the expectation of its further increase increase the public’s need to maintain the value of its liquid money. “The shekel mountain in the public assets portfolio stands at NIS 1.9 trillion, and it has eroded considerably in real terms,” says Pagot. “The stock market is a very good long-term alternative to liquidity balances, as evidenced by the good multi-year performance of the stock indices.”