Download Press Release Israel`s International Investment Position

Bank of Israel
Office of the Spokesperson, External Relations and Public Affairs
March 19, 2012
Press Release
Israel's International Investment Position (IIP), December 2011
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The value of Israeli residents' assets abroad increased by about $250
million in the fourth quarter of 2011, to $256 billion. For the full year of
2011, the value of Israeli residents' assets abroad increased by $5.2 billion
(2.1 percent); the increase was due mainly to the increase in Israelis'
investments abroad and the increase in foreign exchange reserves.
The balance of liabilities to abroad declined by about $300 million in the
fourth quarter of 2011, and reached about $223 billion at the end of
December. For the full year of 2011, the value of Israeli residents'
liabilities to abroad declined by $11.2 billion (4.8 percent); the decrease
was due mainly to the large decline in prices on Israeli markets, but also to
net sales of makam by nonresident investors.
The marked decline in the balance of liabilities and the increase in assets
led, in 2011, to a notable increase of $16.4 billion in the surplus of assets
over liabilities vis-à-vis abroad.
The surplus of assets over liabilities vis-à-vis abroad in debt instruments
alone fell in the fourth quarter of 2011 by about $1.5 billion, and reached
about $56.8 billion at the end of December (a negative net external debt).
The value of nonresidents' portfolio on the TASE declined in the fourth
quarter of 2011 by about $5.7 billion, and at the end of December was
$29.8 billion.
POB 780 Jerusalem 91007 Israel
Tel: 972-2-6552712/3 Fax: 972-2-6528812 www.bankisrael.gov.il
Israel's net assets abroad (the surplus of assets over liabilities) increased in the fourth
quarter by about $550 million, and reached $33.5 billion at the end of 2011.1 During
the full year of 2011, the surplus of assets over liabilities increased by $16.4 billion—
of which about $12 billion was a decline in liabilities to abroad, primarily due to a
decline in share prices in Israel and sales of makam by nonresident investors.
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The surplus of assets over liabilities vis-à-vis abroad for the years 1999–2011 was revised as the result
of an adjustment in the balance of foreign direct investment. Due to the adjustment, the balance at the
end of 2011 was reduced by $15 billion, and as a result, the liabilities to abroad declined, and the surplus
of assets over liabilities vis-à-vis abroad increased by the same amount. A further explanation of the
adjustment in direct investment follows in footnote 2.
2
Figure 1: The balance of Israel's liabilities abroad
1998-2011, $ billion
80
60
40
20
0
-20
03
/1
09 998
/1
03 998
/1
09 999
/1
03 999
/2
09 000
/2
03 000
/2
09 001
/2
03 001
/2
09 002
/2
03 002
/2
09 003
/2
03 003
/2
09 004
/2
03 004
/2
09 005
/2
03 005
/2
09 006
/2
03 006
/2
09 007
/2
03 007
/2
09 008
/2
03 008
/2
09 009
/2
03 009
/2
09 010
/2
03 010
/2
09 011
/2
01
1
-40
The balance of Israel's assets abroad increased in the fourth quarter of 2011 by about
$250 million, to reach $256 billion at the end of December.
In the full year of 2011, the balance of assets increased by about $5.2 billion; this
derived from an increase in direct investment (about $3 billion) and an increase in the
foreign exchange reserves (about $4 billion). Net investment of about $4 billion in
foreign shares, primarily by institutional investors, was largely offset by price declines
abroad ($3.5 billion).
There were net sales of tradable bonds abroad of about $1 billion, which contributed
to a decline in the value of the portfolio.
In other investments, there was net new investment of $2 billion in deposits by Israeli
banks into foreign banks, which was offset by a similar amount of net withdrawals by
Israeli investors of their deposits in banks abroad.
In 2011, there was little change in the composition of residents' securities portfolio
abroad. About 38 percent was in direct investment, about 20 percent in stocks, and
about 14 percent each in bonds, deposits, and other credit.
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Figure 2: Composition of Israelis' Asset Portfolio Abroad*
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Equity investments Bond investments
* Excluding the foreign exchange reserves.
Credit and others
12/2008
12/2009
Bank deposits
12/2010
Direct investment
12/2011
The balance of Israel's liabilities to abroad decreased in the fourth quarter of 2011
by about $300 million, and reached $223 billion at the end of December.
For the full year of 2011, the balance of the liabilities to abroad declined by about
$11.2 billion (4.8%); the decline in liabilities to abroad derived primarily from the
large decline in prices in the Israeli market, but also from sales of makam by
nonresident investors.
The value of Israeli shares in the portfolio increased $900 million in the fourth
quarter; TASE price increases of about $2.6 billion were partly offset by net sales of
$1.3 billion from one transaction in the chemicals sector.
In the full year of 2011, the portfolio value of investment in Israeli shares fell by $13.4
billion, a decline that derived primarily from the large decline in Israeli share prices of
$11.8 billion, and from net sales of about $700 million. The net sales derived from
$1.4 billion in net sales in Israeli shares traded abroad, which were partly offset by net
investment of $670 million on the TASE.
The value of the investment in bonds declined in 2011 by about $5.3 billion, to
reach $31.5 billion at the end of December. The decline in value came primarily in the
fourth quarter, due to net sales of $4.5 billion in makam.
Nonresidents’ net direct investments in Israel totaled $4.5 billion in the fourth
quarter of 2011, $1.2 billion of which was an increase in non-distributed profit that was
reinvested.
For the full year of 2011, the flow of foreign direct investment into the economy was
$11.2 billion, of which $6 billion was net investment (relatively dispersed among a
large number of companies), and about $4 billion in accumulated profits. This
investment flow was reflected in an increase over the full year of 2011 by about 10
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percent in the balance of foreign direct investment in the economy, to about $66.5
billion at the end of the year.2
The value of nonresidents' financial portfolio on the Tel Aviv Stock Exchange fell
in the fourth quarter of 2011 by some $5.7 billion, and at the end of December was $30
billion.
In the full year of 2011, the value of nonresidents' financial portfolio on the Tel Aviv
Stock Exchange declined by $11 billion. Nonresidents' bond holdings declined by $3.6
billion, and reached $10.3 billion at the end of December; the value of their stock
holdings declined $4.9 billion to reach $12.5 billion. Despite the sales of bonds, there
was a 1 percent increase in 2011 in the share of bond holdings and a similar decrease
in the share of stocks in the portfolio (Figure 3).
Figure 3: Nonresidents' Securities Holdings on the Tel Aviv
Stock Exchange
50
45
Bonds
Equity and mutual funds (portfolio)
40
Equity (direct investment)
35
$ billion
30
25
20
15
10
5
01
/2
00
06 6
/2
00
12 6
/2
00
06 6
/2
00
12 7
/2
00
06 7
/2
00
12 8
/2
00
02 8
/2
00
04 9
/2
00
06 9
/2
00
08 9
/2
00
10 9
/2
00
12 9
/2
00
02 9
/2
01
04 0
/2
01
06 0
/2
01
08 0
/2
01
10 0
/2
01
12 0
/2
01
02 0
/2
01
04 1
/2
01
06 1
/2
01
08 1
/2
01
10 1
/2
01
12 1
/2
01
1
0
2
The figures on foreign direct investment in the economy from 1999–2011 were revised. As a result of
the adjustment, the balance of investments at the end of 2011 was reduced by $15 billion, and as a result,
the balance of liabilities to abroad declined by the same amount. The adjustment was made within the
framework of adopting OECD reporting standards, which recommend estimating the balance of foreign
direct investment by nonresident investors on the basis of direct measurement of the balances, and not
on the basis of accumulated transactions, as was done previously in Israel regarding some of the
companies. The adjustment is based on an assessment calculated for 2009 under the new method, based
on several sources, and then spreading out the difference between the new estimate and the previous one
since 1999 in a gradual manner. There was no change in actual direct investment flows.
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The external debt
Israel's gross external debt fell by $5.6 billion in the fourth quarter of 2011, and at the
end of December stood at about $102 billion. Most of the decrease was the result of
about $4 billion in nonresident investors' sales of makam.
The ratio of external debt to GDP at the end of December 2011 was 45 percent, a
reduction of 2.5 percentage points from the ratio at the end of September.
The net external debt
The surplus of assets over liabilities abroad in debt instruments alone contracted by
about $1.5 billion in the fourth quarter of 2011, and reached $57 billion (i.e., a negative
net foreign debt).
The balance of short-term debt assets was $117 billion at the end of 2011, a
coverage ratio of 2.4 of short term debt.
Figure 4: Net* External Debt
$ billion, net lending to abroad (-)
20
10
0
-10
-20
-30
-40
-50
-60
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
Q 08
2
20
Q 09
3
20
Q 09
4
20
Q 09
1
20
Q 10
2
20
Q 10
3
20
Q 10
4
20
Q 10
1
20
Q 11
2
20
Q 11
3
20
Q 11
4
20
11
-70
*External debt minus assets abroad in debt instruments (i.e., excluding equity).
For the complete data file, click here:
http://www.bankisrael.gov.il/deptdata/pik_mth/pikmth_e.htm
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