Download Israel`s International Investment Position (IIP), Fourth quarter of 2016

BANK OF ISRAEL
Office of the Spokesperson and Economic Information
March 22, 2017
Press Release
Israel’s International Investment Position (IIP), Fourth quarter of
2016
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In the fourth quarter of 2016, Israel’s surplus of assets over liabilities vis-àvis abroad increased by about $10.7 billion (about 11.3 percent), further to an
increase of about $10.2 billion (12 percent) in the third quarter of the year.
Most of the increase in the surplus during the fourth quarter of 2016 is a
result of other investments abroad by Israelis and of a decline in the prices of
Israeli financial shares held by nonresidents.
The increase in the value of the portfolio of Israelis’ assets held abroad in the
fourth quarter ($5.4 billion, 1.4 percent) was concentrated in other
investments ($3 billion, 5 percent), and in direct investments abroad by
Israelis ($1.5 billion, 1.7 percent).
The decline in the gross balance of liabilities to abroad in the fourth quarter
($5.4 billion, 1.9 percent) derived mainly from a decline in the prices of
Israeli shares held by nonresidents ($8.1 billion, 8.9 percent).
The surplus of assets over liabilities vis-à-vis abroad in debt instruments
alone (negative net external debt) increased in the fourth quarter of 2016 by
about $3.8 billion (3 percent), to about $129 billion at the end of the quarter.
The gross external debt to GDP ratio increased in the fourth quarter, to 28.6
percent at the end of December, the result of an increase in the shekel value
of gross external debt that was greater than the increase in GDP.
Bank of Israel - Israel’s International Investment Position (IIP), Fourth quarter of 2016
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Israel's net assets abroad (the surplus of assets over liabilities) increased by $10.7
billion (11.3 percent) in the fourth quarter of 2016, to around $106 billion at the end
of December. An increase of $5.4 billion (1.4 percent) in the value of Israelis’ assets
abroad was matched by a decline of $5.4 billion (1.9 percent) in the value of Israeli’s
liabilities to nonresidents (Figure 1).
Bank of Israel - Israel’s International Investment Position (IIP), Fourth quarter of 2016
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The value of Israel's assets abroad increased in the fourth quarter of 2016 by about
$5.4 billion (1.4 percent), to about $381 billion at the end of December, mainly as a
result of net other investments1 abroad and an increase in the balance of direct
investments abroad.
The value of the financial investments portfolio increased by about $1 billion (0.9
percent) in the fourth quarter. Net investments by Israelis in foreign bonds totaling
about $2 billion (3.5 percent) were partly offset by net realizations of foreign shares
totaling about $700 million (1.1 percent).
The value of direct investments abroad increased by about $1.5 billion (1.5 percent)
in the fourth quarter, mainly as a result of the flow of investments in share capital
totaling about $1.5 billion.
The value of other investments abroad increased in the fourth quarter by $2.9
billion (4.8 percent), mainly due to net deposits with Israeli banks abroad totaling
about $1.5 billion (14.5 percent) and an increase in customer credit totaling about $1.1
billion (5.3 percent)
The value of the foreign exchange reserves remained unchanged at $98.4 billion in
the fourth quarter.
The composition of Israelis’ securities portfolio abroad: During the fourth quarter
of 2016, there was an increase in the proportion of Israeli bank deposits abroad, in
contrast with a decline in this proportion in the two previous quarters. In contrast,
there was a slight decline in the proportion of direct and financial investments in
foreign shares (Figure 2).
1
Other investments: Investments abroad by Israelis or investments in Israel by nonresidents in other
instruments: deposits, financial loans (that are not owners’ loans or bonds), credit to
customers/suppliers. Other investments abroad by Israelis also include investments in other assets
(financial derivatives, mutual funds, index funds, and so forth.)
Bank of Israel - Israel’s International Investment Position (IIP), Fourth quarter of 2016
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The balance of Israel's liabilities to abroad declined in the fourth quarter of 2016
by about $5.4 billion (1.9 percent), to about $275 billion at the end of December.
The value of direct investments in the economy increased by $2.8 billion (2.6
percent) in the fourth quarter, derived mainly from the flow of direct investments in
Israeli share capital ($4.3 billion, 4.4 percent), which was partly offset by net
redemptions of owners’ loans totaling about $800 million (6.7 percent).
The value of financial investments (stocks and bonds) declined by about $9.7
billion (8 percent) in the fourth quarter, mainly declines in the prices of Israeli shares
held by nonresidents ($8.1 billion, 8.9 percent) in one company in the pharmaceuticals
industry, and net realizations of Israeli bonds totaling about $1.1 billion (3.8 percent).
The value of other investments increased by about $1.5 billion (3 percent) in the
fourth quarter, mainly due to the receipt of financial loans from nonresidents totaling
about $2.3 billion (13.1 percent).
The value of nonresidents' financial portfolio on the Tel Aviv Stock Exchange
declined in the fourth quarter by about $4.2 billion (11 percent), to about $31.6 billion
at the end of December, following an increase of $1.7 billion in the third quarter.
Most of the decline was due to a decline in the value of the balance of financial shares
(Figure 3).
Bank of Israel - Israel’s International Investment Position (IIP), Fourth quarter of 2016
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The gross external debt
Israel's gross external debt declined slightly, by about $145 million (0.2 percent) in
the fourth quarter of 2016, to about $91 billion, mainly due to realizations of Israeli
bonds and the repayment of owners’ loans.
The ratio of gross external debt to GDP increased in the fourth quarter, to 28.6
percent at the end of December. The increase was a result of an increase in the shekel
value of gross external debt (2.2 percent) that was greater than the increase in GDP
(1.1%). The increase in the shekel value of the gross external debt was a result of the
depreciation of the shekel in the fourth quarter (2.3 percent) (Figure 4).
The net external debt
The surplus of assets over liabilities abroad in debt instruments alone (negative net
external debt) increased by about $3.8 billion (3 percent) in the fourth quarter, to
about $129 billion at the end of December (Figure 5).
The balance of short-term debt assets (repayment/realization within a year) was
about $148 billion at the end of December, mostly in the Bank of Israel’s foreign
exchange reserves, reflecting a coverage ratio of 4.3 times short-term debt.
Bank of Israel - Israel’s International Investment Position (IIP), Fourth quarter of 2016
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For the complete data file, click here.
Bank of Israel - Israel’s International Investment Position (IIP), Fourth quarter of 2016
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