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BANK OF ISRAEL
Office of the Spokesperson and Economic Information
June 17, 2013
Press Release
Israel's International Investment Position (IIP), March 2013
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Israel’s surplus assets over liabilities vis-à-vis abroad continued to increase
moderately during the first quarter by some 1.3 percent, reaching $60 billion
at the end of March. An increase of $9.3 billion (3.4 percent) in surplus assets
held abroad by Israelis was partially offset by an increase of $8.6 billion (3.9
percent) in Israelis’ liabilities abroad.
The increase in the asset portfolio was a result of the combination of
investments in tradable securities portfolio abroad ($4.3 billion) and an
increase in their market value; an increase in deposits by Israeli banks in
banks abroad ($0.9 billion); and growth in reserve assets ($1.1 billion).
The increase in the gross balance of liabilities to abroad was due mainly to
direct investments by foreign residents ($3.9 billion), net investments in
government of Israel bond issues abroad ($2 billion), and an increase in the
value of investments by foreign residents in the tradable securities portfolio
($2.5 billion).
The gross external debt to GDP ratio continued to decline by another
percentage point during the first three months of 2013, to a level of 38
percent.
The surplus of assets over liabilities vis-à-vis abroad in debt instruments
alone increased in the first quarter of 2013, by about $2.1 billion (2.9
percent), and reached about $72.8 billion at the end of the quarter (a
negative net external debt).
Balance ($ billion)
Change ($ billion)
31.12.11 31.12.12 31.03.13
Total assets
of which: Debt instruments
of which:
Direct investment
Portfolio investment
of which: Shares
Bonds
Other investment
Reserve assets
Total liabilities
of which: Debt instruments
of which:
Direct investment
Portfolio investment
of which: Shares
Bonds
Other investment
Total net liabilities
of which Net debt
2012
Price
Transactions differences
8.4
5.8
0.6
0.5
Exchg. rate
chgs. and
other adj.
8.5
2.1
Change (%)
First quarter of 2013
Exchg. rate
Price
chgs. and
Transactions differences
other adj. Balances
7.4
2.3
-0.3
5.1
3.3
0.2
-0.3
0.0
First quarter of
2012 2013
Prices Balances
2.2
3.4
0.3
1.9
Prices
0.8
0.1
265.3
167.7
278.7
167.7
288.1
170.9
70.8
62.4
35.6
26.8
57.5
74.9
222.8
105.3
74.0
75.8
44.8
31.0
53.4
75.9
221.6
97.0
74.2
82.6
49.8
32.9
54.6
77.0
230.2
98.1
2.4
8.8
5.0
3.8
-2.2
-0.2
2.3
-5.6
0.9
4.7
4.2
0.5
0.2
0.1
-1.2
0.1
6.7
5.0
1.7
-0.8
2.2
6.2
-1.5
0.4
4.3
3.2
1.1
1.1
1.8
5.3
1.5
0.0
1.9
1.9
0.0
0.2
0.2
3.1
-0.1
0.6
-0.2
0.8
-0.1
-0.9
0.2
-0.4
4.5
21.4
25.9
15.5
-7.2
1.4
-0.5
-7.9
1.3
7.5
11.8
1.7
0.3
0.1
-0.5
0.3
9.0
11.0
6.0
2.3
1.4
3.9
1.2
0.0
2.5
4.2
0.0
0.3
0.3
1.4
65.0
89.2
58.1
31.2
68.6
-42.5
-62.4
74.4
84.1
57.6
26.4
63.1
-57.1
-70.7
79.0
88.8
60.7
28.1
62.4
-57.9
-72.8
9.5
-3.5
0.3
-3.8
-3.6
-6.1
-6.3
1.4
-2.6
-2.6
0.0
3.0
5.7
5.0
0.7
-2.5
-2.3
-3.6
3.9
1.8
0.1
1.7
-0.4
-2.1
-1.8
0.6
2.5
2.5
0.0
0.1
0.4
0.4
0.0
-0.3
0.5
0.0
14.4
3.9
-5.8
-0.8
-15.1
2.2
3.5
-2.9
-4.5
0.0
6.2
5.6
5.4
6.2
-1.1
0.8
3.0
4.4
-7.0
-0.6
0.9
-0.2
Israel's net assets abroad (the surplus of assets over liabilities) increased by about
$0.8 billion (1.3 percent) in the first quarter of 2013, and was around $58 billion at
the end of March. An increase of $9.3 billion (3.4 percent) in the value of Israelis’
assets abroad was partially offset by an increase of $8.6 billion (3.9 percent) in the
value of liabilities to abroad (Table 1, Figure 1).
Figure 1: The net balance of Israel's liabilities abroad
2003-2013, $ billion
300
30
270
20
10
240
0
210
-10
180
-20
150
-30
-40
120
-50
90
-60
60
-70
Net Liabilities (right axis)
Gross Liabilities
Gross Assets
The balance of Israel's assets abroad increased in the first quarter of 2013 by about
$9.3 billion (3.4 percent), to reach about $288 billion at the end of March. The
increase in the asset portfolio was a result of the combination of investments in
tradable securities portfolio abroad and an increase in their market value; an increase
in deposits by Israeli banks in banks abroad; and growth in reserve assets in the
economy.
The value of the tradable securities portfolio increased by $6.8 billion (9 percent).
About $3.2 billion of that derived from net investments by Israelis in tradable shares,
mainly by institutional investors, and $1.9 billion derived from price increases on
markets abroad. There was a net investment of $1.9 billion in tradable bonds
abroad.
Other investments totaled $1.2 billion, of which there were net deposits by the
public with foreign banks abroad of about $0.9 billion.
Reserve assets increased by $1.1 billion during the first quarter of 2013, as a result of
the deposit of the proceeds from the issue of government bonds abroad totaling $2
billion at the end of January, which were partially offset by exchange rate
differentials totaling $0.9 billion.
In the composition of residents' securities portfolio abroad, the trend of increasing
weight of shares in the tradable portfolio continued in the first quarter, reaching about
24 percent at the end of March, an increase of about 15 percentage points since 2008.
In parallel, there has been a moderate decline in the share of direct investments
abroad during the last two quarters. The continued decline in the share of deposits in
banks abroad was halted in the first quarter.
Figure 2: Composition of Israelis' Asset Portfolio Abroad*
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Equity direct
investment
Equity investments Bond investments
Bank deposits
Credit and others
* Excluding the foreign exchange reserves.
The balance of Israel's liabilities to abroad increased during the first quarter of
2013 by about $8.6 billion (3.9 percent), and reached $230 billion at the end of
March. The increase in the balance of liabilities to abroad derived primarily from
value increases of the tradable securities portfolio in Israel ($4.7 billion, or 5.6
percent) and an increase in direct investments of $4.6 billion (6.2 percent).
The value of the tradable securities portfolio increased by $4.7 billion, including
$3.1 billion in tradable shares, mainly an increase in share prices, and $1.7 billion in
net investments in bonds, which include the Israeli government bond issue in the US
at the end of January totaling $2 billion, half of which are in 10-year bonds and half
in 30-year bonds.
Direct investments in the first quarter totaled about $3.9 billion, of which about $0.6
billion was invested by a foreign resident in an Israeli software company.
Other investments by foreign residents in the Israeli economy resulted in total net
sales of about $0.4 billion. Prominent in the first quarter were net deposits by foreign
banks of about $0.7 billion against the background of the trend of withdrawals from
deposits in Israel that characterized 2012 (withdrawals of $3.9 billion).
The value of nonresidents' financial portfolio on the Tel Aviv Stock Exchange
increased in the first quarter of 2013 by around $2.4 billion, and at the end of March
was $30 billion. The increase is primarily the result of higher prices of shares held in
the nonresidents’ financial portfolio (Figure 3).
Figure 3: Nonresidents' Securities Holdings on the Tel Aviv
Stock Exchange
45
40
35
30
$ billion
25
20
15
10
5
0
Equity (direct investment)
Equity and mutual funds (portfolio)
Bonds
The gross external debt
Israel's gross external debt increased by $1.2 billion (about 1.2 percent) between
January and March, as a result of the government’s bond issue abroad. At the same
time, there were credit repayments to abroad totaling $0.9 billion.
The ratio of gross external debt to GDP continued to decline in the first three
months of the year, by another 1 percentage point, to 38 percent at the end of March
2013 (Figure 4).
Figure 4: The Ratio of External Debt to GDP
70%
65%
60%
55%
50%
45%
40%
35%
*Gross external debt
The net external debt
The surplus of assets over liabilities abroad in debt instruments alone increased by
about $2 billion (2.9 percent) in the first quarter of 2013, and reached $73 billion (i.e.,
a negative net foreign debt) at the end of March (Figure 5).
The balance of short-term debt assets was $116 billion at the end of March 2013, a
coverage ratio of 2.7 of short-term debt.
Figure 5: Net* External Debt
$ billion, net lending to abroad ()
200
150
100
50
0
-50
Net External Debt
Gross External Debt
Total Debt Assets Abroad
-100
*External debt minus assets abroad in debt instruments (i.e., excluding equity).
Additional data: http://www.bankisrael.gov.il/deptdata/pik_mth/pikmth_e.htm