ISRAELFinancial Market Analysis

Presented By:-Anand Mohan JhaRoll No.-1203

Introduction Israel is a parliamentary democracy in the Middle East. It borders Lebanon in the north, Jordan and the West Bank in the east, Egypt and the Gaza

Strip on the southwest, and the Gulf of Aqaba in the Red Sea to the south Jerusalem is the country's most populous city and its designated capital. The Prime Minister serves as head of government. It is a developed country, OECD member ( Organization for Economic Co-operation and

Development) Israel has the highest standard of living in the Middle East and the third highest in Asia. Israel's financial center is Tel Aviv. Israel is considered one of the most advanced countries in Southwest Asia in economic and

industrial development. It has the second-largest number of startup companies in the world (after the United States) The largest number of NASDAQ-listed companies outside North America. The Bank of Israel holds $ 78 billion of foreign-exchange reserves.

Economy

GDP: - $ 252.8 billion (Purchasing Power Parity) GDP: - 3.1%, Per Capita Income: - $ 32800 Population: - 7.9 million, Unemployment: - 6.9% Inflation rate: - 1.7% Labor Force: - 3.606 million Budget: -

Revenue: - $ 62.64 billion Expenses: -$ 72 billion

Budget surplus/deficit: - (4.2%) of GDP Exchange rate: -

3.6 NIS with 1 US$ 5.63 NIS with 1 £ 4.72 NIS with 1 €

Public debt.: - 74.4% of GDP

3%

31%

66%

% Composition of GDP

Agriculture

Industry

Service

Export and Import

Export: -$ 64.74 billion

Exports commodities: - Machinery and equipment, software, cut diamonds, agricultural products, chemicals, textiles and apparel

Export Partners:- US 28.8%, Hong Kong 7.9%, Belgium 5.6%, UK 5%, India 4.5%, China 4%

Import: - $ 77.59 billion

Imports commodities:- Raw materials, military equipment, investment goods, rough diamonds, fuels, grain, consumer goods

Import Partners: - US 11.8%, China 7.4%, Germany 6.2%, Belgium 6.1%, Switzerland 5.4%, Italy 4.2%

Banking Regulatory Bank : - Bank of Israel (1954) Headquarter: - Jerusalem Bank Rate: - 1% Commercial bank prime landing rate: - 5.14% Objectives of BOI: -

To maintain price stability as central goal To support of the govt. economic policy To support the stability and orderly activity of the financial system

Financial Institutions   Ministry of finance Bank of Israel (Central Banks)  Tel Aviv Stock Exchange (TASE) Authorized banking corporations in Israel

Contd…. Commercial and mortgage banks :-

Bank Hapoalim Leumi Group Israel Discount Bank  Bank Mizrahi-Tefahot First International Bank of Israel

Investment companies: - Psagot Investment House Excellence Nessuah Investment House IBI Investments House  Prisma Investment House

Function of Bank of Israel Supervising and regulating the banking system

Supervising the stability of banking corporations Ensuring proper conduct of banking corporations Assuring fair business relations between banks and their customers.  

Managing monetary policy Though the Monetary auctions Though The Makam (short term security) Though the Repo

Holding and managing the foreign currency reserves of the State Preserving the value of the reserves in terms of their uses Managing the reserves at a high level of liquidity Earning a reasonable yield on the reserves portfolio without contravening the

previous two principles.   Supporting the orderly activity and stability of the financial market

Deposit And Saving Union Bank offers you attractive deposit accounts with a variety of plans, giving you

the flexibility to adapt to your changing ability and needs. UNLINKED DEPOSITS: unlinked NIS deposits at fixed interest or variable

interest linked to the prime rate; INDEX-LINKED DEPOSITS: deposits which preserve the real value of the

money which is not eroded even in inflationary times; FOREIGN CURRENCY DEPOSITS: intended for savers who wish to protect

the value of the currency throughout the term of the deposit; STANDING-ORDER DEPOSITS: a number of options for deposits accruing

monthly for various terms; STRUCTURED PRODUCTS: deposits which may provide high yields whilst the

principal is protected; INTERNET DEPOSITS: a variety of deposit plans which can be opened via the

internet.

Stock market Stock Exchange:- TASE(Tel Aviv Stock Exchange) Founded: -1953(precursor 1935) Owners: -15 banks, 12 investment houses Currency: -New Israel Shekel No of listing: -

611 Companies listing equities 653 Series of corporate bonds 33 Series of government bonds 416 Index tracking product 1231 Mutual found

Market capital: - Equity:- US$ 216 billion Bonds: - US$ 196 billion

Volume: - US$ 546 million daily Indexes:- TA-25 index, TA-100 index, TA Blue Tech-50 index

Bond of Israel Bond: - A debt instrument issued for a period of more than one year with the purpose of

raising capital by borrowing. The Federal government, states, cities, corporations, and many other types of institutions sell bonds. Jubilee Issue Bonds (2, 3, 5 and 10-year): fixed rate, $25,000 minimum investment

and $5,000 increments; semi-annual interest paid May 1 and November 1. Maccabee Issue Bonds (2, 3, 5 and 10-year): fixed rate, $5,000 minimum investment

and $500 increments; semi-annual interest paid May 1 and November 1. Sabra Savings Bonds (3-year): fixed rate, $1,000 minimum investment and $100

increments; interest paid upon maturity. Floating Rate LIBOR Bonds (2, 3, and 5-year): variable rate, $5,000 minimum

investment and $500 increments; semi-annual interest paid June 1 and December 1. Mazel Tov Bonds (5-year): fixed rate, $100 minimum investment and $10

increments; interest paid upon maturity. eMitzvah Bonds (5-year): fixed rate, $36 minimum investment and $18 increments;

interest paid upon maturity.

Bond rate: -  Pair Yield Prev. High Low Chg. Chg. %

3-Month 1.188 1.220 1.236 1.188 -0.032 -2.62%

1-Year 1.203 1.210 1.277 1.000 -0.007 -0.58%

3-Year 1.791 1.770 2.015 1.723 0.021 1.19%

5-Year 2.461 2.434 2.652 2.184 0.027 1.11%

10-Year 3.948 3.919 4.181 3.918 0.029 0.74%

Treasury Bills (T-Bills) T-bills are the most marketable money market security.

They are issued T-bill with three-month, one-year, three year, five year and ten year maturity.

T-bills are purchased for a price that is less than their par (face) value; when they mature, the government pays the holder the full par value.

T-Bills are so popular among money market instruments because of affordability to the individual investors.

In 2012, T-bill rate of Israel is 1.5%.

THANK YOU

https://www.cia.gov/library/publications/the-world-factbook/geos/is.htmlhttp://www.boi.org.il/en/markets/reserverequirement/pages/default.aspxhttp://www.unionbank.co.il/1013-en/UnionBank.aspxhttp://www.equities.co.il/Contents.asp?pageName=The+Tel+Aviv+Stock+Exchange&pageID=20