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16.03.2010
 
Israel's International Investment Position (IIP), December 2009
 
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  The value of Israeli residents' assets portfolio abroad increased by about $31 billion (16 percent) in 2009, to $221 billion, the result of a combination of an $18 billion increase in the value of the Bank of Israel's foreign exchange reserves, and a $16 billion increase in the value of the financial portfolio.
  The balance of liabilities to nonresidents increased in 2009 by about $34 billion (18 percent), mainly due to the increase in Israeli share prices.
  The net surplus of Israel's liabilities abroad over its assets abroad at the end of December was about $5.5 billion, and increase of $4 billon from the level at the end of 2008.
  The surplus of assets over liabilities in debt instruments continued to expand in 2009, and reached $55 billion.
  In the fourth quarter of 2009 the surplus of liabilities to abroad over assets abroad continued to increase: the further rise in the value of nonresidents' holdings of Israeli shares was in part offset by the continued investment abroad by Israelis.
 

 
Israel's net surplus of liabilities abroad over assets abroad increased by about
$4 billion in 2009, and reached about $5.5 billion at the end of December. The increase was due mainly to the continued increase prices of Israeli shares held by nonresidents and the persistent flow of investments into the economy. These were offset in part by an increase in the value of Israel's assets abroad––a combination of increases in Israel's foreign currency reserves and in investments in foreign shares.
The balance of assets abroad increased in 2009:Q4 by $6.5 billion, and at the end of 2009 stood at $221 billion. In the whole of 2009 the balance of assets increased by some $31 billion (16 percent), of which $20 billion was the flow of investments abroad.
Israelis’ portfolio investments abroad in tradable securities increased in the fourth quarter of 2009 by $4 billion (12.5 percent), to reach $52 billion at the end of the year. In the whole of 2009 the balance of investment increased by $16 billion (44 percent), a combination of a net $7.6 billion of investments, mainly by institutional investors, and price rises (of $7.5 billion) in stock markets abroad.
The balance of Israel's direct investments abroad stood at $56 billion at the end of December 2009. The flow of direct investments abroad by Israelis in 2009 totaled some $1.7 billion.
The balance of other investments abroad by Israelis, including deposits and credit, fell from the beginning of 2009by $5.3 billion (9 percent), mainly due to the reduction in Israeli banks' deposits in banks abroad.
The foreign exchange reserves in the Bank of Israel grew by about $18 billion in 2009, as a result of the Bank's policy, since March 2008, of buying foreign currency on the market.
Composition of the external assets portfolio
The composition of Israelis' overseas assets portfolio changed in 2009, with an increase in shares at the expense of bank deposits.
 

 
The balance of Israel's liabilities abroad increased by $10.5 billion in the fourth quarter of 2009, to reach $227 billion at the end of December, an increase of $34.5 billion (18 percent) from the level at the end of 2008. $26 billion of the rise was the result of the rise in prices of Israeli shares.
The flow of foreign direct investment into Israel totaled $3.7 billion in 2009, in addition to the rise in share prices which contributed another $4.6 billion (7 percent) to the increase in the balance.
The balance of portfolio investment in Israel by nonresidents increased by
$8 billion in the fourth quarter of 2009, and was $95 billion at the end of December. The value of the portfolio rose by a total of $24 billion (34 percent) in 2009, due mainly to the 30 percent increase in share prices, and also to some extent to continued net investment in the trading portfolio by nonresidents.
The financial portfolio of nonresidents in the Tel Aviv Stock Exchange increased by $14 billion since the beginning of 2009, and at the end of December it stood at $30 billion. An estimate of these share holdings in December indicates that $7 billion of the latter is held by foreign investment funds, and $2.5 billion by institutional investors.
 

 
The external debt
Israel's gross external debt increased by $4 billion (4.7 percent) in 2009, and at the end of December stood at $91 billion. Most of the increase was the result of an increase in suppliers' credit in the private nonbank sector and in loans from nonresidents. The external debt/GDP ratio remained steady at 45 percent.
Data on the net external debt show that net loans from Israel to abroad continued to increase, so that the surplus of assets over liabilities in debt instruments was $55 billion, a rise of $12 billion from the level at the end of 2008. The surplus of short-term assets was $66 billion at the end of December, reflecting a high coverage ratio––short-term assets are 2.6 greater than short-term debt.