Nonresidents’ investments on the Tel Aviv Stock Exchange during the COVID-19 crisis

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·         Since the start of the COVID-19 crisis, from February until the end of October 2020, the value of the Israeli securities portfolio of nonresidents on the Tel Aviv Stock Exchange increased by about $400 million to about $49.8 billion.  A marked increase in the value of the bond and makam portfolio was offset by a sharp decline in the value of the equities portfolio.

·         The value of nonresidents’ equities portfolio on the Tel Aviv Stock Exchange declined by close to $8 billion (NIS 28 billion) since the start of the COVID-19 crisis, mainly due to declines in share prices on the TASE.

·         Despite the crisis and uncertainty in the markets, nonresidents did not sell off significant volumes of Israeli shares on the Tel Aviv Stock Exchange.  There were realizations of financial holdings totaling about $900 million (NIS 3.07 billion) between February and October.  However, nonresidents’ share of the total market value of shares on the Tel Aviv Stock Exchange declined by 0.9 percentage points during the period, to 16.6 percent at the end of October.

·         By way of comparison, during the 2008 crisis, nonresidents sold off shares totaling about $3 billion (NIS 11.05 billion) on the Tel Aviv Stock Exchange between July and December 2008.

·         In contrast, the value of nonresidents’ bond and makam portfolio in Israel increased markedly between February and October, rising by about $8.1 billion to about $20.1 billion—its highest level in a decade. As background to these developments, the government bond purchasing program, Israel’s accession to the FTSE’s world government bond index (the FTSE WGBI), and the widening of the shekel/dollar interest rate gap in dollar loan transactions at the start of the crisis should be noted.