|
| 12.6.2006 |
| |
| Israel's International Investment Position (IIP) at end-March 2006
|
|
| |
|
|
| |
| |
Israel's net balance of external liabilities (the balance of nonresidents’ assets in Israel minus the balance of Israelis’ assets abroad) at the end of March 2006 totaled some $ 25 billion, following a sharp rise of both assets and liabilities abroad, mostly as a result of the Teva-IVAX deal. These developments can be seen from data published today by the Foreign Exchange Activity Department of the Bank of Israel. |
| |
The balance of assets abroad totaled about $139 billion at end-March 2006, a rise of $16.4 billion, mostly due to the increase in direct investment. Teva's purchase of IVAX contributed some $10 billion to the growth in direct investment abroad. Portfolio investments grew by $3.6 billion mostly due to the institutional and households sectors' portfolio adjustments in light of the tax reform. During the first quarter of 2006 the banks increased their purchases of foreign bonds as well as their deposits in banks abroad. The foreign-currency surplus in the banks was a result of an increase in foreign-currency deposits by both firms and individuals as well as repayment of foreign-currency bank credit in light of the contracted interest-rate differential. |
| |
The balance of Israel's external liabilities totaled some $165 billion at the end of March 2006, a rise of $12 billion in the first quarter of the year. Most of this rise resulted from the registration of the Teva-IVAX deal in the nonresidents' portfolio investment. Without this deal the quarter would have seen a slowdown in nonresidents' financial investment in Israeli shares, although in April and May there was a renewed rise in this investment. The positive trend in direct investments that began in the last quarter of 2005 continued and nonresidents invested a further $2 billion in the first quarter of 2006. The lion's share of this investment was in small, non-traded companies of the high-tech industries. |
| |
Israel's net external debt, which has been negative since 2002 (in other words, Israel is a net lender to abroad). grew in the first quarter of 2006, and the assets surplus (debt instruments) vis-?-vis abroad at the end of March totaled $ 22 billion. |
| |
Israel's gross external debt grew in the first quarter of 2006, and at the end of March stood at $81 billion. The surplus of short-term assets (debt instruments) totaled $41 billion at the end of March; an increase of $0.9 billion during the quarter, due mainly to the increase in deposits abroad by the banks. It should be noted that net short-term debt is a major component in assessing an economy’s risk, and a surplus of short-term assets helps to improve a country's credit rating. |
| |
The public-sector external debt totaled $31.7 billion at the end of March 2006. During the quarter the government enjoyed a budgetary surplus due to a surplus in tax collection. Fiscal discipline and utilization of the proceeds of privatization reduced and postponed the need to borrow from abroad, which complements the government's policy of reducing the public debt. |
|
| |
| Table 1: International Investment Position Q1 2006 |
|
| ($ Million ) |
| |
Position as of 2005-Q4 |
Transactions |
Price Changes |
Exchange Rate Changes |
Other Adjustments |
Position as of 2006-Q1 |
| A. |
Assets |
| 1 |
Total assets |
122,909 |
15,853 |
903 |
311 |
-649 |
139,328 |
| Of which: debt instruments |
100,398 |
2,372 |
-100 |
303 |
-280 |
102,693 |
| 2 |
Direct investment abroad |
21,131 |
11,207 |
396 |
9 |
-64 |
32,679 |
| 2.1 |
Equity capital and reinvested earnings |
14,349 |
10,739 |
396 |
9 |
-84 |
25,408 |
| 2.2 |
Real estate |
.. |
-19 |
0 |
0 |
19 |
.. |
| 2.3 |
Equity-holders' loans |
6,782 |
488 |
0 |
0 |
1 |
7,271 |
| 3 |
Portfolio investment |
26,191 |
3,692 |
607 |
81 |
-730 |
29,841 |
| 3.1 |
Equity securities |
8,158 |
2,767 |
607 |
0 |
-304 |
11,228 |
| 3.2 |
Debt securities |
18,033 |
925 |
0 |
81 |
-426 |
18,613 |
| 4 |
Other investment |
47,315 |
954 |
0 |
139 |
145 |
48,554 |
| 4.1 |
Deposits of Israeli residents abroad |
13,942 |
-186 |
0 |
0 |
-124 |
13,632 |
| 4.2 |
Deposits of Israeli banks abroad |
17,801 |
951 |
0 |
93 |
0 |
18,846 |
| 4.3 |
Loans |
5,791 |
93 |
0 |
12 |
0 |
5,896 |
| 4.4 |
Trade credits |
9,371 |
138 |
0 |
34 |
0 |
9,543 |
| 4.5 |
Other Assets |
410 |
-42 |
0 |
0 |
269 |
637 |
| 5 |
Reserve assets |
28,267 |
5 |
-100 |
82 |
0 |
28,255 |
| 6 |
Financial derivatives |
4 |
-5 |
0 |
0 |
0 |
-1 |
| B. |
Liabilities |
| 1 |
Total liabilities |
152,429 |
11,961 |
-507 |
17 |
605 |
164,505 |
| |
Of which: debt instruments |
76,443 |
4,015 |
0 |
195 |
0 |
80,653 |
| 2 |
Direct investment in reporting economy |
36,345 |
2,331 |
93 |
-87 |
17 |
38,699 |
| 2.1 |
Equity capital and reinvested earnings |
33,438 |
1,928 |
93 |
-89 |
380 |
35,750 |
| 2.2 |
Real estate |
.. |
363 |
0 |
0 |
-363 |
.. |
| 2.3 |
Equity-holders' loans |
2,907 |
40 |
0 |
2 |
0 |
2,949 |
| 3 |
Portfolio investment |
66,471 |
8,728 |
-600 |
-65 |
588 |
75,122 |
| 3.1 |
Equity securities |
42,548 |
5,655 |
-600 |
-89 |
588 |
48,102 |
| 3.2 |
Debt securities |
23,923 |
3,073 |
0 |
24 |
0 |
27,020 |
| 4 |
Other investment |
49,613 |
902 |
0 |
168 |
0 |
50,683 |
| 4.1 |
Deposits of foreign residents |
20,907 |
-80 |
0 |
80 |
0 |
20,907 |
| 4.2 |
Deposits of foreign banks |
2,282 |
-14 |
0 |
4 |
0 |
2,272 |
| 4.3 |
Loans |
18,889 |
676 |
0 |
50 |
0 |
19,615 |
| 4.4 |
Trade credits |
7,534 |
321 |
0 |
34 |
0 |
7,889 |
| C. |
Net liabilities |
29,520 |
-3,892 |
-1,410 |
-295 |
1,254 |
25,177 |
| Of which: debt instruments |
-23,955 |
1,644 |
100 |
-108 |
280 |
-22,040 |
|
| |
| Table 2: Gross, Net and Forward Amortization Payments of External Debt and Assets |
|
| by Borrowing Sector |
| ($ Million) |
| |
Balance as of 31.12.05 |
Maturing in |
Balance as of 31.03.06 |
Maturing in |
| up to one year |
over one year |
up to one year |
over one year |
| |
External debt |
| 1 |
Public sector |
31,384 |
3,523 |
27,861 |
31,726 |
3,571 |
28,155 |
| 2 |
Private sector |
21,870 |
10,056 |
11,814 |
25,749 |
10,541 |
15,208 |
| 3 |
Banking system |
23,189 |
19,167 |
4,022 |
23,179 |
19,116 |
4,063 |
| 4 |
Total gross external liabilities |
| |
(debt instruments) |
76,443 |
32,746 |
43,697 |
80,653 |
33,227 |
47,426 |
| |
(Percent ) |
100 |
43 |
57 |
100 |
41 |
59 |
| |
|
| |
External assets (debt instruments) |
| 5 |
Public sector |
28,711 |
28,471 |
240 |
28,925 |
28,685 |
239 |
| 6 |
Private sector |
45,677 |
23,561 |
22,115 |
46,156 |
23,473 |
22,683 |
| 7 |
Banking system |
26,011 |
20,731 |
5,280 |
27,611 |
21,967 |
5,644 |
| 8 |
Total external assets |
100,398 |
72,764 |
27,635 |
102,693 |
74,126 |
28,567 |
| |
(Percent ) |
100 |
72 |
28 |
100 |
72 |
28 |
| |
Distribution of net external debt |
| 9 |
Public sector (1-5) |
2,673 |
-24,948 |
27,621 |
2,801 |
-25,114 |
27,915 |
| 10 |
Private sector (2-6) |
-23,807 |
-13,505 |
-10,301 |
-20,408 |
-12,932 |
-7,475 |
| 11 |
Banking system (3-7) |
-2,822 |
-1,564 |
-1,257 |
-4,433 |
-2,852 |
-1,581 |
| 12 |
Total external liabilities |
| |
less external assets (4-8) |
-23,955 |
-40,018 |
16,063 |
-22,040 |
-40,898 |
18,859 |
|
| |
|
|
|
|
