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15.09.2010
 
Israel's International Investment Position (IIP), Second Quarter of 2010
 
  The net surplus of Israel's liabilities to abroad declined by about $16 billion in the second quarter of 2010, and for the first time Israel showed a net surplus of assets, of about $1 billion.
  The transition to an assets surplus was the result of a fall of about $17 billion in the balance of liabilities to nonresidents due to the steep drop in prices of Israeli shares held by them.
  The value of Israeli's asset portfolio abroad declined moderately in the second quarter of 2010 (by about $0.7 billion), and occurred despite the continued net investment in foreign shares, and the purchase of foreign currency by the Bank of Israel; this was due to greater effect of the fall in share prices and the strengthening of the dollar.
  In the second quarter of 2010 the surplus of assets abroad over liabilities in debt instruments only, continued to contract, declining by about $1.6 billion, bringing the negative net external debt in June 2010 to about $50 billion.
 

 
Israel's net surplus of liabilities abroad over assets abroad decreased in 2010:Q2 by about $16 billion, and for the first time Israel had a net surplus of assets over liabilities, of about $1 billion. This was due mainly to the steep fall of $17 billion in liabilities to abroad, essentially because of the drop in prices of Israeli shares held by nonresidents. Israelis' assets abroad declined by only a moderate $0.7 billion.
 

 
The balance of Israel's assets abroad
The balance of Israel's assets abroad decreased in 2010:Q2 by about $0.7 billion, and reached $223 billion at the end of June. This occurred despite continued net investments by Israeli residents of about $3 billion in foreign shares, and purchases of $3 billion on the market by the Bank of Israel. The decline in the balance was due to the greater effect of the drop in foreign share prices (of about $3 billion, or 9 percent) and the strengthening of the dollar against the euro (also by about $3 billion, or 9 percent).
The composition of Israeli's asset portfolio abroad in the second quarter of 2010 showed an increase in the share of direct investments and a decline in the share of portfolio investments and bank deposits.
 

 
The balance of Israel's liabilities abroad
The balance of Israel's liabilities abroad decreased by about $17 billion in the second quarter of 2010, to about $222 billion, following its increase of some $11 billion in the first quarter. Most of the decline was in nonresidents' portfolio investments in negotiable securities, which fell by about $14 billion in the second quarter, due to a sharp drop of about 17 percent ($13 billion) in prices of Israeli shares. Nonresidents' net investment flow into negotiable securities hardly changed: investment of about $1.6 billion in bonds were offset by net sales of a similar amount of shares.
The value of nonresidents' financial portfolio in the Tel Aviv Stock Exchange (TASE) was about $28 billion at the end of June, a decline of some $6 billion in the second quarter of 2010, the result of the fall in share prices and the strengthening of the dollar. Net flows in the securities portfolio in the TASE were only about $0.3 billion: sales of about $2.5 billion of shares were offset by net investments of $2.2 billion, mainly in makam. Of the $12.8 billion portfolio of shares on the TASE held by nonresidents at the end of June, about $3 billion was held by foreign investment funds, about $3 billion was held by foreign institutional investors, and about $6 billion was held by other large financial institutions.
 

 
The external debt
Israel's gross external debt increased by $0.8 billion in 2020:Q2, and at the end of June stood at about $94 billion. Most of the increase was the result of an increase of $2 billion in the gross public debt, the result of purchases of government bonds by nonresidents, which was partially offset by the effect on the dollar debt of the strengthening of the dollar against the shekel.
The external-debt/GDP ratio at the end of the second quarter was 47.5 percent, an increase of about 2.5 percentage points from the average in the last four quarters.
The downward trend in net loans to abroad continued, and resulted from the combination of a decline in debt assets and an increase in liabilities in debt instruments. Israel's surplus of assets over liabilities in debt instruments in June 2010 was about $50 billion, a decline of about $1.6 billion from the level at the end of the first quarter. The surplus of short-term assets at the end of June was about $62 billion, and reflected a cover of 2.4 times the short-term debt, compared with a cover of 2.6 times in the first quarter.