Bank of Israel
Office of the Spokesperson, External Relations and Public Affairs
BANK OF ISRAEL
Office of the Spokesperson and Economic Information
December, 2012
Press Release
Israel's International Investment Position (IIP), September 2012





The rapid increase in surplus assets over liabilities vis-à-vis abroad continued
during the third quarter (some $3 billion, 7 percent), reaching $46 billion at
the end of September. Since the beginning of the year, the surplus has
increased by about $12 billion.
The value of Israeli residents' assets vis-à-vis abroad increased by about $6.8
billion (2.6 percent) in the third quarter of 2012, to $267 billion at the end of
September. The increase was a result of both investments in equities abroad,
and market price increases.
The balance of liabilities to abroad increased by about $3.8 billion (1.7
percent) during the third quarter of 2012, and reached about $221 billion at
the end of September. The increase was due mainly to price increases on the
Tel Aviv Stock Exchange (some 1.7 percent).
The surplus of assets over liabilities vis-à-vis abroad in debt instruments alone
continued to increase in the third quarter of 2012, by about $4.4 billion (7.1
percent), and reached about $66 billion at the end of September (a negative
net external debt).
The continued decline in Israel's gross debt to abroad since mid-2011, as a
result of makam redemptions by nonresidents, contributed to a sharp decline
of some 6 percentage points in the gross foreign debt to GDP ratio, which
reached 39.4 percent at the end of September.
POB 780 Jerusalem 91007 Israel
Tel: 972-2-6552712/3 Fax: 972-2-6528812 www.bankisrael.org.il
Balance ($ billion)
31.12.11 30.06.12 30.09.12
Total assets
of which: Debt instruments
of which:
Direct investment
Portfolio investment
of which: Shares
Bonds
Other investment
Reserve assets
Total liabilities
of which: Debt instruments
of which:
Direct investment
Portfolio investment
of which: Shares
Bonds
Other investment
Total net liabilities
of which Net debt
Change ($ billion)
Change (%)
accumuated
accumuated change from beginning of Third quarter change (%) from
2012
of 2012
beginning of
Third quarter of 2012
257.3
158.0
260.2
156.1
Exchg.
Price rate chgs.
Price Exchg. rate chgs.
Transactions differences and other Transactions differences
and other adj. Balances Prices Balances Prices
267.0
2.9
2.7
1.2
4.0
4.6
1.1
2.6 1.0
3.8
1.8
158.0
0.5
0.4
1.0
-1.6
0.6
1.0
1.2 0.2
0.0
0.4
71.9
61.0
35.5
25.5
49.9
74.9
223.5
103.9
74.2
64.6
37.9
26.7
46.6
75.1
217.5
94.7
75.1
69.3
41.6
27.7
46.7
76.2
221.3
92.2
0.7
2.4
1.6
0.8
0.1
-0.2
0.3
-2.6
0.4
2.1
1.9
0.2
0.1
0.2
3.8
0.0
0.7
0.2
0.5
0.7
1.1
-0.5
-0.2
2.9
4.5
2.6
1.9
-3.7
0.4
-1.3
-11.1
0.5
3.7
3.3
0.4
0.2
0.2
2.3
0.0
0.5
0.1
0.5
1.2
0.7
-3.5
-1.0
1.2
7.3
9.7
3.9
0.2
1.5
1.7
-2.6
0.5
3.2
4.9
0.8
0.2
0.2
1.7
4.5
13.6
17.0
8.8
-6.3
1.8
-1.0
-11.2
0.7
6.1
9.4
1.4
0.5
0.2
1.0
66.8
89.4
57.9
31.5
67.3
-33.8
-54.1
70.1
83.8
57.1
26.6
63.7
-42.7
-61.4
73.0
87.0
60.5
26.6
61.2
-45.7
-65.8
2.6
0.3
0.3
0.0
-2.6
-2.6
-3.2
0.8
2.9
2.9
-0.4
-0.3
0.1
-0.4
0.2
-2.9
-2.4
7.5
-2.7
1.6
-4.3
-6.1
-5.3
-9.5
0.7
1.6
1.6
-1.9
-1.6
-0.6
-1.0
0.0
-5.8
-3.2
4.2
3.9
5.9
-0.2
-3.8
1.2
3.5
5.1
9.3
-2.6
4.4
-15.5
-9.0
1.1
1.8
2.8
1.0
-0.4
-2.3
-0.6
Israel's net assets abroad (the surplus of assets over liabilities) increased by about $3
billion (7 percent) in the third quarter of 2012, and was around $46 billion at the end of
September. The increase in surplus assets in the portfolio derives from the increase in
asset values due to price rises on markets abroad and the investment flow into foreign
stocks and bonds. These were partially offset by the increase in value of liabilities to
abroad. The balance of liabilities to abroad increased primarily through price increases
on the domestic market, and direct investment in the economy by nonresidents.
For the year to date, the surplus assets over liabilities vis-à-vis abroad has increased by
about $12 billion, a result of both the cumulative increase in the balance of assets and a
concurrent decline in the balance of liabilities, primarily due to sales of government
bonds and makam, and withdrawals of deposits in banks in Israel by nonresidents and
foreign banks (Figure 1).
2
Figure 1: The net balance of Israel's liabilities abroad
2003-2012, $ billion
2
2
01
/2
09
01
/2
03
01
01
/2
09
/2
03
01
/2
09
01
/2
00
Gross Liabilities
03
/2
09
00
/2
03
00
00
/2
09
/2
03
00
/2
09
00
00
/2
03
/2
09
00
/2
03
00
00
/2
09
/2
03
00
/2
09
00
/2
03
00
00
/2
/2
09
03
Net Liabilities (right axis)
1
-50
1
60
0
-40
0
90
9
-30
9
120
8
-20
8
150
7
-10
7
180
6
0
6
210
5
10
5
240
4
20
4
270
3
30
3
300
Gross Assets
The balance of Israel's assets abroad increased in the third quarter of 2012 by about
$6.8 billion (2.6 percent), to reach about $267 billion at the end of September. For the
year to date, the balance of assets increased by about $9.7 billion (3.8 percent).
The value of residents' stock portfolios abroad increased by about $3.7 billion (9.7
percent). About $1.9 billion derived from price increases on markets abroad, and there
were net investments of about $1.6 billion, primarily by institutional investors. For the
year to date, the value of the stock portfolio abroad increased by about $6 billion, of
which $3.3 billion was due to price increases and about $2.6 billion from net
investments abroad by Israelis.
There was a small amount of net investments in tradable bonds abroad in the third
quarter.
In other investments, there were net deposits by the public with foreign banks abroad
of about $0.5 billion (4 percent), which were offset by reductions of customer credit of
a similar amount. The increase in foreign currency balances of some $1.1 billion (1.5
percent) derived primarily from exchange rate differentials, and contributed as well to
the increase in the value of assets.
In the composition of residents' securities portfolio abroad, in the third quarter of
2012 there was a 1.1 percent increase in the foreign shares component, with a decline
in direct investment and other credit. Since the beginning of 2012, there has been an
increase in the share of investment in foreign shares, primarily against a decline in the
share of deposits at banks abroad.
At the end of September 2012, direct investments constituted some 39 percent of the
value of residents' securities portfolio abroad, with foreign bonds and other credit
3
Figure 2: Composition of Israelis' Asset Portfolio Abroad*
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Equity investments Bond investments
Credit and others
* Excluding the foreign exchange reserves.
Bank deposits
12/2008
12/2009
12/2010
Equity direct
investment
12/2011
09/2012
accounting for some 28 percent, stocks for some 22 percent and deposits for some 11
percent.
The balance of Israel's liabilities to abroad increased during the third quarter of
2012 by about $3.8 billion (1.7 percent), and reached $221 billion at the end of
September. The increase in the balance of liabilities to abroad derived primarily from
price increases of in nonresidents' stock portfolio in Israel ($2.9 billion) and from the
flow of net direct investments of about $2.6 billion (3.7 percent).
The increase was partly offset by foreign banks' withdrawals of about $1.1 billion
(18.2 percent) from deposits in domestic banks, and by reduction of suppliers' credit at
a similar amount.
Since the beginning of 2012, the economy's gross liabilities declined by about $2.2
billion, a combination of sales of makam and government bonds, and the continued
trend of withdrawals by nonresidents and foreign banks from deposits in Israel; these
were partly offset primarily by the flow of nonresidents' direct investment in the
economy, which totaled $7.5 billion during the period.
The value of nonresidents' financial portfolio on the Tel Aviv Stock Exchange
increased in the third quarter of 2012 by around $2.7 billion (11.5 percent), and at the
end of September was $26.2 billion. Nonresidents' stock holdings increased by $1.5
billion, and reached $12.9 billion, primarily the result of higher prices, and the value of
their bond holdings increased by $0.6 billion to reach $6.2 billion. Since the beginning
of the year, the portfolio's value has declined by about $3.6 billion (Figure 4).
4
Figure 3: Nonresidents' Securities Holdings on the Tel Aviv
Stock Exchange
45
40
35
30
$ billion
25
20
15
10
5
12
/2
12 00
/2 6
12 00
/2 7
12 00
/2 8
03 00
/2 9
06 01
/2 0
09 01
/2 0
12 01
/2 0
01 01
/2 0
02 01
/2 1
03 01
/2 1
04 01
/2 1
05 01
/2 1
06 01
/2 1
07 01
/2 1
08 01
/2 1
09 01
/2 1
10 01
/2 1
11 01
/2 1
12 01
/2 1
01 01
/2 1
02 01
/2 2
03 01
/2 2
04 01
/2 2
05 01
/2 2
06 01
/2 2
07 01
/2 2
08 01
/2 2
09 01
/2 1
01
2
0
Equity (direct investment)
Equity and mutual funds (portfolio)
Bonds
The gross external debt
Israel's gross external debt declined by $2.5 billion (about 2.6 percent) in the third
quarter of 2012, and at the end of September stood at about $92 billion. Most of the
decline was the result of withdrawals from deposits in Israel by nonresidents and
foreign banks, and reductions of suppliers' credit.
The ratio of external debt to GDP continued to decline in the third quarter, by
another 2 percentage points, and at the end of September 2012 was 39.4 percent.
The continued decline in Israel's gross debt to abroad, as a result of redemptions of
makam by nonresidents, contributed, since the middle of 2011, to a sharp decline of
some 6 percentage points in the gross external debt to GDP ratio.
Figure 4: The Ratio of External Debt to GDP
70%
65%
60%
55%
50%
45%
40%
03 0
/0
09 1
/0
03 1
/0
2
09
/0
03 2
/0
09 3
/0
03 3
/0
4
09
/0
03 4
/0
09 5
/0
03 5
/0
6
09
/0
03 6
/0
09 7
/0
03 7
/0
8
09
/0
03 8
/0
09 9
/0
03 9
/1
0
09
/1
03 0
/1
09 1
/1
03 1
/1
2
09
/1
2
/0
09
03
/0
0
35%
*Gross external debt
5
The net external debt
The surplus of assets over liabilities abroad in debt instruments alone increased by
about $4.4 billion (7.1 percent) in the third quarter of 2012, and reached $66 billion
(i.e., a negative net foreign debt) at the end of September.
The balance of short-term debt assets was $114 billion at the end of September
2012, a coverage ratio of 2.7 of short term debt.
Figure 5: Net* External Debt
$ billion, net lending to abroad (-)
200
150
100
50
0
-50
Net External Debt
Gross External Debt
Total Debt Assets Abroad
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
06 08
/2
0
09 09
/2
0
12 09
/2
0
03 09
/2
0
06 10
/2
0
09 10
/2
0
12 10
/2
0
03 10
/2
0
06 11
/2
0
09 11
/2
0
12 11
/2
0
03 11
/2
0
06 12
/2
0
09 12
/2
01
2
-100
*External debt minus assets abroad in debt instruments (i.e., excluding equity).
To additional tables:
http://www.boi.org.il/en/DataAndStatistics/Pages/MainPage.aspx?Level=
2&Sid=27&SubjectType=2
6