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  •  In the third quarter of 2013 the value of the public's financial assets portfolio increased by about 1.9 percent in real terms (by NIS 54 billion), and reached NIS 2.8 trillion at the end of September. 
  •  Most of the increase was registered in the value of the domestic shares portfolio, which increased by NIS 36 billion (8.7 percent) and in the value of foreign shares, which increased by $17 billion (8.4 percent), due primarily to the increase in share prices and the net flow of investments abroad by Israeli residents.
  •  As a result of the above developments, the share of tradable assets in the portfolio increased by 1.6 percentage points in the first three quarters of the year, in parallel with an increase of 1.4 percentage points in the share of risk assets in Israel and abroad.
  •  There was a net increase of around NIS 10 billion (8 percent) in the section of the portfolio managed through mutual funds in the third quarter of 2013, mainly in money market funds and in funds that specialize in CPI-indexed corporate bonds.

1.     The total assets portfolio

 
In the third quarter of 2013 the value of the public's financial assets portfolio increased by about 1.9 percent in real terms, and reached NIS 2.8 trillion at the end of September.
 
The increase was due primarily to an increase in the value of the securities portfolio on the Tel Aviv Stock Exchange—an increase of about NIS 36 billion (8.7 percent) in the value of the Israel shares portfolio, due primarily to an increase in share prices.  In parallel, there was an increase of about $17 billion (5 percent) in the value of the tradable assets portfolio abroad—a combination of an increase in investments and price increases.  

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During the first three quarters of 2013, there was an increase of about 1.6 percentage points in the share of tradable assets in Israel and abroad, and of about 1.4 percentage points in the share of risk assets.

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2.   The securities portfolio, by main components

Shares in Israel

In the third quarter of 2013 the balance of shares held by the public increased by NIS 36 billion, to NIS 452 billion at the end of September, an increase of 8.7 percent over the previous quarter. This decline was due to the effect of price changes of Tel Aviv Stock Exchange-traded shares.  In the third quarter, the net flow of investments by the public in Israeli-traded shares was zero—net investments by mutual funds and net investments by the direct public were offset by net sales by institutional investors.

Since the beginning of the year, the balance of shares increased by about NIS 44 billion (10.8 percent).  The increase in this component was mainly due to the effects of price increases on the Tel Aviv Stock Exchange (about NSI 45 billion), which was partially offset by net sales of shares by the public totaling about NIS 1 billion.

Corporate bonds

In the third quarter of 2013 the value of negotiable corporate bonds in the portfolio increased to about NIS 261 billion at the end of September. Price increases in the corporate bond market totaling about NIS 4.8 billion were partially offset by net payouts of about NIS 4 billion.

Since the beginning of the year, the value of negotiable bonds in Israel increased by about NIS 3.8 billion (1.5 percent).

The assets portfolio abroad

In the third quarter of 2013, the value of the portfolio abroad held by Israeli residents increased by about NIS 17 billion (5 percent), to NIS 355 billion at the end of September. Most of the increase was in shares traded abroad, which increased by about NIS 16.5 (8.4 percent)—a combination of net investment flow abroad (about NIS 8 billion), mainly by institutional investors, and of share price increases.

In parallel, there was an increase in the value of the tradable bond portfolio abroad (1.6 percent), which was partially offset by a reduction in the balance of deposits in banks abroad (0.3 percent).
Since the beginning of the year, the value of the share portfolio abroad increased by about NIS 30 billion (16.2 percent).  The increase in the balance of shares abroad is due mainly to the net investments in shares by institutional investors abroad and an increase in stock indices abroad.  These were partially offset by the appreciation of the shekel against the dollar (5.3 percent), which lowered the shekel value of the portfolio.

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3.      Mutual funds
 
The value of the portfolio managed by Israeli mutual funds was NIS 218 billion at the end of September, about 7.7 percent of the public's total asset portfolio and about 16.4 percent of the tradable portfolio. In the third quarter of 2013, the value of mutual fund assets increased by about NIS 14 billion (6.7 percent)—of which about NIS 10.8 billion was due to net accumulations (surplus of issues over deposits, minus dividends), and the rest was due to price increases in the markets.
 
A breakdown of mutual funds by specialization shows that net increases in the third quarter of the year were concentrated in “other” bonds (about NIS 5 billion or 7.6 percent)—mainly CPI-indexed corporate bonds, and money market funds (NIS 4.8 billion, 8.4 percent). In contrast, there were net deposits in the foreign bond component (about NIS 0.6 billion, 10.3 percent).
 
Since the beginning of the year, the value of mutual fund balances increased by about NIS 48 billion (28.4 percent), with about NIS 42.5 billion due to net accumulations.

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* Further information on the public's assets portfolio can be seen on the Bank of Israel's website www.bankisrael.gov.il .