(photo credit: Niv Kantor)
Amid ongoing uncertainty over the regional turmoil in the Middle East, the heads
of Israel’s largest investment houses are split over what the short-term effects
will be on the local capital markets.
Of the 10 CEOs present at the
annual Dun & Bradstreet forum for leading investment house executives in
Givatayim on Thursday, opinions ranged from those who see opportunity in current
geopolitical events to those who don’t see the events having any immediate
impact. However, there was a general consensus that it was nearly impossible to
calculate the risks to the market of regional geopolitical
Clal Finance chief Tal Raz suggested that in light of the
present threats to Israel, punctuated by Sunday’s violence along the
Israeli-Syrian border, what was needed was to take specific steps “that are not
too extreme,” in which finances are moved abroad to the United States or
While admitting that weak first-quarter economic results from
the US were also a cause for concern, he said 350 of the Fortune 500 companies
had surpassed expectations in recent financial reports. “We think that the US
market will return to normal,” he said.
Raz said the Israeli market could
capitalize on the unique opportunity presented by the increasing possibility
there will be a declaration of Palestinian independence in September.
look at it from a positive perspective,” he said. “I think that it could
certainly help us to expedite our own decisions, and it could also give foreign
investors coming to Israel a better feeling.”
Psagot CEO Ronen Tov said
the time had come to place a greater emphasis on hedging risks and on looking
Meitav’s Ilan Raviv said Sunday’s violence was proof that “the
penny had dropped” and that events in the Middle East could become either a
trigger for the withdrawal of foreign investment and consequent damage to the
market or, alternatively, an opportunity to attract foreign investors, as was
the case when the Oslo Accords were signed in 1993.
“I think that there
is definitely an opportunity leading up to September to grab the bull by the
horn and to take initiative,” he said, adding, “I think the market can continue
Tachlit Investment House CEO Eyal Segal said geopolitical
events generally don’t have an immediate effect on markets, and it would take a
greater economic crisis to have such an impact.
“In the coming months I
assume that we will see more volatility, but I don’t see an influence on the
market’s direction,” he said.
Peilim CEO Rebecca Algrisi said there was
always economic impact from geopolitical problems.
“We haven’t made any
changes to the investment portfolio because we see strong economic data, despite
what is happening on the political front,” she said.
The moderator of the
panel discussion, Globes editor Hagai Golan, steered the participants toward the
growing housing bubble.
Analysts Investment House chief Itzik Shenidovsky
said the real-estate market was currently going through some sort of stabilizing
period. He predicted there could be “a not insignificant decrease in prices,”
although prices could continue to rise in outlying towns in the North and
The forum participants also addressed the question of whether to
charge management fees and discussed the topic of executive pay. They generally
agreed it was not possible to offer their services without some sort of
Excellence CEO David Baruch said each investment house needed to
decide how much to charge according to its specific considerations.