Bank Hapoalim's new nerve center

Inside Israel's largest trading room at Bank Hapoalim, where anything from a monetary policy change to unemployment statistics to weather can set off a frenzy

By JERUSALEM POST STAFF
Bank trader (photo credit: NIV ELIS)
Bank trader
(photo credit: NIV ELIS)
It didn’t take long after US Secretary of State John Kerry spoke for the relevance of his comments to impact on the financial markets. Syrian President Bashar Assad, he said, had used chemical weapons on his own people, and must be held accountable; a military intervention on some scale seemed imminent.
The reaction was swift: Over the next 48 hours, Israel’s usually strong currency, the shekel, would weaken 2.8 percent against the dollar, and the TA-100 Index would plunge 3.2%.
Setting aside the concern that Israel might get dragged into the conflict, the 100 or so traders at Bank Hapoalim had their own set of additional responsibilities to deal with. Operating within the largest trading room in Israel, they were tasked with ensuring that despite the volatility, they would continue to service the ongoing needs of the nation’s institutional investors, its pension funds, corporations and businesses.
The phones ring, the calls from customers pour in, the bank’s branches and analysts send requests, the email boxes fill up and the chat windows flutter with activity.
“On the days where crazy things happen, you’re here until 11 p.m. But those are the most interesting days,” says Amit Tal, head of FX trading at the bank.
“You come in the morning and you have no idea what will happen, or when your day will end.
About two weeks after Kerry’s speech, US President Barack Obama gave his own speech, playing down the possibility of a military strike. As quickly as the markets had gone haywire, they returned to normal.
“If last week, the escalation between the US and Syria sent the dollar-to-shekel exchange rate soaring, this week, in view of the doubts that the attack will materialize, the shekel is showing strength,” trading firm FXCM wrote in an analysis. “Within 24 hours, it erased last week’s rise in the dollar exchange rate.”
But it is not just the geopolitical news that keeps life in the trading room interesting. Every trader remembers the trauma of 2008, as the global financial system looked like it might collapse. Though things have improved tremendously since, anything from a sudden monetary policy change in Japan to new unemployment statistics from Europe can send the markets into a frenzy. The news of the day affects every part of the trading room differently. The currency traders wait to hear the latest news from the Bank of Israel, while the stock traders delve deep into the health of the traded companies.
The trading room never sleeps. In the morning, as Asian markets bustle, the traders come in and set plans for the day, picking out money-making opportunities to present to their clients. Things build as European markets open, and reach a crescendo in the afternoon as the US wakes up.
Because all the different markets are so interconnected, the bank decided last year it was time to consolidate – putting all its traders on one floor, in a stateof- the-art room in its head office in Tel Aviv. Though the traders have been sitting there since September, the new trading room officially launched last week, putting the bank’s facilities on the global map. After visiting the new trading floor, NASDAQ CEO Robert Greifeld said it put Israel “on par with trading floors in the US and Europe.”
“This infrastructure allows Israeli clients, both institutions and individuals alike, to trade in real time in all of the global markets. It also provides foreign investors access to trade in the Israeli markets, which are viewed as some of the most attractive among developed countries,” notes Bank Hapoalim’s CEO, Zion Kenan.
The traders, whether dealing with foreign currency, stocks or bonds, each sit in front of a multitude of screens. One shows the Bloomberg terminal with the latest data and news. Another has a trading platform.
A third shows the bank’s internal communication. The phones each have two receivers, but no cradle. The setup seems designed for super-humans with eight eyes, four arms and two brains. Many have tiny rear-view mirrors clipped to one of their screens, as if to make up for the fact that they lack eyes in the backs of their head.
“Deals have become very complex, and today because we work under a single platform, we are better equipped to provide the solutions our customers need,” says Ronit Meiri Harel, Hapoalim’s trading floor chief. Being Israel’s biggest bank, however, doesn’t mean management has been resting on its laurels.
“I feel we are a very strong participant in the markets, but we are determined to keep on improving,” adds Harel. Her colleague Liran Carmel, head of the Foreign Exchange and Fixed Income trading and sales side of the floor, concurs. “All the main domestic businesses work with all the banks in Israel. For each major transaction they can choose whoever they want to work with, so to stay ahead is a serious issue. The competition still inspires innovation.”
“You have to take into account that it’s pretty much 24/7 job. What’s the interest rate? What’s the inflation expectations? etc., etc.,” says Ron Atad, one of the bond traders.
It’s about taking the extra steps, he notes, offering the additional bit of advice, insight or service. “In the end, the business sinks or swims on service and the extra bits that you do.”