ISRAEL: Markets and currency down as turmoil continues within the region

Record ID: 395591

  • Title: ISRAEL: Markets and currency down as turmoil continues within the region
  • Date: 2nd February 2011
  • Summary: TEL AVIV, ISRAEL (JANUARY 31, 2011) (REUTERS) FIRST BENLEUMI BANK'S TRADING ROOM CLOSEUP OF TRADER SITTING AT DESK TRADER TALKING INTO HEADSET WHILE LOOKING AT COMPUTER SCREENS VARIOUS OF COMPUTER SCREENS SHOWING ISRAELI MARKETS CLOSEUP OF TRADER LOOKING AT COMPUTER TRADERS HAND ON COMPUTER MOUSE MORE OF TRADER SITTING AT DESK TRADER DROR ZAKSH OF THE FIRST BENLEUM
  • Embargoed: 17th February 2011 12:00
  • Keywords:
  • Location: Israel, Israel
  • Country: Israel
  • Topics: International Relations,Finance
  • Reuters ID: LVA2D5H79G12YQZYJU956OW5H348
  • Story Text: Instability within the Middle East region affected Israel's financial markets, a stock trader for First Benleumi Bank said on Monday (January 31).
    As protests continued in neighbouring Egypt, Israeli stocks on Sunday (January 30) suffered their biggest one-day fall since November 2008, with the TA-25 blue chip index closing down 3.8 percent in the wake of the protests. Israeli government bond prices <0#ILGOI=TA> also fell.
    "Tunisia, Lebanon and now Egypt which put all the region into an uncomfortable place and we see it immediately in the Stock Exchange and in the Foreign Exchange market, the Dollar/Shekel moved from 3.53 to 3.74 which is about more than five percent appreciation in the currency. Still, if you look at the whole region, we are in a good situation. The Israeli economy is still very good but instability now in the region affect the market quite heavily I said, but we are going to see in the next week or two if it will continue or if the Egypt issue will calm down then I think we might see up moving on the exchange and the Dollar/Shekel will relax a little from those levels," Dror Zaksh, a trader for The First Benleumi Bank said.
    The Israeli shekel <ILS=> lost 1.1 percent against the dollar on Monday morning as anti-government protests in Egypt and across the Middle East created geopolitical uncertainties.
    The shekel was at 3.74 per dollar after early morning trade, compared with Friday's official rate of 3.68.
    Last Thursday (January 27), the Finance Ministry said it would act to annul a tax exemption for foreigners on profit from investments in short-term government bonds and short-term Bank of Israel bills. Foreigners until now have been exempt from paying a 15 percent tax to encourage them to invest in Israel's capital market.
    The week before the Bank of Israel imposed a reserve requirement on some foreign exchange derivative deals and said it will require Israelis and foreigners to report on transactions in foreign exchange swaps and forwards of more than $10 million in one day.
    Dealers do not believe these measure will be revoked even though the shekel has lost 5.2 percent since hitting a 27-month high of 3.528 earlier this month.
    In coming days the market is expected to remain volatile with large fluctuations as investors await news from Egypt.
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2011. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register