SWOT Analysis of the Israeli Capital Market February 2008
Strengths n n n Human capital “Jewish Profession” Positive momentum due to progress in the capital market
Strengths - continuation n n Culture of entrepreneurship in a wide range of fields Varied spoken languages in Israel Close proximity to East and Central Europe (between East and West) Trade on Sundays
Weaknesses n n n Geopolitical situation (perception and reality) Governmental instability High bureaucracy Decentralized regulatory system Concentrated financial market
Weaknesses – continuation n n High National Debt (530 Billion) High burden of mandatory pension Not enough use of English (financial statements, etc. ) Lack of financial education
Opportunities n n Proximity to developing markets in East Europe and Asia Jewish money that’s looking for investment Jewish and ex-Israeli human resources – attraction to Israel Existing mechanisms of raising capital of the Bonds, Keren Kayemet, the Jewish Agency, Keren Haysod, etc.
Threats n n Geopolitical situation The sub-prime crisis Non-harmonious regulation Strong workers unions (mostly banks)
Necessary conditions for a global financial center n n n Growing and stable economy Professional and high-quality manpower Advanced and stable regulation Simple and certain taxation Advanced technological infrastructure Advanced leagal system
Financial Sector Data n n n Number of people employed – 83 thousand hired which is 3% of the labor force Average salary: 16. 7 thousand NIS a month, which is more than double the average wage (7, 600) 30 Billion NIS contribution of the financial sector, which is 5% of the GDP
The Main Issues n n n Development of the financial industry Development and advancement of financial tools to enhance competition in the capital market Accessibility of household, small and medium sized business to the capital market and currency Harmonization and equalization of infrastructure of regulatory bodies Human capital
Summary n n Agenda for the capital market for the next 10 years Balance between: o Enhancing the competition: piece of the pie o Developing the capital market and production of financial services: increase the pie n The goal: looking for opportunities and utilizing potential for a financial center
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