Israeli institutions do not invest enough of their assets abroad and the government will seek to implement measures to change this, a senior Finance Ministry official said on Sunday. "The numbers are very small in relation to the rest of the world," Yadin Antebi, the Finance Ministry's supervisor of capital markets told a CIBC-Nasdaq conference that was sponsored by Reuters.
Antebi said Israeli pension funds invest only 10 percent of their assets abroad, compared with 46 percent in the Netherlands and 44 percent in Ireland, for example.
He noted that this was in spite of the fact that the security situation in Israel is worse than in many other countries and that the Israeli market is very small. "This is not the proper point of balance," he said. "In the next crisis in the capital markets we will be in an unpleasant situation."
Among the measures the ministry is considering implementing is requiring the boards of institutional investors to hold a debate on their investment portfolios.
Turnover on the Tel Aviv Stock Exchange has hit record highs since last year, with volumes reaching as much as 5 billion shekels ($1.2 billion) a day.
Fuelled by a rapidly growing economy that has boosted corporate profits, activity has been robust in 2007, with key share indexes hitting new peaks above 1,100 points.