- Tel Aviv’s financial share indices fell by at least 4 percent
- Some Israeli tech companies say they are exposed to Silicon Valley banks.
- Bank Lumi said it was able to transfer $1 billion from SVB.
- Israeli Prime Minister: They help Israeli companies in liquidity problems
JERUSALEM, March 12, 2010 (Reuters) – Israeli shares slid more than 4% on the Tel Aviv Stock Exchange (TASE) late last week following the collapse of SVB Financial Group ( SIVB.O ). To help the affected Israeli tech companies.
As Israel’s business week runs from Sunday to Thursday, it was the first opportunity for Tel Aviv investors to react to the collapse of Silicon Valley Bank, the biggest bank failure since the 2008 financial crisis but seen as an isolated incident.
Banking regulator Yair Avidan said SVB’s failure was an unfortunate occasion to highlight what is often taken for granted – ensuring the stability of the financial system.
“We are closely investigating the matter, and we are monitoring the immediate circumstances and what could happen in any ‘next wave,'” said Avidan, Israel’s banking regulator.
He said that he is participating in the inter-ministerial group established by the Ministry of Finance in monitoring, analyzing and preparing responses as needed.
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Israel’s tech sector is the country’s main engine of growth, and ties to the Silicon Valley region are strong. Although the amount is not fully known, many Israeli startups had an account with SVB.
Israel’s securities regulator has warned public companies to report immediately if there is any material impact on their operations or significant impact on share prices, as the closure of SVB could have local consequences.
Compugen Ltd ( CGEN.TA ), through its U.S. subsidiary, currently holds about 1.3% of cash and cash equivalents with SVB, but said it “considers any liquidity exposure to SVB as a resource.”
Micro-stabilized cameras maker NextVision ( NXSN.TA ) said in a Tel Aviv regulatory filing on Thursday that it has fully withdrawn from its $2.7 million holding in SVB.
Qualitau Ltd ( QLTU.TA ), a developer of test equipment for the semiconductor industry, said it had about $17 million in SVB and most of it was not federally insured.
He added, “He did not have any information about the amount of money he can spend in the future, in relation to the amounts of money deposited in SVB and the time when these funds can be withdrawn.” In view of the order delay, he announced that he would continue his activities.
Video platform developer Idomo ( IDMO.TA ) said it was working to raise its $3 million balance from SVB, while technology venture fund Teuza ( TUZA.TA ) had no money in SVB, while portfolio company Tito Kerr had a 35% cash balance there and the money He was working on a transfer to Israel or another US bank.
The Tel Aviv index of the five largest banks (.TELBANK5) was down 4% in the afternoon, while the index of eight insurers (.TAINS) was down 4.7%. Government bond prices rose as much as 0.8 percent.
Prime Minister Benjamin Netanyahu said he would discuss with his Finance and Economy Ministers and the Governor of the Bank of Israel if there are any necessary measures to help Israeli companies in trouble following the collapse of the SVB. .”
“Of course, we have an obligation to try to protect these companies and their employees whose primary business is in Israel and will remain in Israel,” he said in a barely veiled rebuke of high-tech executives who actively work for cabinet ministers. They opposed the government’s proposed judicial reforms and withdrawal of funds from Israel.
He added that Israel’s economy is “one of the most reliable and stable economies in the world.”
Data published on Sunday showed Israel’s economy growing by 6.4% in 2022 and 5.6% in the fourth quarter.
Israel’s two biggest banks, Leumi ( LUMI.TA ) and Hapoalim ( POLI.TA ), said their technology banking arm would provide loans to startups and other technology firms that could not get loans because of the SVB collapse.
Leumi said he was able to help clients transfer nearly $1 billion to Israel before the Federal Deposit Insurance Corporation (FDIC) was declared a receiver to later dispose of the bank’s assets.
Reporting by Steven Scheer; Editing by Hugh Lawson, Frank Jack Daniel and Raissa Kasolowsky
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