"The capital market in the process of weaning from the zero interest rate"

Against the background of the new economic reality, we met for a personal conversation with the CEO of "Activists" and heard about childhood in a traditional but pluralistic home, entering the capital market, just before the collapse and its philosophy of managing investments in the market that can not be scheduled

Liat Ron

07/07/2022

Thursday, 07 July 2022, 09:04 Updated: 14:15

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"As the uncertainty grows, I enjoy it more" (Photo: Reuven Castro)

Name: Avishai Kroani, Age: 56, Position: CEO Active Portfolio Management.

Who I am: Conservative. I do my challenge privately. I am very optimistic, like to work with people in harmony, listen to them and decide on my own, and as much as I can Greater certainty - I enjoy it more. In time I built a methodology of uncertainty.

Roots: Dad's family came from Yemen. Grandpa was a famous singer and traveled from town to town to be happy, and unfortunately his talent did not pass to his son or me. Find out the origin of the name Croani. It turns out that he is both a songbird and a financier. Grandma had three children from three husbands and she was considered a deadly woman in Judaism.

They reached Rosh HaAyin.

Grandma was a maid and walked from Rosh HaAyin to work in Petah Tikva, and Dad, who was 11, was sent to Mishmar HaEmek, where he grew up in the army, which affected his life trajectory. , What was then considered a coveted job like hi-tech today. The cooperative had a special grocery store and a monthly newsletter, which Dad asked me to check each time how much the stock cost, my first exposure to the capital market.

Mom came from Bukhara, where the family traded in India. In the early 50's

and lived in Kfar Ganim, in the area of ​​Beilinson and Hasharon Hospital, in the orchards. Grandpa mediated deliveries and Grandma raised 12 children.

They got married when she was 17 and a half and within three years they had three children, then two more were born, I the spread of the double sandwich.

We were brought up in a very value-based home, which believed in giving.

Mom worked in the welfare department of the Rosh HaAyin municipality and always volunteered, my job was to carry food baskets for the needy, and Dad was the treasurer of the synagogue.

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"Dad asked me to continue wearing a kippah to honor the main place I am in, the school" (Photo: Reuven Castro)

My childhood

: When I was little, the five of us slept in one room.

When the parents built a very large house instead of the small house, with a room for everyone, at first we slept with each other out of the habit of being together.

The family is traditional but very pluralistic.

Until the age of 18, I wore a kippah, studied in the framework of religious Zionism and was in Bnei Akiva, and also played football on Saturdays as captain of Hapoel Rosh HaAyin.

In high school I studied humanities and a lot of Bible and Gemara. Gemara studies have a lot of logic, difficulties that lead to solutions and sharpen the mind. So I thought it was a waste of time and today I can appreciate it. Because as a child I suffered from bronchitis and spent quite a bit in hospitals The dream ended when I realized that my grades would not be enough to be accepted.

I have always respected religion and less its formal performances.

Dad asked me to keep wearing a kippah to respect the main place I was in, the school, and right after my last adulthood I took it off.

I was a third officer in the brigade of Amos Malka and there I met my wife.

: My wife, who has a master's degree in psychology and is a group facilitator, complements me, listens to me, laughs and fascinates me, reflects things to me accurately, an admirable figure.

She is the daughter of Moshe Keret, former CEO of IAI for years and I had no idea who he was when we met and from day one we became good friends. I am a die-hard fan of him and he has accompanied me throughout my career. We have a son and a daughter and we live in Givatayim.

"The faster you meet the declines, the better you become an investment advisor" (Photo: Reuven Castro)

Investment Advice

: At university I studied sociology and political science because I fell in love with the human resources field in the military and I was sure that was my direction.

By chance I rolled into Bank Hapoalim and in '93 I entered the "Flowers of Counseling" program, a program for training investment advisers, just after the tide on the stock market.

In '94 there was a landslide and I earned a cycle.

The faster you meet the declines, the better you become an investment advisor.

As a young consultant, a 45-year-old man came to me, a policeman, a father of six, who had a large bag that had shrunk in the avalanche to NIS 60,000.

He asked me how he could reach NIS 300,000.

In the high tide years his friends made a lot of money on the stock market and he told, with teary eyes, that he had invested all his pension in stocks and he must get the money back for himself.

I remember telling him he had to come to terms with the loss.

I had to look him in the white of the eye and I learned then, that more than the return to the customer, the adjustment of the bag to his needs is important.

I started as a junior consultant at the branch, I was a regional consultant, responsible for all the consultants at Bank Hapoalim.

After 15 years I became the VP of Marketing and Sales of Activists.

Challenges his team (Photo: Reuven Castro)

Activists

: A subsidiary of Bank Hapoalim that manages investment portfolios in Israel and around the world for a variety of private, institutional, corporate and municipal clients, manages about NIS 20 billion above an investment threshold of NIS 200,000, which is considered relatively low.

We are a subsidiary of a bank nationwide, so we want to address as many customers as possible.

Because the Bachar Committee outsourced the management of the funds and mutual funds to the banks, leaving only the management of the portfolios in their hands, this allows us to conduct ourselves with complete objectivity, because we have no domestic products and no conflicts of interest.

: I have been in the position for ten years and the project I am most proud of is the customer service desk, which consists of ten retirees, who were previously bank consultants and part-time employees, and whose goal is customer retention.

Because they are so experienced, they are not enthusiastic about elevators and are not pressured into descents and keep in touch with the customer.

: The capital market is affected by a lot of factors, such as geopolitical situation, interest rates, inflation, dollars, pricing of companies.

Dominant factors need to be identified to make good decisions.

If I am right in 60% or 70% of the cases I am satisfied.

We make decisions in a team of experts, conduct a sheikh and I challenge them and make sure there is a devil's lawyer to get out of the dogmatic thinking.

"The market disrupted the American plan" (Photo: Reuven Castro)

Stock

market: The capital market in the process of weaning from the zero interest rate over time and the inflow of capital during the corona period, when the market was flooded with cheap money, a kind of Acmo machine that kept the capital market alive.

All of this delayed the rate hike, when it was clear to everyone that zero interest rates were unhealthy for the market.

The US interest rate hike was supposed to be spread over a year, but the market, which saw inflation and soaring commodity prices, shortened the process to two months and disrupted the planned moderate rise, leading to zero-percentage investment portfolios falling more than equities. H. fell because of the expectation of a rise in interest rates, stocks fell and there was nowhere to run.

: The capital market is impossible to schedule and it is impossible to know what will happen tomorrow.

Therefore, patience should be used.

This is the message at our service desk and our customers are attentive to the experienced and act accordingly.

We are now in a new equilibrium: the interest rate is higher, the bond with a yield of 3%, this is the new and correct normal. There was a correction in shares traded in excess because of the cheap money and because there was nowhere to invest

. Clues and hope that the repair will not be just technical.Watching whether Biden will achieve a breakthrough with the Saudis to sell more oil.If so far he has given them a cold shoulder, he has come to visit the country, among other things, also for oil.

"One must understand that Israel is an island" (Photo: Reuven Castro)

The future of Israel's economy

: zero deficit, low GDP debt ratio that allows us to increase spending in the future - 70% of GDP debt does not exist in the US either. Understand that Israel is an island on the one hand and less cooperative neighbors on the other, when in Europe it is possible to jump on the neighbors

. , But because of the stability of the governmental continuum, but even so our rating is

The whole world missed it, because the big surprise was the rate of interest rate rise.

It started with the fact that they thought inflation was temporary and then it became clear that the supply chain was thickening and to this were added the prices of rising goods and the war in Ukraine.

When you get into a crisis you estimate it will go in a certain direction, but we did not think its power would be like that.

The chances of being here are low to nil, because overall the economy is growing, the deficit is fine, more and more people are joining the labor force and there is growth. Inflation is high, but is expected to fall in the coming months due to the technical decline

. I love extreme sports, bungee jumping, skydiving, flying, challenging driving and trekking. I have been to Everest, the Pyrenees and Switzerland. I like to travel alone and with my family.

Looking to the future: I see myself staying in the bank, in senior management positions That's the most important thing, it's good for me and I'm really enjoying it.

• Of money

Tags

• Active

• Capital Market

• Bank Hapoalim