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"Show me one investment committee manager who wants to invest here" - voila! money


Highlights: The Capital Market Conference for Long-Term Savings closed today in Tel Aviv. Senior investment house executives spoke of the dangers of the legal revolution. They also discussed the impact of interest rates, inflation and the economic slowdown. The conference was the first of its kind in Israel and was attended by more than 1,000 people. It was also the first time the conference had been held since the start of the Israeli financial crisis in 2008. The event was also attended by the Prime Minister of Israel, Benjamin Netanyahu, as well as senior officials.

The director of IBI Investment House in a harsh attack on the Minister of Finance, which was also shared by the other panelists of senior investment house officials, at the Capital Market Conference for Long-Term Savings

From right: Hila Korach, Dave Lubetzky, Zvi Stepak and Yossi Levy, at the closing panel of the Capital Market Conference for Long-Term Savings (Photo: Morag Bitan)

The finance minister and senior coalition officials are already used to hearing attacks from political opponents, as well as from academics – and as Bezalel Smotrich has heard recently, even from senior officials in his ministry who are concerned about the future of the State of Israel and its economy, but such an attack, as heard today in the Capital Market Committee for Long-Term Savings (which closed today), seems unheard of so far.

Three of Israel's investment house executives: Dave Lubetzky, CEO of IBI, Yossi Levy, founder and co-CEO of Mor Investment House, and Zvi Stepak, founder and owner of Meitav, spared no words to describe the dangers that lurk in the Israeli economy if the legal revolution is not shelved.

Dave Lubetzky, CEO of IBI Investment House: "Clients are queuing up to open accounts in Switzerland and get money out" (Photo: Morag Bitan)

The Capital Market Conference for Long-Term Savings closed this morning with a panel of senior Israeli investment house executives: Zvi Stepak – founder and owner Meitav Investment House, Yossi Levy – founder and co-CEO, Moore Investment House, Dave Lubetzky – CEO of IBI Investment House.

The panel opened with a harsh response by senior officials to Finance Minister Bezalel Smotrich's proposal yesterday, withdrawing money from Israel and halting investments: Dave Lubetzky, CEO of IBI Investment House:

"Imagine an investment committee that saw Smotrich yesterday afternoon, add to that a geopolitical situation with a chief of staff who tells of an attack on Iran, and show me one investment committee manager who wants to invest here... A situation has arisen in which most large entities do not even look at investing in Israel. Add to that customers who are queuing up with us to open accounts in Switzerland and get money out."

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Yossi Levy, co-founder and CEO, Mor Investment House: "The State of Israel lost on the order of $10 billion" (Photo: PR)

Yossi Levy, co-founder and CEO, Mor Investment House: "Since the beginning of the legal revolution, the State of Israel has lost on the order of $10 billion – funds that left Israel and those that did not. With slogans like Smotrich's yesterday, we will continue to see an abandonment of foreign money. Every day we get calls from two to three customers asking to take money out.

We will see the great effect of this in the longer term - it will affect the turnovers of the stock exchange in Israel, all over the world the volumes are rising and only here on the stock exchange are decreasing. All institutional investors are diverting funds abroad and the trend will only grow. They are looking for a marketable market, a safe market, and here they don't find it."

Zvi Stepak, founder and owner of Meitav Investments: "Bad is yet to come" (Photo: Meitav Dash)

Zvi Stepak, founder and owner of Meitav Investment House, commented on the legal reform and noted: "Until now, businessmen have not exploited their power, but now we are seeing a great awakening of the entire business sector, and I, on a personal level, am definitely very much against the regime revolution.

There is a real danger to our way of life and our future, and I am anxious about it. What is happening today in the State of Israel is an expression of mistrust because half the country does not believe in the intentions of those who want reform. Remember what Yariv Levin said he presented in the program, which is only the first part of the reform. They are power drunks.

The regime revolution creates uncertainty first of all, so we see high-tech companies registering abroad, and we don't even know how many dance investments don't come to Israel – they won't always tell you why they don't invest in Israel. The bad is yet to come. We will feel the effect of interest rates and inflation much stronger.

Interest rates, inflation and recession fears

The officials also addressed the pace of interest rate increases, high inflation and the impending recession: Dave Lubetzky:

"Our opinion differs from estimates of an interest rate cut at the end of the year. I don't see that happening. I expect a recession here in the next year and a half. There will be a high interest rate here in a year and a year and a half, and then there will be a real impact on the ground and we will see people getting rid of assets, and even after the next year and a half we will not return to seeing zero interest rates like a year ago. The world has gone from paradise to paradise for Levites.

We are at a point where even the interest rates on short term credit, they are in the region of 14%, which is amazing numbers, so this is a very good year to build private debt. With this interest rate increase, it brought back the real world without companies that raised with very high leverage with bonds without interest rates. Over the past year and a half, this has been our best track since we entered the field.

Yossi Levy: "I think the recession will come to us much faster. Rents have gone up crazy, food costs are crazy, along with the increase in loans and mortgages, most of the State of Israel doesn't earn NIS 20,000 and NIS 30,000 a month, people are now using up reserves, but what will happen after?

They will meet a much worse situation. I know office towers in Israel that can't sell properties, high-tech companies are also reducing floors and laying off amounts of manpower."

Dave Lubetzky commented on the state of the high-tech industry and the mass layoffs: "In the short term, high-tech is going through a very severe crisis, but in my opinion healthy. Last year we saw absurd fundraising for zombie companies – without a business model and without economic feasibility, but with a billion-dollar valuation. It's good that this madness is over, it wasn't good for the Israeli economy. The unreasonable extravagance and damage done to the labor market with ice cream at lunchtime has done not good for our labor market.

I remember coming to interviews right after school I was scared, and in the last two years, we've seen an absurd situation of interviewees interviewing jobs. We are now seeing many mergers and acquisitions gaining momentum, the market is active and correcting itself – many more companies are consuming credit and are not raising capital for free as in the past. I assume that we will see stabilization and not a crash, but it also depends on the continuation of the legal reform, which, if continued, could cause a catastrophe in high-tech."

The panel concluded with the senior executives' recommendations for the recommended investment portfolio: Yossi Levy:

"Now bank bonds are an excellent investment – alternative investment funds are a hot product that provides opportunities. There's a lot of money just lying in checking accounts and I urge people to invest in money funds and long-term bonds with high yields – it's time to establish a return forward"Dave Lubetzky: "

45% stocks with a strong bias to apply with an emphasis on technology. Alternative component 20-25%. A great emphasis on private debt, those who can afford to give up liquidity are very worthwhile."

Zvi Stepak: "There is a historic opportunity to base your investment portfolio on bonds, and of course you can't give up on stocks – we invest mainly in the US 70% and 30% in Israel. Europe is interesting, Japan and India as well."

The Capital Market Conference for Long-Term Savings is held in cooperation with the Association of Industry Provident Funds and Adv. Erez Kanister and Tamir Peleg, with the professional content of the conference entrusted to the law firm of Gilad Bachar & Co.

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Source: walla

All business articles on 2023-05-31

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