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"There are no sentiments in the investment world": the dollar continues to strengthen - this is the reason Israel today


Since last Wednesday, the dollar has strengthened against the shekel by more than 2% • In the capital market, it is claimed that the planned changes in the legal system create uncertainty about Israel that worries foreign investors • Dr. Davey Dishtnik, who signed a position paper against the reform, warns: "High-tech companies easily can get up and leave"

"Illustrates the dangers we were warned about":

The dollar continues to strengthen against the shekel and climbed today (Friday) by more than 1%, to a height of 3.44 shekels.

In the capital market, they claim that the cause of the weakening of the shekel is Levin's legal reform and warn against foreign investment smuggling.

Since last Wednesday, the dollar has strengthened against the shekel by more than 2%.

In the same period of time, the dollar traded against the euro without significant change and increased by 0.4%.

The situation in the stock market is also similar - in the last two days the Tel Aviv 125 index has weakened by 3%, while the S&P500 index in the US has risen by about 3%.

The capital market traders explain that the "disconnection" of the trends in the local market from the American market stems from the unruly uncertainty in recent days surrounding the legal reform of Yariv Levin and its effect on the Israeli economy.

Will the reform of the judicial system harm the economy?

Netanyahu and Yariv Levin at a cabinet meeting (archive), photo: Amit Shaavi

On Tuesday evening, the governor of the Bank of Israel met with Netanyahu and shared with him what he heard at the international conference in Switzerland, where international bodies expressed concern about what is happening in Israel.

The next day, Wednesday, it was already known about the letter of about 270 economists who warned against the economic damage that could be caused to the economy if the Levin reform is implemented.

Netanyahu's press conference that was convened on Wednesday evening was also intended to calm the flames surrounding the reform mainly in the economic aspects, but it seems to have done exactly the opposite.

Securities traders explain that the uncertainty in the local market is still high.

The director of the foreign securities transaction room, Roni Gitlin, said in a conversation with "Israel Hayom" that "We see concerns of foreign investors regarding the publications regarding the changes in the legal system. In recent days we have seen an outflow of foreign funds because of the Israeli bond and buying dollars which is different from the trend in the world.

Fear of foreign investors fleeing following the legal reform, the stock exchange (for illustration), photo: Gideon Markovich

According to him, "uncertainty is never something positive for the markets, and right now it's mainly concerns and a misunderstanding about what might happen, especially at a time when the world has very interesting and positive markets that are a worthy substitute."

Since the publication of the petition on Wednesday, dozens of signatories have been added, including world-renowned economists and now the number of signatories stands at 310, including Nobel Prize in Economics winner Eric Maskin, Israel Prize for Economics winner Prof. Menachem Yaari and others.

Dr. Davey Dishtnik, senior faculty member of the Faculty of Management, Tel Aviv University who signed the position paper said in a conversation with "Israel Today" that "this step illustrates one of the dangers we warned about in the economists' letter.

High-tech companies can easily get up and leave.

Foreign investors can stop investing here.

There are no sentiments in the investment world.

Investors are looking for certainty and stability and are afraid of sharp changes in systems in general and those that harm the independence of the judicial system in particular."

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Source: israelhayom

All news articles on 2023-01-27

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