Major investors have transferred $40 billion out of Israel since start of war – report

Institutional investors have transferred a whopping NIS 151 billion ($40 billion) outside of Israel since the outbreak of war with the Hamas terror group on October 7, according to a report by Hebrew financial daily Calcalist.

The ongoing war with Hamas and fears over an escalation of the fighting to the north, alongside a ballooning deficit and slowing economic growth have led to a diversion of capital by large insurance companies and investment funds, which are responsible for managing the long-term savings of Israelis, including pension and provident funds, Calcalist says in the report.

With the outbreak of war in October, local institutions initially started to divert funds to Israel increasing their exposure to the local market. However, since April, the trend reversed due to a loss of confidence in the government’s ability to return the economy to sustainable growth, reduce the growing deficit, and bring down inflation, the report says.

According to an analysis by Calcalist, the average exposure to overseas assets by local institutions managing provident funds increased from 51.7% at the beginning of October 2023 to 56.3% at the end of July. The average exposure to overseas assets by financial institutions managing pension funds rose from 47.6% at the beginning of October to 50% in July.