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SWOT Analysis of the Israeli Capital Market. February 2008. Strengths. Human capital “ Jewish Profession ” Positive momentum due to progress in the capital market. Strengths - continuation. Culture of entrepreneurship in a wide range of fields Varied spoken languages in Israel
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SWOT Analysis of the Israeli Capital Market February 2008
Strengths • Human capital • “Jewish Profession” • Positive momentum due to progress in the capital market
Strengths - continuation • Culture of entrepreneurship in a wide range of fields • Varied spoken languages in Israel • Close proximity to East and Central Europe (between East and West) • Trade on Sundays
Weaknesses • Geopolitical situation (perception and reality) • Governmental instability • High bureaucracy • Decentralized regulatory system • Concentrated financial market
Weaknesses – continuation • High National Debt (530 Billion) • High burden of mandatory pension • Not enough use of English (financial statements, etc.) • Lack of financial education
Opportunities • Proximity to developing markets in East Europe and Asia • Jewish money that’s looking for investment • Jewish and ex-Israeli human resources – attraction to Israel • Existing mechanisms of raising capital of the Bonds, Keren Kayemet, the Jewish Agency, Keren Haysod, etc.
Threats • Geopolitical situation • The sub-prime crisis • Non-harmonious regulation • Strong workers unions (mostly banks)
Necessary conditions for a global financial center • Growing and stable economy • Professional and high-quality manpower • Advanced and stable regulation • Simple and certain taxation • Advanced technological infrastructure • Advanced leagal system
Financial Sector Data • Number of people employed – 83 thousand hired which is 3% of the labor force • Average salary: 16.7 thousand NIS a month, which is more than double the average wage (7,600) • 30 Billion NIS contribution of the financial sector, which is 5% of the GDP
The Main Issues • Development of the financial industry • Development and advancement of financial tools to enhance competition in the capital market • Accessibility of household, small and medium sized business to the capital market and currency • Harmonization and equalization of infrastructure of regulatory bodies • Human capital
Summary • Agenda for the capital market for the next 10 years • Balance between: • Enhancing the competition: piece of the pie • Developing the capital market and production of financial services: increase the pie • The goal: looking for opportunities and utilizing potential for a financial center