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Based on the average standard of living for national citizens, the economy of Israel is known as a highly developed and advanced relative to other countries. The World Bank currently classifies the Israeli economy within the 20 leading economies in the world, graded by nominal gross domestic product and purchasing power parity. In fact, the middle eastern super power is even rated more highly than some popular European countries such as France and Finland. Israel also reports a smaller than average disparity of wealth between classes due in partly to the sophistication of their welfare program in addition to the industrious mentality of Israeli citizens. Furthermore, the infrastructure of the Israeli state is strong enough to support its citizens in need and provide them with a means to support themselves moving forward.
Israel’s proverbial claim to economic fame is supported largely by its services sector, highly advanced technology industry and a polished industrial sector. The conglomeration of these different leading industries propels Israel’s economy well past the economic rankings of neigbouring countries. Compared to neighbouring countries, Israel is somewhat poor in terms of natural resources. Despite this handicap, Israel has grown to an unprecedented level of economic wealth and strength in one of the toughest and most competitive markets in the world. Recently, natural gas reserves off the coast have been found, but it remains unclear as to how much these reserves may hold. This article will cover the financial system of Israel, as well as a range of market information covering currency, futures, and stocks.
show moreKnown as ‘The Bursa’, the Tel Aviv Stock Exchange (TASE) is Israel’s only public stock exchange. Legally, the exchange is regulated by Israeli legislature and operates under the direct supervision of the Israel Securities Authority (ISA). While the TASE lists a small number of companies compared to other major stock exchanges, it still maintains a vital role in the Israeli economy. The Tel Aviv-based exchange does however, provide its Hebrew traders with a good number of bonds, equities, and funds to choose from.
The Israeli Shekel is one of the more exotic pairs in the foreign exchange market. The most widely traded currency against the Shekel is the American dollar (USD/ILS), mostly due in part to the heavy trade balance between the two countries. Furthermore, the USD/ILS currency pair is not as volatile as some other exotic crosses can be.
Part of what makes Israel successful is the drive and determination of its people. Hebrews have always fostered financial independence within their communities and are always geared towards owning their own businesses instead of working a job. This can-do attitude matched with Israel’s technologically advanced community makes Israelites a somewhat common fixture in the forex market, and are responsible for pushing roughly $6.5 billion dollars (US) through the market daily.
The formation of the modern Israeli State in May of 1948 (post World War II) brought about many changes for the tumultuous region. For starters, the previous currency of the area was the Palestinian Pound (pegged to the British Pound) which changed to the Israeli Pound after the installation of the Bank Leumi Le-Israel over the previous Palestinian financial institution formerly known as the Anglo-Palestine Bank.
The shekel (symbol ₪) derives its name from an ancient metric for weight, or currency, in early Israel. It is believed the shekel may have previously been used to refer to the weight of commodities, a bartering tool and currency. While this historic reference was out of sight for some years as Palestine took over the region, and even as the Israeli state was formed again, the national currency was pegged to the Pound Sterling.
The Israeli new shekel, also known as simply the Israeli shekel and formerly known as the New Israeli Sheqel (NIS), was the currency of ancient Israel before its Palestinian neighbors took over. At the start of 1986 the shekel was reissued as the NIS, but later renamed simply Israeli shekel. The New Israeli Shekel replaced the hyperinflated old shekel at a 1000:1 ratio. It is currently the legal currency of the widely disputed West Bank as well as the Gaza Strip, home to the Palestinians who used to control the entire region. The new shekel is divided into 100 agora or cents.
The Tel Aviv Stock Exchange (TASE) has a penchant for burgeoning companies, making the exchange a popular place for investors to seek growth rated companies at compelling prices. The Israeli market for IPOs has been extraordinarily high compared to neighboring nations since the early 1990s. Many international interests have increased their participation in the Israeli equities market including German, Hong Kong and Swiss financial institutions.
The most notable index traded on the Tel Aviv Stock Exchange is the TA-35 Index, which lists the 35 largest publicly traded companies within the Hebrew economy. Unsurprisingly, the most popular companies are within the services, financial, and pharmaceutical sectors. The exchange also lists some larger indexes as well as niche sectored indexes that may be of interest to some investors.
