"We are definitely seeing positive sentiment towards the local stock exchange among investment institutions in Israel. There has also been a shift from pessimism about the local bond market a few months ago to optimism, which means that we still expect a sustained negligible or even lower interest rate - not in the short term, but for several years," KSM Indices CEO Avner Hadad said today at the Globes Podium Conference held in the Tel Aviv Stock Exchange (TASE) Conference Center. He added, "That is what the market thinks. The US market also appears to be flexing its muscles, in comparison with other global markets, and here, too, there is a positive change in sentiment."
Two months ago, after the previous Podium Conference, at which investment institutions in Israel were pessimistic about corporate bonds and slightly optimistic about the stock market in Europe, the Financial Institutions Index of "Globes" and KSM Indices now shows a positive change in the attitude towards most of the instruments examined, although not all of them, for the coming months.
The Financial Institutions Index, based on a survey carried out on March 24, and announced today by Hadad at the Podium Conference, shows that the stock market in Israel is currently arousing moderately positive sentiment among investment managers in financial institutions, compared with pessimism two months ago. There is also a slightly positive attitude towards government bonds, compared with moderate pessimism in February, while the local corporate bond market has gone from deep pessimism then to neutrality now.
The index, which examines the expectations of investment institutions for the coming quarter in the main investment instruments, also shows a change for the better for stocks in the US. The institutions expressed moderate optimism about the future for this instrument, compared with neutrality two months ago. For the first time, the institutions expressed optimism about the dollar against the shekel.
On the other hand, the institutions' attitude towards stocks in Europe has worsened; the moderate optimism of two months ago in a survey conducted in January has given way to slight pessimism, accompanied for the first time by deep pessimism about the euro against the shekel. The previous index showing slight overall pessimism came at the height of the downturn at the beginning of the year.
Haded stated, "The common denominator of the investment institutions' responses is that monetary policy is the most crucial question. The question is whether this is the sole issue. Our decisions are clearly strongly influenced by it in the short term. In my opinion, it is better to look at the long term."
The Financial Institutions Index was launched six months ago by "Globes" and exchange traded funds company KSM, controlled by Excellence Investments Ltd. (TASE: EXCE). The index is designed to indicate what the largest investors institutions in Israel are thinking in order to enable those institutions and all the other investors to make better-informed decisions. The current Financial Institutions Index is the third since the index was created.
Published by Globes [online], Israel business news - www.globes-online.com - on April 6, 2016
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