The Israeli Citizens’ Fund, the sovereign wealth fund for the profits from the country’s natural resources, had only $617 million at the end of 2022, according to a report on the fund published today by the Ministry of Finance.
The fund was founded so that future generations can benefit from the royalties the state receives from the country’s natural resources, mainly its offshore gas fields. However, the current government stipulated in the coalition agreements that it would be possible to thaw funds from the fund for immediate use for infrastructure.
The amount that the Citizens’ Fund has accumulated so far falls significantly below the early forecasts of the state. A decade ago, the Bank of Israel estimated that by this stage the fund would have accumulated over $4 billion – 6 times more than the amount currently in the fund.
According to the Ministry of Finance report, the fund began operations in June 2022, and in its first six months recorded returns of 1.2%. Half of the fund’s returns were from investments in stocks and half of the returns were on cash assets. These were very reasonable returns considering that it was an awful year on the markets.
The report on the Israel Citizens’ Fund also referred to the consequences of the government’s planned judicial overhaul legislation. “In the most recent months of 2023, a considerable gap opened up in the performance of the financial markets in Israel compared with the performance of the main stock exchanges in the world, and also the shekel weakened after years of strengthening of the shekel. “There is no denying that the main reason for the underperformance of the Tel Aviv Stock Exchange, as well as for the weakening of the shekel and the increase in capital movements out of Israel, lies in investors’ concerns about the weakening of the judicial system following the legislative changes that the coalition is seeking to enact. Financial investors receive reinforcement for this trend from warnings and alerts from the rating companies,” chairman of the fund’s investment committee, Yarom Ariav, emphasizes.
Published by Globes, Israel business news – en.globes.co.il – on April 4, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.
Stay connected with us on social media platform for instant update click here to join our Twitter, & Facebook
We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
Denial of responsibility! NewsAzi is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
