Israel Finance Ministry officials held their first-ever investor meetings in Asia this week to gauge appetite for the country’s debt before a $2 billion bond sale in early 2014.
A delegation headed by Accountant General Michal Abadi-Boiangiu visited Hong Kong and Singapore, according to TheMarker business daily. The ministry confirmed the report in an e-mailed statement. Israel raised $2 billion of dollar-denominated bonds in January, including its first 30-year notes in more than a decade, as the government took advantage of its lowest-ever international borrowing costs.
Israel plans to raise a similar amount as Prime Minister Benjamin Netanyahu takes steps to boost trade ties with China, its second-biggest trading partner after the U.S., according to Finance Ministry data. Netanyahu visited the world’s second-biggest economy in May and Chinese investments in Israel include Shanghai Fosun Pharmaceutical (Group) Co.’s $240 million acquisition of Caesarea, Israel-based Alma Lasers Ltd. this year.
“Israel is seeing interest from Asian investors and the Finance Ministry will want to strengthen this demand to diversify its investor pool for foreign debt sales next year,” said Eyal Klein, chief strategist at Tel Aviv’s Israel Brokerage & Investments Ltd., said by phone. “A stable economy with sound growth rates relative to the U.S. and Europe is making Israeli debt attractive for investment.”
Near-zero interest rates in Europe and the U.S. are boosting Israeli assets as investors seek higher yields. The Bank of Israel this week left interest rates unchanged at 1.25 percent. Indicators suggest “continued growth of economic activity at the relatively moderate pace” of the past two years. Israel is rated A1 at Moody’s Investors Service, its fifth-highest investment grade.
The economy will grow 3.5 percent next year, according to the median estimate of seven analysts compiled by Bloomberg, compared with 2.7 percent in the U.S., 1.6 percent in the U.K. and 1.2 percent in the euro area. The shekel has appreciated 4.9 percent against the dollar this year, making it the best performer of 31 major currencies tracked by Bloomberg.
The yield on the government’s 3.15 percent dollar bonds due June 2023 fell one basis point to 3.69 percent at 2:59 p.m. in Tel Aviv. It dropped 21 basis points in July, the biggest monthly decline since the notes started trading at the end of January.
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