This morning (August 14, 2018), the Minister of Finance, Mr. Moshe Kahlon, opened the trading on the Tel-Aviv Stock Exchange (TASE) and announced the wealth of the State of Israel, as revealed by a poll of the general public to measure the wealth of the State.

A month ago, TASE, which this year is marking 65 years since its establishment, embarked on a far-reaching information campaign – the biggest in its history. As part of this, TASE called on the public to take part in measuring the wealth of the biggest “public company” in Israel – none other than the State of Israel itself, with this being to mark 70 years of statehood. The wealth of Israel will be assessed using the methodology employed by the World Bank in its valuations of countries, as presented in a unique and comprehensive study recently published. The study covered 141 countries, but Israel was not one of them. To date, no valuation of the state of Israel has been conducted, despite the fact that the country’s citizens are invested in it, directly and indirectly.

In the original valuation conducted by TASE using this methodology, the wealth of the State of Israel was assessed at some NIS 16 trillion. During the past month, the public was asked to take part in measuring the wealth of the State, according to each individual’s assessment of topics relevant to calculating the human capital, which is a core component in measuring the wealth of developed countries. Adi Ashkenazi, a popular Israeli comedian, who is known for her ability to sell a story in a simple and humorous way, has been recruited for the project.

The public’s ratings reveals that the parameter in whose future the Israeli public has the highest confidence is the technological future of Israel – with 77.9% of the Israeli public highly confident in this parameter; Israel’s security future ranked second – with 62.8% of the public having high confidence in this parameter, Israel’s standard of living took third place – with 47.2% of the public confident that the standard of living in Israel will rise; 39.2% of the public has high confidence in the health system; and, in last place, only 35.3% of the public has high confidence in the future of the country’s education.

Tens of thousands of Israelis took part in the poll, which concluded that the wealth of the State of Israel is NIS 17,638,763,277,054.

Moshe Kahlon, the Minister of Finance, who announced the wealth of the State of Israel, stated that: “Economic growth is the main focus of the Minister of Finance’s work. A country that is not growing is a country in decline. Growth is the social, economic and security answer. Our debt to GDP ratio is currently at one of the lowest levels we have ever known. Low debt leads to strengthening of ratings, companies, the stock exchange and the economy – one thing leading to the next. The economy is cyclical, and no one gets a free pass. We have just witnessed what has happened in Turkey: one action by Trump has resulted in a roller coaster. In Israel, we are currently in a good situation but there have been economic crises in the past and these will reoccur in the future. As a responsible Minister of Finance, I know that crises are likely to occur, even though I hope for the opposite. My responsibility as Minister of Finance is to also prepare the country to cope with a crisis, even though I may not be at the helm in another 3 to 4 years. We are striving to reduce government debt, even though sometimes we face criticism for this. Low debt is important for the State of Israel’s future”.

In his speech, the Minister also referred to TASE’s restructuring process and said: “It is important to us that Israel’s citizens also benefit from the country’s economic growth and the fruits thereof. An offering in which citizens can participate reawakens their interest and involvement in the capital market and the economy. We at the Treasury ally ourselves with TASE and believe in it as an impetus for growth and for strengthening companies”.

Ittai Ben-Zeev, TASE’s CEO today said: “As we approached TASE’s 65th year, we were struck with a thought: if we were to make an offering of the State of Israel on TASE, at what value would it be offered? Using the methodology of the World Bank, we calculated that the wealth of the State of Israel amounts to some NIS 16 trillion. I am pleased that the public participated and impacted on the evaluation of the State and valued it at a higher figure than the number we reached at the beginning, which indicates that the public has confidence in the State of Israel”.

Mr. Ben-Zeev added that: “the Ministry of Finance and the Israel Securities Authority have been leading the complex legislative process to restructure TASE’s ownership. It is important to us that the Israeli public should benefit from the State’s strong points and from its ever-increasing wealth. In an offering that TASE is planning to make toward the end of the year, the public will be given the opportunity, with the assistance of the Israel Securities Authority, to participate in the TASE offering in an unprecedented manner – digitally and even in small amounts”.

As part of the measures it is taking, TASE will shortly be launching a special mini site for the “first-time investor”, where a potential investor will be able to find all the information he needs in order to take an active part in the capital market. In the spirit of her TV persona, Ashkenazi will lead the Israeli public’s journey into the world of the stock exchange in an accessible way, and she will answer key questions, such as: “What is a stock exchange?”, “What is a share?”, “How can people invest on the stock exchange?”, and other questions, using a series of web videos in which she stars.

Pictured from right to left:
Amnon Neubach, Chairman of TASE’s Board of Directors; Yitzhak Cohen, Deputy Minister of Finance; Moshe Kahlon, Minister of Finance; Anat Guetta, Chair of the Israel Securities Authority; and Ittai Ben-Zeev, TASE’s CEO.

Photo credit: Omer Messinger,
The photo is approved for use for no financial consideration.