Israel stocks slip on SVB failure, government vows aid for tech firms (updated)

Compugen

12/03/2023 10:20

(Adds details, comments)
    By Steven Scheer
       JERUSALEM, March 12 (Reuters) - Israeli bank and
insurance company shares were more than 2.5% lower on the Tel
Aviv Stock Exchange (TASE) on Sunday following the failure of
SVB Financial Group  SIVB.O  late last week, while the
government vowed to help Israeli tech firms affected.
    With Israel's trading week running Sunday through Thursday,
it was the first opportunity for Tel Aviv investors to react to
the failure of Silicon Valley Bank, the largest bank to fail
since the 2008 financial crisis.
    Israel's tech sector is the country's main growth engine and
its relationship with the Silicon Valley region is strong. Many
Israeli startups had accounts at SVB although the amounts are
not fully known.
    Compugen Ltd  CGEN.TA   CGEN.O  said that through its U.S.
subsidiary it currently held about 1.3% of its cash and cash
equivalents with SVB, but "considers its exposure to any
liquidity concern at SVB as immaterial."
    NextVision  NXSN.TA , a maker of micro stabilised cameras,
said in a regulatory filing in Tel Aviv that it withdrew on
Thursday almost all of the $2.7 million it held in SVB. 
    Qualitau Ltd  QLTU.TA , a developer of test equipment to the
semi-conductor industry, said it had nearly $17 million at SVB
and most of that was not federally insured. 
    It added it had "no information regarding the amounts of
money it will be able to withdraw in the future from the balance
of funds deposited in SVB and in relation to the timing when it
will be possible to withdraw these funds."
    Qualitau added that given an existing backlog of orders, it
was able to continue activities.
    The Tel Aviv index of the five largest banks  .TELBANK5  was
down 2.5% at midday, while the index of eight insurers  .TAINS 
fell 4.2%. Government bond prices  0#ILGOI=TA  rose as much as
1.5%.
    Currently visiting Rome, Prime Minister Benjamin Netanyahu
said he was monitoring the crisis and had been in touch with
senior high-tech figures in Israel. When he returns, he said
would discuss the scope of the crisis with the finance and
economy ministers and the Bank of Israel governor.
    "If necessary, out of responsibility to Israeli high-tech
companies and employees, we will take steps to assist the
Israeli companies, whose centre of activity is in Israel, to
weather the cash-flow crisis that has been created for them due
to the turmoil," he said, adding Israel's economy was "strong
and stable."
    "We stand by the Israeli hi-tech companies and will
accompany them even in moments of crisis," said Finance Minister
Bezalel Smotrich.
    Israel's two largest banks, Leumi  LUMI.TA  and Hapoalim
 POLI.TA , said their tech banking arms would issue loans to
startups and other tech firms that were without access to credit
in the wake of SVB's collapse.
    Leumi said that it was able to help customers transfer about
$1 billion to Israel from SVB prior to the Federal Deposit
Insurance Corporation (FDIC) being named as receiver for later
disposition of the U.S. bank's assets. 

 (Reporting by Steven Scheer; Editing by Hugh Lawson and Frank
Jack Daniel)
 ((steven.scheer@thomsonreuters.com; +972 2 632 2210; Reuters
Messaging: steven.scheer.thomsonreuters.com@reuters.net;
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