Israel Market Overview December 2017

Following the recent trip to Israel, Delta summarised some key data points about the financial services market

  • Liquidity events from company sales such as Mobileye being bought by Intel for $15.3bln, Kite Pharma sale to Gilead for $11.9bln, Netafim sale to Mexichem for $1.5bln and Aristocrat buying Plarium for $500mn, to name a few, have led to an increase in the number of UHNW & HNW Israelis both on the ground and abroad. This type of wealth creation lends itself well to wealth management coverage with an investment banking product suite, allowing private banks to offer structured credit, specialty finance, single stock loans as well as more traditional private banking products. In light of the above, there has been an evident interest in strengthening teams by both established players such as Credit Suisse and UBS, as well as notable brands such as J. Safra Sarasin, who are looking to re-renter the local Israeli market after 6 years of absence

  • Investment Banking teams remained lean over the last decade with bulge bracket headcount on the ground averaging at 6 people, with very limited movement of resources between platforms. Client relationships are held by a tightly knit group of senior Managing Directors who have remained loyal to their employers, in the majority of cases throughout their professional careers

  • Following the upgrade of Israel from 'emerging' to 'developed' status on the MSCI index back in 2010, the majority of equity research teams that had presence on the ground were substantially reduced or fully disbanded, with Citi and Bank of America Merrill Lynch maintaining coverage out of the internationals and Excellence Nessuah out of the locals. MiFID II is likely to have a further impact on this leadership set up

  • Having been burnt by a set of lawsuits, local players including Bank Hapoalim and Bank Leumi are allegedly scaling down private banking both locally and abroad, with Hapoalim having already sold their operations in Luxembourg and Switzerland to J. Safra Sarasin

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