*
Tel Aviv financial share indices fall at least 4%
*
Some Israeli tech companies say exposed to Silicon Valley
Bank
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Bank Leumi says was able to transfer $1 billion from SVB
*
Israel PM: Will help Israeli companies in liquidity
distress
(Adds securities regulator, other company comments)
By Steven Scheer
JERUSALEM, March 12 (Reuters) - Israeli shares slid more
than 4% on the Tel Aviv Stock Exchange (TASE) on Sunday led by
financial firms following the failure of SVB Financial Group 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 but largely seen as an isolated
event.
Banking regulator Yair Avidan said the SVB failure was an
unfortunate opportunity to stress what is often taken for
granted - ensuring the stability of the financial system.
"We are closely examining the case, and monitoring both the
immediate developments and those that may come in any 'following
waves' that may take place," said Avidan, the Bank of Israel's
Supervisor of Banks.
He said he was taking part in an inter-ministerial team
established by Finance Ministry to monitor, analyze and
formulate a response as needed.
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.
Israel's securities regulator said that because the SVB
closure may have local consequences, it warned public companies
to immediately report should there be any material effect on
their activities or a significant effect on its share price.
Compugen Ltd 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 , 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 , 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." Given an existing
backlog of orders, it said it will continue activities.
Video platform developer Idomoo said it was
working to withdraw its balance of $3 million from SVB, while
technology venture fund Teuza said that while it
didn't have any funds in SVB, portfolio company Tyto Care had
35% of its cash balances there and it was working to transfer
funds to Israel or another U.S. bank.
The Tel Aviv index of the five largest banks was
down 4% in afternoon trading, while the index of eight insurers fell 4.7%. Government bond prices rose as
much as 0.8%.
Prime Minister Benjamin Netanyahu said he would discuss the
crisis with his finance and economy ministers and the Bank of
Israel governor to see "if there are any necessary actions to
help Israeli companies that have fallen into distress,
especially liquidity distress, following the collapse of SVB."
"We have an obligation, of course, to try to protect these
companies, whose main operations are in Israel and will remain
in Israel, and also their employees," he told cabinet ministers
in a veiled rebuke to high-tech executives who have actively
protested the government's planned judicial reforms and those
who have said they would pull money out of Israel.
He added that Israel's economy is "one of the safest and
most stable economies in the world."
Data published on Sunday showed Israel's economy grew 6.4%
in 2022 and an annualised 5.6% in the fourth quarter.
Israel's two largest banks, Leumi and Hapoalim , 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, Frank Jack
Daniel and Raissa Kasolowsky)
