Israel Seeks to Entice Asian Investors With Government Bonds

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A Finance Ministry delegation embarked on a roadshow to the Far East this week to promote a $2 billion Israeli government bond offering planned for early 2014, marking the first time ever that the treasury is making such a trip to financial centers like Singapore and Hong Kong.

The ministry's accountant general, Michal Abadi-Boiangiu, her senior deputy Yali Rotenberg and Gil Cohen, director of global debt capital markets at the ministry, are leading the delegation.

It is unclear whether the treasury is seeking to raise the funds with a bond issue in either Singapore or Hong Kong, or perhaps both, or whether it merely wants to stoke interest among Asian investors for an offering in New York.

The trip to the Far East marks a turning point in Israeli public finance policy. Until now, the government raised money by issuing bonds in the United States and occasionally in the euro bloc.

The shift was precipitated by the unprecedented interest by Asian investors, primarily from China, during Israel's latest bond sale last January, which raised $2 billion. Increasing ties with Asian markets is seen as a means for the Israeli government to spread risk, reduce its reliance on the local capital market and develop useful contacts for Israeli companies. In addition, Asian financial markets experts say that in contrast to markets in the West, Israeli representatives do not face strong anti-Israeli or anti-Semitic prejudices.

People walk outside the main branch of the Standard Chartered Bank in Hong Kong.Credit: Reuters