It was a tough day for stock markets the world over – including in Israel, where trading was stopped twice Monday as stocks in almost all sectors were in a near freefall. The Tel Aviv 35, representing the country’s largest firms, fell more than 8% Monday, after falling some 5% Sunday. Shares in the Delek energy firm, one of the partners in the development of the Leviathan gas field, fell 32% on the background of a sharp drop in worldwide oil prices.
Insurance firm shares fell on average 16%, while bank shares fell 7%. In response to the coronavirus crisis, several Israeli insurance companies said Monday that they would no longer insure travelers to the United States. The drop in values was due to heavy sales of bonds by mutual funds, which were seeking safety in cash in response to the fall in stock values around the world in recent days. Government bonds also fell by as much as 1.4%.
Itai Ben-Zeev, chairperson of the Tel Aviv Stock Exchange, told Maariv Monday that while it was understandable that investors were concerned, “in the long run the stock exchange is a very stable investment and it corrects itself as needed.” Regarding the stoppage of trading, he said that “the Israeli stock exchange is technologically equipped to deal with extreme rises or falls in prices.
“The exchange here responds to short-term economic crises as exchanges around the world do, but in the long term the exchange is stable,” Ben-Zeev said. “The Israeli financial system and economy are strong, and I believe that the state and those guiding it will act to ensure that the current crisis does not harm the economy,” he added.