JERUSALEM: A slowdown in Israel’s technology sector has worsened in 2023, exacerbated by political turmoil, and the country may be detaching from broader trends that point to a global recovery, the state-backed Israel Innovation Authority said on Monday.
High-tech has for a decade been the fastest growing sector in Israel and crucial for economic growth, accounting for 14 percent of jobs and almost a fifth of GDP — not to mention innovations coming out of Tel Aviv adopted around the world in cybersecurity, artificial intelligence and other fields.
A global tech downturn began in the second half of 2022 when inflation and interest rates began to rise and supply chains faltered. In Israel, startup investment decreased by almost half and job recruiting slowed.
But as the negative trends appear to be reversing elsewhere, the problems in Israel have continued in 2023, the Innovation Authority said in its latest report.
This coincides with Prime Minister Benjamin Netanyahu’s return to power and his push to overhaul the judicial system. The highly-contested plan, which would limit the power of the Supreme Court, sparked mass protests, caused volatility in the shekel and drew warnings from credit rating agencies.
The Innovation Authority said that “senior figures” in Israel’s tech industry had warned of a backlash and of “foreign investors’ concerns about continued investment in Israel.”
A number of tech firms have reported moving funds out of Israel, while foreign inflows have slowed sharply, New startups are increasingly domiciling abroad.
There usually is a link, the authority said, when two quarters after US stock markets begin to recover — as seen in a rise of the Nasdaq index this year — capital raising and employment in Israel would be expected to increase.
“Based on the indications presented so far, supported by April and May data, there is a genuine concern of a separation trend between the Israeli high-tech industry and global trends,” the authority said.
So far in 2023, the Nasdaq has risen 29 percent, while Israel’s main technology index is up 7.8 percent.
Bank of Israel Governor Amir Yaron last month made a similar observation and pointed out that 50–80 percent of high-tech firms were registering overseas, up from 20 percent last year.
“Insofar as this trend persists, it may have an adverse effect on the economy in the long term,” Yaron said.
Israel’s tech sector troubles persist in 2023, state agency says
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Israel’s tech sector troubles persist in 2023, state agency says
- A number of tech firms have reported moving funds out of Israel, while foreign inflows have slowed sharply, New startups are increasingly domiciling abroad
Closing Bell: Saudi main index dips slightly to 10,912
RIYADH: Saudi Arabia’s Tadawul All Share Index was broadly stable on Tuesday, as it shed just 4.61 points or 0.04 percent to close at 10,912.43.
The total trading turnover of the benchmark index stood at SR3.99 billion ($1.06 billion), with 68 of the listed stocks advancing, and 194 declining.
The Kingdom’s parallel market Nomu gained 0.68 points to close at 23,358.18.
The MSCI Tadawul Index also edged up by 0.03 points to 1,467.56.
The best-performing stock on the main market was Saudi Cable Co. The firm’s share price rose by 9.72 percent to SR161.40.
The share price of Almasane Alkobra Mining Co. advanced by 9.25 percent to SR108.70.
Al-Jouf Agricultural Development Co. also saw its stock price climb by 6.46 percent to SR48.10.
Conversely, the share price of Tabuk Agricultural Development Co. edged down by 3.67 percent to SR7.61.
On the announcements front, Dar Al Majed Real Estate Co. said that it signed a Shariah-compliant banking facilities agreement with the Arab National Bank valued at SR500 million.
In a Tadawul statement, the company revealed that the agreement is aimed at supporting the firm’s expansion plans and financing its future projects in line with its approved strategic plan.
The financing term extends for up to five years and includes a grace period of two years.
The share price of Dar Al Majed Real Estate Co. declined by 0.99 percent to SR9.
Saudi Paper Manufacturing Co. said it signed a credit facilities agreement with Kuwait Finance House Bahrain, which includes facilities allocated to finance working capital and medium-term facilities amounting to $40 million.
In a Tadawul statement, the company revealed that the working capital facilities extend for 12 months and are renewable.
The medium-term facilities last for 48 months, including a six-month grace period.
The credit facilities will be used to cover the company’s working capital for operational activities, plans and expansions in purchasing raw materials, in addition to restructuring medium-term debts to improve cash flows.
The share price of Saudi Paper Manufacturing Co. edged down by 1.09 percent to SR58.80.
