Israel stocks slip on SVB failure, government vows aid for tech firms

Israeli bank and insurance company shares were more than 2.5% lower on the Tel Aviv Stock Exchange (TASE) on Sunday following the failure of SVB Financial Group SIVB.O 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.

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.

NextVision NXSN.TA, a maker of micro-stabilized 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 QLTU.TA, 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.”

Qualitau added that given an existing backlog of orders, it was able to continue activities.

The Tel Aviv index of the five largest banks .TELBANK5 was down 2.5% at midday, while the index of eight insurers .TAINS fell 4.2%. Government bond prices 0#ILGOI=TA rose as much as 1.5%.

Currently visiting Rome, Prime Minister Benjamin Netanyahu said he was monitoring the crisis and had been in touch with senior high-tech figures in Israel. When he returns, he said would discuss the scope of the crisis with the finance and economy ministers and the Bank of Israel governor.

“If necessary, out of responsibility to Israeli high-tech companies and employees, we will take steps to assist the Israeli companies, whose center of activity is in Israel, to weather the cash-flow crisis that has been created for them due to the turmoil,” he said, adding Israel’s economy was “strong and stable.”

Israel’s Finance Minister weighs in on SVB crash

“We stand by the Israeli hi-tech companies and will accompany them even in moments of crisis,” said Finance Minister Bezalel Smotrich.

Israel’s two largest banks, Leumi LUMI.TA and Hapoalim POLI.TA, 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 US bank’s assets.