"Whoever sells a provident fund now is stupid."
A top Israeli investment banker told "Globes" today that pension and provident funds are paralyzed. "There's a real liquidity crisis because the funds don’t have enough money to make more purchases on the market in the aftermath of the latest market plunge, which resulted in a sell-off of funds by investors. There are very heavy sales and no buyers," he said.
Migdal Capital Markets chief economist Yossi Schwimmer said, "Fears of an economic slowdown are greater than fears of an inflationary outbreak. We therefore believe that Governor of the Bank of Israel Prof. Stanley Fischer will cut the interest rate during the first quarter of 2009. The moment we experience such a plunge in the financial markets, a rise in unemployment, and falls in domestic consumption and exports, the road to a slowdown will be steeper and the Bank of Israel will have to respond with a less restrictive monetary policy. We'll feel the real significance of the events now underway in the US in a few months."
Infinity Investment House CEO Amir Eyal told "Globes", "Whoever sells a provident fund now is stupid. People are afraid, and I understand those who feel this way, but the sales are being made without thinking. A provident fund is a long-term savings instrument and selling it now turns it into a day-to-day investment. A provident fund isn't a casino. Those who sell them now will regret it later."
Published by Globes [online], Israel business news - www.globes-online.com - on September 18, 2008
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