Clal Credit Insurance’s solvency index shows that the solvency of Israeli business purchasers fell 1.6% in December, compared with November. The Clal Rishon index is based on a sample of buyers of the policyholders of Clal, which is one of Israel’s leading companies.
The decline reflects the ongoing effect of the violent disturbances, mainly in tourism, construction, and infrastructures.
The 106.3 index in December reflects a worsening, compared with November’s index of 107.9, even though December is usually characterized by growth and increased year-end sales. This year the trend was reversed. “The sales of many companies declined in December, compared with both the previous month and with 1999. The decline is reflected mostly in the tourism, infrastructures, food and computer sectors,” said Clal Credit Insurance general manager Uri Levy.
Clal Credit Insurance publishes the index every month reflecting changes in the solvency of Israeli business purchasers. The index calculates the change in the economic strength of businesses, from which these businesses derive their ability to meet their obligations.
The index is based on a sample of purchasers of Clal’s policyholders. The total insured sales of these purchasers are calculated once a month, in relation to the purchasers’ overall actual sales (both insured and uninsured). The change in this ratio reflects the increase or decrease in the solvency of these companies.
The base of the index is the average risk in 1999, which is set at 100. The sample includes thousands of commercial-business buyers in electronics, construction, textile, food, communications, plastics, chemicals, and other sectors.
Published by Israel's Business Arena on February 5, 2001