Israel’s Accountant General Roni Hizkiyahu on Tuesday signed in agreement with JP Morgan, one of the world’s leading financial institutions, making it a primary dealer for government bonds.
JP Morgan joins 12 banks as primary dealers who participate in Israel’s government bond auctions and trade them in the secondary market, providing liquidity to the Israeli bond market.
The move was made as part of the government’s bond market reform from 2006, which aimed to promote a competitive and efficient bond market, increase demand for bonds and reduce financing costs for the State of Israel.
Hizkiyahu said that the bank’s decision to increase operations in Israel indicates the country’s strong economy, its high credit ranking and investment opportunities.
“The bank joining as a primary dealer in government bonds is expected to strengthen this market and contribute to the marketability and liquidity of bonds,” he said.
Gilad Pais, managing director and head of trade and investments in Israel for JP Morgan, said the bank’s ability to offer its clients Israeli bonds constitutes an “important step forward for the bank.”
“Joining as a primary dealer will expand our Israeli financial offering and strengthen our stance in capital markets. JP Morgan has a long history in Israel spanning over five decades and we are pleased to deepen our commitment to Israel and its economy,” Pais said.
In September, FTSE Russell, a global financial index provider, announced Israel’s government bonds will be included in the World Government Bond Index (WGBI) starting in April 2020, and are projected to comprise 0.29% of the index.
When making the announcement, Nikki Stefanelli, Head of Fixed Income Index Policy at FTSE Russell, said that “the Israeli government bond market meets the thresholds of our highest accessibility level.”
JP Morgan’s addition as a primary dealer will strengthen the accessibility of the Israeli bond market to international investors even further.