Tel Aviv Stock Exchange Concludes Hebrew Year With Phenomenal Returns

The Tel Aviv Stock Exchange (TASE) has concluded the Hebrew year with robust performance, outperforming most global markets despite significant geopolitical and security challenges. During the Hebrew year 5786 (September 25, 2025, to September 4, 2026), the TA-35 index surged by approximately 40.5%, the TA-125 rose by about 37%, and the TA-90 advanced by 25.5%. These gains significantly surpassed those of major international indices, such as the S&P 500 and Dow Jones, which saw around 16% increases, and the Nasdaq with an 18% rise. The European STOXX 600 index yielded about 17%, and the MSCI World index gained approximately 16.5% during the same period.

The TASE research unit noted a substantial increase in trading activity and investor participation. The average daily trading turnover in stocks rose to approximately NIS 4.9 billion, up from NIS 3.1 billion in the previous Hebrew year, with foreign investor participation in stock trading increasing to about 31%. The shift to a Sunday-Friday trading week also had a positive impact, with average daily turnover on Fridays reaching approximately NIS 4 billion, a 150% increase compared to Sundays before the change, and foreign investor participation rising to around 40% on Fridays.

Sector-wise, the insurance index was the standout performer, soaring by approximately 94.5%, attributed to lower interest rates, increased profitability, and growing investment portfolios. The cleantech index also saw a significant jump of about 77%, driven by global energy market volatility and increased investor interest in renewable energy. The banking index recorded a 27% increase, though this was a slower performance compared to the previous year. Real estate and construction indices were among the weaker performers, with gains of around 20.4% and 17%, respectively, impacted by relatively high financing and mortgage costs.

The TA-Overseas Investors index was the only sector to end the year with a negative return, weakening by about 11%. Among individual stocks, Doral Energy led the TA-125 index with a 272% surge, followed by Megor (222%), Ayalon Insurance (211%), Bazan (202%), and AES (181%). Tower Semiconductor also saw a significant jump of 178%.

The bond market demonstrated resilience, with government bond yields in Israel decreasing while rising in many other developed countries. The general Israeli shekel-linked government bond index rose by about 6.0%, while the inflation-linked index saw a more modest increase of 3.2%. This divergence was attributed to falling inflation, interest rate cuts, a strengthening shekel, and a reduced risk premium in Israel, contrasting with rising yields in the U.S. due to inflation concerns and expected interest rate hikes.

The mutual fund industry saw moderate growth in passive funds, with NIS 5.8 billion in net inflows, a decrease from the previous year. However, active funds experienced significant growth, with assets under management increasing by about 22% to NIS 474 billion, and net inflows rising by 17% to NIS 54.9 billion. There was a notable shift in investment preferences towards local bond funds, particularly government and general bond funds, which saw substantial increases in inflows.