Israeli Stock Exchange Sees Dramatic Year Driven by Global Giants and Structural Reforms

The past Hebrew year was a turbulent one for the Israeli stock market, marked by significant growth despite ongoing security challenges. The leading Tel Aviv 35 Index surged approximately 35%, reaching an all-time high of nearly 4,630 points in May. This performance was shaped by major deals, long-awaited structural reforms, and the entry of new players.

The most headline-grabbing event was the February 2026 dual listing of U.S. cybersecurity giant Palo Alto Networks on the Tel Aviv Stock Exchange (TASE). This move made Palo Alto the largest company by market cap on the TASE, with its value soaring to an estimated one trillion shekels. The listing, under the ticker CYBR, was a tribute to the Israeli company CyberArk, which Palo Alto acquired that month. The company, co-founded by Israeli entrepreneur Nir Zuk, cited the listing as a vote of confidence in Israel's economy, though its impact on local trading volume remains modest compared to major Israeli banks.

Another significant development was the completion of "Delek Group's" takeover of "IsraCard," a major credit card company, for approximately 3.56 billion shekels. Initially appearing as a lucrative deal for "Delek" owner "Yitzhak Tshuva," the value of "IsraCard" stock plummeted after a planned acquisition of a digital bank fell through and a costly strategic agreement with "El Al's" frequent flyer club was signed. This saga is expected to influence competition and consumer fees in the credit card market.

A quiet yet profound reform took place on January 5, 2026, when the TASE shifted its trading week from Sunday-Thursday to Monday-Friday, aligning with most global markets. This change, led by the Israel Securities Authority, the TASE, and the Bank of Israel, aims to improve liquidity and attract more foreign investment. Early signs suggest a higher proportion of foreign investors trading on Fridays.

Despite ongoing security operations, including "Operation "Roaring Lion"" against Iran, the Israeli stock market demonstrated remarkable resilience. The Tel Aviv 35 Index rose about 15% in the first quarter of 2026, outperforming the U.S. S&P 500. This strength is attributed to investor confidence in a favorable war outcome, the return of foreign investors, and a strengthening shekel. However, recent market cooling suggests a gradual realization that post-war growth is not materializing as quickly as anticipated, with smaller-cap indices lagging.

Finally, the primary market saw a revival, with around ten new companies listing in the first quarter of 2026, raising approximately 1.7 billion shekels. Unlike previous IPO waves characterized by speculative "dream companies," this wave featured established, profitable firms, signaling a more mature and quality-focused market. This resurgence is fueled by returning institutional and foreign capital.