Israeli Stock Market Sees Dramatic Year With Key Events
The past Hebrew year was a dramatic one for the Israeli stock market, with the Tel Aviv 35 Index climbing approximately 35% and reaching a record high of nearly 4,630 points in May. This surge was driven by significant events including major deals, a long-awaited structural reform, and the surprising entry of new players.
The most headline-grabbing event was the dual listing of cybersecurity giant Palo Alto Networks on the Tel Aviv Stock Exchange in February 2026. This move made Palo Alto the largest company traded in Tel Aviv by market cap, valued at around 410 billion shekels, while it continued trading on Nasdaq. The company's choice of the ticker symbol CYBR was a tribute to its acquisition of Israeli firm CyberArk. Palo Alto's CEO, Nikesh Arora, described the listing as a milestone honoring CyberArk's Israeli heritage, and the stock exchange welcomed it as a major development, aiming to break the trend of large Israeli tech firms favoring Wall Street.
Another major story involved Delek Group's successful, albeit later challenging, takeover of the credit card company Isracard for approximately 3.56 billion shekels. Initially seen as a brilliant move, with Yitzhak Tshuva's potential paper profit nearing a billion shekels, the situation soured when Isracard's planned acquisition of digital bank Ash was canceled. A subsequent ten-year strategic agreement with El Al's frequent flyer club, while expected to bring new customers, will cost Isracard between 110 and 150 million shekels in profit in 2026. Consequently, Isracard's stock plummeted, erasing most of Delek's paper gains.
A significant structural change occurred on January 5, 2026, when the Tel Aviv Stock Exchange shifted its trading days from Sunday-Thursday to Monday-Friday, with Friday becoming a shortened trading day. This reform, led by the Israel Securities Authority, the exchange, and the Bank of Israel, aligns the market with most global exchanges and aims to increase foreign investment and liquidity. Early signs suggest a higher proportion of foreign investors on Fridays, though the shortened day ends before Wall Street opens.
Despite ongoing security challenges and a multi-front conflict with Iran, the Tel Aviv Stock Exchange demonstrated remarkable resilience, with the TA 35 index rising about 15% in the first quarter of 2026, outperforming the US S&P 500. This paradox is attributed to investor expectations of a favorable war outcome, the return of foreign investors, and a strengthening shekel. However, recent market cooling is attributed to a gradual realization that post-war growth is not materializing as quickly as hoped, with smaller company indices lagging behind.
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 in sectors like food, real estate, and defense. This resurgence is fueled by returning institutional and foreign capital, as well as local retail investors.
