Tel Aviv Stock Exchange Surges in Successful Year Driven by Insurance and Tech Giants

The Tel Aviv Stock Exchange (TASE) experienced a highly successful year, marked by significant increases in trading volumes, the value of listed companies, and overall market capitalization. The TASE's market value reached 3.1 trillion shekels in early September, an 82% jump from 1.7 trillion shekels at the end of the previous fiscal year. This surge was fueled by strong performance in existing stocks, new offerings totaling 10.8 billion shekels, and notably, the listing of Silicon Valley tech giant Palo Alto Networks.

Palo Alto Networks began trading on the TASE concurrently with Nasdaq after acquiring Israeli cybersecurity firm Cider Security for $25 billion, the second-largest exit for an Israeli company ever. Palo Alto's market cap on the TASE alone grew from 379 billion shekels in February to 824 billion shekels, an increase of approximately 117%. The TASE's leading indices also posted strong gains, with the TA-35 index rising 40.5%, outperforming major global indices like the Nasdaq and S&P 500.

Insurance companies were standout performers, with the TA Insurance index climbing 94.5%, attributed to growth in managed assets, investment income, and underwriting profits. However, despite the rise in insurance company valuations, outflows from funds tracking the sector exceeded new investments by 680 million shekels. The banking sector also saw a shift, moving from a net inflow of 674 million shekels in the previous year to a net outflow of 98 million shekels, likely influenced by interest rate cuts and expectations of further reductions. The TA Banks index rose 27.4% in the past year.

The shift to a Monday-to-Friday trading week, aligning with global markets, was cited as a key factor in attracting foreign investment. Average daily trading volume increased by 58% to 4.9 billion shekels, with foreign investor activity on Fridays reaching 40%, compared to 13% on Sundays prior to the change. The TASE also introduced 26 new indices, including those for defense, energy, infrastructure, and real estate, and launched the Poalim Resilience index focused on companies in Israel's periphery.