Israeli Stocks Decline Amid Energy and Defense Sector Losses; Nofar Energy Faces Funding Pressure

The Tel Aviv Stock Exchange experienced volatility throughout the day, with the energy and defense sectors leading the declines. The renewable energy sector saw drops of up to 3.4%, impacting the main index, while defense stocks fell by 2.5%. The TA-35 index closed down 0.8%, and the TA-90 index dropped 1.4%. Financials also trended negative, with banks losing 0.7% and insurance companies closing near zero after recovering from earlier losses.

Nofar Energy shares plummeted by 9.25% due to renewed plans to raise approximately 500 million shekels through preferred shares. This move, previously halted pending review by the Israel Securities Authority, aims to strengthen the company's capital without increasing traditional debt or diluting existing shareholders' voting power. The preferred shares are expected to carry an 8.5% annual cumulative dividend but will not include voting rights or a fixed redemption date.

Meanwhile, real estate and construction firms saw minor declines, with Dori Group down 1.81% amid concerns about its potential exclusion from the TA-35 index. The company's public holding ranking is currently 48th, close to the 40th-place threshold for index inclusion. Despite a private placement in October 2025 aimed at increasing public holdings, Dori Group remains at risk of removal, with index changes set to take effect on November 5th.

On the upside, Epitomi continued its positive momentum, while Electra Real Estate managed to recover. The article also noted that four out of five members of the Bank of Israel's Monetary Committee voted for a 0.25% interest rate cut to 3.25% in early September, with one member advocating for no change. Next Vision received positive ratings from Needham and UBS, with price targets suggesting significant upside potential, potentially paving the way for a Wall Street IPO.