Tower, Ormat Stocks to Rise; Israel's Market Faces Mixed Trends

The Tel Aviv Stock Exchange is expected to open with mixed trends on Tuesday, influenced by global markets and specific company news. While some Israeli dual-listed stocks like Tower Semiconductor and Ormat Technologies are anticipated to see gains, others like Palo Alto Networks are projected to decline. Wall Street is experiencing apprehension due to rising interest rates and uncertainty surrounding the returns on massive AI investments, though stock markets have so far remained resilient.

In Israel, economists anticipate a potential interest rate decrease, but this outlook could be significantly impacted if the U.S. Federal Reserve continues its rate hikes. The U.S. market currently shows over a 65% probability of a rate cut in October, which could alter expectations for Israel's monetary policy. This scenario raises questions about whether Israeli interest rates will indeed fall to the anticipated 3% or 2.75% levels.

Several companies are making headlines. Ormat Technologies is set to receive up to $35 million from the U.S. Department of Energy for two geothermal projects, contingent on final negotiations. Meanwhile, a significant accounting issue has emerged at Tomer Food, where an independent review revealed that the company's 2025 profit has been erased due to inflated inventory values and premature revenue recognition. This has led to a net loss of approximately 3.06 million shekels, down from a projected profit, and a reduction in equity. The company's controlling shareholder, Doron Kimelov, influenced inventory valuations, and banks have agreed to defer immediate repayment until 2026 financial reports are finalized.

Additionally, Partner Communications is seeking to distribute a 500 million shekel dividend, exceeding its available surplus. Bondholders have opposed this move twice, but Partner is proceeding with early repayment of certain bond series, with the final decision pending court review. The controlling shareholder, Amphissa, is expected to receive approximately 106 million shekels from the distribution.