Israeli Investor Downplays Election Impact on Economy
Translated & summarized from Bizportal by baba
Avner Stepak, chairman of Meitav, asserts that Israeli elections have minimal long-term impact on the stock market, despite public perception. He predicts strong short-term economic growth post-war but expresses deep concern for the future due to declining immigration and neglected structural issues. Geopolitical events, rather than domestic politics, are seen as more influential on the market, while a lack of focus on long-term economic strategies by politicians is a major worry.
The story in 6 lines · by baba
- Avner Stepak believes Israeli election outcomes have minimal long-term impact on the stock market.
- Short-term economic growth is predicted post-war, but long-term prospects are concerning.
- Declining immigration and emigration of skilled professionals are major long-term worries.
- Geopolitical events significantly influence the market more than domestic politics.
- Politicians are criticized for neglecting crucial long-term economic strategies.
- Stepak separates his personal political views from his economic analysis.
Avner Stepak, the chairman and controlling shareholder of Meitav, one of Israel's largest investment houses, believes that the political landscape and election outcomes have a significantly lower impact on the stock market and the economy than commonly perceived. Despite holding strong and publicly expressed political views, Stepak insists he separates them from his professional assessments.
Stepak argues that while elections might cause short-term fluctuations, particularly in the real estate market, their long-term effect on the stock market is minimal. He points to the period between 2019 and 2022, which saw five election cycles, yet the stock market continued to rise. He suggests that even a narrow government, regardless of its political leaning, poses a challenge to economic stability and decision-making, especially for the real estate sector.
Looking ahead, Stepak is optimistic about Israel's economic growth in the short term, particularly in 2027, predicting a "bonanza" if the current wars conclude and security risks diminish. He attributes this potential growth to pent-up private consumption and a recovering business sector. However, he expresses significant concern for the long term, citing critical issues such as declining immigration, the emigration of skilled professionals, and systemic problems in education and employment integration for the Haredi and Arab sectors.
Stepak also highlights that geopolitical events, like conflicts in the Middle East and global oil prices, have a more substantial impact on the market than domestic politics. He notes a concerning trend of decreasing immigration to Israel and increasing emigration, particularly among the highly skilled, which he believes will have a negative economic impact over time. He criticizes politicians for not prioritizing crucial long-term economic strategies, such as boosting employment in underserved communities, as these issues do not translate into political gains.
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