Israeli Stock Market Shows Volatility Ahead of Elections
Translated & summarized from Bizportal by baba
The Israeli stock market saw a significant recovery, with the TA-35 index gaining 4.5% amid speculation of a national unity government and positive betting odds for Gadi Eisenkot. While green energy stocks rose, concerns about interest rates persist, and companies like Next Vision and Electra Real Estate face challenges. The market is exhibiting high volatility, described as "manic-depressive," with continued nervousness expected before the upcoming elections.
The story in 5 lines · by baba
- The Israeli stock market recovered significantly, with the TA-35 index rising 4.5% amid election speculation.
- Investor optimism is linked to expectations of a national unity government and positive betting odds for Gadi Eisenkot.
- Green energy stocks saw a nearly 10% rise, but concerns about potential interest rate hikes remain.
- Electra Real Estate and Ashtrom Group are highlighted as stocks facing further declines due to business conditions and debt.
- The Israeli derivatives market is experiencing high volatility, with continued nervousness expected before the elections.
The Israeli stock market experienced a positive trading week, recovering from previous declines with the TA-35 index rising 4.5% to close at 4,225 points. This uptick is attributed to investor optimism, fueled by speculation about the formation of a national unity government. Betting sites, particularly Polymarket, indicate a strong likelihood of Gadi Eisenkot from the Yisrael Beiteinu party winning, suggesting this sentiment influences market behavior.
In the corporate sector, bank stocks saw a correction of 4-5%, while green energy stocks experienced a nearly 10% rise. However, the article questions whether this correction in green energy is over, citing inflation data that complicates the prospect of interest rate cuts. The author suggests a potential interest rate hike if US indices remain high in about a month and a half, expressing doubt that green energy investors are factoring this risk.
Next Vision is awaiting company announcements regarding contracts or acquisitions funded by its recent capital raise. Some market participants are reportedly disappointed with the company's slow progress in finding a suitable acquisition, suggesting a buyback as an alternative. Electra Real Estate's stock declined amid news of a rights offering scheduled for the day after the Israeli elections, with the author predicting further drops due to the company's poor business condition and significant debt.
Ashtrom Group is also flagged as a potential short candidate due to substantial debt and an anticipated slowdown in its sector. Conversely, Elbit Systems saw a sharp correction with heavy trading, interpreted by many as a technical rebound after a significant drop from its peak. The article also touches on the upcoming massive metro tender, mentioning Electra, Danya, Shapir, and Ashtrom's involvement, and notes Ashtrom's weak quarterly performance with a sharp drop in operating profit and increased financing expenses.
The Israeli derivatives market, known as "Ma'of," is experiencing significant volatility, with standard deviations high relative to trading volumes. Traders anticipate continued nervousness in the market leading up to the elections, especially with the upcoming monthly options expiration. The author advises investors who cannot tolerate the market's fluctuations to consider staying out, suggesting it's better to miss potential gains than to suffer losses from an election outcome the market dislikes.
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