Tel Aviv Stock Exchange Surges Amid Election Uncertainty
Translated & summarized from Walla by baba
Tel Aviv's stock market indices rose sharply last week despite election uncertainty, with the TA-35 up 4.0% and TA-90 up 5.1%. Institutional investors were significant net buyers, particularly in technology stocks, while foreign investors were net sellers. Analysts like Tzur Ilan suggest the gains may be due to repurchases rather than new investment, and that market reactions to political events are disproportionate to actual economic strength.
The story in 6 lines · by baba
- Tel Aviv stock indices surged last week, with TA-90 up 5.1% and TA-125 up 4.2%, despite election uncertainty.
- Institutional investors were net buyers of 1.3 billion shekels last week, focusing on technology stocks.
- Foreign investors were net sellers of 314 million shekels last week.
- Construction and real estate sectors led the market gains, while defense and financial sectors also rose.
- Analyst Tzur Ilan expressed caution, suggesting gains were from repurchases and market reactions are disproportionate.
- The TA-90 index, reflecting the broader economy, shows significant impact despite overall market rise.
Tel Aviv's stock market indices experienced a significant surge in the past week, defying the heightened uncertainty surrounding the upcoming Israeli elections. The Tel Aviv Stock Exchange's research unit reported that the TA-90 index rose 5.1%, the TA-125 index increased by approximately 4.2%, and the TA-35 index climbed about 4.0%. The TA-35 has led year-to-date with a 16.3% return, while the TA-125 is up 11.7% and the TA-90 remains down 2.9% for the year.
The gains were broad-based, with the construction and real estate sectors leading the advance. The TA-Construction index rose 9.7%, TA-Real Estate by 9%, and TA-Israel by 7.5%. Other sectors also saw increases, including defense (6.2%), financial (5.7%), banks (5.5%), and insurance (5.2%). The insurance sector has shown a remarkable 41.7% return year-to-date, and the banking sector is up 22.7%, while construction and real estate indices have declined.
Daily trading volume averaged around 4.7 billion shekels. Institutional investors were net buyers, acquiring shares worth approximately 1.3 billion shekels last week, bringing their net purchases for the year to about 5.5 billion shekels. Their recent acquisitions were concentrated in the technology sector, totaling 936 million shekels, with notable purchases in Elbit Systems, Tower, Nova, and Camtek.
Conversely, foreign investors were net sellers, offloading shares worth about 314 million shekels last week. However, their net purchases since October stand at 416 million shekels, and 3.1 billion shekels year-to-date.
Despite the market's upward trend, some analysts express caution. Tzur Ilan, CEO of Almanda Capital, suggested that the recent gains were not driven by new capital but rather by investors repurchasing shares at lower prices after significant sell-offs. He noted that while dual-listed and international companies, along with banks and insurance firms, have driven gains this year, the TA-90 index, reflecting the broader Israeli economy, shows the depth of the impact. Ilan also pointed to strong Israeli macroeconomic data and noted that investor reactions to Israeli political uncertainty seem disproportionate compared to other countries, emphasizing that actual economic data ultimately determines market performance.
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