Israeli Markets Brace for Election Week Amid Global Uncertainty
Translated & summarized from Calcalist by baba
Former Israeli finance official David Brodet warned that Prime Minister Netanyahu's comments on using cryptocurrency against sanctions could harm investor confidence. The Tel Aviv Stock Exchange is opening amid global uncertainty, including Brazil's presidential election results and upcoming Israeli Knesset elections. Dual-listed stocks are expected to open mixed, with some showing positive arbitrage gaps from Wall Street while others are negative. Investors are closely watching both local political developments and international events.
The story in 5 lines · by baba
- Former Israeli finance official David Brodet warned Netanyahu's sanctions remarks could hurt investor confidence.
- The Tel Aviv Stock Exchange is opening after a negative week, influenced by global and local politics.
- Lula da Silva won Brazil's presidential election, surprising markets and leading to Bolsonaro's refusal to concede.
- Israeli Knesset elections are scheduled for October 27, with investors monitoring local political developments.
- Dual-listed stocks are expected to open mixed, with some showing positive arbitrage gaps from Wall Street.
Former Director General of the Ministry of Finance and Chairman of Bank Leumi, David Brodet, warned that Prime Minister Benjamin Netanyahu's remarks about potentially using cryptocurrency to counter financial sanctions could undermine investor confidence. Brodet stated that even discussing such measures could create the symptoms of an event that hasn't occurred and might even hasten it. He emphasized that disconnection from the international financial system would harm trade, credit, and investments, while cryptocurrency is not a practical solution for such a scenario. Brodet was among 109 economists and former senior officials who signed a letter opposing Netanyahu's plan.
The Tel Aviv Stock Exchange is set to open the trading week following a negative close last week, mirroring declines in New York. Global markets are also closely watching the Brazilian election drama, where President Lula da Silva secured a fourth term after a surprise victory with 51.8% of the vote against Jair Bolsonaro's 48.2%. This outcome surprised investors, as Bolsonaro had led in the first round and in pre-election polls. Bolsonaro has refused to concede and plans to challenge the results.
Bolsonaro, a right-wing candidate supported by former U.S. President Donald Trump, was known for his pro-Israel stance, including a promise to move Brazil's embassy to Jerusalem. In contrast, Lula has adopted a critical stance towards Israel regarding the Gaza war. Upon entering his new term, Lula will face a Congress where Bolsonaro's party holds significant power, alongside economic challenges, particularly public debt, which reached 82.9% of GDP in August.
In Israel, preparations are underway for the 26th Knesset elections scheduled for October 27. Investors on the Tel Aviv Stock Exchange are monitoring local political developments. Dual-listed stocks in the TA-35 index are expected to open with mixed trading, influenced by arbitrage gaps with Wall Street. Most stocks are returning with positive gaps, notably Palo Alto Networks and NICE. These gaps are projected to contribute approximately 0.3% to the TA-35 index at the opening. Palo Alto Networks leads with an 8.5% positive gap, NICE with 5.1%, and others like Kamatech, Elbit Systems, and Nova also showing positive returns. Conversely, Tower Semiconductor, Teva, and Canon are expected to open with negative gaps.
Mentioned
