Menora Mivtachim Faces Fund Freeze Amid Corruption Probe as Tel Aviv Stocks Rise

The Tel Aviv Stock Exchange closed yesterday with gains exceeding 1%, following the Bank of Israel's decision to cut interest rates by 0.25% to 3.5%, in line with expectations, and to raise growth forecasts. The TA-35, TA-125, and TA Banks indices all climbed by 1.1%, with the banking index recovering sharply from an intraday low of a 1.7% drop. In corporate moves, Ari Real Estate acquired a 26% stake in G City from Norstar, causing G City shares to surge 21%, Norstar to jump 22.3%, while Ari Real Estate shares fell 11.8%.

Meanwhile, a significant development emerged in a corruption case involving the Histadrut labor federation. Israeli police froze 183 million shekels in accounts linked to Menora Mivtachim and senior executives. The allegations suggest that Menora Mivtachim facilitated the signing and renewal of a pharmaceutical insurance policy with the Histadrut by providing benefits and payments to insurance agent Ezra Gabay, allegedly due to his influence over Histadrut chairman Arnon Bar-David. The frozen funds represent the suspected personal gains of the executives from these offenses. Menora Mivtachim stated that the freeze will not affect the company’s regular operations.

Investors are now closely watching how Menora Mivtachim’s stock will react to the freezing of funds amid the ongoing investigation. The broader market remains buoyed by the central bank’s monetary easing and positive economic outlook.