Investment Manager Recommends Renewable Energy and Chip Sectors, Sees Israeli Market as Reasonably Priced

Dan Bienstock, a 38-year-old investment manager at Poalim Asset Management, which is part of Bank Hapoalim, has been working in investment management for 13 years and currently leads the foreign clients desk. Growing up in a banking family, Bienstock developed an early interest in financial markets, emphasizing the importance of staying constantly updated due to the market's dynamic nature.

Despite recent relative weakness, Bienstock advises maintaining exposure to the Israeli stock market, citing Bank of Israel's forecast of 4% growth this year and 5.5% next year, alongside declining inflation at 1.6% and a strengthening shekel. He views the upcoming Knesset elections as background noise, suggesting investors wait to evaluate the new government's economic plans before making major adjustments.

Bienstock remains optimistic about continued market gains, noting a 25% increase in corporate profits and double-digit growth forecasts for next year. He expects no more than one U.S. interest rate hike this year, despite Federal Reserve Chair Kevin Warsh's hawkish tone, as the U.S. economy remains strong and inflation is expected to moderate. However, he expresses concern over the U.S. national debt nearing $40 trillion and rising Treasury yields, which could increase borrowing costs and mortgage rates, potentially triggering a debt crisis.

For portfolio allocation, Bienstock recommends balanced exposure between Israeli and global equities, with conservative investors holding 15% in each and more aggressive investors up to 35% in each. Fixed income allocations favor Israeli corporate bonds and government bonds with a 4-5 year duration.

He highlights two key sectors for Israeli investments: renewable energy, benefiting from AI-driven electricity demand and falling costs, and technology, particularly semiconductor chips, which offer diverse exposure to the global chip industry. Globally, he also recommends exposure to cybersecurity, financials supported by a high interest rate environment and deregulation, and industrials, boosted by U.S. trade policies encouraging domestic manufacturing.

Bienstock concludes that despite recent market volatility, opportunities remain robust, especially in sectors aligned with technological innovation and structural economic trends.