Abner Hadad Predicts Israeli Market Recovery and Dollar Drop to 2.5 Shekels Next Year

Abner Hadad, CEO of Phoenix Investment House and co-CEO of KSM Funds, analyzed the recent underperformance of the Israeli stock market compared to global markets in a letter to investors. He noted that over the past three months, leading Israeli indices lagged about 20% behind the US market. This weakness stems not only from a correction after a 100% rise over the last two and a half years but also from ongoing political, security, and diplomatic uncertainties that have dampened investor confidence and reduced capital inflows.

Hadad identified the upcoming general elections in October as a potential turning point. He explained that elections often reduce uncertainty and risk, which could positively impact the local market. He expects a renewed recovery in Israeli stocks in the coming months, with a strong upward trend likely continuing into the fourth quarter of 2026.

Regarding the foreign exchange market, Hadad highlighted the recent drop of the US dollar to historic lows against the shekel, reaching around 2.8 shekels in May-June before slightly rebounding to about 3 shekels. He forecasts that the dollar could decline further to between 2.5 and 2.6 shekels within the next year, driven by reduced uncertainty in Israel. He expressed skepticism about the effectiveness of Bank of Israel interventions to influence this trend.

Hadad concluded by emphasizing the volatility experienced so far this year and noted that his views are personal opinions, leaving open the discussion about 2027. His analysis provides insight into the factors shaping Israel’s financial markets and currency outlook amid political and economic challenges.