Dollar Strengthens as Investors Seek Returns Abroad

The dollar opened trading this morning, Wednesday, with a sharp gain of nearly 1% and was trading at around 2.97 shekels. Since the beginning of June, the U.S. currency has strengthened by about 10 agorot, after trading at around 2.87 shekels at the start of the month.

At the same time, declines were recorded on the major stock exchanges in Asia. Japan's Nikkei index lost 2.6%, Hong Kong's Hang Seng fell 1.4%, the Shanghai exchange weakened by about 1%, and Singapore registered a decline of 1.3%. Futures on Wall Street were also trading lower, by between 0.4% and 0.7%.

Senior capital market sources told Israel Hayom that there has been some change in the behavior of institutional investors, with some funds beginning to move gradually from the local market to investments abroad. According to them, the reasons are high price levels in the Israeli stock market, along with security and political uncertainty. In addition, the approaching election campaign is adding to fears of a prolonged period of instability.

Market data points to a significant rise in share valuations. The earnings multiple of the TA-125 index currently stands at 18 to 22, compared with 14 to 15 in 2024, while the average over the past five years was about 13. According to market sources, this is not a withdrawal of funds from Israel, but rather an attempt to identify additional investment opportunities. However, as long as prices remain high and uncertainty persists, some of the institutional money continues to flow into markets outside Israel.