Tel Aviv Stock Exchange at Historic High: Market Capitalization Crosses Unprecedented Threshold

The research unit of the Tel Aviv Stock Exchange summarizes the month of July, which closed with gains led by the banking sector, while market capitalization reached a record high of over 3 trillion shekels.

"Stock market: Banks and insurance led this month as the TA-Banks index jumped since the beginning of the month by 10.45% (1.93% since the beginning of the year), TA-Oil and Gas +9.17%, TA-Finance +7.15% and TA-Insurance +6.15%. On the other hand, the construction (-4.96%), technology (-3.99%) and real estate (-3.12%) indices stood out negatively. The flagship indices rose as the TA-35 index rose by 2.03% (14.26% since the beginning of the year), the TA-125 index rose by 1.52% (+11.14%) and the TA-90 remained behind with a rise of only +0.39% since the beginning of the month and a rise of 0.67% since the beginning of the year.

Institutional investor movements: they increased exposure to the local capital market during the month of July by about 1.7 billion shekels net, mainly in chips (about 1.1 billion shekels). Foreigners reduced exposure by about 391 million shekels net in July but increased it by 2.1 billion since the beginning of the year. Main event this week: the entry of Palo Alto into the TA-35 and TA-125 indices starting from August 6.

Bond market: declines in government bonds occurred. Despite the interest rate cut by the Bank of Israel, which lowered the rate by 0.25% to 3.5%, the rise in yields globally outweighed this. The 10-year yield of the Israeli government rose from 3.69% to 3.852%, following the jump in the 10-year US bond yield (from 4.422% to 4.745%).

The long-term shekel segment absorbed most of the pressure: Tel Gov-General fell by 0.30% (but is still +2.24% since the beginning of the year), and the declines were concentrated in the long term (Tel Gov-Shekel 10+ fell by 1.59%), while the short-term ones were supported by the interest rate cut.

The liquidity reform in the Tel-Bond indices is underway in the August update: 87 series of 49 issuers do not meet the new conditions, and a volume of about 725 million shekels is expected to be removed from the indices.

Capital and debt raising: corporate bond raising is active, led by the banks. July concluded with about 14.5 billion shekels in public offerings, and since the beginning of the year about 122 billion shekels. The banks led (48% of the monthly raising): Hapoalim issued about 6 billion shekels and Leumi about 1 billion shekels. Five new bond companies joined the market.

Capital raising: in July, about 1.4 billion shekels were raised, of which about 1.1 billion shekels in four initial offerings (Rafa Laboratories, Rafak Energy, Sola and Cando Drones). Since the beginning of the year, 19 new companies have joined, raising about 7.2 billion shekels and trading at a cumulative value of about 31 billion shekels (Tadhar, Bagira and Rami Levy Real Estate stood out).

Mutual fund market: inflows into local bonds and money market funds, alongside renewed exposure to foreign stocks. The industry raised about 3.1 billion shekels net in July and about 39.7 billion since the beginning of the year. Money market funds led with about 3.7 billion shekels, and local bond funds raised about 3.3 billion shekels."