Tel Aviv Stocks Navigate Volatility as Mizrahi-Tefahot Moves Toward US ADR Listing
Global markets rebound as Tel Aviv navigates volatility and Mizrahi-Tefahot moves toward a US ADR listing. Tech stocks face pressure amid shifting political dynamics.
Global markets opened the week on a positive note following overnight gains, though the Tel Aviv Stock Exchange navigates mixed sentiment amid ongoing corporate earnings reports and shifting macroeconomic conditions. Dual-listed stocks returned from Wall Street with mixed arbitrage gaps, as major technology firms and defense contractors faced downward pressure.
Banking Expansion and Market Volatility
In a notable development for the Israeli banking sector, Mizrahi-Tefahot Bank is set to draw significant attention after Citibank filed a registration statement on Form F-6 with the US Securities and Exchange Commission (SEC) to establish an ADR program for the bank's shares. The move allows US investors to trade the Israeli bank's stock directly on American markets, with Citibank registering up to 50 million ADRs where each receipt represents one-fifth of an ordinary share.
The local market experienced sharp volatility over the weekend, plunging nearly 4% on Thursday before staging a robust rebound of over 3% in the Tel Aviv 35 index on Friday. Despite the late recovery, weekly figures closed in negative territory, with the Tel Aviv 35 and Tel Aviv 125 indices dropping roughly 2.9%, while the Tel Aviv 90 lost about 3%. Defense and technology indices led the downturns, falling 11.4% and 6.6% respectively, leaving the banking sector as the sole gentry index finishing the week in positive territory with a 1.8% gain.
Commodity Shifts and Foreign Exchange
The Israeli shekel weakened by approximately 1.6% against the dollar over the past week, with the continuous USD/ILS rate settling around 3.18 shekels, before strengthening back to trade near 3.17 shekels amid the broader market recovery. Concurrently, the US Dollar Index (DXY) climbed about 0.4% to 102.3 points, bolstered by robust US employment data and safe-haven flows.
Crude oil prices registered sharp weekly declines, driven by geopolitical commentary and optimism regarding potential negotiation progress. Brent crude dropped over 16% to settle near $98 per barrel, while West Texas Intermediate (WTI) fell close to 13% to around $90 per barrel. Meanwhile, gold futures marked their strongest weekly gain since August, rising roughly 4.5% to $4,075 per ounce before retreating slightly following the strong US jobs report.
