The Tel Aviv Stock Exchange said that the performance of local stocks in 2023 was significantly lower than the performance of major global stock indices, which rose by about 20% despite the high interest rate environment.
Anatolia Agency reported, citing the Stock Exchange’s annual report for the current year, that the Tel Aviv Stock Exchange witnessed this year a decline in initial offerings, and a slowdown in companies’ capital, due to the war on the Gaza Strip and the judiciary reform plan.
Israeli stocks and the shekel (the Israeli currency) are closely linked to the Standard & Poor’s 500 index and global technology stocks, meaning that if the US stock index rises, the local market follows with a similar movement in the same direction and the shekel rises, and vice versa.
According to Anatolia, the report indicates that the current year was contrary to this traditional trend, as the Israeli index of major companies’ stocks (TI-35) rose by only 1.4%, while the Standard & Poor’s index jumped by 23%, and the Nasdaq 100 index rose by 51%. .
At the beginning of this year, the Israeli stock market was clouded by a state of increasing political uncertainty regarding the judicial amendment proposed by the government, and fears that the planned changes in the legal system.
The stock exchange said that local stock indices rose in the first eight months of the year by about 2% to 3%, compared to double-digit gains in US and European stock indices.
Economic blow
With the start of Operation “Al-Aqsa Flood” on October 7, the Tel Aviv Stock Exchange fell by 8% at the close of trading on the day following the operation. According to stock exchange data, the banking index recorded a significant decline of 8.7%, construction by 9.52%, and insurance by 9.38. %, investment 9.2%, energy 9.22%, and the stock market continued to decline by more than 10% in the weeks following the war on Gaza, before rebounding upward, erasing most of the losses recorded later, so that the total by the end of the year was a very slight increase.
The stock exchange report revealed that in 2023, the public withdrew an amount of 30 billion shekels ($8.3 billion) from funds that invest in stocks and bonds in Tel Aviv.
He added: “While 20.5 billion shekels ($5.7 billion) were pumped into funds that invest in securities abroad and 53 billion shekels ($14.7 billion) into money market funds.”
Israel recorded a budget deficit estimated at about 17 billion shekels ($4.7 billion) last November, according to what the Israeli Ministry of Finance announced.
Last month, Governor of the Bank of Israel, Amir Yaron, expected that economic losses would reach 10% of the Israeli gross domestic product, which is equivalent to 52 billion dollars, indicating that the bank based its expectations on the assumptions that the impact of the war would continue for the next year, and that no fronts other than Gaza.
