According to data from the Tel Aviv Stock Exchange (TASE), in the first nine months of 2024 Israeli citizens significantly reduced their exposure to stocks, selling about NIS 8.8 billion in net sales.
Meanwhile, long-term institutional investors took advantage of these redemptions and purchased stocks worth approximately NIS 10.2 billion. Thus far, the situation remains unremarkable.
What is remarkable, however, is that while Israeli investors continue to shift their funds and investments from Israel to overseas during times of war and significant uncertainty, foreign investors have accelerated their investments in Israel, demonstrating their appreciation for the state and the potential returns its investments can yield.
From the perspective of a foreign investor, the fear of judicial reform significantly impacted Israeli markets and the economy, surpassing the impact of a tangible, prolonged, and justified war that costs hundreds of millions of shekels per day.
According to the Balance of Payments report from the Israeli Central Bureau of Statistics (CBS), foreign investments in Israel increased by $5.9 billion in the second quarter of 2024.
This represents the largest financial increase since early 2023 – a year in which foreign investors distanced themselves from Israel due to concerns over judicial reform.
According to the TASE, this represents nothing less than a trend reversal, as in the third quarter of 2024 foreign investors made net stock purchases of around NIS 3 billion, reversing redemptions of approximately NIS 2.4 billion in the first half of the year.
A detailed report by the Jefferies investment bank, published in recent days, reviewed Israel’s economy over the past year and shows that investments in Israeli hi-tech companies have grown significantly among foreign investors.
According to Jefferies, in the 12 months preceding October 7, foreign investors participated in about 49% of fundraising rounds, and today, despite all challenges, the volume of investments has grown to 53%.
Hi-tech companies thrive
Since October 7, 2023, Israeli hi-tech companies have raised close to $9.8 billion, placing Israel in an impressive third place globally for capital raised during this period, after Silicon Valley and New York.
In addition, in March 2024, the State of Israel raised a record $8 billion in bonds from foreign investors in London, with demand for the offering reaching around $38 billion, divided among investors from no less than 36 different countries.
These positive and significant figures come despite and alongside Israel’s credit rating downgrades by all international rating agencies and the expansion of fighting against Hezbollah in Lebanon.
From a medium- to long-term perspective,…
Read More: Foreign investments surge as Israel shows economic resilience amid war
