Introduction: A Flurry of Activity
A significant wave of transactions swept through the market between Thursday evening and Friday morning, just before a trading week that will feature only two days: Sunday and Thursday, due to the upcoming Rosh Hashanah holiday. This surge in activity is indicative of investor strategies in a compressed trading environment that could have far-reaching effects on market direction.
Major Transactions to Watch
One of the most notable moves was made by Aaron Frankel, who acquired an additional 1.5% stake in Tamar Petroleum, amounting to 52 million shekels, a day after he bought 9% of the company for 320 million shekels. Both transactions were conducted with Menora Mivtachim at a price of 40 shekels per share, slightly below the closing price of 41 shekels on Thursday. Frankel, having divested parts of his holdings to the Azerbaijani company Socar a few months back, remains a key shareholder in Tamar Petroleum with a 24.9% stake.
Meanwhile, the hedge fund Menikei announced the liquidation of its holdings in the stock exchange, selling 5.6% of its shares for 400 million shekels to foreign entities. This marks the third significant sale by the fund this year, with their exit yielding an impressive return of 1,275%. This transaction signals a major shift as Menikei steps away from being the largest shareholder in the exchange.
Additionally, the Pimi fund, led by Isai Davidy, reported that it sold a third of its shares in the jet engine manufacturer, Be’er Sheva Motors, for 500 million shekels on Thursday.
Discount Bank’s Notable Deal
In a significant banking development, Discount Bank agreed overnight on Thursday to sell its 72% stake in Cal to Union Investments of the Chorev family and Harel Insurance owned by the Hamburger family for up to 4 billion shekels. This transaction not only showcases the shifting dynamics in the financial sector but will also impact the larger investment landscape.
Wall Street’s Mixed Signals
Across the Atlantic, Wall Street is showing mixed reactions. Intel’s stock surged by 22% over the week following Nvidia’s announcement of a $5 billion investment in the semiconductor giant. This significant investment underscores the growing importance of the semiconductor sector in the global market. The Fed’s decision to cut interest rates by 0.25% to a range of 4%-4.25% has fueled bullish sentiment as well, with the S&P 500 increasing by 1% for the week.
Yet, investors locally who invested in the S&P 500 without hedging against currency fluctuations have seen minimal returns, as the strengthening shekel impacts their performance. This suggests that while U.S. markets are rallying, the situation is less favorable for Israeli investors without proper currency risk management.
Local Market Reactions
Domestically, the TA-35 index fell by approximately 2% during the last trading week, negatively affected by Prime Minister Netanyahu’s ‘Super Sparta’ speech. Despite this dip, the index has risen 26% since the start of the year, and many traders seem to be seizing the opportunity to realize profits in recent days. However, ongoing geopolitical tensions and dire local economic conditions contribute to a challenging trading atmosphere.
It’s crucial to note that the Bank of Israel’s upcoming decision at the end of September is eagerly anticipated, with speculations ranging about whether the interest rate will hold steady. Investors are likely to keep a close eye on the government bond market alongside equities as they navigate the uncertain terrain ahead.
Conclusion: Looking Ahead
As Israel approaches the two-day trading week amid Rosh Hashanah, market participants will have to be vigilant and adaptive. The spate of recent transactions, both in Israel and internationally, highlights the complexities of managing investments in a rapidly changing financial landscape. Careful attention to both macroeconomic indicators and individual market movements will be crucial for maximizing returns and mitigating risks in this brief yet pivotal trading period.
