Israeli equity market returns were primarily driven by exogenous factors, including the continued decline in global energy prices, the continued strength of U.S. dollar and the long anticipated announcement of a new European quantitative easing program.
Global financial volatility, coupled with domestic uncertainty and a gradual recovery from the negative impact of the summer 2014 war in Gaza, will continue to be the key drivers for Israeli equities for the next several months.
BlueStar’s ‘BIGI’ and ‘BIGITech’ Benchmarks December 2014 Semi-Annual Rebalancing Further Broadens Both Indexes: MobileEye and Cyberark Join Flagship Israel Equity Indexes
We believe that Israeli equities have largely discounted the economic impact of this summers’ war with Hamas. Shekel denominated share prices have rebounded and there is ample technical evidence of a bottoming out in the prices of financial stocks...
Our short term outlook for Israeli Global Equities remains neutral with a bullish bias as BIGI® has not broken through key technical resistance levels despite its sharp recovery from October’s lows.
The S&P 500 index gained 1.10% in Q3 2014. MSCI EAFE and MSCI EM lost -5.80% and -3.40%, respectively. Israeli companies continued to list on U.S. exchanges during the quarter. Among the most notable were technology companies Mobileye, CyberArk and ReWalk. They will all be eligible to enter the BIGI and/or the BIGITech during the December 2014 rebalancing.
This is an updated version of our inaugural “BluePaper,” originally published in February 2014, on a topic that is highly relevant to prospective investors in Israeli equities. We contrast the perception of risk in Israeli markets versus the reality of economic resilience and correlations with global rather than local events.