Insurance, retail, and income-producing real estate giants: Reports expected this week in Tel Aviv
Mizrahi Tefahot will conclude the banking reporting season, followed by insurance companies and investment houses — the entities managing your savings and pensions. The hot stock market and interest rate cuts have boosted some stocks by tens of percent, though results across the sector remain mixed.
After two weeks where the spotlight was on banks, Teva, and technology companies, this week the reporting season shifts to the financial entities that manage our collective capital. Insurance companies and investment houses are beginning to publish their results against the backdrop of two forces fueling the market: a stock exchange maintaining positive momentum and interest rate cuts.
Mizrahi Tefahot opens the week, closing the banking season. In the first quarter, it maintained the highest return on equity in the system at approximately 14%, despite a slight profit decline to about 1.24 billion shekels. As Israel's mortgage giant with a portfolio of roughly 250 billion shekels, the bank is heavily influenced by housing market trends and borrowing costs. Investors are paying close attention to credit loss provisions, which decreased in the previous quarter, contrary to the broader banking trend.
Insurance companies are perhaps the most anticipated story this week. Migdal will report after the insurance sector jumped over 150% last year and added 22.7% year-to-date. The tailwind is twofold: rising premiums have improved underwriting profits, while the companies' massive investment portfolios benefit directly from stock market gains.
In the previous quarter, Menora stood out with a return on equity exceeding 20%, while Migdal recorded a 27% profit growth. Crucially, these are the entities managing your pension and provident funds; their stock performance often mirrors the trends affecting your personal savings.
Investment houses complete the picture. Meitav, Mor, and Altshuler Shaham report this week, highlighting a drama in the long-term savings industry. Meitav and Mor have climbed to the top in assets under management, with Mor managing over 200 billion shekels and recording a 58% profit jump.
Conversely, Altshuler Shaham, a long-time market leader, continues to lose clients, shedding over 100 billion shekels in assets since 2022. The bottom line is that while market growth and the shift from deposits to capital markets boost management fees, competition for your money remains brutal.
Income-producing real estate is benefiting from lower interest rates, which reduce financing costs and boost asset values. Azrieli, Alony Hetz, Big, and G City report this week, though the picture is mixed: G City and Azrieli have recorded gains, while Alony Hetz and Big are trading down. The market views this as a "battered" sector presenting a potential opportunity, and these reports will test that assessment.
The energy wave continues as well. On Thursday, two of the hottest stocks report: Nofar Energy, which has tripled in value over the past year, and Generation Capital, which jumped about 84% following its acquisition of Shikun & Binui Energy. Both are riding the trend of surging electricity demand in the era of artificial intelligence.
Alongside the high-flyers, companies like Matrix, Retailors, Electra Consumer, and Altshuler Shaham, which are trading sharply lower year-to-date, will face intense scrutiny.
Ultimately, this week is a meeting with the entities holding your money. Even if you do not own shares in these companies, they manage your pension and savings. Therefore, it is worth looking beyond quarterly profits at two critical data points: where savers' money is flowing and the level of management fees being charged.
