Led by insurance giants: financial reports this week in Tel Aviv

The reporting season reaches one of its peaks this week with the completion of the insurance company map. After Migdal and Clal provided the opening for the industry last week, both with a return on equity of about 22.5% and a record core operating profit, this week the last three take the stage: Phoenix and Menora on Tuesday, and Harel on Wednesday.

The pattern to look for is already clear from the previous reports - the core engine of the companies is working stronger than ever, but the total profit is struggling to show large growth, simply because the corresponding quarter last year, immediately after the ceasefire with Iran, was exceptional in its strength.

Phoenix arrives as the largest insurance company in Israel by market value, about 45 billion shekels, and with an ambition to reach the value of the large banks, having already overtaken Discount, which is traded at a value of about 41.5 billion shekels.

In the first quarter, it presented the highest return on equity in the industry, about 24%, and a total profit of 702 million shekels. Its main growth engine is asset management, a field that requires less capital and is priced higher, and in which it sees the arena where insurance companies will compete in the future with bank deposits.

Menora Mivtachim is one of the strongest players in Israel's pension market, with a market share of about 27% and a pension portfolio of over 300 billion shekels. In the first quarter, it recorded a total profit of 464 million shekels and a return on equity of over 20%, and an even sharper jump in adjusted profit reflecting core activity. Menora is considered the most profitable and disciplined company in the industry, especially in general insurance, and therefore its reports are examined as an indicator of underwriting quality in the entire market.

Harel is the interesting story of the week. On one hand, it is the largest group in Israel in health insurance and one of the largest in absolute profit. On the other hand, in the first quarter, its growth actually stalled, mainly due to a jump in life insurance claims that eroded profit. And yet, its stock is the biggest riser in the table this week, with an increase of about 46% since the beginning of the year, which reflects investor confidence in the recovery. The report will examine if this confidence is justified.

Beyond the beautiful returns, the big question for investors is what the companies are doing with the profits. Last week, Clal announced the first buyback program in its history, and Migdal signaled a return to dividend distribution from 2027.

If Phoenix, Menora, or Harel also join the trend, it is a strong signal that the industry is confident in itself. And it is important to remember: these five companies together manage the pensions, savings, and advanced training funds of most Israelis. The same wave that is boosting their stocks by tens of percent is exactly what is inflating your savings.

And around, a busy week with other names. Partner reports against the backdrop of the consolidation of the Hot Mobile sale, a move that may soften the price war in the cellular market. Navitas, the oil and gas exploration company, arrives after a jump of over 20% this year against the backdrop of progress in projects. In retail, Fox and its online arm Terminal X report, alongside the Tiv Taam chain. And in infrastructure and construction, Electra, Ashtrom, and the Keystone fund.

But the other side of the coin is no less prominent. While finance is celebrating, residential developers continue to take hits. Rothstein has fallen about 33% since the beginning of the year, Aura has lost about 22%, and Tidhar has been falling since its IPO in June.

The reason is common: the apartment market is cooling, the inventory of unsold apartments is growing, and the rate of cancellations is rising. These developers finance land and construction even before they have received most of the money from buyers, and therefore a slowdown in sales weighs directly on cash flow and debt. This is an important reminder: not every corner of the economy is enjoying the rally on the stock exchange.

This week paints a double picture of the Israeli economy. On one hand, a boiling financial sector that is generating record profits and returning money to investors, and within it the entities that manage your pension. On the other hand, a housing market that is signaling fatigue. For you, both angles are relevant: one concerns long-term savings, and the second the apartment dream. It is worth following both.