Foreign Investors Boost Tel Aviv Equities Despite October Market Uncertainty
Foreign and local investors expanded their equity holdings on the Tel Aviv Stock Exchange in October despite political uncertainty, while corporate bond issuances reached 14.1 billion shekels and mutual fund assets climbed to 853.8 billion shekels.
The Tel Aviv Stock Exchange closed October with downward trends, yet despite market volatility and political uncertainty, major investor groups expanded their holdings in local equities. According to the Tel Aviv Stock Exchange research unit report released on Monday, foreign investors purchased 920 million shekels net in shares during the month, with nearly half of the total—around 439 million shekels—acquired during the three trading sessions following the elections. Of these post-election purchases, about 235 million shekels were channeled into bank stocks.
Local investor groups also remained net buyers in October. Pension funds, provident funds, and insurance companies bought approximately 1.13 billion shekels net in equities, while portfolio managers and managed clients purchased around 682 million shekels net. Institutional acquisitions stood out in shares of Elbit Systems, Tower Semiconductor, Next Vision, and Nova. Conversely, Israeli corporations sold roughly 3.55 billion shekels net in shares. These inflows follow a period of subdued foreign activity on the local exchange. Data shows that in the first nine months of 2026, foreign residents bought only about 2.7 billion shekels net in Tel Aviv equities, compared to about 8.9 billion shekels in the same period last year—a plunge of nearly 70%. In September, foreign net purchases reached just 70 million shekels, signaling a recovery in October despite an inconclusive election outcome.
Political uncertainty also impacted the government bond market, particularly long-term debt. The Tel Gov-Cpi 15+ index dropped by 2% in October, and the Tel Gov-Cpi 10+ index weakened by 1.8%. The yield on 10-year Israeli government bonds rose over the course of the month from 4.031% to 4.156%, with the primary increase occurring after the election results were published. By contrast, the United States saw an opposing trend, as 10-year Treasury yields fell from 4.986% to 4.929%.
Despite market fluctuations, corporate debt issuance remained robust. In October, corporate bond markets raised about 14.1 billion shekels, with roughly three-quarters of the amount secured by financial instrument firms and banks. The financial instruments sector gathered around 5.63 billion shekels, while banks raised about 5 billion shekels. Notable offerings included Bank Leumi, which raised approximately 4 billion shekels, and Israel Discount Bank, which raised about 1 billion shekels. Aviad Deposits joined the public bond market for the first time with an issuance of roughly 1.1 billion shekels. Additionally, Bank Leumi and Israel Discount Bank together raised about 1.8 billion shekels through commercial paper.
The mutual fund industry continued its growth trajectory, posting net inflows of about 7.8 billion shekels in October, bringing year-to-date inflows to approximately 61.4 billion shekels. Total assets under management across active and passive funds reached roughly 853.8 billion shekels at the end of the month, marking a 13.5% increase since the beginning of the year. Passive funds led the inflows with about 5.2 billion shekels net—including 4.7 billion shekels in exchange-traded funds. Active funds gathered roughly 2.6 billion shekels net, with money market funds standing out by attracting about 3.9 billion shekels.
