The Tel Aviv Stock Exchange ended August on a mixed note against the backdrop of the second-quarter earnings season. The flagship indices traded relatively steadily throughout the month, while significant performance divergences were recorded among sectors, led by the financial and insurance sectors, which delivered outperformance. The TA-35 Index declined by 0.26% during August but remains up 13.96% since the beginning of the year. The TA-125 Index fell by 0.37% during the month and has gained 10.73% year-to-date. In contrast, the TA-90 Index declined by 1.02% in August, bringing its cumulative yield since the beginning of the year to negative 0.36%.
Bonds: Declining Yields Continue in Israel While U.S. Yields Remain Elevated
The Israeli government bond market continued to post positive performance in August, supported by a decline in Israel’s risk premium, moderate inflation and a stronger shekel. The Consumer Price Index for July increased by 0.3%, while the annual inflation rate stood at 1.5%, reinforcing expectations for additional interest rate cuts by the Bank of Israel. Accordingly, the yield to maturity on Israel’s 3-year government bond declined from 3.599% to 3.579% during the month. In contrast, the yield to maturity on the U.S. 2-year Treasury note increased from 4.291% to 4.35%, reflecting the continuation of the Federal Reserve’s cautious monetary policy.
Equity Issuances: 20 New Companies Have Joined TASE Since the Beginning of the Year
Equity capital raised in the primary market totaled NIS 0.55 billion during August 2026, with the bulk of the amount, NIS 530 million, raised by Avisror that completed an IPO at a company valuation of NIS 2.3 billion. Since the beginning of the year, 20 new companies have joined TASE with a combined market capitalization of NIS 33.3 billion at the time of issuance, alongside four companies that completed dual listings of their shares.
Bond Issuances: Robust Corporate Bond Issuance Activity Continued in August
The corporate bond market maintained robust issuance activity during August, with NIS 10.8 billion raised through public offerings. Bank Leumi led the month’s fundraising activity after issuing commercial paper and expanding two existing bond series, raising NIS 5.3 billion. Structured bond issuers also continued to attract strong demand, raising NIS 2.6 billion during the month. Since the beginning of the year, cumulative fundraising by these issuers has reached NIS 24.3 billion, highlighting continued investor interest in this segment.
Mutual Funds Market: Interest Rate Expectations Accelerate Inflows into Bond Funds
The mutual funds industry recorded net inflows of NIS 7 billion during August and NIS 47 billion since the beginning of the year. Assets under management in active and passive mutual funds totaled NIS 840 billion at the end of the month, an increase of NIS 88.1 billion compared with year-end 2025. Expectations of additional interest rate cuts by the Bank of Israel continued to support inflows into bond funds, with funds investing in local bonds recording net inflows of NIS 2.1 billion during August and NIS 24.5 billion since the beginning of the year. At the same time, demand for funds investing in international shares remained strong, with net inflows of NIS 2.3 billion during August.
