LIVE MARKETS-Israel shares emerge as unlikely winners of 2024's stock surge

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ISRAEL SHARES EMERGE AS UNLIKELY WINNERS OF 2024'S STOCK SURGE

Despite the country being at war, equities in Israel have had a stellar run in 2024, clocking their best yearly performance in 15 years, and even outpacing the advances in the United States, Europe, China and broader emerging markets.

The MSCI Israel stocks index .MIIL00000PUS has jumped 35.2% for the year, currently trading near its highest since July 2015. It is set to outpace Chinese equities .dMICN00000PUS, which are up 16.5% for the year, while the broader emerging markets index .MSCIEF is only up 5.3%.

Israel and Hamas have been in conflict since the Palestinian militants' Oct. 7, 2023 attack on southern Israel, although the potential for a ceasefire has emerged recently.

Earlier this month, Israeli and Hamas leaders expressed hope that talks brokered by Egypt, Qatar and the United States could lead to an agreement to halt the fighting and return Israeli hostages held by Hamas.

However, no such agreement has been made so far.

Israeli equities were swept up in the wave of buying of global risk assets in 2024 as investors sought to increase their exposure to stocks.

It is even on track to outshine developed market equities in the United States and Europe, with U.S. .dMIUS00000PUS set to clock gains of almost 24%, while Europe .dMIEU00000PUS has fallen 1.1% this year.

MSCI Israel has 14 components, with the information technology sector composing more than 43% and financials the second-biggest holding with a 31.4% weighting.

Teva Pharmaceutical Industries TEVA.TA is the biggest single stock, accounting for nearly 13% of the index. The broader index has a market capitalisation of over $147 billion as of November.

The local Tel Aviv 125 Index .TA125, considered to be the benchmark, is also up 28% for the year with a market cap of around $283 billion, as per LSEG data.

Amongst its EM peers however, Israel is not the best performing, with stocks in Argentina .MIAR00000PUS in the lead, which are set to more than double in value in 2024.

Egyptian stocks .dMIEG00000PUS are down more than 30% for the year, while shares in Jordan .dMIJO00000PUS are up just over 12%.

(Shashwat Chauhan)

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