Last week was one of the most turbulent in the annals of the Tel Aviv Stock Exchange since the global economic crisis of 2008. Investors in Israel took their cues from markets abroad, which panicked due in large measure to concern over the Chinese economy.
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The benchmark Tel Aviv-25 index lost 5.8% for the week while the broader Tel Aviv-100 slumped by 5.3%. By contrast, in the United States, the Nasdaq, home to a large number of Israeli companies, recovered, closing the week 2.6% higher than it began, while the Dow Jones Industrial Averages gained 1.1%.
Investors in Israel redeemed mutual fund investments at a high rate, particularly last Monday. For the week, 4.2 billion shekels in investments were redeemed, including 3.7 billion shekels from managed funds and 500 million from funds that track other financial indexes, the Meitav Dash investment firm estimated. Redemptions for last Monday were intensified by sales orders on foreign investments that were submitted in Israel on Sunday, a regular business day, but executed on Monday.
Most of the redemptions were from general bond funds – 1.7 billion shekels in all, the heaviest weekly sell-off since December of last year. From the beginning of August, general bond mutual fund redemptions hit about 1.1 billion shekels in an industry that as of last Thursday was managing 241 billion shekels in assets.