Foreign investors poured back into the Tel Aviv Stock Exchange in May, purchasing approximately NIS 2.5 billion shekels ($700 million) in shares, despite the ongoing war in Gaza, uncertainty surrounding hostages held by Hamas and geopolitical instability in the region. Since the start of 2025, total foreign acquisitions have reached roughly NIS 9.1 billion shekels ($2.55 billion).
May also saw the second-highest daily trading volume in the exchange’s history, totaling about NIS 12.6 billion ($3.53 billion).
According to the exchange, 70% of foreign purchases in May were bank stocks. Since the beginning of the year, bank shares have accounted for about 67% of all foreign investor acquisitions.
The Tel Aviv Banks 5 Index rose by approximately 9.9% in May, extending its year-to-date gain to about 30%, fueled by strong first-quarter earnings. Bank Hapoalim posted a record NIS 2.7 billion ($756 million) profit, Bank Leumi reported NIS 2.4 billion ($672 million), Mizrahi-Tefahot earned NIS 1.3 billion ($364 million) and the Israel Discount Bank reported a NIS 350 million ($98 million) profit.
Foreign investors also showed strong interest in Israel’s booming defense sector, buying roughly NIS 5 billion ($1.4 billion) in defense industry stocks since January.
Quarterly earnings reports released in May helped drive strong market performance. The Tel Aviv 35 Index rose by 4.6%, the TA-90 by 5.5%, the TA-125 by 6% and the TA-SME60 by 5.5%. By comparison, money market funds—considered safer—offered returns of up to 4%.
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Sector indices also gained, led by banks, insurance (up 7.9%) and the telecom and tech sector (up 6.9%). The exchange welcomed a new listing in May: Eldan, a vehicle leasing and rental company, became the seventh company to hold an initial public offering in 2025.
“Despite ongoing fighting in Gaza and missile launches from Yemen, trading in May 2025 was marked by rising prices and market stability,” said Ehud Nir of the Tel Aviv Stock Exchange’s research department.
“A missile landing near Ben Gurion Airport caused temporary concern, but had no lasting impact on the market. Meanwhile, Q1 earnings reports provided a tailwind, along with positive global developments such as U.S. trade deals with key partners, including China.”