At Bank Hapoalim they met with hedge funds in London and returned with a message: in this scenario the shekel will fall to 3 shekels
A Bank Hapoalim review reveals that bank representatives met in London with hedge funds and foreign banks, and the message that emerged is that if Gadi Eisenkot succeeds in forming a government, the dollar is expected to fall to around 3.0 shekels. Assessments of his chances are divided, and the Bank of Israel is not expected to cut interest rates soon.
A review by Bank Hapoalim, written by Modi Shafrir, Chief Strategist for Financial Markets, reveals the message that emerged from a round of meetings held by bank representatives in London with hedge funds and foreign banks: if Gadi Eisenkot succeeds in forming a government, almost all investment managers expect the dollar to fall to around 3.0 shekels. Shafrir notes that politics opened almost every meeting, and that foreign investors are well acquainted with the political map in Israel and are waiting for clarity before increasing exposure. Assessments of Eisenkot's chances are divided: an economist at one institution estimated a 50% chance of forming a government and a 50% chance of another election. In the positive scenario, a sharp reaction in the foreign exchange market is expected, along with a decline in the risk premium and a rise in local stock indices. A trader at a foreign bank even sees the possibility of a rate below 2.85 shekels. Conversely, another round of elections could prolong the negative sentiment toward Israel and lead to a decline in investment volumes. Foreign positions in the local market are very low, meaning that if the positive scenario materializes, there is a lot of money that could enter the market. The second risk worrying investors is a sharp decline in the Nasdaq and AI stocks. On the interest rate front, the prevailing assessment in London is that the Bank of Israel will not continue to cut rates soon.