What does JPMorgan think about the shekel the day after the elections?

JPMorgan estimates that the results of the Israeli elections could cause a movement of up to 3% in the shekel. An opposition victory is expected to strengthen the currency, while another government led by Netanyahu could weaken it. Foreign investors are cautious, and the share of global funds holding Israeli stocks is at a historic low.

Investment bank JPMorgan estimates that the results of the Israeli elections, to be held tomorrow (Tuesday), could cause a movement of up to 3% in the shekel exchange rate. According to the bank, an opposition victory, which would lead to improved relations with Western allies, could strengthen the Israeli currency, while the formation of another government led by Benjamin Netanyahu could weaken it. The elections are also generating interest among foreign investors, who, according to Reuters, some assess that an opposition victory could give a boost to the stock market and the shekel. American billionaire Bill Ackman estimated that a government without ministers Itamar Ben-Gvir and Bezalel Smotrich would signal a 'new page' and help restore Israel's international standing. On the other hand, not all investors expect a hit if Netanyahu remains in power; Sergei Dragachev from Union Investment said he is buying Israeli bonds based on the assessment that the economy will show resilience. However, the share of global funds holding Israeli stocks is at a historic low, after a sharp decline since 2023. Some investors see an opportunity outside Israel: Jean-Charles Sambor from TT International estimates that an opposition victory could reduce regional tensions and benefit Lebanese bonds.