Israel Capital Markets – Early Summer 2021

Kroll Senior Advisor Efraim Chalamish shares insights on the capital market activity in Israel and the driving factors behind the rise in energy and infrastructure companies in the region.

Economically, the Tel Aviv-125 index (TA-125) improved 13% year to date and the nominal GDP growth is forecasted to be ~5% for the full year 2021.

The COVID-19 pandemic emphasized and, in some cases, accelerated the need for technological innovation, which has fueled Tel Aviv’s thriving tech startup community. To further capture growth, the Tel Aviv stock market recently established rules for special purpose acquisition companies (SPACs). These rules are expected to attract more investment in Israeli technology companies.

Valuations of Israeli companies were stronger in May 2021 than in 2020 across many industries as business operations return to “normal” and restrictions on consumers are lifted. Some highlights include:

• In 2020, 128 M&A transactions were completed, which was down from 158 M&A transactions in the 2019 pre-pandemic period.
• As of May 2021, there have been a total of 60 M&A transactions closed, with nearly half of all activity in the technology sector.