Equities: Political Developments Will Weigh On TA100

Despite the remarkable recovery of the Israeli economy in recent quarters, we are only cautiously optimistic on Israel's Tel Aviv 100 (TA100) equity index for the moment (see our online service, March 7, 'Exports and Private Consumption To Rebound'). The index was trading just above key support at 1,180 on March 24, and a close above that level would be a bullish signal in our view, setting the stage for a run up to 1,220. While the TA100 is rising concomitant with global equity markets, we caution that political events have elevated the risk profile for Israeli assets.

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