Psagot Investments chief economist and strategist Ori Greenfeld sees no dramatic changes in Israel's economic policies following the victory of Benjamin Netanyahu's right wing block in yesterday's election.
He said, "It is not really expected to influence economic matters because unlike other areas, in terms of the economy, the government that will be formed, will probably be like the outgoing government. Ultimately the economic agendas of both governments at the macroeconomic level are similar."
"Looking at the situation of companies operating in the market, their ability to produce profits is not expected to substantially change. I do not see that the government will break through the deficit in an exceptional way or completely change direction in terms of its policies in the fields of energy or exports. Also in regulation, and the financial system, there probably isn't expected any change.
US interest rates will impact more than the elections in Israel
A veteran underwriter in Israel's capital market said, "What will impact Israel's stock market is the voting this evening. In other words the votes of the US Federal Reserve Board of Governors on the level of the interest rate for the dollar. The clear result of the elections in Israel perhaps 'will encourage' the Tel Aviv Stock Exchange in the future because markets like certainty. But ultimately what is of interest to investors is the interest rate on the shekel."
According to the underwriter, the consequences of the interest rate should be reflected in the real estate industry, and this is a trend won't be influenced much by the election results. "The real estate developers are currently under double pressure. On the one hand, the land they bought, with expensive financing from the banks which is becoming more expensive, continues to weigh on them with interest rate repayments. On the other hand, the public's purchasing power for new apartments has been crushed by the rising cost of mortgages. The pressure on real estate is expected to increase in the coming months, and what we see in these third quarter reports are past data that do not reflect the intensity of the change."
Published by Globes, Israel business news - en.globes.co.il - on November 2, 2022.
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