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Shekel Volatility Spikes and Defense Listings

The shekel falls against a stronger dollar, while state-owned defense group Tomer prepares a landmark TASE UP bond debut.

Signalpoint TeamBrief

Markets

A surging dollar and rising regional tension are squeezing the shekel — complicating the Bank of Israel's efforts to keep interest rates steady without sparking domestic inflation.

BackgroundThe Bank of Israel has been navigating currency volatility as regional conflict and shifting global interest rates strain the shekel. A weaker shekel drives up the cost of imported goods, threatening to trigger domestic inflation.

Points
  1. The US dollar rally was fueled by the Federal Reserve's decision to keep rates unchanged, triggering a sell-off in emerging market currencies as investors seek safer yields.
  2. Fresh geopolitical rhetoric from Washington warning of retaliation against Iran injected a war-premium risk into regional currency pairs, driving capital away from local assets.
  3. The rapid depreciation is forcing Israeli tech startups to reassess their unhedged dollar exposures, potentially causing sudden balance sheet losses if the shekel continues to slide.
SourcesInvesting.com: Israel stocks lower at close of trade; TA 35 down 0.99% (opens in new tab)Ynet News: Dollar rallies again, and Israeli startups must rethink currency risk (opens in new tab)

Markets

Tomer's planned bond issue marks the first practical step toward privatizing Israel's secretive rocket industry — opening defense infrastructure to private capital.

BackgroundIsrael has been exploring the partial privatization of its state-owned defense conglomerates to raise funds and improve operational efficiency. Tomer manufactures the rocket engines used in Israel's advanced Iron Dome, Arrow, and Shavit missile systems.

Points
  1. The TASE UP platform bypasses traditional retail public offering regulations, allowing Tomer to raise institutional capital quickly without disclosing sensitive technical details.
  2. Tomer intends to leverage the bond issue to fund facility expansion, signaling a long-term shift toward private ownership of critical military manufacturing.
  3. Privatization plans for larger state defense peers like Israel Aerospace Industries remain stalled, leaving Tomer's listing to serve as a test for investor appetite.
SourcesCTech / Calcalist: Israel's Iron Dome and Arrow makers unlikely to reach the IPO market before 2027 as Tomer joins the queue (opens in new tab)

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