ISRAELI GLOBAL EQUITIES LEAD DEVELOPED MARKETS IN Q1 2017 AS TAILWINDS STRENGTHEN
Israeli Global Equities, as measured by BIGI®, gained 1.65% in March and 8.32% in Q1 2017. BIGI® outpaced US equities for the third month in a row, and outpaced US equities and Global Developed Market equities in Q1 by 2.25 and 1.07 percentage points, respectively. Throughout Q1, Israeli Global Equities were led higher by Information technology stocks and Israeli companies focused on serving the domestic Israeli economy, as measured by the Solactive-BlueStar Israel Domestic Exposure Index which gained 16% in Q1 2017 and is up 32% over the past 12 months.
Israeli Global Technology Equities, as measured by the TA-BIGITech® benchmark outpaced all major technology sector indexes in March and Q1 2017. TA-BIGITech gained 6% in March and 14% in Q1 2017. The big news in the Israeli technology sector was that Intel announced it reached an agreement to acquire Mobileye for roughly $15 billion. Mobileye’s valuation reached $15 billion back in June 2015, almost a year after the company held its IPO, but started 2017 off with a market cap of just $8.5 billion. Click here for BlueStar’s monthly Technical Analysis update.
MOBILEYE AND THE STRUCTURAL TAILWINDS FOR ISRAELI TECHNOLOGY SECTOR
The acquisition of Mobileye by Intel was the major business news headline out of Israel in March. The news sent Israeli Global Equities - Israeli Technology stocks in particular - soaring higher, even after a very strong January and February. But the acquisition continues to make waves in the Israeli technology sector and Israel’s capital markets. BlueStar’s TA-BIGITech index is the only index in the world that tracks a portfolio of innovative Israeli companies regardless of their stocks’ listing venue.
43 of the 56 stocks included in the TA-BIGITech index posted gains in Q1 2017. 43% of TA-BIGITech’s 14% gain in Q1 was attributable to Mobileye’s performance. In other words, even without Mobileye’s performance, TA-BIGITech would have gained roughly 9% in Q1. Some of the other top performing stocks in the index include: Wix.com (up 52%); Kornit Digital (up 50%); Attunity (up 32%); Mazor Robotics (up 31%); Telit Communications(up 29%); and SolarEdge (up 26%).
The Mobileye acquisition is important for investment in Israel’s technology sector for several reasons: investor interest in the sector is increasing and the viability of Israel’s technology ecosystem is more certain.