Only The Tel Aviv Stock Market Celebrates Israel Election Results

Israel election results indicate formation of a Unity Government but there are mixed views on the formation and durability of a coalition between rival parties. But the country is seeing a good start with President Netanyahu inviting Kachol Levan leader Benny Gantz for talks.

Results

  • KaholLavan won 32 out of 120 Knesset seats
  • Likud captured 31 but Netanyahu’s bloc comprising of right-wing and ultra-Orthodox parties presently stands at 55 seats
  • The centre-left bloc has 56 seats

What is the likely outcome of these results?

Since no party has a majority to form a government, there are more chances of a unity government. Also, Netanyahu has already started the dialogue to come to terms with others and work together. He has invited Gantz for talks to chalk out a plan for forming a government.  

What economists have to say about government formation?

It is good news for economy because a unity government would be less susceptible to coalition demands from small parties and narrow sectoral interests of mean politicians. Economists favour a unity government because it would be able to take structural reforms and hold on policies of recent years. They further said that a strong government would have little difficulty in announcing fiscal adjustments needed for 2020 budget.

How is stock market responding to unity government?

The Tel Aviv Stock Exchange rose on Wednesday after the results are out. The benchmark TA-35 and TA-125 indices both posted gains of about 0.5% while the banking index surged 2.3% higher. Also, prices for medium and long term government bonds recorded an increase of 0.9%.

What others have to say about Unity Government?

But there are people that are of the view that Netanyahu can still pull a rabbit from his hat. They see it very difficult for Netanyahu to except ministership under someone else.

Source: https://bit.ly/2kIc3GQ

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