Despite the geopolitical turmoil in the rest of the Middle East, Israel's stock market continues to be a stellar outperformer. In fact, the country's principal equity indexes are surging at time when its neighbors are declining. The Tel Aviv 100 and Tel Aviv 25 have registered double-digit gains for the year, while many others in the region have shown lackluster numbers that have worsened considerably in recent days. The most recent opportunity for the Israeli markets, and challenge for regional competitors, came after Prime Minister Benjamin Netanyahu's election victory last month which came amid a general recovery for Israeli stocks. Stocks slipped in 2014 as a result of economic turmoil in Europe, as Israel relies heavily on its exports, and on the prolonged Gaza conflict.
"As Europe seems to have stabilized and other export markets continued to grow, Israel started to hit bottom and began to turn around," said Brian Friedman, president of Israel Investment Advisors, which has a private fund that invests in the country.
Though the market dipped in the days immediately following the election, the TA 25 is up 3 percent over the past week. It has gained 6.9 percent in the past month and has risen 12.1 percent year to date and 16.1 percent over the past 12 months.
Economists also have been moving up estimates for gains in Israel's gross domestic product, currently at 3.5 percent.
"You have to remember, Israel, even though it sits in the Middle East, it's much more like a developed Western economy," Friedman said. "The rule of law exists (in Israel) and you can't say that for any other country in the region."