Israel’s Markets Are Soaring Despite 22 Months of Brutal War

When Eylon Penchas talks to foreign investors these days, some complain the private equity executive isn’t enthusiastic enough. “They say I should begin any presentation with a slide saying, ‘A new era’ or ‘It’s a new Middle East,’” says Penchas, founder of Israel Legacy Partners. “But I have so many worries about what’s happening in Israel, and I would have expected the economy to go in a different direction.”

The Tel Aviv Stock Exchange is defying wartime expectations.

Photographer: Kobi Wolf/Bloomberg

He isn’t the only one scratching his head that Israeli assets are soaring despite 22 months of a brutal multifront war. The Tel Aviv Stock Exchange’s benchmark index ...