The evolution of stock market analysts’ recommendations in Israel, 2002-17

This article examines the evolution of stock market analysts’ recommendations in Israel in 2002–17. Over these years, Israel has been marked by far-reaching changes in its economy. Its capital market has grown, developed, and embarked on a process of regulation. To track the quality of analysts’ recommendations, nine indices from stock exchanges that were found leaders in their recommendation were selected to represent the spectrum of investment opportunities. Calculating the deviation of two investment portfolios, analysts’ recommendations and equal division, from the efficient portfolio frontier leads to the conclusion that until 2007 the portfolio of analyst’s recommendation has no added value compared to equal division and only afterwards a significant gap has been opened.