Trading on the Tel Aviv Stock Exchange was mixed today. The Tel Aviv 25 index was off 0.55% at 411.98 points, the Tel Aviv 100 index was down 0.29% at 395.89 points, and the TelTech index gained 0.49% to 248.59 points. Turnover totaled NIS 171 million.
Several factors influenced today’s trading: the gains on Wall Street last night, the lowering of the interest rate by 0.3% by the Bank of Israel, light profit taking, expectations about the expiration of November Maof options at the end of the week, and concern over a possible US attack on Iraq. All this led to a hesitant market, which opened with rises and closed more or less unchanged, on a low turnover.
Euro derivatives to be launched tomorrow
On Wednesday, the TASE will launch new euro derivatives, ahead of the scheduled changeover to the European currency in early 2002. Dror Shalit, head of the trading and clearing department, says the TASE decided to launch euro derivatives because of the great interest investors and companies are showing in buying efficient hedging at low cost against the euro-shekel fluctuations.
Teva rises on ”Buy” recommendations
Teva regained its customary prestige in the market, by rising 3.3% on the day’s highest turnover of NIS 19 million, following a positive 2.5% arbitrage gap. We received a “Buy” recommendation for Teva today from Ilanot-Batucha, which raised the target price to $72 and set the company value at $10.2 billion. This is 34% higher than its market value.
Ilanot-Batucha noted that the company had 55 generic drugs, with a market value of $22 billion, waiting for FDA approval. Eighteen of these drugs, worth $5 billion, are candidates to receive marketing exclusivity. Ilanot-Batucha also believes that Teva will “keep its promise”, i.e. earn $0.60 per share in the fourth quarter. Ilanot-Batucha stressed that Teva had suffered some weakness recently against the backdrop of the weakness of generic drug companies traded on Wall Street.
Other arbitrage shares benefiting from positive gaps were NICE, up 2.3% due to a 3.1% positive gap and Formula, which rose 4% following the opening of a 2.6% positive gap, but then fell, closing 2% in the red.
The banking sector was traded today on moderate declines almost across the board. This is not particularly surprising, considering the disappointing financials being published. On the other hand, the fuss the mortgage banks are causing continued, with Leumi Mortgage Bank soaring 7.5% on a high turnover in the morning session. This was due to reports in Hebrew daily “Ma’ariv” that Bank Leumi, which has a 90% stake in the mortgage bank, is considering swallowing the bank, in a move that would be similar to Bank Hapoalim's transaction vis-a-vis Mishkan Bank.
Lehman Brothers reportedly believes Bank Hapoalim will reach its lower Tier 1 limit by 2003. At the same time, the investment house lowered the target price for the stock by 19%, leaving the “Buy” recommendation intact.
Meanwhile, Leader-Dash granted Bank Hapoalim a “Buy” recommendation at a price of NIS 12.8 – 44% higher than the current price. “We believe that in the coming quarters no further substantial losses are expected to be incurred by Bank Hapoalim from (its) Koor (investment),” says Leader-Dash, “although smaller losses could be incurred. As a result, an improvement in the bank’s financial results is expected in the coming quarters.”
Leader-Dash analyst Yuval Ben-Zeev forecasts Bank Hapoalim’s net profit this year will total NIS 996 million, down 39% compared with last year. That forecast reflects an 8.1% return on capital, compared with a record 15.1% achieved in 2000.
Lively trading in Retalix continued today, after the share fell sharply yesterday, on rumors of a financing round, denied by the company. The share tried to correct upwards today, but without great success. At closing, Retalix was unchanged.
Bank Hapoalim: “Buy” for Tower
Analyst Moshe Moshkovitz of the Bank Hapoalim research department issued a “Buy” recommendation for Tower Semiconductor today, with a target price of NIS 84.5. Tower leaped 4% on lively turnover. The company announced that its creditors had exercised an option for $53 million of company shares at $12.75, compared with the current price of $6.54.
Now to dual-listing. Camtek is one of the 15 companies joining the TASE under dual-listing regulations. The company, traded on Nasdaq (CAMT), will begin trading in Tel Aviv in the next few days. The provider of yield enhancement solutions for the printed board industry will be included in the TelTech index.
Published by Israel's Business Arena on 27 November, 2001