Shares on the Tel Aviv Stock Exchange are trading modestly higher in extremely light early afternoon trade, after falling into negative territory earlier in the session. One possible explanation for the low activity is that traders are waiting for direction from Wall Street, which will gear up for trade later this afternoon after a long weekend.
At web-posting, the Tel Aviv 25 index is up 0.49% at 460.16 points, and the Tel Aviv 100 index is up 0.45% at 441.45 points, and the TelTech index is up 0.32% at 267.04 points. Turnover amounts to a paltry NIS 40 million so far.
Another factor that may be persuading investors to sit on the sidelines is the likelihood that the violence in the region will escalate. Today, Hamas declared that its so-called truce with Israel was over. The announcement came after this morning’s raid by Israeli forces on an explosives lab in Nablus which left four Hamas operatives dead, including two men Israel had asked the PA to arrest.
The pick-up in violence is not good for the shekel, which continues to make headlines as it hits new lows against the dollar. Currently, the Israeli currency is trading at NIS 4.579/$, a depreciation of 0.57% from yesterday’s representative rate.
As well as paying close attention to security related developments, investors are focusing on the progress of the 2002 budget, as it makes its way through the Knesset. Yesterday, the draft Economic Arrangements Law, which sets out the cuts in the state budget, passed its first reading. The bill is now being sent to the Knesset Finance Committee, and will then be submitted for second and third readings.
Also, investors will be on the lookout for fourth quarter financials, as the reporting season in the US reaches its peak. Today, dual-listed AudioCodes (Nasdaq: AUDC) will release its quarterly numbers before US markets open. After US market close, billing solutions provider Amdocs (NYSE: DOX) will announce its fiscal first quarter results.
On the TASE, heavywight shares are mixed. Bezeq is down 0.2%, Bank Hapoalim is up 0.7%, and Bank Leumi is up 0.6%.
Holding companies are also mixed, but on extremely light turnovers. Koor is shedding 1.2%, while IDB Development adds 1% and IDB Holdings adds 0.3%.
Clal Industries of the IDB Group is up 0.6% on a low NIS 330,000 turnover. Today, French biopharmaceutical company Immuno-Designed Molecules, owned 10% by Clal Biotechnology Industries (a wholly owned subsidiary of Clal Industries), announced that Sanofi-Synthelabo of France would invest up to €600 million in its technology.
Mobile phone operator Partner Communications (Nasdaq: PTNR) is up 1% on a low volume. “Globes” reports that Matav-Cable Systems Media (Nasdaq: MATV) (+1.9%) is considering selling a third of its 15% stake in Partner to deal with the problem caused by Bank Hapoalim's loan to Partner. Partner shares have lost about 18% of their value since the start of 2002.
In a separate Matav-related story, “Globes” reports that the cable companies’ shareholders have accepted Antitrust Authority director general Dror Strum’s request that they sell 25% of the merged cable company to investors who are not cable shareholders, no later than four years after the cable companies’ merger.
The weaker shekel has created positive arbitrage gaps for some leading dual-listed shares in Tel Aviv, as their dollar denominated value falls. In order to maintain their dollar value, the Tel Aviv listed share’s price has to rise.
Teva (Nasdaq: TEVA), the most active share on the TASE, is up 1% and is trading 0.3% above its New York share’s price.
Meanwhile, NICE-Systems (Nasdaq: NICE), Tower Semiconductor (Nasdaq: TSEM) and AudioCodes (Nasdaq: AUDC) are all trading unchanged but below their US share prices. Elbit Systems (Nasdaq: ESLT) is up 1.2%.
Published by Israel's Business Arena on 22 January, 2002