Shares in Tel Aviv are likely to dip today after the US markets suffered from a broad sell-off on Monday, and in the wake of a sharp shekel depreciation at the start of trade today.
At web-posting, the Israeli currency is trading at NIS 4.871/$, a 0.56% depreciation from Monday. A weaker shekel raises the chances of a sharp interest rate hike by the Bank of Israel.
Activity on the Tel Aviv Stock Exchange is likely to remain low, in line with previous sessions. Yesterday, the market was very stagnant with turnover reaching just NIS 143 million. Traders said one factor behind yesterday’s low activity was the absence of London-based investors, because of the bank holiday there.
On Monday, shares in New York fell, with the Dow Jones falling below 10,000 points and the tech-laden Nasdaq ending under 1,600 points. By the close of trade, the Dow was down 1.98% at 9,808.04 points, while the Nasdaq was off 2.14% at 1,578.48 points.
Despite the declines in New York, some Israeli companies saw their shares advance yesterday. Teva (Nasdaq: TEVA) was up 1.77% to $59.75, while ECI Telecom (Nasdaq: ECIL) added 3.9% to $3.20.
Traders said Teva often had an inverse relationship to the Nasdaq because of the defensive nature of the stock, while ECI’s gain came after the telecom equipment manufacturer released better than expected results for the first quarter on Sunday.
Today, Teva starts the session in Tel Aviv with a 2.3% positive arbitrage gap against its US share. Many other dual-listed shares have negative arbitrage gaps, including Partner (-3.6%) and Tower Semiconductor (-4.2%).
Holding company Koor may outperform the market after ECI Telecom - in which it has a 30% stake - outperformed the Nasdaq yesterday. Koor’s NYSE-listed share rose 2.02% on Monday.
Hebrew daily “Yediot Ahronot” reports that TASE-listed Union Bank is in preliminary negotiations to buy Bank Otsar Ha-Hayal, from the Bank Hapoalim group.
Arbitrage gaps Tuesday 7 May 2002
| Stock | % Change* |
| Audiocodes | -2.4 |
| Blue Square Israel | -0.1 |
| Delta Galil | 0.5 |
| Elbit | -1.3 |
| Elbit Systems | -1.0 |
| Elron | -0.9 |
| Formula | -2.2 |
| Koor | -1.1 |
| Magic | -2.5 |
| Matav | -1.9 |
| Nice | -0.7 |
| Partner | -3.6 |
| Teva | 2.3 |
| Tower | -4.2 |
*%change required in Tel Aviv to meet New York closing price
Published by Globes [online] - www.globes.co.il - on 7 May, 2002