The Tel Aviv Stock Exchange (TASE) is suffering from uncertainty about Israel’s security situation today, following the terrorist attack in Rishon-LeZion on Wednesday evening, and this morning's attempted attack on the Pi Glilot fuel depot. Investors may be concerned about a possible renewed wave of Palestinian suicide bombings, after the attack in Netanya earlier this week and a previous bombing in Rishon Le-Zion on May 7.
Leading indices have been in negative territory for most of the session, expect for a modest rally towards the early afternoon. At web-posting, the Tel Aviv 25 index is down 0.7% at 387.76 points, the Tel Aviv 100 index is down 0.4% at 377.54 points, while the Tel-Tech 15 index is up 0.5% at 230.01 points.
Turnover totals NIS 153 million so far, which is low for this time of day, especially after taking into account that 57 million of that turnover is trade in heavyweight share Teva.
In the past, Palestinian terror attacks have had the effect of stifling activity on the TASE. Also, some investors may have decided to take a “long weekend” break from the market, ahead of the Bank of Israel’s interest rate decision on Monday. The central bank is expected to raise interest rates by about 1% after the 1.5% increase in the CPI for April.
Adding to the gloom, the shekel is sliding against the dollar in afternoon trade, towards the NIS 4.91/$ mark. The shekel’s weakness increases the chances of a major interest rate increase by the Bank of Israel next week. Most analysts are expecting the central bank to raise interest rates by 1%, although some are hoping for a slimmer increase.
Abroad, the picture is mixed. Nasdaq futures are currently down 0.7%, while European bourses are flat, with the London FTSE-100 index down 0.1%.
Drug manufacturer Teva (Nasdaq: TEVA) is leading the gainers on the Tel Aviv 25 index with a 1.2% advance, on the back of a 1.3% positive arbitrage gap versus its Nasdaq-listed share. On Wednesday, Merrill Lynch published a bullish report on Teva, saying it was excited about the company’s prospects for 2003 and that its already above consensus estimates should prove conservative.
Bank Hapoalim shares are up 0.7% on a NIS 18.6 million turnover.
Meanwhile, Bank Leumi is down 2.1%, United Mizrahi Bank is down 0.8%, amid low trading volumes. Hebrew daily “Yediot Ahronot” reports that Israel’s banks will be forced to make allowances for doubtful debts amounting to NIS 6 billion thus year - a 50% increase from last year. The forecast was calculated by Alon Glazer, banking analyst at Ilanot Batucha.
Holding companies are in negative territory today, but also on low volumes. IDB Holdings is down 1.6%, IDB Development is down 1.3%, and Clal Industries - the heaviest decliner in the Tel Aviv 25 - is dropping 4.3%.
Shares of supermarket chain Blue Square Israel (NYSE: BSI) are unchanged. “Globes” reports that Mivtachim Pension Fund and Gmul Investment Company are holding preliminary talks with the Epsilon brokerage to set up a consortium to compete in the tender to acquire Blue Square Israel, at a company value of $450 million, compared with a market capitalization of $490 million.
In the telecom sector, Bezeq is down 1.3% and Partner Communications (Nasdaq: PTNR) is off 1%.
Published by Globes [online] - www.globes.co.il - on 23 May, 2002