The Tel Aviv Stock Exchange rose today. The Tel Aviv 25 index closed 1.30% higher, at 372.17 points; the Tel Aviv 100 index closed 1.11% higher, at 361.29 points; and the TelTech index closed 0.84% higher, at 194.37 points. Turnover was NIS 214 million.
The optimism that pervaded the Tel Aviv market yesterday continued to be felt today, as the overnight advances on Wall Street spurred investors on. Trading volumes were also a little higher than of late.
Israel Chemicals’ shares have enjoyed positive sentiment since the company’s excellent quarterly financials, which beat analysts’ projections by a long way, and because of expectations that the improvement will continue in the near future. The share has attracted very high turnover in the past few days. Having climbed 7% in three weeks, it rose another 1.6% today.
Another share that has stood out for the right reasons in Teva. In fact, Teva (17%) and Israel Chemicals (10%) are the only Tel Aviv 25 shares showing positive returns this year.
Within the past few days, Teva has announced two more FDA approvals for generic drugs, though this time it is a matter of minor products - sales of the ethical versions amount to some $15 million each.
Teva started the day with a positive arbitrage gap of 1.3%, closed the gap in the opening stage, and eventually closed 1.8% higher.
IDB shares also stood out today with large turnovers and sharp rises, even though there was no particular news about any of the group companies. IDB, it should be recalled, is very much affected by what happens on Nasdaq, as many of the portfolio companies are traded on that exchange. IDB therefore frequently reacts positively in Tel Aviv to rises on Wall Street.
In addition, IDB shares have a high beta, that is, risk rating in relation to the company. When the market rises, the group’s shares tend to rise more strongly than the general trend, and similarly tend to fall more sharply when the market falls.
This was borne out today when, in a rising market, Discount Investment rose 3.9%; Clal Industries rose 3.3%, IDB Development rose 1.7%, and IDB Holdings rose 0.9%.
War talk boosts defense stocks
The sense that an attack on Iraq is imminent has boosted shares of Elbit Systems, which makes advanced military systems.
Since the beginning of August, Elbit Systems shares have risen more than 10%, with the company’s good financials contributing to the trend. Today saw profit taking in the stock, which fell 1% on high turnover, despite opening with a 0.4% positive arbitrage gap.
Another defense stock that has been attracting interest recently is Tadiran Communications. Daily turnover in the stock has been over NIS 2 million in the past two weeks, with peaks of NIS 5-6 million on some days. The explanation for the lively activity in the share lies in the expiration of the company’s warrants a few days ago. The fact that the options were traded in the money in the last couple of months of their lives led to the assessment, almost entirely correct as it turned out, that all the warrants would be exercised. This weighed down on the share price, because of the higher supply on the market, despite the excellent results and positive guidance the company published just a few weeks ago.
Tadiran Communications is now free of the effect of the warrants on its share price, and so we have seen an upward breakthrough. Today, the share rose another 1%, to record an advance of nearly 8% in four days.
Published by Globes [online] - www.globes.co.il - on September 10, 2002