The Tel Aviv Stock Exchange (TASE) indices were mixed today. The Tel Aviv 100 rose 0.2% to 326.54 points, the Tel Aviv 25 index rose 0.3% to 335.97 points, but the Teltech fell 1.08% to 162.312 points. Turnover was NIS 93.8 million. The Tel Aviv 25 index lost 1.1% for the week, on thin trading.
An anemic week came to a close with boring trading on the TASE, continuing the pattern of recent days. The falls on Wall Street and this morning terrorist attack outside of Tel Aviv had little impact on the TASE, which continued to flirt at the zero level with dreary, not to say, dismal, turnovers.
The really sad story is the TASE’s lack of volume. A bourse that wants to be taken seriously as a market cannot survive on daily turnovers of NIS 50-100 million, especially when Teva (Nasdaq; TASE: TEVA) accounts for a fifth to a quarter of that total, and only another 5-10 shares trading in volumes in excess of NIS 1 million a day. That is out of a total of 871 securities – shares, options, and convertible bonds – listed on the TASE.
ECI is vanishing
Koor Industries (NYSE; TASE: KOR)is still falling, each day recording a new low. Koor’s value today was the same as at the beginning of 1992.
As we’ve written recently, Koor has no lack of reasons to fall. The two main factors are the murky future of Telrad, and ECI Telecom (Nasdaq: ECIL) continuing plunge. ECI lost another 3.6% yesterday to a nadir of only $1.35. Let us not forget that Koor, like Clal Industries and Investments, books ECI at a price of $6.90 a share, i.e. 411% above it market price.
The capital market is already pricing both Koor and Clal Industries as if they had written down part of their investment: Clal Industries has fallen 24% since publishing its second quarter financial report in August, and shed another 0.4% today; while Koor has lost 30% since publishing its second quarter report, and dropped another 2.3% today on a low turnover.
Teva and the banks go up
In contrast to Koor and Clal Industries’ fall, the major banks have stabilized in the past few days. Bank Leumi, which fell to a three-and-a-half-year low last week, is treading in place at NIS 5.40-5.45. Today, it rose 0.7%. The Ministry of Finance is due to publish the details of its plan to sell the state’s shares in the bank in the last week of October.
Bank Hapoalim also rose a slight 0.3% today, after falling in recent days. In contrast to the decline in Israel’s largest bank, Maritime Bank of Israel, which Bank Hapoalim intends to buy, rose strongly this week.
In a few weeks, Bank Hapoalim’s general shareholders meeting is expected to approve its plan to acquire Maritime Bank for NIS 31 million in shares. The impending meeting has energized the TASE, since the acquisition offer is approaching, and market players are buying up the share in the hope that the recent rise will force Bank Hapoalim to make a very generous offer.
Maritime Bank, whose share surged almost 10% to just over NIS 27, say profit-taking push it down slightly by 0.4%.
Tshuva gets a negative answer
While on the subject of acquisitions, an unusual capital market occurrence cannot be ignored: market players said “no” to shareholders. Green Venture Capital shareholders foiled the plan of Yitzhak Tshuva – one of Israel’s most influential businessmen – to delist the company.
Last month, Tshuva published an offer to purchase all of Green’s shares at NIS 1.70 a share. The offer was conditional on Tshuva and Green’s subsidiaries acquiring a 95% stake in the company, which would allow him to make forced purchase of the rest of the shares and delist the company.
The capital market understood that Tshuva’s wanted to delist Green, so market players decided to make him sweat and offer a higher price for the company. The offer to purchase was therefore met with a polite refusal, with only half of the company’s shareholders accepting the offer, while the rest (who own 11.7% of the company) refusing. As a result, Green today announced that the offer to purchase was cancelled, due to the lack of response.
The capital market believes that Tshuva will probably renew the offer at a higher price. Green was unchanged today at NIS 1.68.
Published by Globes [online] - www.globes.co.il - on October 10, 2002