The Tel Aviv Stock Exchange (TASE) fell today. The Tel Aviv 25 index closed down 1.99% at 377.61 points, the Tel Aviv 100 index fell 2.50% to 384.78 points, and the Tel-Tech 15 index lost 3.89% to 210.85 points. Turnover totaled NIS 491 million.
The TASE is still in a profit-taking mood. The market took a substantial downward turn for the fourth day in succession, winding up 10% below its recent peak.
Today’s decline occurred in the shadow of a rise in terrorist threats in Israel and worldwide.
Bloomberg reported today that the Moody’s rating company was considering downgrading Bank Hapoalim’s credit rating. The report quickened the pace of the entire market’s fall, which reached 3.7%, while the Bank Hapoalim share was taking a 4% tumble.
Moody’s, however, later denied the report, after which the market corrected upwards and limited its loss to 2%, pushing the index back over the 376-point support level. Bank Hapoalim also regained some of its lost ground, winding up with only a 2.1% slide.
The false report and the ensuing storm gave a shot in the arm to trading volume, which eventually reached almost NIS 500 million, including practically NIS 200 million in the final 90 minutes of trading.
Technical correction or reversal of trend?
Ofek Securities and Investments trading room manager Shay Yaron says that today’s falls are a result of profit-taking, following the bull market of recent months. “The market rose very powerfully, so the current profit-taking is also powerful,” he says. “The general atmosphere has changed. We haven’t heard any good news in the past few days, and the mood changed sharply from optimism to pessimism, with every new development being interpreted negatively.”
”Globes”: The falls accelerated in the final hours of trading, although nothing noticeable occurred why?
Yaron: ”The problem with the TASE is that all significant investment decisions are made by investment committees, which don’t meet every day. It appears that several such committees convened in recent days, and decided to sell merchandise, which increased the pressure on the indices.”
Not everyone thinks that the past few days show that the market trend has changed, and the indices can be expected to continue their downward path indefinitely. One of the less pessimistic traders is Netivey Gemel investments division manager Meirav Segal. She believes that the recent falls are merely a sharp, but healthy, correction to the recent wave of rises on the TASE.
So it’s just disillusionment, following the euphoria of recent months.
Segal: ”I wouldn’t say disillusionment, because I personally am quite optimistic. Rather positive things have been happening in recent months, including corporate cost cutting, the removal of the uncertainty regarding Iraq, the Sharon-Abbas meeting (even if the meeting wasn’t especially successful), the economic plan, and expectations of an interest rate cut. All in all, these things are quite positive, and I see only good things ahead, depending on the pace of these expected events.
”Given all this, I think we’re still near the bottom, and our stay here won’t last forever, even if does take a little longer.”
Today’s heavy trading in Bank Hapoalim carried the other bank shares down also, with Bank Leumi losing 2.7%, Israel Discount Bank 0.2%, First International Bank of Israel 1 4.9%, and First International 5 5.3%.
The other major TASE shares also lost ground. Teva dipped 0.9%, after opening the day on a negative 1.2% arbitrage gap. Israel Chemicals sank 2.1% and Makhteshim-Agan (MA) Industries 1.9%, while Super-Sol continued its negative momentum with a 0.2% dip, following last week’s poor report.
Also going in the wrong direction was Agis Industries, which dropped 1.4%, despite reporting excellent results yesterday. The Elco Industries share plunged 4% today, after a disappointing quarterly report.
Outdoing all the losers in negative fashion was Tower Semiconductor, which nose-dived 10.8%, after starting out with a negative 7.6% arbitrage gap. The share’s plummet on Nasdaq yesterday is attributable to profit taking, following its recent surge. The company announced yesterday it had received $13.4 million of the $305 million for its Fab 2 project promised by its strategic and financial investors.
Putting up a relatively strong showing was Bezeq, which stood up to the negative trend, limiting its fall to only 0.8%. Cellular operator Pele-Phone and the YES satellite broadcasting company, Bezeq’s two main subsidiaries, reported better performances in recent days, with smaller losses.
Bezeq is scheduled to publish its results tomorrow evening. Judging by its subsidiaries, the results will be pretty good. Leader Finance and Co. today raised its first quarter profit forecast for Bezeq from NIS 41 million to NIS 59 million, after seeing the subsidiaries’ results.
Published by Globes [online] - www.globes.co.il - on May 21, 2003