The Tel Aviv Stock Exchange (TASE) indices fell today. The Tel Aviv 25 index fell 1.45% to 597.31 points, the Tel Aviv 100 fell 1.55% to 616.65 points, and the Tel-Tech fell 1.57% to 422.46 points. Turnover was NIS 714.1 million.
Today was a time of profit-taking on the TASE. For the first time in eight days, the Tel Aviv 25 index fell below to the psychological threshold of 600 points, with only one share - Given Imaging (Nasdaq: GIVN; TASE:GIVN) - rising 0.8%. All the other share in the index fell.
Teva Pharmaceutical Industries Ltd. (Nasdaq:TEVA; TASE:TEVA) which opened with a negative arbitrage gap of 0.6%, fell by a similar amount at the opening. The trend then reversed, and the share rose 0.5%. But the market trend affected Teva as well, and it ended the session down 0.3%.
Teva published two announced that investors can view favorably. The first announcement concerned Teva's business - pharmaceuticals. Teva announced that the US Food and Drug Administration (FDA) granted tentative approval for Teva's abbreviated new drug application (ANDA) for rosiglitazone maleate tablets, 2 mg, 4 mg and 8 mg. This product is indicated as an adjunct to diet and exercise in the treatment of type 2 diabetes.
US sales of the ethical drug amount to $1.4 billion a year. Teva said final FDA approval was expected after a court hearing on the patent.
Teva's second announcement will have an immediate effect on the company. Teva announced that its board of directors had increased its repurchase program to authorize the company to purchase up to an aggregate of $600 million of Teva securities. The buyback was expanding following an 18% rise in Teva's share in recent weeks, to recover half of the fall in the share during summer.
Profit-taking at the banks and FMS
The dynamic duo shares of Israel's two large banks, the hottest blue-chips stocks on the TASE, both saw profit-taking today. The shares of both banks rose in recent weeks as foreign investment flowed into the TASE, most of which was channeled to Bank Hapoalim (LSE:BKHD; TASE:POLI) and Bank Leumi (TASE:LUMI).
Profit-taking pushed Bank Hapoalim down 1.1% today and Bank Leumi 3%.
Another hot share that saw profit-taking today was FMS Enterprises Migun (TASE:FBRT). This share, which only very few TASE players knew about just a few months ago, tripled in value between the beginning of the year and the end of last week. The surge brought the share to the attention of many investment institutions, boosted the hype surrounding it, and raised its p/e ratio to 19-20.
Profit-taking has affected FMS over the past week, and it fell 6.1% in the past two days. The fall strengthened today; the share dropped 4.1% on a turnover of NIS 11 million.
I will now move onto a larger defense contractor - Elbit Systems (Nasdaq:ESLT; TASE:ESLT). Bulgaria, NATO's latest member, has chosen Elbit Systems as Lockheed-Martin's (NYSE:LMT) partner as the preferred bidder to upgrade 18 Russian-built Bulgarian Army helicopters. The deal is worth an estimated $60 million, most of which will accrue to Elbit Systems. The share fell 0.8% today.
El Al Israel Airlines (TASE:ELAL) was also unable to beat the market trend. After rising over 2% in early trading, it closed down 0.3%. In recent days, several investment houses recommended their investors accumulate El Al shares, even though the 150% rise in the share since the beginning of the year appears to have fulfilled its potential. Poalim IBI Underwriting and Investments (TASE:PIU) gave a very positive recommendation for El Al yesterday, and I know that other brokers also recommended their clients increase their positions in the airline, even if it wasn’t in an official report.
Knafaim-Arkia Holdings (TASE:KNFM), controlled by the Borovich brothers, took another step today toward acquiring control of El Al. Knafaim issued an offer to sell its other aviation and tourism interests, including Arkia Airlines, >a target=new href=http://www.kishrey-teufa.com/default.asp> Aviation Links (TASE:AVIA), ISSTA Lines (TASE:ISTA), Maman Cargo Terminals and Handling (TASE:MMAN) and Arnon Paz (1985) Ltd., in accordance with orders from the Antitrust Authority.
Published by Globes [online], Israel business news - www.globes.co.il - on December 21, 2004