Market Report || Most shares close up in Tel Aviv despite U.S. credit-rating concerns
Drama expected to get tense over next two days.
The Tel Aviv Stock Exchange closed mixed with a positive bias on Wednesday as investors waited to see if attempts to negotiate a higher debt ceiling in the United States would succeed, amid warnings by rating agency Fitch that the U.S. credit rating could be lowered.
The blue-chip Tel Aviv-25 Index lost 0.3% to close at 1,307 points, while the broader Tel Aviv-100 Index gained 0.3% to close at 1,177 points. The Banks-5 gained 0.5%, while the Real Estate-15 closed unchanged. Total turnover was a rather average NIS 1.14 billion.
European shares rose on yesterday, with a blue-chip benchmark hitting a 2-1/2 year high, propelled by expectations of an imminent deal in Washington to avert a U.S. debt default. Japan’s Nikkei average eked out a sixth straight session of gains in choppy trade on Wednesday, hitting a two-week closing high, while Hong Kong shares slipped from a near-three week high. Wall Street began the day in the green, while the dollar rose to a three-week high against the yen and gained against most other major currencies.
Investors around the world are focused on the U.S. fiscal crisis, said Erez Zadok, CEO of Aviv Risk-hedged Funds Management. “These next two trading days are likely to be particularly tense and the drama may last through Thursday night,” he said, adding that the past two days indicated that investors were fairly certain that the problem would be solved.
Notable shares in Tel Aviv included Opko Health, which gained 3.7%, putting it up 33% for the last month.
Medication manufacturer Kamada lost 2.5% on turnover of NIS 11 million, twice the usual. The company was listed on the Tel Aviv-25 two weeks ago.
Energy shares also lost ground yesterday. Shemen dropped 17%. Its share has been plummeting ever since it announced earlier this week that its Yam 3 drilling site is dry. The Zerah partnership lost 4%.
Haifa Oil Refineries gained 3.8%. Market sources believe the company is planning to launch a rights issue worth hundreds of millions of shekels sometime in the short term due to its financial problems.
Teva Pharmaceuticals lost 0.4%. The company is participating in a tender for what could be its biggest purchase under CEO Jeremy Levin – California-based Receptos. Teva is believed to be offering a 40% premium for the company’s shares.