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Zvika Barinboim and Ofer Gilboa want to increase the volumes of trade in Polgat and Bagir stock. With that aim in mind, the boards of the two companies yesterday agreed to enter a market making contract with Solomon Capital Markets.

The controlling shareholder, SG Textile Holdings ? which is controlled by Barinboim and Gilboa - will lend Polgat shares. As for the Bagir shares, they will be lent by Polgat, Bagir's parent company (68.5%).

This year the average daily volume of trade in Bagir has been NIS 350,000. Polgat has done even worse this year, attracting no more than an average of NIS 70,000 a day, which is a third of the average turnover it had achieved in 2005.

In the last week, trade in Polgat stock slumped to just NIS 17,000 a day, which propelled the company to seek a market maker for its stock.

One reason for the slump in Polgat trade could be that Bagir, the subsidiary, went public six months ago, and Bagir is responsible for most of the parent company's operations.

From the start of 2006, Polgat's share price has risen by 10%, after rising by just 4% in 2005, severely underperforming the market.

Shares in Bagir have risen 5% this year.

In the market making agreement, Solomon has the option to buy or sell, as is relevant, any surplus or shortfall of Polgat and/or Bagir stock at the end of the contract period.

Bagir makes tailored clothing while Polgat engages in woolen apparel. The Silverboim group headed by Zvika Barinboim bought the controlling interest in Polgat in December 2004.

The companies are not minnows. For the first nine months of 2005 Polgat reported revenues of NIS 462 million, and a net profit of NIS 68.7 million.