Market Report / Ben-Dov's Hutchison deal boosts benchmark index
The TA-25 blue chip index ends higher by 0.4% at 1,055.82; TA-100 adds 0.5% to 971.07 on lighter-than-usual trading of NIS 818 million.
It was a battle between the good news at home and the bad news imported from Europe and America on the Tel Aviv Stock Exchange on Tuesday.
But it was the good news - principally that embattled telecom entrepreneur Ilan Ben-Dov had made a tentative agreement to sell back control of Partner Communications to Hong Kong's Hutchison - that prevailed.
The continued troubles of the euro zone and declines on Wall Street weighed on the market indices over the day, but in the end the main indices ended the session higher.
The TA-25 blue chip index ended higher by 0.4% at 1,055.82, while the TA-100 added 0.5% to 971.07 on lighter-than-usual trading of NIS 818 million. The TA-Banks Index finished up 0.7% and the Real Estate 15 Index 0.7%.
Trading in Ben-Dov's companies Suny and Scailex resumed yesterday morning following the official report of the Hutchison negotiations. Both companies, as well as Partner, rose sharply, with Suny soaring 129% to NIS 7.32 and Scailex 27.7% to NIS 9.21. Partner rose 3% to NIS 19.41. Scailex's Series Aleph bonds traded heavily, with NIS 4.7 million changing hands as the price rose 47% to a yield of 24%.
Under the terms of the agreement, Hutchison will buy about 75% of Suny Electronics, in Scailex, which in turn owns 44.5% of Partner, for $125 million. The sale will leave Ben-Dov as a minority shareholder in Partner. That will inject badly needed cash into Suny's balance sheet to the relief of bondholders. Suny's Series Aleph bonds rose 30%, although that still leaves them yielding 75%. The price of its Bet and Gimel Series rose 65% and 75%, respectively.
Concerns about an escalation of the euro zone's debt crisis kept a weight on the Tel Aviv and other markets yesterday.
Spain's Treasury Minister Cristobal Montoro said his country's high borrowing costs mean it is effectively shut out of the bond market and the European Union should help Madrid recapitalize its debt-laden banks.
Statements on the outcome of emergency talks among the Group of Seven industrialized nations as they tackle the euro zone's deepening crisis offered little clarity to investors. The U.S. Treasury Department said G7 finance ministers "reviewed developments in the global economy and financial markets and the policy response under consideration."
Foreign currency trading was mixed yesterday, with the shekel gaining against the dollar and staging a small retreat against the euro. The Israeli currency strengthened 0.6% on the dollar to a representative rate of 3.892 while advancing about 0.2% to the euro to a fixing of 4.84.
Bank of Jerusalem economists said they see no reason why the trend of dollar appreciation against the shekel will not continue and see the next resistance levels at NIS 3.93, NIS 3.97 and NIS 4. The Bank of Israel base rate will probably be lowered at the end of this month, Bank of Jerusalem expects.
Israel Petrochemicals closed 2.8% higher after it said the day before that it had met conditions to get a NIS 120 million bridge loan aimed at tiding it over while it awaits a divided payment from its 30%-owned Oil Refineries Ltd. affiliate (see story on page 11 ).
Psagot Investment House said this week that the time had come to stop selling shares in Partner and Cellcom and revised its recommendation to a Market Perform from a Sell, although Psagot warns that they remain high-risk shares. Cellcom gained 2% yesterday.
The Israel Corporation and Makhteshim Agan Industries are holding talks on a joint production and marketing energy venture. Israel Corporation dropped 1.8% while Koor, which is a minority shareholder in closely held Makhteshim, edged down 0.8%.
Reuters contributed to this report.