Market report / Telcoms lead share gains
Patrick Drahi, who controls HOT Telecom, announced he wanted to buy out other shareholders in the company for NIS 37 a share, a premium of 12.5% over the company's current market value of NIS 2.7 billion.
Trading on the Tel Aviv Stock Exchange was thin enough on Sunday, but it appears it will be getting thinner, as yet another company has been slated for delisting.
Patrick Drahi, the French entrepreneur who controls HOT Telecom, announced he wanted to buy out other shareholders in the company for NIS 37 a share, a premium of 12.5% over the company's current market value of NIS 2.7 billion.
The announcement pushed HOT shares up 13.9% by close and the Telecommunications Index up by just over 4% to 430.09.
There was also other positive news to help lift shares Sunday - namely, a strong performance from Wall Street on news that the European Central Bank is considering setting targets in a new bond-buying program to contain euro-zone borrowing costs. Investors were also counting on more stimulus measures from the U.S. Federal Reserve.
The TA-25 and TA-100 indices both rose 0.3%, to 1,112.27 points and 986.99 points, respectively. The TA-Banking index, however, dropped 0.8% to 847.74, while the Real Estate index ended almost unchanged at 233.76. Turnover was just NIS 431 million.
Insurance shares gained after Harel Insurance announced on Sunday that it had agreed to buy the life and health insurance operations of closely held Eliahu Insurance for NIS 210 million. Shares of Harel rose 1% while those of Migdal Insurance rose 1.1%. The sale clears a regulatory obstacle for Shlomo Eliahu to buy control of Migdal, one of Israel's top two insurers.
Oil and gas shares were lower amid concerns that the Myra 1 drilling well will not yield natural gas in commercial quantities. Shares of two Myra partners, ILDC Energy and Modiin, dropped 9% and 7%, respectively.
Elad Bronstein, trading room manager at Excellence Nessuah, said the market's performance has been poor relative to global markets.
"Without the gains from Mellanox, EZchip and Perrigo, we would have seen declines in Tel Aviv share prices today," he said. "The Israeli market is priced low compared with world markets, and it is difficult to see a change in trend, given how low the turnover has been in Tel Aviv."
In the corporate bond market, prices rose moderately. IDB bonds were mixed with short bonds trading unchanged to lower, while longer issues rose sharply. Series Dalet bonds jumped 9%, cutting the yield to 69%.
On Friday, Bank Leumi in a report cast doubt over IDB Holding's ability to recycle its debt.It said controlling shareholder Nochi Dankner would continue to divest assets to repay debt to banks and bondholders totaling NIS 8 billion.
Delek Real Estate, which owes bondholders NIS 2.15 billion, was suspended from trading Sunday until a vote Monday on a debt accord for the embattled property developer. A preliminary vote of bondholders holding Series Dalet, Heh and Kaf-Heh bonds suggested that controlling shareholder Yitzhak Tshuva's proposed debt settlement would not win the minimum 75% approval.
Leumi analysts were equally pessimistic about Ilan Ben-Dov's chances of coping with his debt load after Hutchison Whampoa walked out of a deal to buy back control of Partner Communications. Shares in Ben-Dov's holding company Scailex were down 18.4% Sunday.
Clal Industries, which was sold by IDB to Len Blavatnik last month, said it plans to expand its electrical generating station, used primarily to power its concrete plant, at a cost of $90 million. Clal was up 6.6% at close.
Reuters contributed to this report.