Market Report / Tycoon troubles hit TA-25
The Tel Aviv Stock Exchange's TA-25 index dropped 0.5% to 1,114.59 points, while the TA-100 shed 0.6% to 993.76.
It was a tough weekend for Israeli tycoons Nochi Dankner and Ilan Ben-Dov.
While U.S. Federal Reserve Chairman Ben Bernanke was assuring markets over the weekend that he looked favorably upon a new stimulus program, Dankner's IDB Group published its second-quarter reports with a "going concern" warning attached, while Ben-Dov's Scailex turned in a massive loss.
The Tel Aviv Stock Exchange's TA-25 index dropped 0.5% to 1,114.59 points, while the TA-100 shed 0.6% to 993.76. The banking index extended its losses, ending 1.3% down, at 840.95 points, and the TA Real Estate-15 dropped 1% to 236.16. The Oil and Gas Index continued its upward correction, advancing just under 0.1% to 980.35.
IDB Holdings stock ended the day down a relatively mild 2.1%, a drop that trimmed its market capitalization to a mere NIS 631 million, on the back of the going concern warning, the first in the holding group's history. IDB ended the second quarter with a massive loss of NIS 1.27 billion, leaving it with negative equity of NIS 1.66 billion.
But its Series Gimel and Heh bonds plummeted as much as 8%. That left them with yields of 232% and 235%, respectively. Series Dalet bonds, with just under two-and-a-half years to maturity, fell a more modest 1.9%, leaving their yield at 78%. IDB is calling a meeting of bondholders at 10 A.M. Monday.
Ilan Ben-Dov's holding company Suny, which got a going concern warning for the second quarter in a row, ended the three months with negative cash flow of NIS 1 million and negative working capital of NIS 276 million. Suny wrote down NIS 1.5 billion from the value of its shares in Partner Communications. Suny shares nevertheless rose 10.9% on Sunday.
Scailex, the Suny unit that directly controls Partner, avoided a going concern warning, but it reported a whopping NIS 727 million quarterly loss, brought on largely by a write-down on its Partner stake. After plunging close to 50% last week, Scailex shares ended down just 0.3% Sunday.
The Fed's Bernanke on Friday left the door wide open to a further easing of monetary policy, calling the stagnation in the U.S. labor market a "grave concern." But he stopped short of providing a clear signal of imminent action. Speaking at a central banker's conference, Bernanke used stark language to give a temporary lift to U.S. stocks. Economists, however, walked away from the Fed chairman's remarks still divided over whether the central bank would act at its next meeting in September.
On the positive side, Delek Real Estate soared 37.5% on turnover of NIS 1.9 million, after the company published a new debt settlement proposal whose centerpiece is an offer by controlling shareholder Yitzhak Tshuva to inject NIS 750 million into the company.
Ampal rallied 27.7% after its controlling shareholder, Yossi Maimon, won himself a reprieve against bondholder action for the holding company's debt after he filed for Chapter 11 bankruptcy protection in the United States. The move also transfers the struggle over Ampal's debt to the United States from Israel, which would allow a court to dictate settlement terms.
Modiin, the energy exploration company controlled by IDB Development and Tzahi Sultan, reported on Friday that it received approval from regulators to complete its purchase of 10% of the Shimshon license from Isramco. Modiin fell 1.5% while Isramco dropped 2.1%.