Growing expectations that the United States and Europe are about to undertake economic stimulus measures lifted shares on the Tel Aviv Stock Exchange on Monday.
The benchmark TA-25 index climbed 0.5%, to 1,119 points, while the broader TA-100 index added 0.4%, closing at 997 points. The Banks-5 index continued its downward slide, closing 1.3% down at 844 points. The Oil and Gas index continued its upward correction, advancing 0.2% to 982. The TA Real Estate-15 index closed up 0.8%, at 238.
Remarks over the weekend by U.S. Federal Reserve Chairman Ben Bernanke, which analysts interpreted as keeping the door open for further stimulus measures, lifted shares in Asia and Europe yesterday. European markets were also focused on this week's European Central Bank policy meeting, during which it is expected to unveil details of a plan to buy bonds from Spain and Italy to ease the region's debt crisis.
"It's no longer a matter of if, but how and when," Yaniv Hevron, head of macro-strategy at Excellence Nessuah Investment House, said, although he warned that he didn't see any action coming soon. "Bernanke won't use up his ammunition before a stimulus program is under way in Europe or before the U.S. election," Hevron said.
The IDB group and Israel Petrochemical Enterprises, both mired in debt woes, went against the upward trend.
Shares of Petrochemical Enterprises, which is controlled by David Federman, dropped 13.9% on heavy turnover. Market sources attributed the selling to the mutual funds. Oil Refineries, which is 30%-owned by Petrochemicals, fell 7.9%, also in heavy trading, while Oil Refineries' Carmel Olefins unit closed 6.4% lower.
The declines were apparently due to a rating downgrade of Carmel Olefins to A3, one notch above the level at which bondholders could call for immediate repayment. Oil Refineries, meanwhile, has been suffering declining profitability for several quarters. As a result, Petrochemical Enterprises may not get the dividends from Oil Refineries it needs to service its own debt.
Oil Refineries bonds plunged 6% to bring their yields up to junk levels of 13% to 15%. Those of Carmel Olefins dropped 6.5% while Petrochemicals' Series B bonds lost 14.5%. Yields on the company's various bonds now range between 21% and 59%.
IDB Holding Corporation shares fell 0.6% yesterday. Company executives met with the holders of its Series Aleph through Dalet bonds yesterday morning to detail the firm's financial situation two days after auditors attached a "going concern" warning to its second-quarter report.
Shares in the partners of the Myra 1 drilling license rallied sharply yesterday. Modiin, which is controlled jointly by the IDB group and Tzahi Sultan, jumped 15% while ILDC Energy advanced 34%. The rises came amid speculation about the results of the Myra 1 drilling, due to be published next week.
Semiconductor manufacturer TowerJazz gained 7.5% after the company reported winning another contract from Vishay Siliconix to manufacture chips at its Japanese facility and to expand its Israeli plant to produce a family of additional products.
Super-Sol continues to divest property holdings. Yesterday, it announced its sale of a 22,000-square-meter office building in Kiryat Ata for NIS 40 million. The building includes a Super-Sol branch that will remain on the site. Super-Sol shares ended 0.3% down.
Reuters contributed to this report.
