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Last update - 01:34 07/10/2008 TASE tumbles as crisis spills to Europe By TheMarker Correspondents and Staff , By Nimrod Halpern and Tal Levy Tel Aviv stocks tumbled yesterday as the credit crisis spread to Europe's banking scene, sending share prices dropping hard worldwide. Israeli heavyweights in particular were hammered: Potash producer Israel Chemicals, once quite the favorite among foreign investors, fell 8% and shares of its parent company Israel Corporation lost 10%. All in all, the rout in Tel Aviv was less dramatic than that suffered by other markets. That doesn't mean Israelis were spared: the benchmark TA-25 index fell by a steep 3.2%, but around the world, $2.5 trillion in value evaporated yesterday from the planet's stock markets. Advertisement From the start of the year, the combined market cap of the world's listed companies has shrunk by $25 trillion. European exchanges and emerging markets posted their steepest losses since 1987 as investors declined to take heart from steps being taken by the world's political and economic leaders to deflect the crisis. London markets fell by almost 8% and Paris dived by 9%. Asian stocks were also hit, but not as hard. However, Brazil's benchmark index lost 15%, Argentina's sank by nearly 11% and Mexican stocks lost about 8%. On Wall Street, the Dow Jones fell below 10,000 points for the first time in nearly four years, and the euro weakened by almost 6% against the yen, its steepest daily loss since its launch in 1999. The Australian dollar weakened by 8% against the American dollar and oil sank below $90 per barrel, while gold soared by 5%. Here at home, the Tel Bond-40 index, consisting of the 40 corporate bonds with the biggest market capitalization on the Tel Aviv Stock Exchange, lost 7.5% yesterday. The drop in corporate bonds will hit the provident funds and pension funds in which Israelis have their long-term savings, not to mention mutual funds that specialize in that sort of thing. One sign of the times is that trading on the Tel Aviv exchange has been starting late. When the TA-25 index starts with a loss of 2.5% or more, the TASE automatically delays the opening for three to five minutes, to give people a chance to cool off. That has been happening all week. (If the TASE starts on a drop of 8% or more, the TASE only starts the session after a 45-minute delay.) On to some stocks. One of the day's gainers was Yitzhak Tshuva's Delek Group, whose shares leaped like an ibex, gaining 8.4%. Still, from the year's start Delek Group stock is down 70%. However, shares of Delek Group subsidiary Delek Real Estate lost nearly 12%. From the year's start, shares of this company have lost 63% of their value. At present, in an effort to restore investor faith, Delek Group is mulling moves that would change Delek Real Estate's formal status as its subsidiary - and would relieve its balance sheet of Delek Real Estate's enormous liabilities. (For more, see Page 8.) The Real Estate-15 index had actually spent most of yesterday's session above water, but it didn't stay there. As Wall Street opened on the downside, the index reversed but still managed to close 0.5% up. Real estate companies are considered to be especially heavy borrowers. They use the money to make fresh investments, and borrow to recycle old loans. As credit is drying up and financially strapped tenants are dodging rent payments, they may find themselves in real trouble. Nor can they get top dollar for assets they'd rather sell these days. Just this week, Maalot downgraded the credit rating of real estate company Azorim to A-minus with a negative outlook. Shares of Lev Leviev's Africa Israel lost 0.8% and Kardan NV gained 0.8%. Israel Chemicals, however, sank 8%, bringing its loss over five trading days to 33%. At its peak the company's market capitalization was more than NIS 100 billion. Yesterday ICL ended at a market value of NIS 47 billion. Overseas, Potash Corporation of Saskatchewan, a benchmark for the potash industry - which is where ICL lives, so to speak - was tumbling by more than 16% in afternoon trading in New York. Back over here, the Banks-5 index lost nearly 4%, led south by Bank Leumi, whose shares sank by 3.7%, and Bank Hapoalim, which lost 3.9%. Drugs maker Teva Pharmaceutical Industries retreated by 1.9%. There was a group of Israeli companies that advanced yesterday, though - the pack generally considered to be defensive plays. Namely, these are food and telecommunications companies. As analysts say, people gotta eat and they're gonna talk. Strauss Group (food) gained 4.5%, Osem added 0.6%, Partner Communications (cellular communications) gained 1.4% and Cellcom (ditto) advanced by 0.5%. Meanwhile, in the forex arena, the dollar-shekel rate stood steady. The exchange rate, set by the Bank of Israel, closed at NIS 3.465 to the dollar yesterday.Elsewhere in the world, the dollar bounded against currencies: the euro weakened by almost 1.7% against the resurgent greenback. Bookmark to del.icio.us   Asleep at the wheel Sharon told 1973 probe that IDF top brass was clueless in Yom Kippur War. Laughing at Hitler Clips parodying film The Downfall make their way onto the Web.

Read & React Security officials: Time running out on deal for Shalit release Responses: 100 Lebanese union to sue Israel for 'claiming ownership' of falafel Responses: 138 Avi Primor: It's time for the IDF to leave the West Bank Responses: 66 The Holocaust, Tarantino-style: Jews scalping Nazis Responses: 55 Hamas: Jewish Lobby in U.S. to blame for global financial crisis Responses: 178 More Headlines 21:40 Olmert wins no firm pledge from Russia on arms sales to Iran, Syria 00:54 Footage shows freed terrorist Kuntar training with Hezbollah 23:16 Trailing in polls, McCain seeks to gain ground on Obama in second debate 01:21 Experts offer tips on how to make the Yom Kippur fast a bit easier 16:28 Hamas: 'Jewish Lobby' in U.S. to blame for global financial crisis 19:50 VIDEO / YouTube pranksters have Hitler raving about Obama, Xbox 20:30 Settlers to Barak: Don't give PA security control of Hebron 01:30 Newborn heads home to Gaza Strip, leaving mother in coma in Israel 01:04 Surprise rate cut lifts TASE; real estate stocks jump 20 percent 22:59 Angola seeks to halt Gaydamak's Paris arms trafficking trial 19:47 Ariel Sharon told 1973 probe: IDF top brass was clueless in Yom Kippur War 22:02 Deputy FM protests gov't delays in funding of Druze sector 16:24 Dutch lawyers seek arrest of Minister Ayalon for 'war crimes' 20:36 Food giant Tnuva fined NIS 55m for adding silicone to milk 13:25 Israeli security officials: Time running out on Shalit deal Previous Editions Select Day 07 oct 06 oct 05 oct 03 oct 02 oct 01 oct 30 sep 29 sep 28 sep 26 sep 25 sep 24 sep

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