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Market Report Oil and Gas Shares Lift Tel Aviv Stocks

The TA Oil and Gas Index gained 3.2% for the day, outstripping the 1.5% gain by the benchmark TA-25 index to 1,081 points. The broader TA-100 index gained 1.4% to close at 990 points.

Tel Aviv shares barreled north yesterday, driven by surging gas and oil exploration stocks. Certainly no joy was to be had in Europe, where markets eased down almost across the board. The few gains achieved, for instance by the Stockholm stock exchange, were puny.

In Tel Aviv on the other hand the gains were quite robust. The same can't be said of turnover - that remained quite thin at NIS 1.2 billion - but it's an improvement from the levels of less than a billion shekels a day during February.

Meir Shamir - Daniel Tchetchik
Daniel Tchetchik

The TA Oil and Gas Index gained 3.2% for the day, outstripping the 1.5% gain by the benchmark TA-25 index to 1,081 points. The broader TA-100 index gained 1.4% to close at 990 points. Biomed shares closed the day 1.7% higher but other sector indexes finished only slightly above water.

Uriel Goren, head of the international clients desk at DS Securities & Investments, poured chilly water on any nascent enthusiasm about recovering volumes of trade. "It can't be said that turnovers are recovering. There are very specific and nonrecurring reasons for the increases of late," he explained. "For instance, a few days ago the reason was a structure in options on banks. Somebody closed the structure, resulting in high trading turnovers. The reason today was the rebalancing of the MSCI index - there are no real buyers and sellers, unfortunately," he told TheMarker.

But there was not one but two reasons for yesterday's surge in the Oil and Gas Index, the main one being news that representatives of the Russian national company Gazprom came to Israel to talk with Delek Group and Noble Energy about a possible collaboration in development of the deep-sea Leviathan gas field. "That created positive momentum," Goren said. The other reason was that oil and gas shares had dropped by more than other shares of late for no obvious reason. "Investors feel they overshot and had become cheap," he explained.

A close look at the TA-25 index shows that despite the green screens, trading was selective. Among the 25 blue chips, three lost ground - of which two were the cellular companies Partner Communications and Cellcom. Again, the changes were not dramatic - each lost 0.2%. The cellular companies are in the doghouse among investors because of radical changes in their business environment - that may smile on the consumer but not on them.

The other heavyweight to fall was technology company Nice Systems, despite a warm report from Psagot yesterday. The investment bank raised its target price for Nice to $42.30, from $37.60, after the company itself raised its guidance for the year 2012. Among other things analyst Aviad Shimon noted the company's record backlog of orders.

Meir Shamir's company Mivtach Shamir ended its first day back on the trading floor unchanged, on heavy turnover of NIS 24 million. The company had been suspended over nondisclosure of results by its significant holding, Tnuva, in which it owns a 20.7% stake. Five months ago Tnuva's reports were finally revealed, paving the way for Mivtach's return (see story on Page 8 ).

One of the day's bigger movers was Cimatron, which gained 10% after reporting a decent increase in revenues to $28.7 million in 2011, compared with $21.8 million in 2010. Earnings per diluted share came to 30 cents, compared with 17 cents a year ago.