Recent talk of a future war with Iran were didn't put a damper on trading yesterday on the Tel Aviv Stock Exchange, where shares made major gains. Although trading got off to a modestly good start, stock prices were boosted in a big way after the Central Bureau of Statistics released data for the first half of the year that showed the economy growing at a 3% clip in annual terms.
The growth figures were a pleasant surprise to investors. The benchmark Tel Aviv-25 index rose by 0.74% to 1,099.66 points. For the week, the index was 0.1% higher. The broader Tel Aviv-100 index gained 0.84% for the day but was off 1.41% for the week, closing yesterday at 982.03 points. Trading volume on the exchange yesterday was NIS 926 million.
The Banks-5 index continued its upward trajectory, adding another 3.94% yesterday, but closing the week just 1.82% higher. The Real Estate-15, which the day before declined by 2.8%, primarily due to the share price decline of Africa-Israel Investments, gained 2.3% yesterday, but for the week it declined by 6.34%. The Oil and Gas index gained 2.28% yesterday but was also down for the week as a whole by 8.24%. The Communications index fared better, gaining 5.17% yesterday and 6.29% for the week. The Tel Bond indices made a course correction yesterday after prior declines, and rose by up to 0.6% yesterday after declining Tuesday and Wednesday.
Data from the Central Bureau of Statistics on the growth of the economy for the first two quarters of the year buoyed investor sentiment. On an annualized basis, the economy grew by 3.2% in the second quarter, the CBS said. Ziv Sapir of Migdal Capital Markets, however, called the reaction "optimism for the moment," cautioning investors not to resume the hunt for risky stocks. "Gross domestic product data are a fiction," he said, adding that the yields reflected in the Tel Aviv exchange indices are lower than what foreign exchanges have shown. The new GDP numbers will not reverse the general downward trend, Sapir maintained.
In stocks of local interest, shares in cellular firms Cellcom and Partner Communications, which does business as Orange, made major gains, closing the arbitrage gap after positive performances in U.S. trading. The financial results released by the two firms Tuesday reflected declines of 40% in their profits amid new stiff competition in the industry, but it didn't prevent the stocks from performing well yesterday. Uri Licht of IBI Investments said the companies' results reflected the firms' continued success in streamlining their operations. Partner shares gained 7.4% yesterday and Cellcom's stock was nearly 11% higher on the day.
The major price rise in Cellcom's stock also led to rises in the value of bonds issued by Discount Investment, its parent company. The firm's Series Dalet bonds rose by 5.3% and traded at yields of 21%. Series Vav bonds rose by 5% and traded at 14% yields. And higher up the corporate pyramid, bonds of IDB Development rose by 1.6% and were trading at a gross yield of 47%.
Shares of Tower Semiconductor rose 9% yesterday amid rumors that the company's top management, which is abroad, is about to close a major new deal. The company said it doesn't respond to rumors and "if and when there is something to report, it will do so according to the law."
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