Market report / Energy gains, banks fall
The result was a tie: Tel Aviv Stock Exchange's TA-25 index of blue chips finished the final days of the trading week almost unchanged at 1,120.58 points, while the TA-100 added 0.4% to 999.59.
Energy shares rallied on Thursday, inspired by the government report on natural gas exports while bank shares were brought lower by disappointing earnings at three of the country's top lenders.
The result was a tie: Tel Aviv Stock Exchange's TA-25 index of blue chips finished the final days of the trading week almost unchanged at 1,120.58 points, while the TA-100 added 0.4% to 999.59. The TA-25 was fixed at 1,123.84 and the TA-Banking index contract at 861.00 for the expiry of the August Maof in the morning. Turnover was a high NIS 2.2 billion due to Maof-related trading.
The oil and gas index rose 4.7% to 979.54 points yesterday, adding to its gain of 3% the day before after the government's Tzemach committee on natural gas policy produced a series of industry-pleasing recommendations, chief among them allowing more than half of all output to be exported.
Ella Fried, an analyst at Leumi Capital Markets, said from the point of view of the stock market the most important proposals would provide incentives for small and satellite gas fields to be developed by giving incentives for multinational companies to join their exploration and development.
Among the biggest gainers, Ratio closed 9.5% higher, Avner 7.2% and Delek Drilling by 6.5%.
The TA-Banking index dropped 1.6% to end at 851.86. Bank Hapoalim reported a 15% decline in its second-quarter profit from a year ago to NIS 607 million and ended 1.8% lower. Bank Leumi saw an even sharper decline of 50% to NIS 321 million in the quarter, and its shares ended down 1.8%. Israel Discount Bank gained 0.7% even though its profit dropped 28% to NIS 165 million.
Nevertheless, analysts continue to be bullish on the banks. "We continue to recommend them [the banks] as a buy," Alon Glazer, deputy CEO of Leader Capital Markets, said. "We have to remember that the banks are in the middle of a difficult period in the world and Israeli economy, which has been hurting their results."
Glazer said he continues to believe that the banks will succeed in producing a return on equity of more than 10%, in the case of Mizrahi-Tefahot and Hapoalim, and 8% to 10% in the case of Leumi and Discount, after discounting one-time factors.
On the embattled tycoon front, Ilan Ben-Dov's holding company, Scailex, convinced its auditors not to attach a "going concern" warning on its second-quarter report, which would signal that the company may not be able to repay debt. Its shares, nevertheless, plunged more than 17%.
Delek Real Estate fell 3.7% a day after its bondholders declined to support a debt settlement and sought a restraining order on its controlling shareholder, Yitzhak Tshuva.
Food maker Osem was down 1.6% at close, even as it reported a 10% rise in second-quarter net profit to 86.9 million. Teva Pharmaceuticals won U.S. Food and Drug Administration approval for a version of Amgen's Neupogen, a drug that boosts the production of white blood cells in some patients receiving chemotherapy.Teva shares fell 0.6%.
Avgol shares extended their rally into a second session, rising 0.6% yesterday on top of their 5.3% increase Wednesday after Israel Petrochemicals Enterprises said it was selling its stake in the maker of nonwoven fabrics to a British buyout fund at a price that valued the company in excess of its TASE traded price.