Trading on the Tel Aviv Stock Exchange yesterday closed lower on minuscule trading of NIS 369 million - the smallest volume in eight years. The benchmark Tel Aviv-25 index declined by 0.78% to 1,058.85, while the Tel Aviv-100 slumped by 0.46% to 968.33, although the market in general was on the upswing most of the day.
"I expect that we'll be seeing very low trading volume over the coming two months," said Uri Licht, the director of the research department at IBI Investment House. "The Olympics will reduce interest in the Israeli capital market. And the City in London [the British capital's financial center] will be entering a period in which the only thing that will interest it is whether a record is set in the 100-meter dash or not."
Licht added that the revival of the social justice protest in Israel and current regulatory uncertainties have contributed to the current situation on the Tel Aviv exchange. He called efforts to increase trading volume here of utmost importance, if interest among local and foreign investors is to be rekindled.
The recent announcement by the supervisor of insurance at the Finance Ministry that managers' insurance would be phased out has rattled the industry, but the Insurance Index, which lost about 8% of its value last week, inched back 0.15% yesterday. On the other hand, the Technology Index, which declined by 6.6% last week, continued to head south yesterday, losing another 0.65%.
The Blue Tech-50, which consists of the stocks with the highest market capitalization from the Tech and Biomed indexes, declined by almost 0.4% yesterday after losing 6.2% last week. The Banks-5 index was a standout for negative reasons as well, declining by 2.15% yesterday after a slight decline last week. The Tel Bond indexes were up to 0.2% higher yesterday with government bonds redeemable in 2026 ending the day at a yield of 5%, up 0.2%.
The Standard & Poor's credit-rating agency warned that an actual increase in the country's budget deficit would prompt a reassessment of the country's debt rating. [See further coverage on page 8]. The government recently announced that next year's deficit would be raised to 3% of GDP, but an S&P delegation hinted that a better approach to the current decline in revenues would be to increase taxes. The visitors suggested that Israel could see its rating A + with a "Stable" outlook changed to a "Negative" outlook with a future downgrade to A possible if policy did not change.
The share prices of the partners in the Leviathan underwater natural gas exploration site - Ratio, Delek Drilling and Avner - lost ground yesterday. In Ratio's case the loss was nearly 4.8%, and there was speculation the downturn was the result of an announcement that the owners of the Homer Ferrington underwater rig were in talks about possible drilling work at the Gabriella site, to ascertain whether there is natural gas or oil there.
It was the Ferrington rig that performed the drilling at Leviathan to see if oil reserves existed underneath the gas discovered there. The rig was ultimately removed from the Leviathan site due to technical glitches, but the fact that it is now being eyed for work elsewhere was interpreted by investors as meaning that it would not be returning to Leviathan in the next year.