Market report / Bezeq deal lifts Internet Gold 10%

Tel Aviv stocks gained ground on Monday, albeit not very much. The benchmark TA-25 index gained 0.3% to close at 1,056 points, while the broader TA-100 index advanced by 0.6% to close at 990 points. Total turnover was in the normal range (for these days) at NIS 1.7 billion. Yesterday's gain brings the TA-25 index to 15% from its peak level: It's gained 61% this year. The Real Estate-15 index gained 0.9%, despite heavyweight Africa Israel losing nearly 3%.

On the macro front, the Bank of Israel waxed optimistic in its interest rate announcement yesterday, though it left its overnight rate unchanged at 0.75%. It had been the first of the developed world's central banks to start tightening monetary policy, in August, indicating a belief that domestic consumption would increase (which it has). Yesterday's move indicates that while the Bank of Israel may think monetary tightening is in order, it doesn't need to be done apace.

Another positive macro development was success on the part of Israel's representatives during a hearing (in the sense of "examination") held by the Employment, Labor and Social Affairs Directorate of the Organization for Economic Cooperation and Development. Following the meeting in Paris with Israel's ministers Isaac Herzog, Benjamin Ben-Eliezer and Avishay Braverman, the directorate's chief John Martin commented favorably on the professionalism they demonstrated regarding labor and welfare. The hearing is part of the process following which Israel hopes to become a full-fledged member of the OECD, in 2010.

Africa Israel stock sank 2.9% as the tug-of-war with its bondholders drags on. The company rejected the counter-offer from its bondholders and no new meeting has been scheduled.

Shares of Internet Gold climbed 9.8% on turnover of NIS 15 million, while shares of its subsidiary Smile Communications advanced by 5.6% on heavy turnover (for it) of NIS 51 million. Smile is the company through which Shaul Elovitch plans to buy the controlling interest in Bezeq for almost NIS 7 billion from the Apax-Haim Saban-Mori Arkin group, in one of the biggest deals ever done in Israel's business scene. Market sources whisper that Bank Hapoalim will be leading the lending consortium. Bezeq stock lost 0.6%.

Apropos of which, Bank Hapoalim stock gained 1.1%. And while on Hapoalim, Kibbutz Amir in the Upper Galilee has finally reached a debt arrangement with the banks, under which it will return NIS 21 million of its NIS 109 million debt. In other words the banks, yet again led by Hapoalim, have to write off 80% of their loans to the cooperative.

Elron gained 12% on news of moves to sell its subsidiary Medingo for as much as $213 million, after adjustments.