Market report / Dubai who? Israeli stocks power ahead

While the rest of the world pondered the debacle in Dubai and investors quaked, Tel Aviv stocks ended yesterday with firm gains. Gulf region stock markets posted steep losses - Abu Dhabi's leading index lost 8.3%, its worst one-day drop in the emirate's history, for example. No such thing over here, perhaps in part because Bank of America's Merrill Lynch counseled investors to overweight Israeli stocks until the dust settles in Dubai.

The benchmark TA-25 index gained 0.9% to close at 1,083 points, and the broader TA-100 index gained 1% to close at 1,015 points. The Banks-5 index jumped by 2.1% as the banks turned in better-than-expected financial statements for the third quarter of 2009. Even the bruised Real Estate-15 index bounded north, gaining 1.5%.

Total turnover was above average at NIS 1.9 billion.

Most markets around the world lost ground yesterday as the fallout from Dubai continues. European shares fell to their lowest close in more than three weeks, with oil companies among the biggest fallers, as worries about Dubai's debt continued to unsettle equity investors the world wide, with the glaring exceptions of Tel Aviv - and Tokyo, where the benchmark indexes gained nearly 3%. Japanese bank shares rebounded as concerns about debt default in Dubai eased, Reuters reported yesterday.

However, London share prices continued to falter, pulled down by weak energy stocks and banks as investors succumbed to lingering Dubai anxiety.

Though UBS is predicting that the prices of homes in Dubai could drop by as much as 30% the year to come, and though Kazakhstan is also undergoing a subprime crisis of its own that has caused losses to big banks worldwide, Israel's investors seemed unconcerned yesterday, and all Tel Aviv's indexes were in the green.

There's what to wait for this week: jobs data from the U.S. and the Chicago purchasing managers index for November (which Bloomberg suspected will post a fall). Meanwhile, over here, Bank Hapoalim published its consumer-confidence index, showing a drop of 0.4 points in November to 132.7 points, following a similar drop in the previous month. However, seen over time, the index is quite steady.

Yesterday was the deadline for Israel's companies to file their third-quarter financial statements. Delek Group shares gained 1.6% after the sprawling conglomerate, owned by Yitzhak Tshuva, reported netting NIS 60 million (attributable to shareholders) compared with losing NIS 612 million in the same period of 2008. Of course, Delek Group was consolidating its financials with Delek Real Estate, which was losing money hand over fist back then - it had posted a loss of NIS 428 million for the third quarter of 2008. Delek Group's revenues slipped a tad against the parallel quarter, to NIS 12 billion.

Shares of Bank Leumi also gained 1.6% after the bank yesterday unveiled the biggest profit of all Israel's banks for the third quarter: NIS 534 million. For the first nine months of 2009 Leumi reported netting NIS 1.47 billion, up from NIS 1.28 billion in the same period of 2008. However, the results were skewed by nonrecurring events, such as the recent sale of Leumi's shares in the HOT cable TV company and in Bezeq, for a total of NIS 170 million.

Israel Discount Bank stock gained nearly 3% after the bank reported a 26% increase in income from financing, to NIS 1.32 billion. Net profit shot up nearly threefold to NIS 292 million.

Then there's real estate company Lagna, shares of which sank 2.2% yesterday. Lagna, which is controlled by embattled real estate magnate Shaya Boymelgreen, reported a 2.5% increase in quarterly revenues against the parallel quarter, to NIS 34.2 million.