Market Report / Perfect storm of positive forces

The final trading day of the week, and of 2009, opened against the optimism voiced by U.S. investors for the new year, and closed with gains overall. The TA-25 and TA-100 indexes both rose 0.4%, closing at 1,145 and 1,046 points, respectively. Turnover was a respectable NIS 1.7 billion. On the week, the TA-25 fell 1.3% while the TA-100 lost 0.4%.

The Tel Aviv Stock Exchange made a remarkable recovery this year: The TA-25 index gained around 75%, just 7% off its all-time high. The TA-100 gained about 89%. The Real Estate-15 index leaped by 124%, while bank shares put on 114%. The Tel Bond indexes also turned in impressive performances, with gains of from 21% to 44% for the year.

The three highest-yielding stocks for 2009 were Isramco, with a yield of 1,854%; Nova Measuring Instruments at 1,118% and Zerah Oil & Gas Explorations at 1,090%.

"In the Israeli market of 2009 the four main forces - liquidity, alternatives, pricing and momentum - all acted in the same direction beginning with the second quarter of the year," explained Kobi Feller, chief investment manager at Clal Finance.

"There was a great deal of liquidity; there was a lack of low-risk alternative investments; stocks and bonds were priced cheaply, leading to a very positive momentum after 2008, when the leading indexes posted significant losses," said Feller. "In 2010 the market remained liquid and interest rates are still low, which makes the alternative investment channel - government bonds - less than attractive. There is still a preference for investing in shares and corporate bonds, but selectivity will increase and so will volatility."

Gas exploration firms continued to make waves. Givot Olam gained 6.2% yesterday in the wake of its announcement to the TASE about the finding of what appears to be "significant quantities of oil" near Rosh Ha'ayin.

Ratio Oil Exploration shares climbed 20.3% yesterday, after Wednesday's 30% gain and Tuesday's 40% tumble. The word on the street is that day traders, rather than institutional investors, are behind the steep rise.

Compugen has been making its investors happy lately, after signing a collaboration agreement with Pfizer on cancer treatments and announcing in November the discovery of a genetic biomarker for predisposition to Type 2 diabetes, but investors are unlikely to be thrilled by yesterday's news that it sold 4.1 million of its shares on the open market through Cantor Fitzgerald for $20 million, at $4.91 per share. Shares in Compugen climbed 6.8% yesterday in Tel Aviv.