Market report / Real estate shares lead TASE retreat

Tel Aviv stocks fell yesterday as real estate stocks retreated. The Real Estate-15 index lost a steep 5.4%, although all the leading indexes finished the day in the red.

The benchmark TA-25 index lost 1.4% to end at 940 points, and the broader TA-100 index lost 1.7% to 872 points. Trading turnover increased to NIS 1.6 billion, after dwindling to a mere billion shekels on Sunday.

The TA-25 index has spent the last month hovering between 950 to 1,000 points, but its attempts to break through the ceiling on the upside have been doomed to failure as uncertainty continues to reign.

Tonight the Central Bureau of Statistics will be announcing the consumer price index for August. Analysts expect an increase of up to 0.5%. From the year's start the CPI has risen by 3.2%, which ostensibly means that inflation is above the ceiling of the price stability target range. However, economists estimate that tax hikes contributed 1% to the index. (In 2008 the index rose 3.8%.)

A survey by the Manufacturers Association found that for the first time since the crisis began, manufacturers think the slowdown has stopped. Another encouraging macroeconomic factoid is that Israel's trade deficit was $0.5 billion a month (on average) in the first eight months of 2009, or $5.9 billion in annualized terms, compared with a trade deficit of $13.2 billion in 2008.

Shares of Africa Israel fell 7.5% after the company's bondholders assembly on Sunday, which was a tense affair. The company wants a single representative to be named for the bondholders. The bondholders want each of Africa Israel's 13 series to have their own representative. Certainly the B9 series bondholders who aren't getting their NIS 590 million this November (Africa Israel doesn't want to discriminate among creditors, the company explained when stating that it won't pay them) want their own representative, because their interests do not coincide with those of holders of longer-term bonds.

Nor did Africa Israel Residences escape the wrath: It lost 13.6% yesterday.

Other real estate companies were also in the doghouse. Eliezer Fishman's Jerusalem Economic Corporation lost 7.9% and Moti Zisser's company Elbit Imaging lost 6.8%. Nathan Hetz's company Alony Hetz lost 4.5%.

Israel Corporation shares fell by 3.4% as it thrashes out an arrangement to keep its shipping subsidiary Zim afloat. The latest is that 50 to 60 Zim workers will take early retirement.