Market Report / TASE shows small gains in anticipation of big interest rate cut

The Tel Aviv Stock Exchange opened the trading week up in anticipation of another interest rate cut today by the governor of the Bank of Israel, Stanley Fischer.

The TA-25 rose 0.6% to close at 641 points and the broader TA-100 gained 1.1% to end the day at 578 points. The TelTech-15 was up 2.6%. Turnover was very low, even for a Sunday with foreign investors still enjoying a day off of work.

The day began with small losses, but the trend changed towards noon after the Bank of Israel announced its updated growth forecast, a drop of 0.2% in 2009, and 7.6% unemployment.

This bad news actually buoyed the market as traders felt Fischer would lower rates by even more, possibly even by 0.75%, instead of the analysts' previous consensus of a 0.5% reduction. Such a cut would lower Israeli interest rates to only 1%, the lowest level in Israeli history.

Koor rose yesterday by 3.5%, after Credit Suisse shares rose 3.9% on Wall Street Friday. Koor owns 3.4% of the Swiss bank's shares.

Israel Chemicals rose 2.7% yesterday after potash-based fertilizer stocks gained nicely on Friday in New York. Chemicals parent, The Israel Corporation, rose 1.7%.

Bezeq jumped 4.9%.

Teva was down 1% after opening with a negative arbitrage gap. Fears are that Merck's new multiple sclerosis drug is a threat to Teva's Copaxone, and Teva's bottom line.

The Banks-5 was down 1.1%. Bank shares continued their losing ways from last week with Bank Leumi off 2.2% and Bank Hapoalim down 0.7%.

Makhteshim Agan rose 0.2% after Bank Hapoalim agreed to finance its NIS 750 power plant at Ramat Hovav (see story page 8).

The Real Estate-15 was up 4.6%, lead by Africa Israel, which gained 5% yesterday.

Shares in the companies involved in the Tamar-1 natural gas discovery continued to rise again yesterday, with Isramco jumping 10%, Delek Drilling was up 5.4% and Avner rose 3.7%.