Market report / Tel Aviv stocks buck international trend

Tel Aviv stocks ended yesterday's session with weak gains, in contrast to the retreat on world markets. The benchmark TA-25 index gained 0.6% to close at 1,068 points, and the broader TA-100 index advanced 0.5% to close at 1,005 points. Total turnover was heavy at NIS 1.9 billion.

In the rest of the world, the trend was rather less sunny. European shares ended lower yesterday after hitting a 13-month high in the previous session, as a smaller-than-expected rise in U.S. industrial production soured sentiment among investors and put pressure on mining and financial stocks. The FTSE 300 lost 0.4%, following its 1.5% gain the day before.

Moving onto Asia, Tokyo's Nikkei edged down as the yen edged up, which isn't good for Japan's exporters. Chinese stocks achieved a three-month closing high, but Hong Kong's Hang Seng index failed to sustain early gains.

U.S. shares weren't having a great day either, despite the mounting indications of economic recovery. Retail sales were better than expected, rising 1.4% in October compared to the month before, whereas economists had predicted an increase of only 0.9%. Given the size of the American retail scene, that is a significant difference. But U.S. Federal Reserve chairman Ben Bernanke sounded a note of caution, saying that weakness in America's lending and labor markets is likely to force the Fed to keep American interest rates low.

Apropos Bernanke, the euro zone's top economic policymakers yesterday backed Bernanke's comments the day before in favor of a strong dollar. European Central Bank President Jean-Claude Trichet said a sound U.S. currency was in the interests of the entire international community - a change in tone from his usual stance that a strong dollar is in the interests of the United States.

Returning to the home front, the Bank of Israel announced that Israel's debt-to-GDP ratio, which is a key parameter in gauging a nation's financial robustness, will remain at 78% in 2009, the same as in 2008.

Bank Hapoalim released its Mishkan index on the state of home buyers, which found that their situation deteriorated in October. In plain English, that means it is harder for people to buy homes. The index factors in various economic parameters, including the average wage, the unemployment rate, average housing prices and the average rate of interest that mortgage banks charge. In October, the index sank by 0.8% compared with the month before. Bank Hapoalim ascribed the deterioration to the increase in housing prices.

On to some stocks: Shares of Africa Israel Investments powered ahead by nearly 10% after controlling shareholder Lev Leviev reached a final agreement with all the banks other than Hapoalim over his personal debts. He had reached an agreement with Hapoalim earlier. Leviev will be paying the banks NIS 400 million and will be adding collateral.

Kamor Motors finished the session unchanged after the company filed third-quarter financials that indicate it isn't benefiting much from the recovery in car sales. Kamor, which imports BMW cars and motorcycles, yesterday reported that its third-quarter revenues sank 8% against the parallel, to NIS 149 million. Operating profit tumbled 86% year over year, to NIS 1 million, and it posted a net loss of NIS 3.8 million. In the parallel quarter of 2008, it earned NIS 1.3 million.

Ituran Location & Control did rather better than expected in the third quarter of 2009, which might explain the 4.8% jump in its stock yesterday. The company reported a 9% drop in revenues for the third quarter, to $32 million, while operating profit fell 12.6%, to $6.5 million. But the company paid about half the amount of tax it had in the parallel quarter of 2008, and therefore, net profit sank by "only" 20%, to $4.6 million. The thing is that analysts had thought Ituran would report earnings of 19 cents per share, but it actually brought in 22 cents per share. However, in the parallel quarter of 2008, it earned 28 cents per share.

Software company Retalix gained 4.8% after reporting third-quarter revenues of $50 million, down 11% from the same period of 2008. Operating profit increased by 84%, to $3.5 million, and the company netted $4.2 million, or 20 cents per share - well over the $1.1 million, or 5 cents per share, it earned in the parallel quarter of 2008.

Knafaim, which owns the controlling interest in El Al Israel Airlines, has decided to step back at this stage from plans to float another group unit, Global Leasing, on the Tel Aviv Stock Exchange. It is however considering bringing in a partner that would buy 25% of Global Leasing, to give it the means to beef up its fleet. El Al stock gained 0.4% yesterday.