Market report / Tel Aviv stocks gain ground on global rally

Tel Aviv stocks gained ground yesterday, driven north by a rally in world markets. Or most of them. Chinese and Hong Kong stocks lost early gains to profit-takers, with worry over huge supplies of new shares from IPOs offsetting the impact of market-friendly central government measures on the mainland, Reuters reports.

Over here, total turnover picked up as players return from the Sukkot holiday. Time to put down the palm fronds and pick up the portfolio: trade volume rose to NIS 1.6 billion as the leading indexes advanced. The benchmark TA-25 index gained 0.9% to 1,038 points. The broader TA-100 index advanced by 0.1% to close at 968 points, as the relatively good news continues to arrive.

The third-quarter financial statements starting to show up on Wall Street are generally more upbeat than had been expected. The Bank of Israel released the minutes of its monetary deliberations, showing that the central bank chiefs believe Israel's gross domestic product will grow by 2.5% in 2010 (though unemployment will continue to climb, rising to an average of 8.3% next year, projects the central bank).

The Bank of Israel also said that during September, it bought $1.6 billion worth of foreign currency on the forex market. In August the central bank had bought $4 billion worth. The central bank also noted that in September, volatility in the shekel-dollar trading arena significantly abated compared with the preceding month.

The bottom line is that based on the macroeconomic data, the Bank of Israel heads think the economy will recover a lot faster than generally had been predicted. Global trade is gradually rebounding and so is domestic demand over here. The general sentiment has turned more optimistic and capital market indexes have been rising and rising.

Speaking of which, the Real Estate-15 index gained nearly 4% yesterday, driven in part by none other than Africa Israel Investments. Lev Leviev's real estate empire is still in the doghouse, but it hired a fresh face to broker a deal with its irate bondholders, who are owed NIS 7.5 billion. (Africa Israel owes the banks NIS 0.5 billion on top of that.) The broker is Amir Barnea, a highly respected professor, who is still at the stage of doing his homework, as he clarified in conversation with TheMarker this week.

HOT shares gained 3.7% on news that Cool Holdings, an investment vehicle belonging to businessman Patrik Drahi, is buying another 12.9% interest in the cable TV company, which increases his interest to 32.8%. Drahi had offered to pay NIS 35 per share, which means the acquisitions (from HOT shareholders) cost Cool NIS 343 million. HOT closed the trading day at exactly the price Drahi was offering. However, he may be disappointed: he'd set out to buy another 15% of the company.

Shares of Israel Discount Bank fell by 3%. Next week the bank means to raise NIS 200 million through an offering of two kinds of deferred notes for its superior tier-2 capital. In other news regarding the bank, the state has made up its mind: it will be selling its 25% minority stake in Discount in stages, in packages of 5% at a time. The Finance Ministry is still working out exactly how it means to sell these packages.

Shares of bio-medical holdings company Hadasit Bio Holdings jumped by 20% and some, on heavy turnover, after its portfolio company Tolerax said it will shortly commence tests of its therapy for graft versus host disease.