Market report / Tel Aviv stocks wilt with world markets

Tel Aviv shares ended slightly lower yesterday, in keeping with the trend around the world.

The benchmark TA-25 index lost 0.2% to close at 1,066 points and the broader TA-100 index fell 0.3% to close at 1,008 points. The Banks-5 index lost 0.7%. Total turnover was above average at NIS 1.9 billion.

As of the Tel Aviv closing, U.S. futures were indicating a flat session. Almost everywhere the benchmark indexes were taking a breather, though China bucked the trend yet again. Shanghai's key stock index rose 0.6% to a three-month closing high as investors bought energy stocks on optimism over rising demand for power to fuel the country's economic recovery, Reuters reported.

Elsewhere the mood was downbeat: European shares lost ground for the second day in a row as gains in mining stocks failed to offset weak U.S. macroeconomic data that showed an unexpected fall in housing starts in October. Construction of new homes in the United States dropped by 10.6% to a seasonally adjusted annual rate of 529,000 units, the lowest level in six months, a government report said.

Across the briny, British shares retreated, led south by food retailers and tobacco companies. Japan's Nikkei hit a six-week closing low as concerns about banks and property firms joined a rush to tap the equity market for capital.

Back at home, we find Africa Israel Investments and its controlling shareholder Lev Leviev back in the headlines. Africa Israel lost 6.7% after it appeared that the company's debt arrangement with bondholders may be unraveling. Leviev himself is the one who set a cat among the pigeons by agreeing to terms, in his personal arrangement with the banks (meaning, the arrangement reached by his private company Memorand), that contradict the terms of his arrangement with bondholders.

Sano shares gained 2.3% after the detergents company announced the acquisition of Careline brands from Emilia Development, whose shares gained 1.7%. Sano bought the intellectual property and licensing associated with Careline for NIS 85 million. Sano has undertaken to continue manufacturing Careline products - currently made at a plant in Yeruham - for five years.

Africa Israel Residences gained 2% even though the company reported a 70% slide in net profit for the third quarter. The company explained that it now uses international accounting rules, rather than Israeli standards, and can only recognize revenue from selling an apartment when its new owners take possession. The upshot was that the company could only recognize revenue from selling 96 apartments in the third quarter, compared with 294 a year earlier. The company's revenues sank by 60% to NIS 85 million.

Elbit Systems lost 1.6% even though its quarterly report was a fine one. The defense systems maker said its backlog was steady at $5 billion. Revenues increased 9% to $733 million, but operating profit shrank by 16% to $64.5 million. Net profit grew by 63% to $58.3 million nonetheless.

012 Smile shares ended just under the flatline after the company showed an 11% increase in third-quarter operating profit to NIS 37 million and a 17% increase in net profit to NIS 294 million. The company also reported that it had signed up 16,000 people to its wireline phone services during the quarter.

The HOT cable TV company saw its stock sink 6.4% after it admitted to losing 2,000 subscribers during the quarter. It didn't say so, but its archrival, the Yes satellite television broadcast company, recruited 5,000 during the quarter. On the flip side, HOT said its revenues from phone and Internet services were growing nicely.

Property & Building, an IDB group company, gained 1.3% after announcing that it may contend to buy a chunk of the Tel Aviv wholesale market, a 55-dunam piece of prime land in the heart of the city on Carlebach Street. The Tnuva fresh-foods cooperative owns 60% of the land.

This article includes reporting by Reuters.