TASE shed almost half its value in 2008

The story on the Tel Aviv Stock Exchange was not just another day of big losses, following the lead of world markets yesterday, and big Wall Street a day earlier. U.S. markets continued their plunge yesterday with both the Dow Jones and Nasdaq losing over 5% and the S&P 500 down over 6%.

Trading ended almost an hour late at 6:25 P.M. after a huge drop of over 8% for the TA-25 late in the day. There had been a sell order worth NIS 35.5 million for the entire index and trading was halted (see box).

At the end of the day the TA-25 was down "only" 4.9% at 633 points. For the week the blue-chip index was down 7.8%. The TA-100 lost 5.3% yesterday to close at 554 points, and was off 7% for the week. The TelTech-15 dropped 9%. Turnover was NIS 1.5 billion.

Besides troubles all over the globe and in particular bad economic news from the United States, Israeli markets reflected pessimism over the treasury's economic plan announced a day earlier, and threats of a general strike over the Histadrut labor federation's plan because the plan does not include protection for pension savings. In addition, the Bank of Israel cut its economic growth forecast for 2009 almost in half.

A year and a half since the beginning of the world financial crisis the TA-25 is now back where its was in February 2005. The TA-100 has dropped to where it was four years ago - after losing half its value since the beginning of the year.

The Real Estate-15 fell 6.5% after Africa Israel released an earnings warning, saying it expected a loss between NIS 1.7 billion and NIS 2 billion for the third quarter - the largest quarterly loss ever for an Israeli firm. The share fell 1% after actually gaining slightly earlier in the day. Africa Israel Properties fell 4% on news it would lose between NIS 105 and NIS 125 million for the quarter.

Israel Chemicals tumbled another 12% yesterday after a number of investment banks cut their recommendations and its Russian potash competitor Uralkali announced an earnings warning. IBI lowered its target price for Chemicals from NIS 50 to NIS 29, with a Neutral rating. Also, Deutsche Bank lowered the stock to Neutral. The Israel Corporation fell 1.1%.

Bank Leumi, which owns 18% of Israel Chemicals, fell 6% yesterday, and Bank Hapoalim was down 2%.

VeriFone saw half its value evaporate yesterday after it halved its fourth-quarter profit forecasts.

Koor plunged 23% as Credit Suisse fell another 11% yesterday; Koor has now lost 30% of its NIS 4.3 billion investment in the Swiss bank. Makhteshim Agan fell 3.7%.

One of the few shares to have a good day was Amot, up 12% after announcing dividends of NIS 440 million.

Bond markets reacted relatively mildly to the sharp fall in stocks, and bond trading ended normally at 5:25 P.M. The TelBond-20 was off 0.1%, the TelBond-40 was down 1.2%, and the TelBond-60 lost 0.5%.