Border Tensions Worry TASE

Vadim Sviderski
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Vadim Sviderski

The Tel Aviv Stock Exchange ended lower again on Monday amid growing nervousness over fighting on the borders with Syria and the Gaza Strip.

The TA-25 index of blue chips finished 0.7% lower at 1,199.41 while the TA-100 dropped 0.6% to 1,061.38. Turnover was a skimpy NIS 807 million. The Real Estate-15 index dropped 0.8% to 283.89 and the TA-Insurance index by 1% to 1,073.42.

The TA-Banking index paced Monday's slump, declining 1.7% to 1,062.88. Bank Hapoalim led the drop, shedding 2.3% as NIS 80.9 million in shares changed hands, making it the volume leader. .

An errant mortar shell fired from Syria landed near an Israeli town in the Golan Heights on Monday in the second such incident in two days. It was the sixth time in just over a week that the infighting from Syria has spilled into Israel. In the south, missile fire from the Gaza Strip continued for a fourth straight day, with Prime Minister Benjamin Netanyahu convening foreign ambassadors in what appeared to be an attempt to preempt international censure should Israel decide to attack Gaza.

The border tensions helped strengthen the dollar against the shekel. The greenback gained nearly 0.8% to a Bank of Israel representative rate of 3.927. The euro also gained ground against the shekel, advancing 0.6% to NIS 4.994.

In spite of the political jitters now weighing on the market, a survey of Israeli institutional investors taken by the U.S. investment bank Oppenheimer showed they were keen on equities. About 62% predicted stocks would turn in the best performance among various investment channels, up from 52% a year ago. Corporate bonds were rated best by 19%, government bonds by 9% and commodities by 4%.

"The Tel Aviv bourse has the potential to gain 20% to 25% in 2013 so long as the recovery of the primary market in corporate bonds continues and geopolitical risks don't come to fruition, nor does the risk of a global recession," said Zvi Stepak, chairman of Meitav Investment House.

Matrix fell 2.4% after it reported a drop in third-quarter profit to NIS 21 million from NIS 22.2 million a year ago, even as revenue climbed 10% to NIS 478 million.

IDB Holding Corporation edged lower by less than 0.1% but the price of its Series Dalet bonds rose 1.9%. A day after Yossi Maiman turned over control of his Ampal-American Israel Corporation to bondholders after failing to reach a settlement, Hagai Badash, CEO of Psagot Investment House, warned the same could happen to Nochi Dankner's company.

"As a bondholder and a representative of the creditors, I will not hesitate to act by all means at my disposal to protect the rights of bondholders, including turning to the court and seeking a wind-up of the company," Badash said.

Technology shares ran against the market trend, with the TA-Technology index adding 0.7% to end on Monday at 342.58. Among the biggest gainers were Retalix, which gained 5.2% two days before it was due to report third-quarter results; Gilat, up 2.2%; Liveperson, up 1.9%; and Mellanox, up 1.4% on heavy turnover of NIS 28.3 million.

Orbit, the satellite-equipment maker, rallied for a second day after it announced Sunday it had won a $150 million, five-year contract to supply equipment and services to an unnamed company. The shares climbed nearly 25% on Monday after advancing nearly 40% the day before.

Reuters contributed to this report.

The Tel Aviv Stock Exchange. Credit: Ofer Vaknin