Market Report / Israel Chemicals Pulls Tel Aviv Stock Exchange Lower

Fears increase that Jerusalem will use its golden share to prevent a takeover by Canada's PotashCorp.

Israel Chemicals heavily weighed on the Tel Aviv Stock Exchange Thursday as investors sold when Finance Minister Yair Lapid said he opposed selling the company to Canada's Potash Corporation of Saskatchewan.

ICL shares tumbled 3.2% on turnover of NIS 168.7 million, accounting for nearly a fifth of the day's volume and extending its 3.9% fall the day before. ICL's parent company, Idan Ofer's The Israel Corporation, dropped 2.1% on turnover of NIS 30.1 million.

PotashCorp has sought to boost its minority stake in ICL but can't act unless the government agrees – Jerusalem controls a so-called golden share that gives it veto power. But on Wednesday the treasury said Lapid planned to wage a more assertive policy to preserve Israel's natural resources.

ICL more than counterbalanced gains on Wall Street overnight to leave the TASE's benchmark TA-25 index down 0.2% for the day at 12,230.12 points. Just over NIS 1 billion in shares changed hands. The broader TA-100 was also off 0.2% to finish at 1,096.43.

For the week, the TA-25 was unchanged, leaving its year-to-date rise at 3.8%, while the TA-100 edged up 0.2% to show an advance of 4.5% this year. The week's star performance was the TA-Communications index, which gained 7.6%, bringing its gain for the year to 12.7%.

European shares rose for the fourth straight day as bumper gains for asset managers benefiting from this year's equity rally lifted financial stocks. The pan-European FTSEurofirst 300 index provisionally closed up 0.6% at 1,193.40 points, pushing the index back toward a four-and-a-half-year peak of 1,209.05 points reached last month.

On Wall Street, the Dow and the S&P 500 climbed to fresh all-time intraday highs in late morning trade after data showed jobless claims had dropped more than expected. Technology stocks were the day's underperformers, with tech blue chips such as Microsoft and Hewlett-Packard sharply lower after an industry report showed that shipments of personal computers had fallen significantly in the first quarter.

The Dow Jones industrial average was up 0.4% at 14,859.06, while the S&P 500 also gained 0.4%, to1,593.58.

In currency markets, the euro climbed to a six-week high versus the dollar as Italy's three-year debt costs fell to their lowest level since January at an auction. Against the shekel, the greenback slipped 0.3% to a Bank of Israel rate of NIS 3.6230, while the euro lost 0.1% to NIS 4.7550.

FXCM said Thursday the Bank of Israel's intervention this week stemmed a further appreciation of the shekel, but warned that strong drivers remained for the trend to resume, including relatively high domestic interest rates and the start of natural gas production at the Tamar field.

"Fischer's intervention has established a psychological floor of NIS 3.6," the currency trading house said. "It is likely that in the next few days speculators will test that again."

Energy shares were lower, with the TA-Oil and Gas index falling 0.9% to 1,159.99 amid concerns that the issue of exports and tax on natural gas is about to be reopened. Lapid made comments this week to that effect. Noble Energy CEO Charles Davidson said that in such a case he would have to reconsider his company's operations in Israel. 

Shares of the partners of the Texas-based company in the Leviathan field were all lower, with Delek Drilling off 1.2%, Avner down 0.7% and Ratio off 1.5%.

Eliezer Fishman's property holding company Jerusalem Economy Corporation advanced just over 1% after it said subsidiaries in France had won consent from a French court for a six-month safeguard to negotiate repayment terms on loans due in July.

Tech shares paced the TA-100 lower, with TowerJazz finishing down 4.1%, Given Imaging off 3.3%, and Ceragon and Allot Communications both down 2.8%.

Clal Biotechnology added 0.2% ­– its subsidiary Gamida Cell, a developer of stem cell therapy products, plans to meet with the U.S. Food and Drug Administration and European Medicines Agency in the coming months to discuss approval for its StemEx treatment.

With reporting by Reuters.

Ofer Vaknin