Market Report

IDB Holding Jumps 19% on Slow Sunday Session

Israeli stocks crept up, with biomed shares doing well; analyst counsels investors to take profit.

Tel Aviv shares ended Sunday with a slight positive bias, with technology and biomedical shares pacing the market. The dollar strengthened to above 3.50 shekels on Friday. But the story of the day was the IDB group: shares of the company at the top of the pyramid jumped 19% after a court ruled on the group's sale.

The benchmark TA-25 index started the session with steeper gains but quickly ran out of steam and spent most of the session under water, before finally recovering to end at 1,323.43 points, a gain of 0.07% for the day.

The broader TA-100 did better, adding almost 0.3% to finish at 1,208.73.

Turnover was very thin, even by the standards of a Sunday, with just 620.4 million shekels in shares changing hands.

The day was marked by two dramatic developments. In the early afternoon Tel Aviv District Judge Eitan Orenstein ordered IDB Holding Corporation to be transferred to the Elsztain-Ben-Moshe group. Shares of IDB jumped 18.9% before trading was suspended ahead of the news, while its Series Gimmel bonds due in June added 1.76%.

Trading in the shares of the Leviathan gas field partners − Avner, Delek Drilling and Ratio − was suspended close to the end of trading pending a critical announcement. After the Tel Aviv Stock Exchange was closed for the day the three said they had signed an agreement to supply gas to the Palestine Power Generation Company.

U.S. stocks ended a volatile session mostly flat on Friday as investors digested comments from Federal Reserve officials that raised questions about how quickly the central bank will end its stimulus program. The Dow Jones industrial average climbed 0.2% at 16,469.99, but the Nasdaq Composite Index was down 0.3% at 4,131.91.

European stocks rose, with Telecom Italia surging on speculation of a sale of its Brazilian wireless unit. The FTSEurofirst 300 index of top European shares ended 0.5% higher at 1,312.15 points.

“In the near term, the Israeli markets will be following its Uncle Sam overseas,” said Erez Tzadok of Aviv Mutual Funds. “The United States is waiting for a correction and anything bearish could set it off, whether it‘s the start of corporate earnings, employment data or an announcement by the Fed accelerating the wind-down of its bond-buying program.”

Tzadok said it was impossible to time when the correction would occur, but recommended that investors whose equity portfolios improved in the 2013 rally use the opportunity now to take profits.

In local foreign currency trading, the dollar pushed past 3.50 shekels on Friday, thanks to a second day of Bank of Israel intervention. The greenback was fixed at a Bank of Israel rate of 3.5046 after appreciating 0.523%. The euro advanced as well, adding close to 0.1% to 4.7775.

Tech and biomed shares advanced, led by Compugen’s 9.8% jump. Opko Health added 2%, holding company Clal Biotechnology rose 2.5%, Mazor Robotics climbed 3.6%, and Pluristem and PhotoMedex both added 3%. PhotoMedex revised its estimated fourth-quarter 2013 revenues higher last week.

Perion rallied 6.1% after announcing on Thursday that it had completed its merger with a unit of closely held Conduit.

Among the biggest losers of the session, Elbit Systems declined 1.8% and the biotech company Protalix lost 1.5%.

Bank shares were generally lower, with Hapoalim down 0.8% on turnover of 38.7 million shekels, making it the most active of the day. Israel Discount Bank ended down 0.8%, but Mizrahi Tefahot Bank rose 1.1%.

Reuters contributed to this report.

Daniel Bar-On
Bloomberg