Market Report

Israeli Stocks Rise on Delay in Syria Attack

Some think a U.S. attack on Syria would be precisely the time to get into stocks.

Israeli shares and bonds rose yesterday as the United States held back from an attack on Syria.

But analysts warned of stormy days ahead for the Tel Aviv Stock Exchange.

"We believe September will be a volatile month mainly because of the situation in Syria and the rollback of the stimulus program in the United States," said Assaf Shaul, deputy CEO of Alpha Platinum Mutual Funds, after U.S. President Barack Obama said he would not act in Syria until Congress gives him the go-ahead. That is highly unlikely to happen before U.S. lawmakers return from recess on September 9.

A U.S. attack, which could spur a Syrian attack on Israel, could depress shares but not for long, said Shaul. "We think an attack on Syria would be a good time to get into stocks," he suggested.

The TA-25 index closed 0.6% higher at 1,185.11 points while the broader TA-100 advanced 0.3% to 1,085.23 as turnover reached a fairly high NIS 587.5 million.
The biggest gainers were the sectors that sustained the heaviest losses last week when war fever was at its peak. The TA-Insurance index rose 1.6% to 1,374.63 points, paced by Phoenix's 2.5% advance, Hare's gain of 2.2% and 1.9% increase by Clal Insurance.

The TA-Oil and Gas index ended 1.7% higher at 1,201.87. Shemen Oil & Gas jumped 16.9% shortly before it is due to wind up exploratory work on its Shemen license. The Modiin partnership, which holds rights to an adjacent license, gained 11.6%.

Not knowing Obama planned to delay any Syrian operation, U.S. and European markets fell on Friday in expectations that an attack was imminent. The Dow Jones industrial average closed 0.2% down at 14,810.31. The Standard & Poor's 500 Index lost 0.3% at 1,632.97 and the Nasdaq Composite Index ended down 0.8% at 3,589.87, completing August with its worst monthly showing in over a year. MSCI's world equity index, which tracks shares in 45 countries, fell 0.3% on Friday, closing out its worst week since June 21. European shares felt the pressure from a drop in oil stocks with the broader STOXX Europe 600 index down 0.9%, taking weekly losses to around 2.4 percent.

In foreign currency trading on Friday, the dollar and the euro both lost ground against the shekel. The greenback weakened 0.44% to a Bank of Israel rate of NIS 3.6140 while the euro lost 0.6% to NIS 4.7838.

Bond markets also advanced on the TASE yesterday. Government 10-year fixed-income bonds advanced 0.36%, which trimmed their yields to 3.97%. 10-year inflation-index debt rose 0.25%, bringing the yield down to 1.83%. The Tel Bond 20,40 and 60 indices rose as much as 0.45%.

S&P Maalot raised the credit outlook for the Nochi Dankner's holding company Discount Investment Corporation to Stable from Negative, citing "improved liquidity and reduced leveraging" in expectations of the sale of Credit Suisse shares by its Koor unit. Discount's Series Tet bonds rose 1.1% while its shares closed 4.6% higher.

Two other corporate bonds sank. Israel Land Development Company's Series 13 debt dropped 1.73%, boosting its yield to 9.6%. Israel Chemicals' Series Gimmel bonds lost 1.2% to a yield of 2.91%.

Ilan Assayan