Market Report / Babylon Plummets, Telecom Stocks Rally in Quiet Trading

Dollar sinks below NIS 3.60, prompting speculation of Bank of Israel intervention.

The Tel Aviv Stock Exchange held steady on Monday, with telecoms shares rallying while online translation company Babylon plummeted.

The TA-25 benchmark index of blue chip stocks escaped from negative territory just before the closing bell, ending up 0.01% to finish the day at 1,196.86 points. The broader TA-100 edged 0.06% higher to 1,073.90. Turnover was just NIS 713.6 million.

Babylon plunged 6%, the biggest decliner among TA-100 stocks, on turnover of NIS 35.5 million. The company posted sharply higher quarterly net profit and revenue on Sunday after the market had closed, but Babylon also revealed that CEO Alon Carmeli plans to retire. Carmeli said that after 11 years in the company – the last five years as CEO – he plans to retire as soon as a successor is found but will continue to serve on the board.

Meanwhile, the telecom sectors rose sharply, with the TA-Communications index rising 2.4% to 569.80. The rise was led by Partner Communications, which advanced 4.2%, and Cellcom Israel, which added 2.5% in heavy trading. Sapcecom, the operator of Amos satellites, advanced 2.2%.

Stock indexes advanced along with the euro on Monday as the formation of a government in Italy eased uncertainty about the political future for the euro zone country.The markets were also focused on prospects of an extension of the current loose monetary policies from the U.S. Federal Reserve and the European Central Bank this week.

MSCI's world equity index was up 0.6%, while the broad FTSE Eurofirst 300 index of top European shares was up 0.5%, led higher by Milan's FTSE MIB, which rose 1.8%. On Wall Street, the Standard & Poor's 500 Indexrose 0.55% in late morning to 1,590.92 while the Nasdaq Composite Index gained 0.9% to 3,307.91.

The euro rose 0.5% to $1.3095, with hedge funds cited among key buyers.In local foreign currency trading the dollar dropped below NIS 3.60 – a rate many traders and economists say is likely to prompt another round of dollar-buying by the Bank of Israel – losing 0.33% to reach a Bank of Israel rate of NIS 3.5920. The euro held steady at NIS 4.7002.

"The pressure on the dollar is increasing," said currency trader FXCM Monday. "The Bank of Israel will need to intervene in a big way both in order to bring about a real change in the rate and in order to send a stronger message to speculators."

On the TASE, Israel Chemicals continued its descent, but on Monday lost only 0.9% in brisk turnover of NIS 48.9 million. ICL shares are still reeling from last Thursday's news that Potash Corporation of Saskatchewan had pulled back from its effort to gain control of the company. TheMarker reported on Monday that ICL is now engaged in a global search for new sources of potash to replace dwindling domestic reserves and keep its downstream Performance Products division supplied with raw material.

Protalix ended 2.5% lower, despite getting approval from Mexican and Chilean regulators to market its UPLYSO treatment for Gaucher's disease. Other big losers in the TASE Monday included Avgol, a maker of nonwoven materials, which sunk 2.3%; geothermal-power company Ormat, down 2.1%; and biotech firm Kamada, which lost 1.9%.

On the gainers' side of the ledger, real estate companies Nitzba and Aloni Hertz both ended 2.5% higher, helping to lift the TA-Real Estate 15 index up 0.9% to 334.41 points. Delek Automotive finished 2.3% higher.

Reuters contributed to this report.

David Bachar