Market Report / Insurers Advance in a Mixed Session

The Tel Aviv Stock Exchange ended a day of mixed trading, with only the insurance sector showing much movement either higher or lower.

The benchmark TA-25 index of blue chips ended down 0.2% at 1,202.88 points, its first decline in five sessions,on volume of NIS 952 million. However, the broader TA-100 index edged 0.1% higher to finish at 1,074.65.

Insurance stocks were higher, with the sectorial index up 1.9% to 1,243.99. Migdal was up 2.1% by the end of the session on relatively heavy trading of NIS 10.7 million, while Harel gained 2% and Clal Insurance rose 1.9%. In the bond market, the government's 10-year shekel bonds advanced 0.13% to a yield of 4.07%. Inflation-linked bonds due in nine years traded on a rise of 0.26% to a yield of 1.45%.

Dudi Reznick, who heads the macroeconomics desk at Leumi Capital Markets, said the local market was following the global trend of falling yields.

"We're waiting to see what will happen with the new government and if the budget will pass, as well as who will be the next governor of the Bank of Israel," he said.

"Meantime, we're seeing investors sitting on the fence. The Bank of Israel published its monthly report on foreign capital flows and we saw that they continued to buy government bonds last month of about NIS 300 million.”

European equities extended their losses in the afternoon yesterday, weighed down by a string of disappointments from the earnings season and tracking a move lower by U.S. stock futures. The Euro STOXX 50 Volatility Index, or VSTOXX, Europe’s widely used measure of investor risk aversion, hit a two-and-a-half-month high.
Fresh signs of political conflict in the euro zone also dented sentiment, with signs of disagreement between Germany and France over the euro exchange rate. The spokesman for German Chancellor Angela Merkel said the euro is not overvalued, thus potentially reducing the chances of any political intervention to curb an exchange rate that analysts say could start hurting corporate profits.

The FTSEurofirst 300 was down 0.4% at and the euro lost 0.5% against the U.S. dollar to trade at 1.3519.

Against the shekel, the euro also was fractionally lower at a Bank of Israel rate of NIS 4.998. The dollar gained 0.14% to NIS 3.696.

Protalix, the biotechnology company whose shares soared Tuesday on reports that it is readying to sell itself for a valuation that could reach $1 billion, ended 3.4% lower yesterday. The company confirmed after trading Tuesday that it had retained Citigroup to explore its options but declined to confirm details about a possible sale.

Steven Tepper of Harel Finance yesterday raised his target prices for Protalix to NIS 28.50 a share, assuming there is a 50% chance that the company will be sold for $800 million. Allot Communications reversed course to drop more than 6% to make it the biggest decliner among TA-100 stocks. Despite reporting a fourth-quarter 2012 loss and failing to meet analysts’ forecasts, Allot had spiked on Tuesday. Another big loser was the semiconductor company Mellanix, which ended 3.6% down. The U.S. law firm Holzer Holzer & Fiste said it was weighing a class action suit regarding Mellanox’s claims about demand for its InifiniBand product and on its competitive position.

Among gainers, Perion Network jumped 10.4% after it reported yesterday it had entered into a new search and distribution relationship with the Microsoft Corporation’s Bing search engine.