Market Report / Israel Chem Trading Surges

The TA-25 gained 0.3% to 1,193.01 while the broader TA-100 had gained 0.4% to 1,060.61. Turnover was NIS 1.12 billion.

Israel Chemicals lifted the Tel Aviv Stock Exchange higher a day before the election as around NIS 241 million worth of its shares changed hands, more than a fifth of the market’s turnover for the day. ICL closed 1.3% higher.

Market sources attributed the move to a single foreign investment bank that acted after the company signed a series of major contracts with Chinese customers for potash. The same bank also traded heavily in shares of The Israel Corporation, ICL’s parent company, which rose 1.7% on turnover of nearly NIS 28 million.

The election itself was no cause for joy, with the benchmark TA-25 index lower by as much as 1.5% much of the session. But by the end of the day, the TA-25 was up 0.3% to 1,193.01 while the broader TA-100 had gained 0.4% to 1,060.61. Turnover was NIS 1.12 billion.

The shekel weakened, losing nearly 0.76% against the dollar to a Bank of Israel rate of NIS 3.738 and 0.1% against the euro to NIS 4.976.

“The elections results are likely to weigh on the shekel if an unstable coalition appears to be in the offing,” currency trader FXCM Israel said in a comment Monday. “Although polls confidently predict Benjamin Netanyahu will be the next prime minister, the division of the seats [in the Knesset] present him with difficulties in forming a stable coalition that will enable him to lead a responsible economic policy.”

Against what appeared to be negative sentiment in the equities and foreign currency markets, the treasury successfully sold two debt issues on Monday. In the first auction, yields were set at 1.46% and the price at 103.16 for 10-year, inflation-linked shekel bonds. In the second, 10-year, unlinked shekel bonds were sold at 103.16 and yields at 4.05%.

“These prices point to optimism among investors who are expecting the government to be formed to know how to deal with fiscal matters,” said Dudi Reznick, trading room manager at Bank Leumi.

The corporate sector was also active Monday in raising debt. Mizrahi-Tefahot Bank sold NIS 1.5 billion in bonds, Strauss Group sold NIS 300 million, real estate company Nitsba NIS 200 million and Industrial Buildings some NIS 160 million in two issues. Monday’s fund-raising brought total new bond issues for January to about NIS 5 billion.

Meanwhile, European shares inched toward two-year highs as a political attempt to break a budget impasse in the United States and expectations of aggressive Japanese stimulus bolstered the appetite for shares. By late afternoon London’s FTSE 100, Paris’ CAC-40 and Frankfurt’s DAX were all slightly higher, leaving the pan-European FTSEurofirst 300 near a two-year high.

In Tel Aviv, Bezeq ended 1.6% higher after falling sharply on Monday. News that CEO Avi Gabbay was preparing to leave after six years met with some relief by investors after the media reported that Stella Hendler, who recently stepped down as chairwoman at Bezeq rival HOT, would probably be offered the job.

Harel Investments rose 1.4% and Blue Square Real Estate 1.3% after the insurance company said it would buy half the Comverse office complex project in Ra’anana from Blue Square for NIS 143 million.

With reporting by Reuters

Guy Raivitz