Market Report / Israel Chemicals Leads TASE Lower

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Tel Aviv shares ended the week lower, led by a big drop in Israel Chemicals shares on concerns about future profits.

The mood was also soured by news that Tel Aviv Stock Exchange Chairman Sam Bronfeld was stepping down, just a week after CEO Ester Levanon said would be leaving (sees story on page A8).

The benchmark TA-25 index fell 0.4% to finish at 1,229.24 points, although it succeeded in scratching out a weekly gain of 0.2%. The TA-100, weighed down by mid-cap stocks, lost 0.6% to 1,110.56, trimming its weekly gain to just 0.1%. Turnover was an unusually strong NIS 15.3 billion.

So far, the TA-25 is up 3.7% for the year, while the TA-100 has risen 5.9%.

The TA-Telecommunications index, which has rallied the last two weeks thanks mainly to Bezeq, has been by far the bourse's top performer for 2013. It gained 2.9% for the week, including a 0.3% advance Thursday, capping a 26% run-up since the start of the year. On Thursday, Bezeq traded heavily, with 126.9 million shares changing hands but finished unchanged. Cellcom Israel rose 3.1%, making it the top gainer among TA-100 shares.

ICL dropped 3.3% and was the most heavily traded stock on turnover of NIS 206.5 million after rival Potash Corporation of Saskatchewan signaled a worsening business environment for the fertilizer industry. Potash, the world's biggest producer and a shareholder in ICL, reported a lower-than-expected quarterly profit on Thursday and cut its outlook, citing lower prices for its crop nutrients.

Global equity markets and the dollar fell on Thursday after mixed results from blue-chip companies on both sides of the Atlantic and renewed concerns about the slowing pace of growth in China weighed on investor sentiment.

Global shares as measured by MSCI's all-country world index fell 0.4%, while the FTSEurofirst 300 index of top European shares closed down 0.5% to a provisional 1,208.57. On Wall Street, the Standard & Poor's 500 Index was down 0.3% at 1,680.93 while the Nasdaq Composite edged up 0.05% to 3,581.43 at about noon local time.

The dollar eased against the euro and the yen as investors found positive economic news in Europe, but a rise in U.S. business spending plans for a third straight month in June were not enough to drive the U.S. currency. Nevertheless, the dollar continued higher, adding close to 0.5% to a Bank of Israel rate of NIS 3.5940. The euro advanced as well, by 0.2% to NIS 4.7466.

"The Bank of Israel is closely following the shekel's strengthening and plans steps to stop significant appreciation," said Yossi Fraiman, CEO of Prico Risk Management & Investments. "We believe that the shekel is likely to move in a narrow range of 3.56 to 3.59 to the dollar in the short term."

Teva Pharmaceuticals dropped 0.7% on turnover of NIS 107.8 million after the company and the Swiss specialty chemicals maker Lonza said yesterday they were ending a generic drugs venture by mutual agreement, but Teva said it would continue the effort alone.

Tech shares paced the market lower on Thursday, with the Blue-Tech 50 index down 1.2% at 308.65. Among the biggest drops were by Silicon, which extended its losses with a 4.4% decline, and TowerJazz, which also lost 4.4%. Allot Communications declined 3.1%.

Mellanox, the semiconductor company on its wait out of TASE, dropped 2.2%, although its second-quarter profit statement beat analysts' forecasts. Nevertheless, the company reported that revenues dropped 326% from a year ago to $98.2 million while non-GAAP net income dropped to $13.8 million, or 30 cents a share, from $42.9 million, or 99 cents.

The Israel Corporation dropped 2.5%. The holding company said on Thursday that Idan Ofer, its controlling shareholder, is stepping down from the board of directors after serving for 14 years since his family bought control from the Eisenberg family. The departure was seen as being in line with Israel Corporation's plans to split itself into two and list part its operations as a separate holding company overseas.

Among gainers in Thursday's trading, food maker Strauss roser 3.1% and defense electonrics maker Elbit Systems added 1%.

With reporting by Reuters.

A conveyor belt deposits white potash into storage piles at ICL Fertilizer's Dead Sea Works, part of Israel Chemicals Group, on the Dead Sea.Credit: Bloomberg

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