Market Report / Rockets in North Send TASE Down at End of Trading Day

TA-25 index nudges down 0.16%, TA-100 index closes down 0.18%.

Thursday’s session on the Tel Aviv Stock Exchange closed down slightly, as reports came in of rocket fire in northern Israel. The benchmark TA-25 index closed down 0.16%, at 1,201.28 points, while the broader TA-100 index declined 0.18%, closing at 1,095.28 points.

The Banks-5 index slumped 0.2%, but the Real Estate-15 index bucked the negative trend and rose 0.45%. Government bonds also finished the day lower, with index-linked 10-year bonds declining by up to 0.15 % and unlinked 1-year bonds by up to 0.3%.

Shares of Frutarom Industries slumped 2.1% Thursday, one day after the flavoring and specialty ingredient company reported a 30% increase in net profit for the quarter, to $17.6 million from $13.5 million in the parallel quarter of last year, due to acquisitions and the launch of products with higher margins.

Gilat Satellite Networks sold its Spacenet subsidiary to Oklahoma-based Sagenet for $16 million. The sale, which is subject to regulatory approval, is expected to close within three months. Gilat's shares fell nearly 0.4% Thursday.

MediWound, a wound care company in which Clal Biotechnology Industries has a majority stake, completed preparations this week to end its alliance with Teva Pharmaceutical Industries, raising $20 million in a stock offering to shareholders. All shareholders except for Teva took part in the offering. The offering provides for a cash injection of $15.4 million and the conversion of $4.6 million in loans into shares and reflects a company valuation of $200 million. Clal Biotech shares lost 0.8% Thursday.

On Wednesday the Bank of Israel issued restrictions on mortgage loans in what it said was a measure aimed at reducing the risk for borrowers and for the system as a whole. The new guidelines bar mortgages whose monthly payments exceed 50% of the borrower’s monthly income. "On its face, there is nothing far-reaching about [the guidelines],” said Nir Peleg, the CEO of Kryptonite, which calls itself an alternative hedge fund management company.

“Today, too, the banks restricted the size of their mortgage loans in accordance with the quality of the borrowers and their ability to repay, but the continuing trend of stiffening the conditions for issuing mortgages affects the desire and feasibility of [investing in] real estate,” Peleg said, adding, “In today's investment world, in the absence of investment alternatives and a low-interest environment, reducing the feasibility of a main investment channel -real estate - will strengthen the alternative of investing in the stock market."

Overseas, trading was halted on the Nasdaq stock exchange Thursday due to technical problems. All traffic through Nasdaq stopped at 12:14 P.M. New York time, the exchange said on its website, adding that trading in all Nasdaq-listed shares would be halted until further notice. The U.S. Securities and Exchange Commission said it was monitoring the situation, while Nasdaq urged securities firms to reroute their trades.

European stocks, meanwhile, received a boost Thursday as new economic data indicated a recovery in the euro zone was taking hold that could lift earnings through the end of the year.

European shares enjoyed their best session since early August, rebounding 11.32 points, or 0.9%, to 1,219.03 points, after declines in the first three trading sessions of the week. The Stoxx 600 rose 1%, to 303.55 points, after data showed business activity across the euro zone picked up more quickly than expected in August.

With reporting from Reuters.

Bloomberg