Market Report / Shares Trade Quietly as Dollar Rebounds

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Shares on the Tel Aviv Stock Exchange rose in quiet trading Monday, with the telecommunication sector providing about the only excitement for the day. The dollar rebounded against the shekel.

The TA-25 index of blue chips closed at 1,206.86 points, a gain of 0.3% while the TA-100 index nudged up 0.1% to 1,099.09 points. Turnover was just NIS 843 million, as many traders are on vacation. The two most active shares – Teva Pharmaceutical Industries and Israel Chemicals, with a combined turnover of NIS 142 million - barely moved. Teva fell 0.9% and ICL ended unchanged.

The TA-Telecommunications index rose 1.66% to 663.27 points, with Bezeq adding 1.9% in heavy trading and Cellcom Israel adding 1.8%.

Global equity markets were flat on Monday, with safe-haven assets such as the U.S. dollar and gold making gains as signs of economic recovery pointed to future cuts in central bank stimulus.

Late Monday morning New-York time, the Dow Jones industrial average was down 0.03% at 15,421.48 points. In Europe, the FTSEurofirst 300 was trading slighter higher at 1,229.72 by mid-afternoon in London, while the euro zone’s blue-chip Euro STOXX 50 also traded flat at 2,825.74 points.

In foreign currency trading, the dollar advanced 0.43% against the shekel to a Bank of Israel rate of NIS 3.5450. The dollar rallied globally, with expectations rising that strong U.S. data will prompt the Federal Reserve to act sooner rather than later to pare back its monthly purchase of about $85 billion in bonds. The euro, however, was down 0.2% to NIS 4.7131.

“Speculators are continuing to explain the uncertainty at the Bank of Israel after the governor affair, which created headlines around the world,” said forex trader Atrade in a comment Monday, referring to the successive withdrawals of Jacob Frenkl and Leo Leiderman as candidates for the top job at Israel’s central bank. “The dollar succeeded to recover a little … but the potential remains higher for further declines. Breaking below NIS 3.5 will lead to a drop below NIS 3.45,” Atrade said.

In TASE equities trading the biggest losers for the day were energy company Ratio, which fell 3.7% by the finish; biotech company Protalix, which lost 3.1%, and automotive security technology maker Ituran, which fell 2%.

Ceragon posted the biggest advance among TA-100 index stocks on Monday, rising 6.6% by close. The maker of cellular backhaul equipment posted a loss of 15 cents a share in the second quarter as revenue tumbled 24% from a year ago to $90.1 million. But the loss was narrower than analysts’ average estimate of 17 cents, and CEO Ira Palti said he saw “signs of improvement in the business environment” while books “increased significantly” in the quarter.

H. Mer, which build wireless network infrastructure, jumped more than 15% after reporting that the FIMI private equity fund was negotiating to buy a 30% stake for NIS 95 million. The company also said it planned a dividend of NIS 10.14 a share, or an aggregate NIS 70 million.

Among other tech shares posting gains, TowerJazz added an additional 2.14% after reporting stunning second-quarter earnings last week as well as a 15% increase in design wins in the first half over the same period of 2012, a precursor for future sales. Online translation company Babylon advanced 3.5%.

Reuters contributed to this report.

Israel chemicals plant in HaifaCredit: Hagai Fried