Market Report

TA-25 Ends 2013 With Rise of 12.1%; Dollar Weakens

Investment house predicts another strong year for TASE with shares still attractively priced.

The Tel Aviv Stock Exchange started the new year on the right foot, posting a strong rise even as the absence of foreign investors made for a day of light trading. The benchmark TA-25 index finished the session up 0.8% at 1,339.62 points while the broader TA-100 advanced nearly 1% to 1,219.32. With foreigners on New Year’s holiday throughout most of the world, turnover was 988.8 million shekels. Biotechnology and energy shares paced the market higher.

On the first day of 2014, the TASE was virtually alone among major world stock markets trading. There was no local foreign currency trading.

Psagot Investment House said in a report released on Wednesday that the TASE was poised for another strong year. Even after the TA-25 showed a rise of 12% in 2013 and the TA-100 a 15% gain, shares remained attractively priced, it said.

“Even though the U.S. Federal Reserve is scaling back its quantities expansion in the United States, the positive macro-economic environment is more than compensating,” Psagot said, recommending that investors balance their portfolios evenly between domestic and foreign equities.

Psagot forecast Israeli economic growth would be somewhere between 3% and 3.5% and inflation at 2%, with the Bank of Israel’s base lending rate remaining unchanged at 1%.

Stocks closed 2013 by setting record highs and world equity markets ended at six-year peaks on Tuesday, while benchmark bond yields posted their first annual rise since 2009. Ultra-easy monetary policies by the Fed and other central banks and an improving economic outlook worldwide led to a stellar year for stocks.

The S&P 500 benchmark ended its best year since 1997 with a 29% gain. More than 450 of the stocks in the index ended the year higher, the most since S&P started collecting that data in 1980.

Japan’s Nikkei 225 ended 2013 up 56.7 % and Europe’s FTSE EuroFirst 300 gained 16%. MSCI’s all-country world equity index was at 408.33, its highest level since late 2007 and up 20% for the year.

The TA-Biomed index jumped 2.5% to 1,039.26, led by a 6.6% rise for the holding company Clal Biotechnologies. Clal’s 54%-owned D-Pharm unit reported on Wednesday that it had begun enrollment of first patients into a Phase II study of THR-18 in stroke patients treated with tissue plasminogen activator.

 Other biotech stocks to rally included Pluristem, which advanced 5.1%, Compugen ahead 4.8% and Kamada up 4.4%.

Energy stocks gained on a report that Australia’s Woodside was prepared to raise its offer to buy a 30% stake in the Leviathan gas field. The three Leviathan partners also rose sharply – Avner by 2.,3%, Delek Drilling by 2.7% and Ratio by 2.9%. Ratio was the most heavily traded share of the day, with 45.7 million shares changing hands.

Lev Leviev’s holding company Africa Israel Investments was up 5.4% after its AFI Development unit reported it had sold a Russia property. IBI Israel Brokerage & Investments said the sale would generate $65 million in cash.

In the fixed-income market, the Tel-Bond 20, 40 and 60 indices fell as much as 0.17%, Discount Investment Corporation’s Series Dalet bonds dropped 0.3% after they were removed from the Tel-Bond indices. However, its shares closed 6.5% higher ahead of a planned bond offering aimed at swapping short-term for long-term debt.

Elbit Imaging’s Series Dalet bonds rose 4.7% after a court approved a 2.5 billion-shekel debt -restructuring for the holding company.

Reuters contributed to this report.

Bloomberg