Market Report

TASE Down Slightly Against Backdrop of Declines Overseas

Shares of Globe Exploration down 49% after Ofek-2 well comes up dry.

Shares opened mixed on the Tel Aviv Stock Exchange Wednesday before following overseas markets decidedly downward. After dipping 0.8% at one point during the session, the benchmark TA-25 index recovered to close down just 0.06%, at 1,363.86 points. The broader TA-100 index closed down 0.33%, at 1,218.50 points.

The share price of Globe Exploration plummeted 49% Wednesday, after plunging 52.7% on Tuesday on the petroleum exploration company’s announcement Tuesday morning that production test drilling at its Ofek 2 site, near Ben-Gurion International Airport, had come up dry. The company said the drilling data will be submitted for further analysis, but apparently that wasn’t enough to buoy the confidence of investors. Globe Exploration said it would seek financing for more production tests and might bring in additional partners.

In other trading, shares of Priortech, which is engaged in the electronics sector, fell 5.13% Wednesday after soaring 111% on Tuesday. Shares of Priortech subsidiary Camtek, a dual-listed manufacturer of automated inspection systems for the printed circuit board industry, have soared some 200% since November 20, but yesterday the share price fell 6.3%.

The Banks-5 index closed down 0.1%. Israel Discount Bank shares declined 1% Wednesday, for a drop of 5% Wednesday and Tuesday combined, after controlling shareholder the Bronfman-Schron group began selling shares on Monday. The TASE technology index closed down 0.6%, while the insurance index declined 2.2%.

The Tel Bond bond indexes declined only slightly. Shekel-denominated 10-year government bonds edged down 0.17%, bringing yields up to 3.53%. Index-linked 10-year bonds rose 0.18%, bringing yields down to 1.42%.

Total trading volume Wednesday was 1.17 billion shekels. “We expect to see a growth in trading volumes due to increased activity by foreign investors and a continued flow of money into mutual funds,” IBI investment house CEO Ido Cook said at a news conference yesterday. IBI chief strategist Eyal Klein said Israel’s big companies were in excellent shape, with “record earnings, minimal leveraging, high liquidity and low financing costs of historic proportions.”

World stocks were headed for a third straight day of losses Wednesday, with European exchanges down again and Japan’s Nikkei index recoiling from Tuesday’s surprising six-year highs. In commodities, benchmark Brent crude oil was flat after a two-day rally while gold remained at a five-month low.

U.S. bond prices recovered somewhat after the Institute for Supply Management said its services index fell to 53.9 last month, from 55.4 in October, supporting the view that the Fed would hold any quick paring on its stimulus. The dollar rose against the euro and the yen. The euro zone service sector data showed activity in Italy and France contracting in November but expanding in Spain and Germany.

With reporting by Reuters and Dror Reich.

Bloomberg