Market Report: TASE Somewhat Higher, Communications Shares Gain

Alvarion share price leaps almost 24% on takeover rumors.

Most of the leading indexes on the Tel Aviv Stock Exchange closed somewhat higher Monday against the backdrop of steady trading in world markets. The benchmark TA-25 index gained 0.13% for the day, closing at 1,208.84 points, while the broader TA-100 nudged up 0.1% to close at 1,102.02 points. Trading volume was NIS 900 million.

The Banks-5 index bucked the trend and declined by 0.6%, led by the First International Bank of Israel, which declined by 1.2%. The Real Estate-15 index lost 0.12%.

The Telecommunications index was a standout, showing gains of 1.88%, led by shares of Space-Communication, the company that operates the Amos satellites. It gained 3.54% while Partner Communications, the mobile firm that does business in Israel as Orange, gained 2.14%.

Partner's competitor Cellcom, part of Nochi Danker's IDB group, rose 3.31% Monday; the company issued its second-quarter earnings report in the morning. Cellcom reported NIS 1.23 billion in quarterly revenues, down 17.5% from the parallel in 2012. The drop, from NIS 1.5 billion in the second quarter of last year, was due to reduced income from both services and devices. Net profit fell 44.6%, to NIS 67 million from NIS 121 million in the parallel.

The company’s cellphone customer base remained relatively stable, at 3.15 million. Cellcom reported a loss of 15,000 customers during the second quarter but stressed that these were customers using prepaid phones.

CEO Nir Sztern said prices continued to fall, albeit more slowly than before due to strong competition. The company said it would continue its policy of not distributing a shareholder dividend, in order to strengthen its balance sheet.
One standout beyond the TA-100 index Monday was wireless broadband technology firm Alvarion, whose shares leaped nearly 24% on the day. The company has recently been the subject of takeover speculation.

Shares of Intec Pharma shares 9.71% Monday after the company raised $5 million from an investor group. And the Azrieli Group announced Monday morning that it had secured NIS 960 million from two lenders. The announcement did not keep the share price from edging down 0.62%, however.

The bond market saw declines, with the Tel Bond indexes slumping around 0.15%. Ten-year unlinked government bonds showed declines of about 0.5% while linked 10-year government bonds were off 0.4%.

Overseas, U.S. benchmark bond yields hit a two-year high yesterday and emerging market currencies from India to Indonesia tumbled as markets braced for the Federal Reserve to start withdrawing support for the U.S. economy.

U.S. stocks were mixed while political uncertainty in Italy hurt Italian bank shares, dragging down the broader European market. Fear that the Fed will scale back stimulus spending next month battered Wall Street last week, with the Dow industrials putting in their worst weekly run of the year.
With reporting from Reuters.

Dror Artzi