Tel Aviv Stock Exchange Loses Steam After Heady Week

TASE closes lower after three days of gains, with financial and real estate stocks leading the market down.

The TA-25 blue-chip index eased 0.1% to close at 1,226.89 points while the TA-100 declined 0.2% to 1,096.38. Turnover topped NIS 1 billion for the second day running.

For the week, both indexes were up about 0.5%, bringing the TA-25’s year-to-date gain to 3.5% and the TA-100’s to 4.5%. The star, however, has been the biotechnology sector, whose TA-Biomed index climbed 1.6% this week to bring its rise this year to 10.3%.

Insurance stocks, which had been pacing the market higher the previous two sessions, turned sharply lower yesterday. The TA-Insurance index dropped 1.5% to 1,149.07. Menorah led the declines, losing 1.8%. Real estate shares also fell, with the Real Estate 15 index declining 1.4% to 324.66.

In contrast to the TASE, global equity markets rose yesterday after weekly U.S. labor-market figures suggested a steadily improving economy. And the euro strengthened after the European Central Bank left its benchmark interest rate unchanged.

European shares, however, pared gains when ECB President Mario Draghi was noncommittal on whether he felt equity markets were fairly priced at current lofty levels. The FTSEurofirst 300 index, which hit a 4-1/2 year intraday high of 1,193.35 points on Wednesday, provisionally closed 0.1% lower at 1,185.26 points. The Dow hit an intraday record for the third day in a row, climbing as high as 14,344.95 points.

In forex trading, the two major currencies lost ground to the shekel. The euro weakened 0.2% to a Bank of Israel rate of NIS 4.85 while the dollar was off by a little less than 0.1% to NIS 3.732.

The bond market was mixed, with the Tel Bond 20, 40 and 60 indexes rising as much as 0.1%. Real estate company Habas saw its bonds sink 15% in heavy trading of NIS 76 million for its Series 12 debt, bringing its yields deeper into junk territory 47% for Series 12 and 22% for Series 4.

Among stocks, Teva Pharmaceutical Industries climbed 3.6% on turnover of NIS 121.6 million, the biggest of the day. Teva began surging overnight in New York after the company said it had begun a Phase III study of its daily oral laquinimod in patients with relapsing-remitting multiple sclerosis.

In addition, Bloomberg News quoted a Sanford C. Bernstein & Co. analyst as saying that cost savings could offset the effect of generic competition for best-selling multiple sclerosis injection Copaxone.

Babylon, the online translation company, posted the biggest gain among TA-100 shares, rising 4.1% on turnover of NIS 16.4 million. A report in TheMarker (see adjacent story) provided evidence based on the company’s financial reports that a long-anticipated initial public offering on Wall Street is going ahead despite delays.

Energy shares ran against the market trend as well, with the TA-Oil and Gas index up 1.4% at 1,149.07. The partners in the Leviathan natural gas field raised their average estimate for total estimated reserves to 18 trillion cubic feet from 17 trillion. Ratio ended 3.4% higher, Avner 1.5% and Delek Drilling 0.8%.

Africa Properties, a unit of Lev Leviev’s Africa Israel Investments, ended 3.5% lower. Taking advantage of a 27% run-up in the shares over the past 12 months, Bank Leumi’s investment arm sold a 2.3% stake in the company for NIS 25 million.

Tech stocks were mixed, but three posted strong gains for the day semiconductor company Mellanox and software maker Magic both added 3.1% and TowerJazz, a semiconductor foundry, finished 2.6% higher. Delek Auto led the TA-100 lower with a 4.7% drop. Despite a drop in the value of the yen at the end of 2012, which more than doubled net profit, the car importer failed to increase its operating profit.

Bloomberg