Shaya Boymelgreen Takeover of Azorim Ignites Real Estate Stocks Sunday

Orckit overcame a 3.4% negative arbitrage gap to climb almost 1% on Oscar Gruss counsel to buy in the dip

Tel Aviv blue chips added another percent on Sunday, following 2.3% gains the week before. Real estate stocks spearheaded the upswing after U.S. businessman Shaya Boymelgreen agreed to buy Azorim from the IDB group at a stout premium above its market capitalization. Wall Street also boosted local stocks after last week's gains.

The TA-25 index rose by 0.9% to 840 points, the TA-100 index gained 1% to 863 points but the TelTech-15 index dropped 0.3%. Turnover was normal at NIS 1.1 billion.

Boymelgreen's deal for Azorim, which specializes in domestic residential construction, provided the impetus for gains throughout the real estate sphere. The American-Jewish businessman agreed to pay $319 million for Azorim, pricing the company at half a billion dollars, which was 18% above its market capitalization. The market views the deal as a declaration of faith by Boymelgreen, who commonly invests together with Africa Israel, in the domestic real estate sector.

So: Azorim jumped 4.4% on heavy turnover passing NIS 30 million. Boymelgreen Capital (formerly known as Gambit Computers, which Boymelgreen bought and renamed in December 2005) leaped by 9.3% on heavy turnover, for it, of NIS 0.9 million.

IDB was in favor after the deal, as group company IDB Development should be posting a huge NIS 620 million capital gain. Also, investors seemed pleased that IDB walked away from a gigantic real estate deal in Europe, where the company had been part of a group mulling a $2.5 billion takeover. Shares in IDB Development added 2.7%, IDB Holding gained 2.7% too, Discount Investment rose 1.6% and Clal Industries gained 0.7%. Property & Building Corporation , the IDB real estate investment arm, gained 3.4% on heavy turnover nearing NIS 6 million.

At the end of the Sunday session the Real Estate-15 index gained 2.5% to 489.5 points. This year the index has risen 26%.

Delek Real Estate advanced 3.9% on a volume nearing NIS 9 million after pulling a rabbit out of its hat and winning a tender, jointly with REIT Israel, to buy 50% of the Givatayim mall. Delek Real Estate hadn't been considered a serious contender but filed the highest bid, $65 million.

Can't leave real estate yet - Jerusalem Economic Corporation rose 0.6%, GTC gained 2.8% and Africa Israel added 2.5%.

To finally leave real estate behind - now for insurance: shares in Migdal jumped 2.5% after the company today reported a 4% increase in 2005 net profit against the year before to NIS 556 million. By the end of the day the optimism had spread to Clal Insurance, which rose by 1.3%, and Harel, which gained 1%.

Osem rose 1.9% on a volume of NIS 5 million after reporting a mere 2.4% increase in 2005 sales to NIS 2.52 billion. But net profit contracted by 8.2%  to NIS 177 million due to a drop in "other income". Rival food maker Strauss-Elite gained 1.3% on a treasury of NIS 11 million.

Dual listed stocks were mixed. Koor Industries gained 2% on turnover of NIS 29 million and Teva added 0.7% after NIS 60 million had changed hands. Last week Teva rebounded by 2%. But mobile operator Partner Communications retreated by 0.3% and Nice Systems dropped 1%. Perrigo, which bought Agis Industries, fell 0.4% and Elbit Systems dropped 1%.

An upbeat analysis from Oscar Gruss recommending that investors buy in the dip sent Orckit stock climbing 0.9%, though it had begun with a 3.4% negative arbitrage gap.