Market Report Israeli Blue Chips Fail to Lift a Lackluster TA-25

Israel Chemicals gains as its potash sales to China climb, but financial stocks fall.

Jul 23, 2013

Even with some heavy lifting by Teva Pharmaceutical Industries, Bezeq and Israel Chemicals, the TA-25 index barely posted a gain on Tuesday as liquidity remained in the doldrums.

Teva ended 2% higher on a turnover of NIS 55.9 million, making it the session's volume leader. Israel Chemicals added 1.7% on heavy trading of NIS 40.7 million after UBS forecast second-quarter earnings of 24 cents a share thanks to higher potash sales to China. Bezeq rose 1.5% with NIS 35.3 million in shares changing hands.

But all that couldn't make the benchmark index scratch out a gain of even 0.1%. The TA-25 index ended the day at 1,130.79 points, a rise of just 0.07%, while the broader TA-100 finished 0.03% higher at 1,1122.52. Just NIS 760 million in shares changed hands.

Put the blame on financial stocks. Among banks, Mizrahi-Tefahot ended down 1.9%, First International dropped 1.8% and Leumi 1.3%. Insurance stocks also took it on the chin; Clal Insurance fell 1.6%, Migdal 1.2%, Menorah 1.1% and Phoenix 1%.

World stock prices climbed closer to five-year highs on Tuesday, supported by signs that China was moving to avoid a hard landing for its slowing economy, while the dollar hovered at its one-month low as a recent selloff slowed. Major U.S. equity indexes opened higher on news of solid earnings from chemical maker DuPont and insurer Travelers.

The MSCI world equity index climbed 0.3% to 376.53, within about six points of its five-year high set in May. In mid-morning trading, the Dow Jones industrial average was up 0.01% at 15,547.50, while the Standard & Poor's 500 was down 0.2% at 1,691.41. The pan-European FTSEurofirst 300 index provisionally closed down by 0.2% at 1,208.41.

In foreign currency trading, the dollar's Bank of Israel rate held steady from the day before at NIS 3.5710, while the euro edged up less than 0.1% to NIS 4.7057.

"Only massive intervention or the imposition of a tax will weaken the shekel. Until then, manufacturers and exporters will continue to feel the pressure of a strong currency on their profitability," said Gideon Ben-Nun, CEO of Agio Risk Management & Financial Decisions. "We expect will see such steps in the coming months."

Ceragon rose 3.4% after the maker of wireless backhaul equipment said that Vivo, a subsidiary of Telefonica Brasil, had selected it as its wireless backhaul partner for the next phase of its nationwide LTE network ahead of the 2014 World Cup in a $6 million deal. PhotoMedex, a maker of home skin-care devices, advanced 2.1% after investment house Sidoti rated its shares a Buy with a target price of $25. They were trading at $16.05 on the Nasdaq Monday.

Big losers on Tuesday included Discount Investment Corporation's 2.3% drop after the Israel Securities Authority said it had transferred its probe on controlling shareholder Nochi Dankner's alleged share-price manipulation to the state prosecutor.

Silicom slumped badly for a second day in a row, shedding 8.6% after the stock was downgraded by Maxim Group from a Buy to a Hold with a price target of $32 versus a New York closing on Monday of $36.59.

With reporting by Reuters.

The Dead Sea Works potash fertilizer manufacturing plant belongs to Israel Chemicals.Credit: Bloomberg