Market Report / Banks Lead TA-25 Higher

The TA-25 index of blue chips edged 0.2% higher to 1,131.47 points, putting it 16% under its high for the year.

Bank stocks led the Tel Aviv Stock Exchange moderately higher Monday. The TA-25 index of blue chips edged 0.2% higher to 1,131.47 points, putting it 16% under its high for the year. The broader TA-100 posted an 0.1% rise to 1,006.97. The TA-Banking index gained 1.7% to 881.82. The Real Estate advanced 0.3% to 240.19. Turnover was about NIS 810 million.

Tel Aviv was also influenced by European shares, which eased Monday as they awaited for developments slated for later in the week. The pan-European FTSEurofirst 300 index shed 0.3% to a provisional close of 1,103.97 points after rallying 2.7% the previous two sessions.

A German constitutional court ruling on Wednesday on the legality of the euro zone's permanent rescue fund could impact the ECB's bond buying plan, while elections in the Netherlands and talks between Greece and its lenders will also be watched closely. In addition, the U.S. Federal Reserve is expected to announce more bond buying at its meeting this week, which would trigger a return of capital flows to emerging markets.

In Tel Aviv, Bank Hapoalim and Bank Leumi both ended the session up 2.2%. Mizrahi-Tefahot closed up 0.8%.

Oil and gas shares were lower yesterday, with the index down 0.4% to 943.37. Among the Leviathan gas drilling partners, Ratio and Avner both lost 1.4% while Delek Drilling fell 0.7%.

Nevertheless, Roni Biron, analyst at the Swiss bank UBS, said the oil and gas exploration companies are benefiting from two positive developments. The first was the Tzemach committee's recommendations on natural gas exports from last month, and the second is official confirmation from the Leviathan partners that they have begun contacts to recruit an international investor.

"It's no surprise that investors are starting to make offers, a process that will continue through the end of the year," he said. "We are witnessing growing interest by international investors in Israel's energy sector and the entry of a major foreign investors will add value to sectoral shares."

He said whoever the new partner in Leviathan, it will raise the valuation of the project from its current level because the partnership will bring the ability to develop markets and build liquefied natural gas infrastructure.

Beleaguered IDB Holdings ended 4.2% higher yesterday. "The company's situation is challenging but not difficult," its chairman and controlling shareholder, Nochi Dankner, told bondholders during an emergency meeting at the company's headquarters.

Elbit Systems gained 1.4% after it reported that a partnership it has with state-owned Israel Aerospace Industries had won a NIS 2.4 billion contract from the Defense Ministry.

Joseph Papa, the president of Perrigo, continued to sell stock in the pharmaceuticals company as their price rises. At the end of August, Papa sold 26,000 shares at $109 each, bringing his total sales to $2.8 million. Perrigo ended yesterday unchanged.

Gilat jumped 9.5% to NIS 14.56 after the private equity fund FIMI said it had bought an 11% stake in the satellite company. FIMI bought the shares from Menorah Holdings for NIS 63 million, or NIS 14.27, a premium of 6.5% over the market price before the purchase was revealed.

Reuters contributed to this report.