Market Report / IDB Group, Delek Drag Down Tel Aviv Indexes

Tel Aviv's leading equity indexes lost ground across the board yesterday, apparently depressed by the U.S. failure to reach a debt deal, the IDB group's failure to sell Super-Sol, and the mere thought of a possible downgrade of France. The benchmark TA-25 index lost 1.5% to 1,031 points, the broader TA-100 index fell 1.3% to 941 points. Turnover remained tiny: NIS 1.2 billion.

IDB Holding's announcement that it won't be selling Super-Sol after all, at least not to the Matthew Bronfman-Leo Noë group, sent yields on IDB group bonds up, indicating that investors frowned at the news. Super-Sol gained 0.9% but parent company Discount Investment lost 8.2%. IDB Holding, the company at the top of the group, finished 2.4% higher. Yields of Discount Investment bonds remained in reasonable territory, maxing at 7.61%, but yields on IDB Holding bonds rose to a maximum of 11.18%.

Another group in the spotlight is Delek, belonging to Yitzhak Tshuva, who is proposing a hair-raising haircut at group company Delek Real Estate. Delek Group shares lost 4.1% yesterday while Delek Real Estate itself lost 6.3%.

While on the day's biggest losers, there's Partner Communications, which sank 3.3% as it struggles to adapt to the newly competitive environment, and which will be laying off massively - some analysts think as many as 2,000 people. But then it has thousands more workers than archrivals Cellcom and Pelephone.

No succor was to be found for Israel's investors against the cold winds blowing from Europe, where benchmark indexes may have started the day with gains - but reversed to the red for the fourth day in a row, after record yields at a Spanish debt auction showed investors are far from convinced the euro zone is on track to solve its debt crisis. The losses in Europe were not great: 0.3% in the UK, 0.8% in France and 1.5% in Madrid. Gold on the other hand was quite the flavor of the day.

Whither Europe? "The more time passes, even investors who believed in the European leadership are taking their money out of the capital markets," commented Rafi Niv, CEO of Meitav Mutual Funds.

Ido Azulay, CEO of Epsilon Mutual Funds Management, put it more plainly: Trade these days is entirely random, he said. There are no events directing the markets up or down. There is no sense that anybody knows how to solve the debt trouble in Europe, and that means volatility will continue. As for specific stocks, that's anybody's guess. People might feel Israeli bank shares have taken enough punishment, but on the other hand, he pointed out, the business environment is changing.