Market Report / Shares Gain After Automatic Delay of Trade at Opening

Tel Aviv Stock Exchange finish the week and month on the upside.

The Tel Aviv Stock Exchange finished the week and the month on the upside yesterday.

Due to an negative arbitrage gap of more than 6% in the trading of Israeli shares in the United States, the TA-100 should have opened down 6%, but the trading rules provide mechanisms to head off sharp price fluctuations, which temporarily suspended trade yesterday.

The Tel Aviv-25 rose in value by 0.3% yesterday, closing at 1,229.97 points. The index chalked up gains of 1.9% on the week and 1.3% for the month of November. The broader Tel Aviv-100 Index increased by 0.3% yesterday, closing at 1,089.61 points. Trading volume was very brisk at NIS 2.9 billion.

The Banks-5 Index rose by nearly 2.2% yesterday and gained 3.5% for the month, while the Real Estate-15 added a smidgen under 1% in value in yesterday's trading and almost 6% for the month.

The Oil & Gas Index rose by 0.8% for the day and 2.2% on the month, while the Insurance Index, by contrast, slumped by nearly 0.4% yesterday, but rose by 8.9% for the month. The Communications & Media Index rose by 2.1% yesterday, while the Tel Bond indices showed mixed results.

Robby Goldenberg, the exchange's senior vice president and head of trading and derivatives, explained the temporary suspension in trade: "The first mechanism that went into effect was the old one, which is designed to moderate a change of more than 2.5% in the [TA-100] index at the opening. Since in the morning the index dropped by 6.03%, the exchange activated the mechanism. The opening, instead of being at 9:45 and 16 seconds, was five minutes later, but the exchange's mechanism spotted Mellanox [Technologies] shares, which are traded on the Tel Aviv-25 Index, falling by 10.5% and therefore activated the second suspension mechanism."

The second mechanism triggered to stop trade is new, Goldenberg noted, and suspends trading by five minutes if there is a major change in one of the stocks making up the benchmark TA-25 Index.

In addition, Goldenberg said, trading was complicated by the announcement of the Delek Group's third-quarter financial results, which suspended trading in its shares, but because it is one of the companies whose stock makes up the TA-25, trading was delayed until 10:14 A.M. because it was not possible to set the TA-25 Index. (The Delek Group reported a 33% decline in net profits attributed to shareholders compared to the comparable quarter in 2011, while revenues grew by 24%. )

Mellanox closed down 10.7% for the day. Retalix, which the American corporate giant NCR announced Wednesday evening that it would be acquiring, jumped by a whopping 32.5% yesterday on Tel Aviv trading. Amid news that Israeli-American entertainment mogul Haim Saban was about to sign a deal to buy a controlling stake in Partner Communications, shares in Partner's parent firm Scailex shot up by 27% yesterday.

Shares in the IDB group of companies continue to be in the public eye following news this week that IDB controlling shareholder Nochi Dankner was being investigated by the Israel Securities Authority over allegations that he and others manipulated the price of IDB Holding in advance of a February public offering of shares and warrants of the company. Yesterday, however, shares in IDB Holding actually rose by 2.2% after dropping 10.2% the day before.

Several of the country's banks released their third-quarter earnings reports yesterday (See page A10 for further coverage ). All three of the country's major banks reported higher net incomes for the quarter. Shares of Bank Hapoalim rose by 2.6% yesterday. Bank Leumi's stock gained 1.3% for the day, while Israel Discount Bank's stock gained 3.3%.