Market Report / Tel Aviv Stocks Mixed on Low Turnover

Turbulent session marked by sharp fluctuations ends in mixed market in Tel Aviv Stock Exchange; blue chips closed with gains, technology stocks bounced, biomed stocks slipped.

A turbulent session marked by sharp fluctuations culminated in a mixed market in Tel Aviv. While blue chips closed with gains and technology stocks bounced, biomed stocks slipped. Bank stocks also closed below water after the Japanese downgrade, which, it must be said, left investors clammy the world wide.

Japanese stocks did slip 1.1% after Moody's Investors Service downgraded Japan's sovereign debt rating one notch to Aa3. The credit rating agency blamed the cut on Tokyo's large budget deficits and the buildup of debt since the 2009 global recession. The agency had warned in May that it may downgrade Japan's Aa2 rating due to heightened concerns about its faltering growth prospects and a weak policy response to deal with a bulging public debt, now twice its $5 trillion GDP.

Certainly European stocks were not affected: There the markets gained ground across the board, with German shares leaping 2.7% skyward and France's CAC-40 index not far behind with a 1.8% gain. UK shares gained 1.5%.

Back on the kibbutz, the benchmark TA-25 index gained 0.8% to 1,115 points. The broader TA-100 index gained 0.7% to 996 points. The Banks index didn't budge and real estate stocks fell 1.4% as financial statements pour in. Total trading turnover remained sub-average at NIS 1.2 billion.

Yesterday the Bank of Israel published new stats on the development of debt. Business-sector debt contracted by 0.7% or NIS 5 billion in June 2011 to NIS 748 billion, the central bank said. Meanwhile, households stepped up their borrowing, which increased by 0.9% to NIS 354 billion as of June's end, the central bank said.

It also noted that in June, Israeli companies (excluding banks and insurance companies ) issued some NIS 2.4 billion of bonds.

Speaking of which, the tsuris of the tycoons remain in the spotlight. S&P Maalot put Scailex, a holding company belonging to Ilan Ben-Dov, on credit watch with negative implications, which indicates a downgrade within the next three months. The agency's beef is that Scailex's income of dividends from Partner Communications is in danger. Partner didn't do too well in the second quarter of 2011 and isn't distributing any dividends for that quarter, Maalot pointed out. There's no telling when Partner will resume paying dividends to shareholders, and there you have it. For more on that see Page 8.

Bezeq lost 0.6% yesterday, a day after reports that the Communications Ministry means to elbow the company into lowering its price of naked ADS, which is an Internet line without a phone line. Now you know. The ministry thinks Bezeq charges 30% to 40% too much. Bezeq says it doesn't.

Industrial Buildings Corporation lost 0.9% despite reporting a 28% increase in revenues for the second quarter of 2011, to NIS 222 million. Net operating income came to NIS 140 million, an increase of 11% against the parallel quarter of 2011.

Avgol, which makes nonwoven textiles for hygienic napkins, diapers and that sort of thing, fell 2.4% despite reporting an increase in results for the second quarter of 2011 - revenues climbed 24% to $81.9 million and profit shot up 39% to $7.7 million.