Market Report / Teva Drops in Mixed Market

TA-25 reaches as high as 1,248.82 points in the early afternoon before tracking downward to finished at 1,244.45 points; TA-100 index is 0.13% lower at the finish, at 1,097.06 points.

A gentle rise in the TA-25 index on Wednesday petered out by the end of the day, leaving the Tel Aviv Stock Exchange's benchmark index unchanged as shares in Teva Pharmaceuticals weighed on the market.

The TA-25 reached as high as 1,248.82 points in the early afternoon before tracking downward to finished at 1,244.45 points. The broader TA-100 index was 0.13% lower at the finish, at 1,097.06 points. Turnover pushed past the one billion shekel mark, to NIS 1.09 billion.

Most sector indexes ended higher for the day, with the Banks-5 index rising a strong 1.6% to 1,173.10 points, led by a 2.8% rise in Mizrahi Tefahot Bank and 2.3% gain for First International Bank of Israel. The only sector to end lower was the TA-Insurance index, which posted an 0.6% decline to 1,175.17 points, led by declines of 1.4% for both Harel and Migdal.

"The most interesting number of the day today, beyond the actual rise in the bank shares, was that the bank have marked a 50% rise since the low they were trading at," said Alon Glazer, VP research at Leader Capital Markets. "Their financial results have led investors to understand that the banks had been oversold and that they have nothing to worry about concerning [the quality of] their loan books."

Teva was the center of attention yesterday, a day after CEO Jeremy Levin unveiled the company's long-awaited strategic plan. Investors reacted negatively, with the share ending down 3.9% following Teva's route lower overnight in New York Stock Exchange trading, with turnover reaching NIS 91.2 million, the day's largest for the TASE.

Interest in Teva

Nevertheless, Harel Finance analyst Steven Tepper said he remains optimistic and continued to recommend Teva as a Buy with a $47 price target.

"The presentation of the company's strategy, which stresses creating value together with a new and professional management team, is expected to arouse interest in the stock in the near term," Tepper said in a note issued after the presentation in New York Tuesday night.

IDB Holding Corporation, Nochi Dankner's holding company, ended 4.1% higher after he reached an agreement with bondholders late on Tuesday. The pact calls for payment to bondholders of IDB's Series Dalet bonds to be delayed to the end of March, at which time Danker will transfer some NIS 120 million to IDB. He is to deliver an additional NIS 60 million to IDB in May.

Scailex, Ilan Ben-Dov's holding company, dropped 7.7%. The company reported that the sale of its controlling stake in Partner Communications to Haim Saban will leave it with an NIS 80 million loss, although that may narrow to NIS 40 million if Partner pays a dividenbefore the sale of completed.

Global shares edged higher and commodities firmed yesterday on expectations that the U.S. Federal Reserve would announce a fresh round of bond buying to stimulate a fragile economic recovery after the TASE closed for trading.

The FTSEurofirst 300 index was up 0.6% at 1,139.4 points and the MSCI global stock index advanced 0.3% to 337.97 points. Earlier in the session it touched a high of 338.23 points, its strongest level in nearly two months.

In the local bond market, a tide of cash into the provident funds is continuing to bring down yields for government bonds. The 10-year inflation-indexed Galil bond rose another 0.15% yesterday, bringing its yield down to a low of 1.4%. The 10-year unlinked shekel bond rose 0.06% to a yield of 3.75%.

By contrast the Tel Bond indexes were all lower yesterday, by 0.13%, 0.08% and 0.11% for the Tel Bond-20, Tel Bond-40 and the Tel Bond-60 indexes, respectively.

In foreign currency trading the dollar sank to a six-month low against the shekel, shedding 0.7% of its value to a Bank of Israel rate of NIS 3.78. The euro also lost ground to the Israeli currency, weakening by 0.2% to NIS 4.9305. "The shekel's appreciation is likely to continue, said Prico Management CEO Vered Itzhaki.

"The capital markets are operating under the assumption that the negotiation in the United States over the 'fiscal cliff' will yield results - Meanwhile, the precarious situation in Europe supports renewed weakness of the euro," she said.

With reporting from Reuters.