Tel Aviv Stock Exchange Kicks Off 2018 With a Strong Advance

Business in Brief: Small gain for TA-35 in 2017, but some sectors showed double-digit rises ■ Discount has biggest exposure to leveraged lending of Israeli banks

A large digital ticker shows financial information to pedestrians outside the entrance to the Tel Aviv Stock Exchange (TASE) in Tel Aviv, Israel, on Thursday, Aug. 4, 2016.
Rina Castelnuovo/Bloomberg

Small gain for TA-35 in 2017, but some sectors showed double-digit rises 

The Tel Aviv Stock Exchange’s TA-35 index ended 2017 with a paltry 2.5% gain, an improvement over its 3.8% loss the year before but well below other world stock market indices. The S&P 500 rose 19.4% while the FTSE gained 7.6% (18.6% in dollar terms) and China’s CSI added 2.14% (37.1% in dollar terms). The Israeli benchmark index’s poor performance was due to the plunging share prices for Teva Pharmaceuticals and other pharma stocks, as well as for Bezeq and energy shares. Other TASE indices did much better. The Banks 5 index rose 2.38% for the year, adding to a 17.8% gain in 2016. Insurance shares did even better, rising 36.4% following a 2016 advance of 16.5%. Smaller-cap shares did better than big caps: The TA-90 index posted a 21% advance in 2017, following a 17.3% gain the year before. The worst performer was the Oil and Gas index, down 18% in 2017 and 2016. (Guy Erez and Dafna Maor)

Discount has biggest exposure to leveraged lending of Israeli banks 

Israel Discount Bank, which is in talks over a debt bailout for Shaul Elovitch’s financially troubled Eurocom Group, has the biggest exposure to leveraged borrowers of any of Israel’s big banks. At the end of the third quarter, Discount’s leveraged lending – which is lending for corporate takeovers or to holding companies reliant on dividends paid by subsidiaries for the cash flow – was 2 billion shekels ($580 million at current exchange rates), or 12.5% of its shareholders’ equity. At Hapoalim such lending was equal to 9.5% of equity and at Leumi it was 7.5% to 8%. Besides the 735 million shekels in loans outstanding to Eurocom, Discount has 1 billion shekels in loans to Access Industries and its Clal Industries unit, which are controlled by the U.S. billionaire Len Blavatnik. It also has loans to insurance magnate Shlomo Eliahu of as much as 400 million shekels and 200 million to Shari Arison’s investment vehicle Arison Holdings. (Michael Rochvarger)

Tel Aviv shares kick off 2018 with a strong advance

The Tel Aviv Stock Exchange got off to a strong start for the new year, with across-the-board gains led by energy shares. The benchmark TA-35 index rose 0.9% to close at 1,523.24 points, while the TA-125 added just off 1% to 1,378.25. Turnover was a low 761 million shekels ($219 million) because of the New Year’s holiday that kept foreign investors away. Delek Group climbed 5% to 589 shekels after its Delek Drilling unit said over the weekend it would increase the royalty it pays to its parent company on Tamar gas field profits after covering all the field’s development costs. Delek Drilling shares rose 3% to 9.82, OPC Energy was the most heavily traded share of the day, gaining 4.2% to 18.49. Internet Gold advanced 8.3% to 31.05 and El Al Airlines gained 6.6% to 1.59. Among losers, Azrieli Group lost 1.4% to 191.60 and Super-Sol 1.1% to 22.75. (Omri Zerachovitz)