Market Report / Green Returns to Tel Aviv

The Tel Aviv Stock Exchange saw green screens yesterday. After the New York markets stabilized at the end of last week and European markets posted gains, the downward winds changed in Tel Aviv as well. Shekel-dollar options showed a strengthening local currency and bonds climbed, while leading indices turned upwards.

The Maof-25 blue-chip index ended trade up 1.7 percent, at 372 points, and the TA-100 closed up 1.4 percent. Almost the entire TA-100 gain came from Maof shares, as the TA-75 eked out a tiny 0.3 percent gain. Turnover was low at NIS 128 million.

With no currency trade on Sundays, shekel-dollar options reflected market expectations for the exchange rate at NIS 4.716 - up 0.6 percent from Friday's actual representative exchange rate.

Currency market players are divided on the likely direction of the shekel. Some economists note that the dollar is still attractive as an investment and could climb to NIS 4.80 on speculators and foreign banks increasing dollar exposure due to increased volatility and security concerns.

Others note that last week's devaluation was curbed and the public did not join the rush to sell shekels. In the coming days, the Finance Ministry's ability to get its budget cuts passed and global dollar-euro trade, global capital markets, where activity resumes today, as well as security and political developments will affect the local currency market.

The bond market continued Thursday's upward momentum yesterday with fixed-interest Shahar bonds gaining 0.2 percent on short-term series, through 1.2 percent on long-term series. The sharp 15-20 percent gains Shahar bonds had posted since June 23 slowed at the beginning of last week, as the bonds slid on fears of a deterioration in the security situation and a 2.2 percent devaluation. The bonds lost 3 percent during last week.

The sharpest gain posted by a Maof share came from Teva Pharmaceuticals (Nasdaq: TEVA), which climbed 4.1 percent on turnover of NIS 30 million - the highest volume of yesterday's session. Teva is slated to publish its Q2 financials this morning and apparently market players know (or assume) a few things about those reports that led them to increase their holdings.

Partner Communications (Nasdaq: PTNR), also slated to publish financials today, was the Maof's second-highest climber, with a 3-percent gain. The major banks also traded up as Bank Hapoalim, Bank Leumi and Israel Discount Bank all climbed about 2.7 percent.

Medium-sized shares that stood out yesterday included Harel Insurance Investments, which climbed 2.5 percent on unusual turnover of NIS 8.5 million. Salt Industries, a partner in the controlling bloc of Bank Hapoalim, posted a sharp 7.7 percent gain.