Market Report / Security Concerns Weigh on Market

As has been the norm on days of security tensions in the past two years, Tel Aviv Stock Exchange indices fell yesterday as the shekel slid. As uncertainty increases, investors are concerned about further security and political deterioration and they sell Israeli stocks and bonds and direct more and more of their portfolios into foreign currency.

The Maof-25 blue-chip index closed down 0.82 percent, at 372 points, and the TA-75 fell 0.88 percent. Turnover was relatively low and amounted to NIS 230 million. The Tel-Tech slid 0.66 percent. The Maof had gained 1.6 percent in the last week of July, bringing it to a 2.4 percent gain on the month.

The shekel lost 0.2 percent against the dollar, with the representative exchange rate set at NIS 4.698. The shekel kept losing ground after the official rate was set and traded at NIS 4.70 against the greenback.

Bank Leumi shares slid 4 percent on a large volume of NIS 40 million, as the Marani Committee published its recommendations for the bank's privatization (See story page 4). Since its early-January peak, Leumi has parted with 34 percent of its value.

In light of the encroaching financial crisis in Brazil, Makhteshim Agan slid 2.6 percent yesterday on unusually high turnover of NIS 20 million. Makhteshim, with sales in South America and after absorbing losses on the Argentine financial crisis, is at a two-year market low. But the Brazilian crisis scares investors even more, since the company's sales in Brazil are around $200 million annually, as opposed to $20 million in Argentina. The company has slid 32 percent since the beginning of the year.

Teva Pharmaceuticals (Nasdaq: TEVA) posted the sharpest Maof gain as it tacked on NIS 64 million, making its climb since last Wednesday 14 percent. Teva's quarterly financials were an upside surprise this week, with an impressive $92 million in net profits - on the high edge of analyst expectations.

Retail chains dropped yesterday on reports of slipping sales that will be reflected in their upcoming Q2 financial reports. Blue Square-Israel lost 3.4 percent and Super-Sol lost 1.4 percent, while controlling shareholder Discount Investments parted with 2.8 percent.

Dankner Investments leaped 6.9 percent on reports of restructuring control in the family's companies.