Market Report / TASE Restrained in Face of Renewed Terror

The Tel Aviv Stock Exchange saw another day of falls yesterday. Dragged down by the renewed terror attacks, the Tel-Aviv 25 index closed 0.65 percent down, at 361 points; the Tel-Aviv 100 fell 0.56 percent; and the Tel-Tech dropped 0.3 percent. Turnover for the day was low, at only NIS 150 million.

It can nevertheless be said that the TASE's response to the current events has been restrained and far from hysterical.

The representative dollar-shekel exchange rate was set yesterday at NIS 4.722 - 0.1 percent above Friday's rate, but lower than the rate that options on the U.S. currency reflected yesterday. After the representative rate was set, the shekel continued to gain, with the greenback trading at around NIS 4.705. Consequently, non-index linked bonds gained slightly as well.

The talk of the day yesterday on the TASE were the retail chains, which saw their shares fall sharply. SuperSol shed 6.7 percent on a volume of NIS 17 million; Blue Square also dropped 6.7 percent; and Blue Square Chain Stores Properties lost 7.3 percent (each of the latter holds several stores in the Blue Square chain).

For weeks now, there has been talk of a fall in private consumption and the resulting impact on the results of the retail chains, which, until now, had suffered from the recession less than any other sector. Indeed, SuperSol's quarterly reports that were released yesterday indicated a drop in sales and profit.

Although this was hardly unexpected, some investors seemed to have been taken by surprise and decided to sell their stock. Apparently, the losses of Blue Square, SuperSol's competitor, reflects concerns that this company, too, would be publishing similar results.

The yields of two food producers, Osem and Elite, also lost yesterday, with the former shedding 2.4 percent and the latter 1.0 percent. There may be more to come.

Leumi stock continued to slide yesterday in the wake of the government's decision to sell 7 percent of the bank's shares on the TASE next month. Leumi lost another 1.7 percent yesterday, completing a 9-percent loss since July 29. The bank's market cap is now NIS 9.2 billion, compared to more than NIS 13 billion in equity.

Two other banks fared better yesterday: Bank Hapoalim gained 1.2 percent; and Israel Discount Bank climbed 1.6 percent.

Despite the Peled-Givony scandal, Formula Systems gained 1.8 percent on a volume of NIS 1.7 million. Iscal Holdings, which controls 9 percent of Formula, is in a financial crunch and Bank Hapoalim, which has a lien on Formula stock, keeps selling its holdings, pushing the value of the Formula stock down. However, there is still businessman Avi Wertheim, who bought options on 12 percent of Formula's stock two months ago; so the bank may have a client for its holdings.

Matrix IT will be issuing NIS 100 million worth of convertible debentures today. The bonds will be linked to the CPI and will guarantee a 4.95 percent annual yield. Effective interest will, however, be higher, since buyers can, in the first two days of trading, sell the options that they get for free for NIS 0.8 apiece. Bezeq has already pledged to buy half of the issued bonds.