Market Report / TASE Rises on Maof Options Expiry Date

Banking sector hit by Peled-Givony loan concerns.

The Maof Index opened sharply up yesterday ahead of the expiry of the July Maof options later that afternoon, and the options index closed at 372.3 points, a gain of 2.3 percent from the opening bell. But the Maof itself began to slip as the session wore on, and ended the day up only 0.5 percent, at 365 points, due to pessimistic expectations regarding trade on Wall Street. The Tel-Tech and the TA 100 also gained by just under 0.5 percent. As is usually the case on expiry days, turnover was higher than average, totaling NIS 450 million.

The collapse of the Peled-Givony group weighed heavily on the banking sector, which, against the trend, was down sharply. The sector could find itself having to wipe out hundreds of millions of shekels in loans to the group in the second quarter. The banks have already written off tens of millions of shekels in loans to the group in the first quarter, and in the wake of the investigation into the group by the Securities Authority they could be left with far more significant losses.

Israel Discount Bank fell 3.2 percent, the heaviest loss of the session on the Maof. Bank Hapoalim, the controlling shareholder in Continental Bank, which is owed NIS 57 million by Feuchtwanger-Hayl (a company owned by the Peled-Givony group), fell 1 percent. But Bank Leumi bucked the trend, gaining 2 percent. The First International Bank of Israel, which trades on the Tel Aviv 100, fell a sharp 5.5 percent.

Teva Pharmaceuticals gained 2.1 percent on turnover of NIS 56 million, the heaviest of the session. Israel Chemicals gained 2 percent on news of improved bromine sales by Great Lakes, an American chemicals firm.

Fears of a deterioration in the security situation sent the dollar up against the shekel. The representative rate was set at NIS 4.72, a gain of 0.6 percent for the dollar compared to the previous day's rate. The greenback continued to gain ground after the representative rate was set, closing at NIS 4.738.

After three days of losses, shekel-denominated bonds gained 0.25 percent on average. Yields on shekel-denominated bonds are currently around 9.5 percent after having peaked at 12.5 percent in June.