One Good Day Does Not a Summer Make

The Tel Aviv Stock Exchange returned to its performance levels from the glory days yesterday, with prices rallying and the dollar slipping. It was difficult to explain this optimism though, given the economic and geopolitical conditions here in Israel. "The market is looking for news," said one trader, "and the news has been better today than in recent days."

The Maof index gained 2.7 percent, to close on 393.8 points; while the Tel Aviv 100 climbed 2.3 percent.

The senior economist at Leumi, Gil Bapman, said yesterday that the political uncertainty, the international crisis and the economic slowdown in Israel and the United States were negative influences that would not permit stock prices to rise, nor the dollar rate to fall for a long period of time.

In his opinion, one good day on the bourse does not signify a long-term trend, noting that until the economic indicators and other factors were put right, he could not foresee any permanent rise in prices. Although he admitted that cutting the interest rate would certainly provide a boost to the economy, such a move would not serve as the be-all and end-all of the problem.

The bank shares continued to occupy center stage yesterday. Bank Hapoalim registered the highest rise, with a gain in its price of 3.55 percent on a trade volume of NIS 35 million; Leumi was up 1 percent on trade of NIS 22 million. Some market traders claimed that the decision earlier this week by Finance Minister Silvan Shalom to go ahead with Leumi's privatization by selling the government's stake in the bank on the local exchange (a partial sale, in the initial stage, out of the state's 36 percent holding), would put downward pressure on Leumi's price.

Analysts contend that Leumi has managed to maintain a relatively high price recently in relation to others in the banking sector, but that now the share should certainly see some erosion.

There is some difference of opinion, though, with other analysts predicting that Leumi will see a share battle between parties eager to wrest control of the bank, particularly between Shlomo Eliyahu and Migdal insurance, each of which holds about 9 percent of the bank's stock. It is reasonable to assume, however, that the battle has not commenced on the trading floor, at least not yet; otherwise we would have seen much higher trade volumes.

Bezeq, the telecoms giant, has seen sharp price falls recently, but managed a 2.4 percent gain on very active trading of NIS 40 million yesterday. Many of the Bezeq share deals took place in the early part of the day, after the price of the share had dropped by about 1 percent.

Partner Communications, which has enjoyed high negotiability since dual-listing on the local exchange, gained an impressive 4.7 percent yesterday, on a volume of NIS 4 million. Partner leads the Maof listing in its monthly performance, showing a 20-percent gain for the month.

Elbit Systems has climbed 11.5 percent over the past month, and a stellar 55 percent for the year, but has been suffering a bout of profit-taking by its investors recently. The share slipped yesterday by 0.4 percent.