There's certainly an air of celebration on Ahad Ha'am Street in Tel Aviv nowadays. The future of the ruling coalition may be uncertain, peace hasn't broken out in the Middle East and the dollar may be as weak as water, yet Tel Aviv stocks reached record heights yesterday.
The previous record high was recorded in August 2000, before the great crash. The TA-25 index closed at 587.6 points yesterday, beating that date's level by 1.6 percent.
Traders attributed the gains to a combination of circumstances, one being robust world markets and another the thought that Labor will soon be joining the Sharon coalition.
Traders also point to the change in the Palestinian leadership, Syrian President Bashar Assad's persistent calls to pursue negotiations and Egypt's release of businessman Azzam Azzam eight years into his 15-year term on charges of spying for Israel.
The TA-25 index (the Maof) soared 2.6 percent to 587.6 points, the TA-100 index rose 2.2 percent to 610.3 and the TelTech-15 index advanced too, albeit by just 0.3 percent. Since the end of October, the Maof has climbed 13 percent, while over the whole year it gained 16 percent.
Turnover was enormous at NIS 1.15 billion yesterday. One market source said volumes that high attest to active foreign investments, and also show that mutuals investing in Israeli shares have been raising money. "It all depends on these mutual funds. Only they can presage whether we're ahead of another wave of gains," said Gilad Shimoni, an analyst at Excellence-Nessuah. "The public didn't participate in the last upswing, from 520 points at the end of October. This time I think the public is in, so I think we are moving into another wave of gains."
Share prices are still cheap, Shimoni said. The banks, for instance, are trading at equity multiples of just 1.1, and chemicals stocks are also cheap compared with the multiples in stock exchanges elsewhere.
Among the leading movements on the exchange yesterday, Teva Pharmaceuticals (TASE, Nasdaq: TEVA) began with a positive arbitrage gap of 2.3 percent with New York and gained 2.5 percent on turnover of NIS 57 million. The IDB group was riding the wave too: Clal Insurance (TASE: CLIS) climbed 1.6 percent on enormous turnover of NIS 230 million.
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