Israel stocks lower as key banks weaken

Israel stocks lower as key banks weaken

Stocks are falling like a ton of bricks, banks are getting weaker. More evidence of economically-bankrupt Israel. What was that again about Israel being a “land of milk and honey”?

Israel stocks lower as key banks weaken
By Robert Daniel, MarketWatch
Last Update: 1:32 PM ET Nov 28, 2006

TEL AVIV (MarketWatch) — Israeli shares fell on Tuesday, led lower by weakness in two key banks.Strength in Teva Pharmaceutical Industries (TEVA : 32.40, -0.36, -1.1%) and two major chemicals producers cushioned the market’s pullback, however.

The Tel Aviv Stock Exchange’s benchmark TA-25 index closed off 0.29% to 922.02, while the TA-100 index fell 0.38% to 928.13.

The Tel-Tech 15 got hammered, with all but one of its 15 members losing ground. The index of top technology issues shed 1.8% to 377.06.

The most-active issues were Bank Leumi and Bank Hapoalim, with Leumi falling 1.5% to 16.87 shekels ($3.92) and Hapoalim losing 1.4% to 20.81 shekels.

Together, the banks accounted for more than an eighth of total TASE volume of $290 million. That total in turn is shy of the average daily TASE trading through October of $332 million.
Leader & Co. reiterated its recommendations on the banking sector as a whole: It rates Leumi as a buy and Hapoalim, Discount and Mizrachi as outperform.

“The banks currently trade at [a price-to-earnings multiple of] 10-11 with strong growth potential,” analyst Alon Glazer wrote in a note. “The banks will continue to present [return on equity] of about 15% in the coming years and [a] decent 4%-6% dividend yield with a lower risk than other sectors.”

Meanwhile, Africa Israel Investments (AFIVY : 0.00, 0.00, 0.0%) slipped 0.2% to 295.5 shekels. It was downgraded to neutral from buy at UBS, though analyst Darren Shaw also raised his price target on the real-estate investment company.

“Despite our view that AFIL’s portfolio of assets and management’s ability to continue to increase the [net asset value] are both very high quality, we believe the share price is approaching fair value,” Shaw wrote in a note.

The move followed by a day management’s announcement that Moscow authorities had approved a company plan to build a development project it described as mixed-use but largely features office towers.

Shares of Koor Industries (KOR :10.42, +0.22, +2.2% ) added 1.6% to 224.4 shekels. The company’s ECI Telecom affiliate (ECIL :8.35, -0.01, -0.1% ) received a contract to upgrade Beijing Power’s optical-communications network in preparation for the 2008 Olympics.
And Koor Corporate Venture Capital said it sold its holdings in Followap, a U.K. provider of telecommunications solutions, for $13.3 million. It sold the stake as part of the $139 million sale of Followap to NeuStar (NSR : 31.65, -0.14, -0.4% ).

Bezeq edged down less than 0.1% to 6.7 shekels. The telecommunications provider on Monday declared a dividend of 0.115 shekel a share, which Leader said gave the company a compounded annual dividend yield approaching 11%.

Teva Pharmaceutical’s shares rose 0.6% to 141.6 shekels.

Israel Chemicals, which produces fertilizers, tacked on 1.5% to 25 shekels. Makhteshim-Agan, a producer of agrichemicals, climbed 1.4% to 22.38 shekels.

Among Tel-Tech components, defense contractor Elbit Systems (ESLT : 33.18, +0.03, +0.1% ) traded most actively, off 1.5% to 142.4 shekels, followed by payment-solutions provider Verifone (PAY : 32.99, -0.76, -2.3%) , down 4.1% to 141.2 shekels; Retalix, down 2% to 71.97 shekels, and Nice Systems (NICE : 31.55, -0.07, -0.2%), a provider of digital recording and archiving systems, down 2.4% to 136.1 shekels.
Retalix (RTLX : 16.80, -0.59, -3.4%) , the Ra’anana, Israel, producer of management systems for supermarkets and distributors, swung to a third-quarter loss from a year-earlier profit as revenue slipped 2.4%. The company had warned of the loss at the end of October.
The one gainer in the Tel Tech was Aladdin Knowledge Systems (ALDN : 18.20, -0.20, -1.1%) , the producer of security software, up 0.8% to 80 shekels.

Off the Tel-Tech index, shares of Ituran (ITRN : 16.28, +0.13, +0.8% ) edged up less than 1% to 69.77 shekels. The provider of vehicle-location and -recovery technology and services was reiterated at a rating of outperform by William Blair.

Rounding out the action, Israel Land Development rose 1.9% to 18.81. The company said it agreed to sell the Yorkgate Mall in Canada. The mall is held 75% by the company and 25% by an affiliate. End of Story

Robert Daniel is MarketWatch’s Middle East bureau chief, based in Tel Aviv.

One thought on “Israel stocks lower as key banks weaken

  1. So stocks falling on average by around 1% is a sign of impending ‘economic collapse’?

    Israel’s per capita GDP – US$25,000.

    Thats one of the highest in the middle east and certainly much, much better than Malaysia (per capita GDP – around US$12,000, and we don’t live in a conflict zone either).

    So its quite clear really, Zionism is far better for you than Islamic fundamentalism, which will lead a country straight down the dumps (see: Iran, larger than Israel and Malaysia put together, but with a comical per capita GDP of US$8,400, lower than Botswana, Mexico and Thailand).

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