Trading on the Tel Aviv Stock Exchange opened this morning with steep falls against the background of developments in Greece. The Tel Aviv 25 Index is down 1.35%, after falling 0.8% last week, and the Tel Aviv 100 Index is down 1.49%.
The Greek government has decided to put the austerity demands being made by the creditor countries to a national referendum on July 5. Meanwhile, it is reported that the Europen Central Bank will end emergency lending to Greek banks today. By the end of this month, Greece is due to make a payment of €1.6 billion to the International Monetary Fund. The question therefore arises whether Greece will default on July 1, or whether the IMF will allow an extension on the loan until the referendum in Greece takes place. Meanwhile, Greeks are withdrawing deposits from banks, increasing the strain of the country's financial system.
Leumi Capital Markets bond research manager David Reznik writes in a market review, "The chances of Greece leaving the euro block rose substantially at the weekend, because of the decision by the Greek government to call a referendum on July 5. The official stance of the Greek government is that it will not accept the dictates of the euro block finance ministers, and if Greece's citizens adopt this stance, the will pave the way for Greece out of the euro block. At the end of the week, a shortage of liquidity in Greece's banks began to become apparent, reflecting the fear that Greece will indeed abandon the euro and that the euro will no longer be legal tender in the country. Greece will then revert to using the drachma, which is likely to be worth much less than the euro is today."
In the local arena, the gas saga continues to be the focus of attention. The government is due to vote today on exercising the power to circumvent the Antitrust Commissioner's opposition to the proposed arrangement with the gas exploration companies. Assuming that the vote is positive, the arrangement will then be made available for public comment, and will come before the government for approval in a month's time.
Gas exploration stocks are currently down on the Tel Aviv Stock Exchange: Delek Drilling is off 3.23%, Ratio is off 2.42%, and Avner Oil and Gas is off 2.78%. Leading stock Teva is down 1.29%. The big two banks are also sharply down: Leumi by 2.44%, and Hapoalim by 2.72%. ICL is down 0.99%. Bucking the general trend is Opko Health, which is up 3.69%.
Published by Globes [online], Israel business news - www.globes-online.com - on June 28, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015