The Tel Aviv Stock Exchange (TASE) rose today. The Tel Aviv 25 Index rose 8.4% to 913.09 points; the Tel Aviv 100 Index rose 10.3% to 836.20 points, while the Tel Tech Index rose 11.57% to 221.08 points. Turnover totaled NIS 2.445 billion.
The main event at the start of the new trading week today on the TASE was without doubt, the phenomenal rally in all indices, as the battered real estate and bank stocks ended the day just short of their value before the crisis erupted, an event that clearly signaled the optimistic mood among investors. The most spectacular gain of all was seen in the real estate sector, where the TA Real Estate 15 Index rocketed 32.8%, while the Banking Index soared 18.4%. The buoyant mood trickled over into the bond market where the yield on Shachar long-bonds climbed 1.4%, and by 2% on Galil bonds. The Tel Bond 20 Index finished the session 5.3% stronger, while the Tel Bond 40 Index soared 7.9%.
Today's rally was triggered by the announcement at the weekend of the US government of an estimated $800 billion rescue plan for the country's beleaguered financial institutions. The plan was welcomed by the markets, which felt the administration was taking the right moves to put the economy back on track, but the fear is that the payment for this program will come in the form of a slowdown or even recession over the next few years.
Roy Laufer, trading room manager at Excellence Investments Ltd. (TASE: EXCE) said, "The US administration made the right moves. It had two alternatives. One was the hard and long way - educating the market and acting as if the US is not the world's insurance company. The other option is the quicker of the two - to act as if it is the world's insurance company. The trouble with this option is the price. The US taxpayer is the one who will have to foot the bill for this. Raising taxation will lower private consumption levels, and the massive raising of debt will cause a fall in public expenditure and investment. These three factors will bring about a slowdown or recession that could last a number of years."
In market news, Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY.PK) took center stage on the market today, rising by a dizzying 34.8% in what appeared to be a renewed surge of confidence in the share. The movement was much the same in the company's bonds, with the Africa Israel series 21 bonds adding 14.5%, although they are still being traded at a gross return of 15.9%. Africa Israel had faced demands from institutional investors for the repayment of NIS 300 million out of a commercial securities portfolio worth NIS 1.5 billion.
Most of the other companies in the real estate sector joined Africa-Israel on the northbound trail, with Housing and Construction Holding Co.(Shikun u'Binui) (TASE: HUCN) climbing 32.5% while Jerusalem Economic Corp. (TASE: ECJM) soared 32%, and Elbit Imaging (Nasdaq: EMITF; TASE: EMIT) jumped 35%.
Bank stocks were similarly moved, with Bank Hapoalim (LSE: 80OA; TASE: POLI) up 18.1%, while Bank Leumi (TASE: LUMI) rocketed 23.6%. Arison Holdings Ltd., the controlling shareholder in Bank Hapoalim announced today that it had acquired 800,000 shares at NIS 9.425 each.
Some stocks in the food and telecommunications sector found themselves left behind in today's euphoria, as investors piled into anything that fell sharply during the turmoil of the last few days. Osem Investments (controlled by Nestle) (TASE: OSEM) ended the day down 3.5% while Bezeq (TASE: BZEQ) and Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) both fell 2.9%.
IDB Holding Corp. Ltd. (TASE:IDBH) subsidiary Koor Industries (TASE: KOR) climbed 26.2% today after disclosing that it will record a combined capital gain of NIS 416 million in the third quarter on its sales of Credit Suisse shares.
Published by Globes [online], Israel business news - www.globes-online.com - on September 21, 2008
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