Record Close in Tel Aviv
The Tel Aviv 100 index, which tracks the largest companies on Israel's exchange, crossed the much-anticipated 1000 level for the first time Wednesday, completing a 5.5% climb since the beginning of the year.
Share increases across the board were fueled by a host of bullish corporate and economic news.
Earlier this week, Standard and Poor's raised its outlook on Israel's debt from negative to stable based on "improved economic and fiscal resilience to external shocks." That followed similar upbeat outlooks and credit upgrades by both Fitch and Moody's.
Also adding to a red-hot trading environment was a note by Morgan Stanley, which said it expects 5% GDP growth in Israel in 2007 and an even higher growth rate in 2008. The estimates top the Bank of Israel's previous estimate of a 4.5% expansion this year.On the corporate front, Teva Pharmaceutical's (TEVA) in-line earnings outlook and solid sales guidance for 2007, along with news reports of a possible acquisition of Israel's Retalix (RTLX) by VeriFone (PAY), helped the overall bullishness. Retalix surged 7%. Still, since positive momentum has been dominating the Tel Aviv indices for a while now, analysts and investors keep asking themselves whether it can continue for much longer. The Tel Aviv 100 index rose by more than 50% in the last two years.
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