Blue-chip speculators moderate TASE opening drops to 1.8%

Tel Aviv stocks opened are cutting early-morning drops of 2.5% Wednesday morning to 1.8%.

The drops relate to reports on the plans of the treasury to impose tax on capital gains.

Finance Ministry Director General Ohad Marani on Monday hinted on Israel Radio that the ministry may impose a capital gains tax as part of the emergency economic plan. It has also been leaked that the Rabinovich tax reform committee is planning to recommend imposing 15% to 25% tax on capital gains from the stock exchange and savings plans.

The negative mood is also attributed to a potential sharp hike in lending rates, and to continuing sharp drops on Wall Street where Nasdaq dropped 1.6% and Dow Jones closed off 0.5% Tuesday.

The Maof-25 blue chip index is off 1.8% to 390.7 points, the TA-100 index is off 1.7% to 376.6 points, and technology shares are down 2.1%. Total turnover is a moderate NIS 70 million.

Meanwhile, the dollar continues to climb against the shekel to NIS 4.85.

Market players attributed the slight recovery to Maof speculators' attempts to support the index ahead of the expiry of April options tomorrow. The dealers said speculators are currently making the best of the relatively low volumes of trade, and of actions by few players. All this is allowing them to moderate the losses, dealers believe.

Bank shares are sliding, with Bank Hapoalim off 2% on NIS 7 million volume, Bank Leumi down 2.4%, and Bank Discount off 2.2%. It was reported today that debt-burdened cable TV firm Tevel is likely to ask the banks to write off debt of hundreds of millions of shekels. In 2001, the banks made provisions worth hundreds of millions of shekels for the communications sector. On Tuesday, Tel Aviv District Court granted Tevel a two-month stay of liquidation proceedings.

Drug giant Teva Pharmaceuticals (Nasdaq:TEVA) is down 0.6% on 1.2% negative arbitrage spread, attracting the session's biggest volume, NIS 14million. Yesterday, Teva said its relapsing-remitting multiple sclerosis treatment, Copaxone, is now available in "pre-filled, ready-to-use syringe." In addition, Teva was rated a Buy by investment bank Nessuah Zannex. Analyst Haim Israel restated his $79.5 price target, 44% above market. The analyst estimates that Teva will post 45% growth in Q1, and $79.4 million net profit.

IDB group stocks are posting big losses. IDB Holding Corporation is down 2.6%, IDB Development Corporation is off 2.5%, while subsidiaries Clal Industries is down 2.2%, and Discount Investments is down 3.6%. The latter announced today it is in talks to sell its entire ownership of Albar Mimunit Services, which provides vehicle-financing services, vehicle leasing and fleet management services.