Fighting allowing Tel Aviv stocks to rise 1% Thursday morning

TASE is sustaining a rally which began two days ago. Tel Aviv stocks are rising 1% Thursday morning, as drug maker Teva Pharmaceuticals powers ahead with 2.2% gains after receiving U.S. Food and Drug Administration approval for Fenofibrate.

Investment bank DBM CEO Rami Dror believes that the correction effort began three days ago. He bases this view on the fact that stocks posted just mild drops even as Israeli troops were conducting intense fighting in the West Bank town of Jenin, where 13 Israeli soldiers died on Tuesday. Dror estimates that the current rally is a technical correction of previous drops. He does not regard the recent gains as a new upward trend.

Dror expects gains today to be milder than yesterday's 1.7% gains, mainly due to the need for liquidity in the face of uncertainty in the security situation and the economy. Much of this uncertainty relates to treasury plans to make additional budget cuts and to impose new taxes and levies to cover rising defense spending.

Dror expects that shekel instruments, namely long-term treasury bonds, will rise sharply today by 0.75% given reports the government is planning to cut the budget by NIS 10 billion. Dror estimates that should the cut be implemented, the central bank won't continue raising interest rates.

Back to the floor: Teva Pharmaceuticals is up 2.2% after the FDA approved the drug giant's Fenofibrate capsules, 134 mg and 200 mg, and gave tentative approval for the 67 mg. Teva has been granted 180-day marketing exclusivity. The drug is the generic equivalent of Tricor capsules made by Abbott (NYSE:ABT), used for treating patients with very high triglyceride, blood fatty acids.

CFO Dan Suesskind two weeks ago estimated sales of the original drug in 2001 at $180 million.

Cellular provider Partner Communications (Nasdaq, TASE:PTNR, LSE:PCCD) is up 4.1% on reports that cable TV firm Matav Cable Systems (Nasdaq:MATV) is due to sell a 7.6% stake to Hutchison-Whampoa for $60 million to $70 million. This would resolve the Dankner family's cross ownership problem, with control in Matav and, together with the Arison family, control in Bank Hapoalim. In addition, the sale will allow more time for paying back its $98 million credit from Bank Hapoalim.

Matav is up 4% on estimates it will post significant capital gains from the sale.

Food retailer solutions firm Retalix (Nasdaq:RTLX) is up 1%. On Wednesday the company announced that it is likely to meet Q1 targets with over $16 million revenue, and over $1 million operating profit. This prompted Investment bank Ilanot Batucha to rate Retalix a Strong Buy, setting $19 as price target, 63% above the market.