Nasdaq and speculators on the Maof-25 index send Tel Aviv blue chips 1.5% into the red - TheStreet

Nasdaq and speculators on the Maof-25 index send Tel Aviv blue chips 1.5% into the red

Formula group shares lost ground after Magic's profit warning
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The Wednesday session in Tel Aviv was negative. Traders said that one of the factors weighing down on the indices was increased activity of Maof-25 speculators ahead of the Maof-25 options expiration on Thursday. Another reason was drops at opening on Wall Street.

The Maof-25 index closed 1.52% off to 508 points. The TA-100 index shed 0.92% to 491.28 points, while the Tel-Tech index lost a sharper 1.85%. Total turnover remained slim at NIS 200 million.

Harel Capital Markets' Danny Gabay noted that the speculators on the Maof-25 index played a central role in today's losses. Other traders said that the Maof-25 players have NIS 300 million worth of underlying assets, which explains the intense action in blue chips. Another trader related the drops to institutional investors grooming their portfolio as the year ends.

Formula group (Nasdaq:FORTY) shares suffered losses today in the wake of the profit warning released yesterday after Wall Street closing by

Magic Software Enterprises

(Nasdaq:MGIC). Magic lost 12.3% in Tel Aviv today and dropped 7.5% as trade opened on Wall Street.

In its warning, the company announced it will not meet expectations for sales and earnings in the fourth quarter of 2000. The company related the decline in sales and earnings to one-time expenses in respect of reorganization in the company's management. Chairman Dan Goldstein will be assuming the responsibilities of Magic CEO and Director Jack Dunietz and President and CFO Israel Teiblum will be leaving the company.

Magic expects that Q4 2000 sales will come to $23 million. Loss is expected to total $6 million or 23 cents per share, against analyst forecasts of 5 cents EPS.

Mashov Computers added 2.3% after suffering sharp drops of late. In the last two weeks the stock has shed 35%.

Teva Pharmaceuticals (Nasdaq:TEVA) managed to moderate the negative trend among blue chips. The stock added 2.1% on a positive arbitrage gap, and attracted the session's highest turnover of NIS 17 million. Bank Hapoalim analysts today predicted that Teva will go on dominating the generic drugs sector, in light of the many expected patent expirations in the United States on 2001.

Bank Hapoalim analysts likewise expect that marketing chains, chemical companies and commercial banks will regain prominence in the economy in 2001 as hi-tech loses some of its luster. The bank said that with the passing of the election turmoil and the security threats, the public will go back to investing in stocks in the second half of the year.

The factors supporting the projected rise of these three sectors are the efficiency drive underway among marketing chains; the expected rise of the pharmaceutical sector due to many patent expirations in the United States next year, which in turn will push forward the chemicals sector; and progress in privatization that will help banks increase the scope of their business. However, the bank analysts say, much depends on the resolution of the security-political situation.

Makhteshim-Agan rose 0.6%. The stock has been enjoying a positive moment of late.

Koor Industries (NYSE:KOR) closed down 3.9% on NIS 13.9 million turnover. National phone company Bezeq lost 1.8%. Bank Hapoalim economists today said that Bezeq's privatization will be postponed to 2002 in light of the security situation.

IDB shares were weak today. Clal Industries shed 1.2%, Discount Investment Corporation lost 3.1% and IDB Development Corporation dropped 2.4%.

Dual-listed stocks posted losses. Elron Electronic Industries (Nasdaq:ELRNF) fell 3.3%, Elbit (Nasdaq:ELBTF) shed 3.2%, and

Metalink

(Nasdaq:MTLK) dipped 7.6%.

Oil shares drew lively action for the second day running. Isramco participation units closed unchanged on high turnover, while Avner participation units added 5% after jumping 9% yesterday. Delek Energy, which controls Avner, climbed 14.5%.

Chemical companies, banks to regain prominence in 2001

Bank Hapoalim analysts predict that marketing chains, chemical companies and commercial banks will regain prominence in the economy in 2001 as hi-tech loses some of its luster. The bank also predicts that with the passing of the election turmoil and the security threats the public will go back to investing in stocks in the second half of the year.

The factors supporting the projected rise of these three sectors are the efficiency drive underway among marketing chains; the expected rise of the pharmaceutical sector due to many patent expirations in the United States next year, which in turn will push forward the chemicals sector; and progress in privatization that will help banks increase the scope of their business. However, the bank analysts say, much depends on the resolution of the security-political situation.