Good results from Koor Industries (NYSE:KOR) are lifting Tel Aviv stocks at Tuesday's start. Investors seem apathetic to the 1% rate rise the Bank of Israel announced yesterday. As the hike had been widely expected, or even expected to be sharper, it had presumably been factored into share prices.
The Maof-25 index is starting 0.6% up while the Tel Aviv-100 index is slightly above the flatline with an 0.4% gain. Tech stocks are also rising by 0.6%. Total equity turnover is thin at NIS 13 million.
DBM Investment House manager Rami Dror concurs that the market was not surprised by the rate rise. Nor does he believe investors will hare for shekels: if anything, the dollar gained some strength against the shekel yesterday.
Bank of Israel governor David Klein also stated that he does not expect the shekel's stability to be undermined by the rate hike, given the widening interest spread between the dollar and shekel.
Throwing in his two cents, Ofek investment house's chief economist, Yossi Mualem, said he doesn't see the government deficit dropping below 5% of GDP in 2002. Hence, he says, a sovereign credit downgrade is inevitable. He added that interest on central bank sources is likely to rise to 6.5% by year-end, which would mean that the governor would gradually raise rates by 0.9% by then.
The Israel Corporation will be publishing its first-quarter financial statements today. It is expected to report losing NIS 50 million, mainly due to its holdings in Tower Semiconductor (Nasdaq:TSEM), Oil Refineries and the Zim shipping company. In any case the share is rising by 2%.
Koor Industries (NYSE:KOR) published its report before the bell this morning. It noted losing $105 million for the quarter, largely due to an $82 million currency conversion writeoff by defunct subsidiary Tadiran Communications. Yesterday Koor slipped 1.5% on turnover of NIS 5 million, on top of the 2.7% it lost the day before. This morning it's up 1.8%.
The Bezeq phone company will also be revealing its first-quarter results this morning. It is expected to announce profits of NIS 20 million for the first three months of the year, and is starting on a gain of 0.8%.