The Tel Aviv Stock Exchange has closed up, after opening hesitantly earlier in the day. Traders say Israel's upcoming election for prime minister to be held on Tuesday, February 6th, 2001, is not impacting on local markets. Usually an Israeli pre-election period is characterized by uncertainty and minor market fluctuations, with trade only moving 1% in either direction.
But today the Maof-25 index finished up 2.21% to 462.35 points, and the TA-100 index rose 2.05% to 459.6 points. The Tel-Tech jumped 2.1%. Turnover was moderate at NIS 303 million.
Teva Pharmaceuticals (Nasdaq:TEVA), which fell slightly at the opening of today's trade, had gained 2% by closing, while attracting the session's highest turnover at NIS 41 million
Formula Systems (Nasdaq:FORTY) climbed steadily throughout the day, finishing up 5.6%. This follows yesterday's reports that the Delek Investments and Properties (of the Delek group) is negotiating to acquire the Formula holdings of Delek's main shareholder, Yitzhak Tshuva. The company is also reportedly negotiating with Formula on a private placement of Formula stock to Delek.
Yesterday, investment bank
predicted that right-wing Likud leader Ariel Sharon will win Tuesday's election for prime minister. The bank forecasts a 70% chance that Sharon will establish a national unity government with Labor and Likud, and a 30% chance that he will win and establish a narrow right-wing coalition. Goldman Sachs advises that the chance of a win for incumbent Ehud Barak is slim to nil.
The bank has lowered its expectations of TA-100 index stocks. Three weeks ago it had projected that TA-100 stocks would gain 35% this year. Now it's betting on 25%, assuming that Sharon wins and promotes peace at the head of a national unity government.
Goldman also issued a report on Israel's five big banks. It says prices are attractive, but still not a Buy opportunity. It favors Bank Leumi, and rates it as Attractive, setting a price target of NIS 13. That's up 40% from its current market price. Bank Leumi's stock gained 1.8% on a NIS 25 million turnover.
Bank Hapoalim today attracted a lively turnover gaining 3.4%. Goldman set a NIS 14 price target for the share, up 30% from its current market price. The investment house also says that the bank has the skills and ability to merit an upgrade.
Bank Mizrahi's stock rose 2.7% on Goldman Sachs' rating. In its report on the banking sector, Goldman Sachs predicts that the bank's growing presence in the mortgage sector (through its holdings in Tefahot Israel Mortgage Bank), will allow it to expand beyond retail banking.
Oil shares posted strong gains today. Isramco rose by 7%, Avner gained 6% and Delek Drilling closed up 6.3%.
David Levi of Tamir Fishman says that TASE prices have already factored in a Sharon win. He and several others do not expect a correction after the election, unless Barak wins unexpectedly. Referring to IDB Development, which gained 2% or an aggregate of 7% in its last three days of trading, Levi said that the group is substantial and that large investors have already started acquiring positions in the company, based on the notion that there will not be any election upsets.
But Leader Holdings & Investments' Eytan Ben David believes that today's gains are just a technical correction, as evidenced by the low volumes of trade. He says given the low price of shares, the market must correct itself upwards, and today's gains have nothing to do with tomorrow's election.
Formula's subsidiary Mashov Computers rose by 4.2% after adding 9% yesterday. Investors evidently appreciate Mashov's intention to distribute shares in
(Nasdaq:MGIC) and Makor Haformaika as dividends.
Discount Investments rose by 3%, and Clal Industries & Investments jumped 2.4%. IDB Holdings closed up 0.8%.