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Tel Aviv stocks reversed from mild morning gains to end in the red, on assessments that any improvement in the world markets yesterday and today will be short-lived.

Stocks started Wednesday in the green, lifted by gains on Wall Street and in European markets Tuesday evening, and the shekel's rebound against the dollar in early morning trade. Yesterday the world's stocks sprung back strongly from their plunge on Monday, and the shekel inched up against the dollar by 0.2%. Today the shekel climbed even more.

But although Tel Aviv stocks proved resilient to the bedlam spreading through the globe's exchanges, market players shrugged and attributed the robustness to the low turnovers and the general public's absence from the arena. There was nobody there to panic, they say.

DBM Investment House manager Rami Dror says Tuesday's correction to Monday's plunge did not indicate a change in trend. As for the local market, he sees the Israeli government failing to stay within its deficit boundaries this year. The government's growing shortfall in tax collection, compared with forecasts on which the 2002 budget was based, will force the treasury to step up its bond issues, Dror predicts, which will impose more pressure on the already-battered sector of government paper.

On Monday the treasury raised NIS 500 million through an offering of fixed-interest shekel-denominated Shahar bonds, which went at yields of 12%. Despite that sky-high yield, Dror deemed the offering a success, since it closed at a yield below expectations. He noted that foreign institutionals sold Shahar bonds short and bought dollars. Yesterday's trend, of Shahars rising and the dollar falling, could attest that they are closing their positions, he said.

The Maof-25 index ended down 1% to 344 points and the TA-100 index sagged by 0.7% to 335.6 points. The Tel-Tech-15 index kept its lead, albeit a slim one, ending on a gain of 0.1%. Total turnover was slim at NSI 168.5 million.

Israeli agrochemicals company

Makhteshim Agan Industries (TASE:


) rose by 3.3% as investors smiled on its agreement, revealed today, to buy a series of agreements for products and rights over pesticide products from the


(NYSE:BAY) conglomerate. Makhteshim is paying €154 million for the whole enchilada, including inventories. The operations the Israeli agrochemicals maker is buying generated sales of €88 million in 2001.

Eyes were on

United Mizrahi Bank (TASE:


) stock after

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wrote today that Migdal has laid out the terms for taking over the Ofer Bros' 26% stake in the bank, if the insurer's Italian parent company, Generali, agrees. Migdal is reportedly prepared to pay a premium over the bank's shareholders equity value. But first, Migdal will lhave to sell its 10% stake in

Bank Leumi Le-Israel(TASE:




points out.

In any case, Mizrahi fell 1.8% and Leumi reversed to fall 1.2% on NIS 13.8 million turnover. Migdal started flat but gradually gained momentum - downwards, ending on a loss of 2.8%.

Generic drugs giant

Teva Pharmaceuticals



) surged by 1.1%.

The Formula group announced a reorganization, in which the operations of

New Applicom (TASE:



Sintec Advanced Technologies (NYSE, TASE:


) and

Sivan Training and Systems (NYSE, TASE:


) would be merged into

Matrix (TASE:


). The first three will be delisted.

What did the market think? New Applicom climbed 8.3%, Sintec inched up by 0.4%, Sivan gained 44% - and Formula lost 0.1%, while Matrix sank by 0.7%. All of those were on low turnovers.