Tel Aviv stocks finished Monday with 1% gains as Teva Pharmaceuticals (Nasdaq:TEVA) continued to stride north, after last week's debacle.
The Maof-25 index ended up 1% at 377.3 points and the TA-100 index rose 0.9% to 363.6 points. Tech stocks reversed from a day-long slump to end 0.7% in the green.
Teva's morning gains weakened to leave it ending the day 0.4% down on NIS 33.4 million turnover. The Israeli drugmaker had taken a beating last week on a double whammy: a distaste for pharmas thanks to the Bristol-Myers probe, and the alliance between Pfizer (NYSE:PFE) and Europe's Serono (SEOZ.VX) to market multiple sclerosis drug Rebif in Teva's key U.S. market. Rebif will compete with Teva's multiple-sclerosis treatment Copaxone, which has been a major profit-maker for the Israeli drugmaker. The American MS market is estimated to be worth about $1.3 billion a year.
Analysts last week were saying that another reason for Teva's slump is, simply, that it has become very pricey compared with peer companies.
Its multiples are much higher than other generic drugmakers, and are still so even after last week, Leader DS analyst Ori Hershkovitz points out. Possibly investors are less concerned about multiples in these scandal-rocked days, and have an eye on a company's good name and reliability, Hershkovitz surmises. On Thursday Israel Makov, Teva's CEO, told TheMarker that the company's accounting methods are straightforward and the company is completely transparent.
Action has been animated in Matav Cable Systems (Nasdaq:MATV), which rose 1.8% on turnover of NIS 5.6 million, after TheMarker reported a $92 million cash infusion from the banks. To be accurate, the banks are lending Matav the money to equate its debt level per subscriber with that of Israel's other two cable companies. Why would they do that? To facilitate a merger between Matav and the other two, Tevel and Golden Channels. The three companies are, technically, creating a joint subsidiary named Gvanim and one of the key obstacles has been their differing levels of debt, with Tevel having roughly twice that of Matav.
The banks were strong today, with Hapoalim rising 1.2% and Bank Leumi up 2.4%. Discount is gained 2.3% as the cloud of contenders around its subsidiary, Discount New York, continues to swirl. And expand.
Elco lost morning gains of almost 2% to end down 2.1%, after handsome gains of 6.5% on Sunday on the company's announcement of intentions to buy back a million shares. Elco is offering NIS 37 per share, costing it NIS 37 million. that is a premium of 10% above its closing price on Sunday.