Tel Aviv stocks are trading at a mild loss at early afternoon on Wednesday, after cutting steep morning losses. Turnover is paper-thin at NIS 70 million.

Meanwhile, the State of Israel's first issue of ten-year unlinked bonds went over well.

Investors are worrying about several factors, including Wall Street's lackluster response to the Fed's rate cut and the local 0.9% gain in the April CPI, which proved higher than expected. Losses on European exchanges and negative Nasdaq futures are hardly helping to lift spirits.

The Maof-25 index of blue chips is down 0.62% to 420.45 points and the TA-100 index is losing 0.54% to 411.6 points. Tech stocks are inching up by 0.07%.

Teva Pharmaceuticals (Nasdaq:TEVA) is dropping by 2.4% on the session's highest turnover, NIS 10 million, after starting on a negative arbitrage gap with Nasdaq of 3.2%.

Other dual-listed losers this morning include Elron Electronic Industries (Nasdaq:ELRNF) - down 2.7%, Matav Cable Systems Media (Nasdaq:MATV) - down 3.5%, Elbit Medical Imaging (Nasdaq:EMITF), which is losing 2.8%, and Metalink (Nasdaq:MTLK), down 2.2%.

Formula Systems (Nasdaq:FORTY) shares are rising by 4.2% on lively volume of NIS 8.5 million. This morning

Ma'ariv

reported that by Yossi Maiman and Formula's controlling shareholders, Danny and Gad Goldstein, will be buying back some of the public's holdings in the company. The Goldsteins reportedly want to consolidate their control of the company by lifting their stake from 18% to 25% or 30%.

Nice Systems (Nasdaq:NICE) is off 1.5% on NIS 7.2 million turnover after rising 0.5% at opening. Yesterday the company confirmed that Poalim Investments and Koor want to replace four of its directors.

Delta Galil Industries (Nasdaq:DELT) is losing 3.7% on NIS 1.3 million volume of trade, despite opening on a positive arbitrage gap of 3.6%. Today the company posted net profit of $4.3 million for the first quarter of 2001, 23% less than the parallel period in 2000. Sales grew to $134.3 million, 42% higher than the first quarter of 2000.

IDB group shares are mixed. IDB Development Corporation is slipping by 0.3%, Discount Investments is up edging up 0.1%, Clal Industries is dropping 2%, and IDB Holdings is gaining 1.8%.

Clal Insurance is unchanged after starting on a 2% hop. Today the company posted decreased revenues of NIS 106.4 million for the first quarter of 2001, 4% less than the comparable quarter in 2000. Net profit shrunk to NIS 56.1 million, significantly less than in the first quarter last year when the company posted one-time capital gains following the sale of holdings. The company announced it will be distributing an NIS 100 million dividend.

Successful bond issue

Gideon Ben-Noon adds:

The State of Israel's first issue of unlinked long-term Shahar bonds was a great success. Investors soaked them up today, indicating that the market believes Israel's traditionally high inflation has been curbed.

The series of the 10-year bonds closed at 103.2 points, reflecting a yield of 6.57%. The return per bond is lower than bond traders had expected. Expectations had ranged from 6.6% to 6.8%. It is almost the same rate as the yield on 5-year unlinked bonds.

The scope of the issue was not large, only NIS 200 million. In a sense, the bond issue was a trial balloon by the treasury and Bank of Israel to sell long-term bonds. To date the longest term the treasury hawked was ten years.