Tel Aviv stocks closed down 1% on Wednesday on a thin turnover of NIS 167 million. The session opened with a 0.5% decline, which was due to Wall Street's lackluster response to the Federal Reserve's rate cut, and the 0.9% rise in Israel's Consumer Price Index (CPI) for April, which was higher than expected. Investors weren't cheered by the news.
Losses on European exchanges and negative Nasdaq futures hardly helped to raise spirits.
The Maof-25 index of blue chips closed down 1.07% to 418.56 points. Earlier in the session, blue chips had lost 1.23%. The TA-100 index fell 0.92% to 410.27 points, and tech stocks shed 0.52%.
Teva Pharmaceuticals (Nasdaq:TEVA) dropped 2.6%, on the session's highest turnover of NIS 30 million. That's after the share started on a negative arbitrage gap from Nasdaq of 3.2%.
Elron Electronic Industries (Nasdaq:ELRNF) lost 2.9%, Matav Cable Systems Media (Nasdaq:MATV) dropped 2.3%. But Relatix (Nasdaq:RTLX) added 1%, and Metalink (Nasdaq:MTLK) gained 2.2%.
Formula Systems (Nasdaq:FORTY) rose by 1.9% on a lively volume of NIS 23 million. This morning Israeli newspaper
reported that Israeli businessman 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 raising their stake in the firm from 18% to 25%, or even 30%.
Investors were apparently heartened by the paper's report that the parties intend to tender an offer, which will probably be higher than the market price.
Nice Systems (Nasdaq:NICE) closed down 2.2% on a NIS 12 million turnover, after opening earlier with moderate gains. The losses might have been prompted by the company's announcement that it won't be cooperating with Koor Industries (NYSE:KOR) and Poalim Investments, should they continue in their hostile takeover attempt, which was reported yesterday.
Yesterday Nice had been polite about the attempt at a hostile takeover.
"The recent development does not constitute an attempt to take over the company. It is an act of faith by two very significant bodies in the Israeli economy, which are to take part in the company's development."
"Koor and Poalim Investments are among Nice's shareholders. They are entitled to request a change to the agenda of the general meeting and appoint directors on their behalf," said the Nice press release. But today Nice took off the gloves, and Koor reportedly backed away from the potential takeover.
Vehicle-location company Ituran Location & Control plunged 12% on a NIS 2 million volume of trade. The company announced today that it will be writing off $5 million in the first quarter of 2001. This follows a board decision to close the firm's subsidiaries in New York and Washington DC, due to their high operating costs.
Successful bond issue
Gideon Ben-Noon adds:
Meanwhile, the State of Israel's first issue of unlinked long-term Shahar bonds was a great success. Investors snapped them up today, indicating that the market believes Israel's traditionally high rate of inflation has been curbed.
The series of 10-year bonds closed at 103.2 points, reflecting a yield of 6.57%. The return per bond is lower than the 6.6% to 6.8% that bond traders had expected. It is almost the same rate as the yield on 5-year unlinked bonds.
The scope of the issue was only NIS 200 million. In a sense, the issue was a trial balloon sent up by the treasury and the Bank of Israel. To date, the longest term the treasury has sold bonds for was ten years.