Bloomberg News

Israel Stocks Rise Most Since 2009 on Shufersal Sale, Europe

October 16, 2011

Oct. 16 (Bloomberg) -- Israel’s benchmark stock index climbed the most in more than two years after Discount Investment Corp. agreed to sell its stake in Shufersal Ltd. and as Europe’s sovereign debt strategy received global backing.

Shufersal jumped to the highest since August. Bank Leumi Le-Israel, the country’s largest lender by assets, surged the most since 2009, and Bank Hapoalim Ltd. gained 5 percent. Israel’s TA-25 Index, trading for the first time since Oct. 11, rose 4.3 percent, the most since April 2009, to 1,131.34 at the 2:45 p.m. close in Tel Aviv. The Bloomberg Israel-US 25 Index of the largest Israeli companies traded in New York last week had their the biggest weekly surge since October 2008.

“The Shufersal deal together with increased chances for an EU bailout is boosting the local market,” Darren Shaw, head of research at UBS Securities Israel Ltd. in Herzliya Pituach, Israel, said by telephone. Stocks are also making up for gains abroad while Israel was closed for the holidays, he added.

European officials yesterday outlined the initiatives they’re considering at a meeting in Paris of finance ministers and central bankers from the Group of 20 economies. With the continent’s fiscal woes rattling financial markets and threatening the world economy, governments were urged to complete the plan at their Oct. 23 summit in Brussels and to tame the threat of contagion by maximizing the firepower of their 440 billion-euro ($611 billion) bailout fund. Europe and the U.S. are Israel’s biggest trading partners.

Beating S&P

Twenty-four of the 25 companies in the Bloomberg Israel-US 25 Index gained 6.3 percent last week, beating the Standard & Poor’s 500 Index’s 6 percent advance. Global stocks rallied on Oct. 14, extending the biggest weekly rally since July 2009, as the G-20 began talks and U.S. retail sales beat estimates.

Israel’s stock market will close earlier than usual at 2:45 p.m. through Oct. 18 for a holiday. The bourse will be shut Oct. 19 and Oct. 20.

Shufersal gained 4.2 percent to close at 17.10 shekels. They surged as much as 12 percent earlier after Discount Investment agreed to sell its 46 percent stake in Israel’s largest supermarket chain for 2.42 billion shekels ($662 million), or 24.18 shekels a share.

Discount Investment surged 9.8 percent to 36.02 shekels, the highest level since Aug. 4.

Bank Leumi soared 7.3 percent, the most since April 2009, to 12.38 shekels and Bank Hapoalim, the nation’s second-largest bank, advanced to 13.49 shekels.

‘Umbilical Cord’

“The banks in Europe and the U.S. went up last week on positive news on the solution for debt," said Adi Scop, banking analyst at I.B.I.-Israel Brokerage & Investments Ltd. in Tel Aviv. "Israel is connected by an umbilical cord to the rest of the world."

The Tel Aviv Banking Index advanced 6.5 percent, its biggest jump since April 2009. The gauge has declined 26 percent over the past six months, compared with a 15 percent drop for the benchmark index.

Allot Communications Ltd., Israel’s biggest maker of high- speed networking equipment, jumped 13 percent to 46.92 shekels, or the equivalent of $12.83. The shares soared 22 percent in the U.S. last week to $12.93, leading the increase in the Bloomberg Israel-US 25 Index, on growing speculation that profits at technology companies will improve on demand for smartphones.

Israeli technology companies, which raised $569 million in capital during the second quarter, the most in two years, are benefiting from rising Internet traffic and increased online video streaming. Allot will report adjusted third-quarter earnings on Nov. 1 of 10 cents per share, according to the median estimate of eight analysts surveyed by Bloomberg.

Apple Line

"Companies that have good exposure to robust businesses such as smartphones’ suppliers, those are the ones that will be holding on well," said Jay Srivatsa, an analyst at Chardan Capital Markets LLC in New York.

Hundreds of people in cities from New York to London and Tokyo lined up overnight at Apple Inc.’s stores to snap up the company’s newest iPhone on Oct. 14. The device sold out for pre- order at AT&T Inc., Verizon Wireless and Sprint Nextel Corp. a day before it officially went on sale, according to the carriers’ websites.

Allot of Hod Hasharon, Israel, whose customers include Virgin Media Inc. and billionaire Carlos Slim’s fixed-line carrier, Telefonos de Mexico SAB, developed a technology that allows Internet providers to differentiate network traffic and provide tailored plans to their clients as demand for faster data surges.

‘Infrastructure Market’

EZchip Semiconductor Ltd. increased 2.2 percent to 127.90 shekels, or the equivalent of $34.98. The maker of network processors that counts Cisco Systems Inc. as a customer rallied 5.9 percent to $34.31 in the U.S. last week. EZchip, based in Yokneam, Israel, will report third-quarter adjusted earnings per share of $0.32, according to eight analysts surveyed by Bloomberg.

Teva Pharmaceutical Industries Ltd., the world’s largest maker of generic drugs, gained 3.4 percent to 145 shekels, or the equivalent of $39.66. The shares advanced 6.6 percent to $39.17 in New York last week.

Teva last week completed its $6.2 billion acquisition of Cephalon Inc. after winning approval from European Union regulators.

--With assistance from Tal Barak and Zachary Tracer in New York. Editor: Shaji Mathew

To contact the reporters on this story: Claudia Maedler at cmaedler@bloomberg.net Susan Lerner at slerner2@bloomberg.net To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net ALLT IT <Equity> LUMI IT <Equity> POLI IT <Equity> SAE IT <Equity> DISI IT <Equity>


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