Bloomberg News

Israel Stocks Head to Three-Week High Amid Perrigo Deal Report

July 15, 2014

Israeli stocks rose for a third day after Globes reported that prescription-drug maker Perrigo Co. (PRGO:US) is considering a stake sale.

The benchmark TA-25 Index (TA-25) climbed 0.3 percent at 2:38 p.m. in Tel Aviv to 1,399.23, headed for the highest level since June 24. Shares of Perrigo, which has the biggest weighting on the index, led the advance, rallying 7.8 percent to 533.80 shekels. The stock traded at 2.5-times the three-month average daily volume, and is headed for the biggest advance since August 2011. The shekel strengthened 0.5 percent, the most since March 6, to 3.4033 per dollar.

Perrigo is considering selling itself to a large pharmaceutical company, the Israeli news website reported, without saying where it got the information. Bradley Joseph, a spokesman for Perrigo, said the company doesn’t comment on market rumors, according to emailed statement. The list of potential buyers is limited to five pharmaceutical companies, according to a Jefferies Group LLC note. Perrigo’s U.S.-traded shares gained 8.7 percent yesterday to $158.85.

“The market is rising based on global strength as well as Perrigo, which is closing a parity gap on rumors of an acquisition,” Steven Shein, a trader at Psagot Investment House Ltd. in Tel Aviv, said by telephone. “This, together with talks of a cease-fire, is pushing the market up.”

Israel accepted Egypt’s proposal to end a week of fighting with Gaza militants and ordered its military to cease fire at 9 a.m., Prime Minister Benjamin Netanyahu’s office said. Hamas, the militant movement that controls Gaza, said it wasn’t consulted on the plan, and gave conflicting responses ranging from outright rejection to a statement saying it was being debated. At least 175 Palestinians have been killed in the conflict.

Muted Reaction

“Egypt is the most influential Arab nation and the market doubts that Hamas will reject its proposal,” Rony Gitlin, head of spot trading at Bank Leumi Le-Israel Ltd. by telephone today.

The violence has so far received a muted reaction in capital markets. The TA-25 index retreated 1.5 percent between July 3 and July 10, less than the 1.7 percent decline on the MSCI World Index. Israel’s gauge has risen every day this week.

“Investors have been unfazed by the conflict, assuming it would not escalate,” Shein said. “If the cease-fire brings a halt to fighting in the near term, that would be a mild positive for the local markets.”

The yield on the benchmark bond due March 2024 dropped four basis points, or 0.04 of a percentage point, to 2.81 percent, the lowest since June 29.

To contact the reporters on this story: Shoshanna Solomon in Tel Aviv at; Yaacov Benmeleh in Tel Aviv at

To contact the editors responsible for this story: Samuel Potter at James Doran, Dana El Baltaji

Ebola Rising

Companies Mentioned

  • PRGO
    (Perrigo Co PLC)
    • $150.19 USD
    • 0.46
    • 0.31%
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