Israel Matzav

Tel Aviv Stock Exchange now above September 2008 levels

On Sunday, for the first time, the Tel Aviv Stock Exchange closed higher than it was when Lehman Brothers collapsed and world markets dropped in September 2008.

The trading week opened on a particularly optimistic note as stocks took off yesterday, partially following the lead of Wall Street at the end of last week, and partially following all last week's big gains. Asian markets also rebounded strongly last week.

The TASE rose impressively yesterday, with the TA-25 up 3.3% to close at 945 points, and the TA-100 gaining 3.2% to end the day at 878 points. The Real Estate-15 leapt 4.4% and the Banks-5 rose 3.4%. Turnover was very high for a summer Sunday with foreign investors still enjoying their weekend: NIS 2.1 billion.

The TA-25 crossed the 945 point level yesterday, returning the index to where it was in September 2008 when Lehman Brothers failed. So far in 2009 the TA-25 has regained 44%, though it is still 23% below its October 2007 high. Since January the TA-100 is up 56%, and is now 26% below its high-water mark in October 2007.

The real estate index has fallen 31% in the last 12 months, but in 2009 it is so far up 109%. Bank shares are down 14% over the past year, but have climbed 57% this year. The TelTech-15 is only off 5% over the past 12 months, but has gained 64% in 2009.

The market is also waiting to hear from the governor of the Bank of Israel, Stanley Fischer, who will announce his decision on September interest rates this evening. Most analysts forecast he will leave rates unchanged at 0.5% even though the June consumer price index rose a surprising 0.9%. The central bank said in last month's interest rate announcement that inflation was expected in the short term to remain within the government's target range of 1-3%, even if some of the time it was near the upper limit - which supports leaving interest just where it is now.

If you need a lawyer to help you navigate the Israeli stock market, please feel free to call me.

posted by Carl in Jerusalem @ 5:49 PM