Tel Aviv Stock Exchange Ends Higher Amid Mixed Trading; Electra Real Estate Soars

The Tel Aviv Stock Exchange concluded a shortened trading day on a positive note, with the TA 90 index rising 0.7% while the TA 35 remained flat. Real estate indices were notable performers, with the construction, "Mivneh Israel," and "Mivneh Ch""L" indices each gaining approximately 0.6%.

In the TA 35 index, Palo Alto Networks and Kamatech were top gainers, up 6.3% and 3.5% respectively. Conversely, NICE and Elbit Systems saw declines of around 3%. The TA 90 index was significantly boosted by Electra Real Estate, which surged nearly 10% after a substantial 16% drop the previous day, despite no apparent unusual company events. Nofar Energy and V-Sure experienced drops of about 4%.

The Israeli Shekel reversed global trends, strengthening by approximately 0.5% against the US dollar to trade at 3.06 shekels per dollar, recovering from an earlier low of nearly 3.07 shekels, a two-month low. Analysts suggest Electra Real Estate's volatility may be linked to its potential exclusion from the TA 90 index and possible impacts from US interest rate hikes on its US property investments.

Earlier in the day, the TA 35 index showed a slight decline, while the TA 90 maintained its gains. Electra Real Estate's significant jump followed a sharp fall the prior day, with its trading volume more than doubling its average. Concerns about its potential exclusion from the TA 90 index and the impact of US interest rate hikes on its US housing portfolio were cited as possible reasons for the volatility. Analyst Avi Shakuri of Psagot Sigma Capital noted that initial negative sentiment stemmed from a July capital raise, where a canceled public offering was followed by a discounted private placement to Menora Mivtachim, leading to a decrease in the controlling shareholder Elco's stake. This, coupled with Elco's limited market purchases, was perceived as a weak signal of support for the company's capital structure. Psagot Sigma believes the market is now focused on the company's capital structure and awaiting a clear signal from Elco, such as a rights offering or aggressive share purchases, to stabilize the stock and restore financial flexibility.