Tel Aviv Stock Exchange Indices Decline Amidst Tech and Defense Sector Weakness

The Tel Aviv Stock Exchange experienced a negative close on Tuesday, with major indices seeing declines. The TA-35 index fell by 1%, and the TA-125 dropped by 0.8%. In contrast, the TA-90 and All Share indices remained nearly unchanged, closing down 0.1% and 0.2% respectively. The technology sector index was down 1.9%, influenced by a downturn in semiconductors on Wall Street. The energy infrastructure index lost 1.7%, and the renewable energy index decreased by 2.1%. The defense index saw a 1.4% drop, while banks declined by 0.8%, and the insurance index closed flat. Trading volume for the All Share index was approximately 3.7 billion shekels, with the continuous dollar trading around 3.11 shekels.

Notable decliners in the defense sector included ERODROM, down 8%, and Elbit Systems, down 1.8%. Conversely, TSG saw a 2.5% increase. In real estate, Hachshara and Carasso Real Estate rose, while Aura fell. Max Stock saw a 1.6% gain, and Carasso Motors declined. Other market movers included the Tel Aviv Stock Exchange itself, up 4.1%, and Malam-Team, up 4.7%, while Qualitao and Solrom fell.

Mitronics experienced a significant surge of 15.9% after receiving a preliminary, non-binding offer from FIMI fund to inject 200 million shekels in cash for half of its share capital post-allocation. The offer price reflects a valuation of 200 million shekels before the investment, with the fund also holding options for further investment at higher prices. FIMI has secured a 60-day exclusivity period for due diligence.

Rani Zim's company also saw a 2.1% increase after Zim sought to increase his stake in the commercial centers he founded. He will purchase 7.5% of the shares for 75 million shekels, reflecting a valuation of 1 billion shekels. This deal involves Hajaj Real Estate selling a portion of its investment to reduce debt, while Zim aims to increase his exposure to the company's assets and future growth, potentially regaining control.

In energy, Dalia Energy has initiated international arbitration against NewMed Energy and Ratio, contesting the cancellation of a gas supply agreement from the Leviathan field. Dalia claims the cancellation notice was not in accordance with the agreement, while the partnerships maintain the cancellation was valid. Dalia Energy's parent company, Energy Resources, also saw a decline.

Spi Singer, Chairman of the Securities Authority, warned against insurance groups becoming financial conglomerates that also own banks and credit card companies, noting that a significant portion of institutional assets are concentrated in a few large groups. Meanwhile, the Capital Market Authority is accelerating the licensing of Gemachim (loan funds), which manage an estimated 5-6 billion shekels, with approximately 20 licenses issued so far out of 110 applications.

A Bank of Israel survey indicated a decrease in credit demand from construction and real estate companies in the third quarter, with banks increasing credit margins for them. Conversely, banks are easing lending to small businesses and households. Wall Street closed sharply lower overnight, led by technology stocks, with the Nasdaq down 2.6%, impacting trading in Tel Aviv.