TASE Dips After Tax Hike News

YERUSHALAYIM -

The Tel Aviv Stock Exchange was prepared for an austerity budget with deep spending cuts, but the news of Finance Minister Yair Lapid’s proposed 1% increase in the corporate income tax rate left investors feeling somewhat queasy, reported Globes on Tuesday.

As a result, the benchmark TA-25 index, which had been up as much as 0.8% earlier on Monday, closed down 0.2% at 1,201.62 points. The TA-100 showed a slight gain of 0.1% to 1,073.35. Turnover was a relatively lively NIS 1.15 billion.

In foreign currency trading, the dollar lost almost 0.9% against the shekel to a Bank of Israel rate of NIS 3.6290. The euro lost 0.2% to NIS 4.7339.

Yossi Fraiman, CEO of Pico Risk Management & Investments, was optimistic about the dollar, telling Globes it will probably stay between NIS 3.61 and NIS 3.64 because it is trading in a narrow range against the euro.

“We believe that in the long term, the shekel will likely continue to strengthen, while in the short term, brief surges in demand will support its depreciating to a level of NIS 3.65,” he said.

Bank shares led the market lower, with the TA-Banking index off 1.4% at 1,091.97. Mizrahi-Tefahot bank dropped 2.7% on turnover of NIS 83.3 million, the day’s second highest. Bank Hapoalim was down 1.5% and Bank Leumi was off 1.1%.

Telecommunications was also losing altitude. The TA-Communications index slumped 1.4% to 563.67. Bezeq declined 2.8%, Partner Communications dropped 2.2% and Cellcom Israel lost 1.3%.

El Al Airlines recovered from a bumpy ride on Sunday, closing on Monday 2.5% higher, as a strike settlement was in the offing. The threat of stronger competition from EU carriers due to the Open Skies pact did not seem to be generating acute anxiety.

Yitzhak Tshuva’s Delek Group advanced 2% on news that Tshuva will turn to U.S. markets to raise some $2 billion in debt capital. The proceeds will be used to recycle some $800 million in debt.