ISRAEL/JERUSALEM: Israel's stock hits a record high as economic growth accelerates

Record ID: 396744

  • Title: ISRAEL/JERUSALEM: Israel's stock hits a record high as economic growth accelerates
  • Date: 8th April 2010
  • Summary: JERUSALEM (APRIL 7, 2010) (REUTERS) ECONOMIST JONATHAN KATZ SAT LOOKING AT MOBILE PHONE (SOUNDBITE) (English) ECONOMIST JONATHAN KATZ SAYING: "As investors really have no alternative to park their money, locals are looking at the Bond market where rates are very very low. Deposits are of course not returning anything significant, so the alternative really is the stock m
  • Embargoed: 23rd April 2010 13:00
  • Keywords:
  • Topics: Economic News,Domestic Politics
  • Reuters ID: LVA17D87S7F0TJE1C5PHVFWYG5K5
  • Story Text: Israel's blue-chip Tel Aviv 25 index <.TA25> rose 0.4 percent to close at an all-time high on Tuesday (April 6), as strong economic growth continued to buoy the stock market.
    In the first full trading day since March 28, the TA-25 index <.TA25> closed at 1,237.85 points in moderate volume of 1.6 billion shekels ($432 million) to eclipse a previous high of 1,237.13 set on Oct. 31, 2007. It had risen as high as 1,242.39 early in the session before settling back to the end of day figure.
    "The Tel Aviv Stock Exchange, today reached a long time high, the last time it reached these levels was at the end of October 2007, the market closed at 1,237 and today the market closed, touching 1,238. This is an all time high for the Tel Aviv Stock Exchange. It is a very nice continuation to the fabulous year that we had because the market rose allot higher than other developed markets," Elah Alkalay, Vice President of Business Development at IBI Investment House said.
    Israel's equities market had either been closed or traded in shortened sessions since March 29 due to the seven-day Jewish Passover holiday. Its previous trading session was last Thursday.
    Many Israelis used the holiday period to spend some of their new earnings, helping to increase retail growth throughout the country.
    "We just had the holiday of Passover and what was going on in the shopping centres was incredible, there was a real traffic jam throughout most of the shopping centres, which made it very difficult if you were Israeli but I think shows very well the Israeli economy, So I think the retail and the internal growth is showing very very high numbers and strong performance," Alkalay added.
    After surging some 70 percent in 2009, the Tel Aviv bourse is up another 8 percent so far in 2010 on the heels of a rapidly rebounding economy.
    Economists speculated the general mood in the markets is for continued gains.
    "As investors really have no alternative to park their money, locals are looking at the Bond market where rates are very very low. Deposits are of course not returning anything significant, so the alternative really is the stock market. While the housing market has rebounded, most people now see that as an investment that is a big risk and therefore you really have a boom in the Israeli stock market," Israeli economist Jonathan Katz said.
    The economy contracted in the fourth quarter of 2008 and first quarter of 2009 before posting positive growth starting in the April-June period of last year. Growth was an annualised 4.9 percent in the fourth quarter and the economy is expected to grow at least 3.5 percent in 2010.
    Gains have been broad-based but led by telecoms and financial companies, although bank shares are believes to still be cheap after getting hammered starting in 2008.
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