Sky Diving in TASE

Energy stocks are shaking

While North American markets take a cool breath during the weekend, the TASE (Tel- Aviv Stock Exchange) is boiling.

The energy sector may be at the end of its Golden Era and the investors are becoming sober after a wild party that brought the sector to imaginative prices.

As we speak, the major companies who invest in oil and natural gas are falling like rocks from the sky. IsramCo (-7.98) percent, Avner (-8.36) percent, Delek Drilling (-9.09) percent, and Ratio (-4.48) per cent.

The sector is heavily and negatively impacted by Prof Eytan Sheshinsky's recommendations. Sheshinsky was nominated by the State of Israel to inspect and recommend on the economic aspects of the Oil & Gas sector.

His recommendations of increasing taxes to 20-60 per cent from future profits were a slap in the face to many investors. Many who oppose Sheshinsky's conclusions say that his recommendations will "dry" all future investments in the sector and will make it too risky and unprofitable.

Noble Energy published a warning with regard to Leviathan. The company said that the market is already behaving as if Leviathan is already a positive discovery. It reminded all of us that it is still under exploration and beside 50 per cent chances of success there are also 50 per cent chances of failure.

Israeli investment houses, such as IBI, say that the sector prices are too high and some companies may face losses in the near future.

Add this data to the not so good news from China, who lost 5.16 per cent on Friday, and the worries about Greece and Ireland and you will get a free sky dive in share value.

Dual stocks

Over 100 TASE companies are also traded in New York markets. Negative results in Tel Aviv will also have negative results in New York tomorrow. As investors always say: "When it rains everybody gets wet."

Dual stocks at focus: Teva (+2.13) per cent, TSEM (-0.56) per cent, CTCH (-3.15) per cent.

Macro data

The consumers' price index for October (Inflation rate) will be published tomorrow. Most analysts and economist expect a 0.2 per cent increase. Higher data may be bad to the stock market as it may cause an increase in the Central Bank interest rates by 0.25 per cent.

Investors’ behavior

These are times when the risks are higher than opportunities. The markets are very unstable and as we said before, we may see a very red November in the global markets.