Prospects for offshore gas boom propels Israeli sharemarket
ISRAELI stocks are surging, bolstered by prospects that domestic gas output will start next year.
ISRAELI stocks are surging, bolstered by prospects that domestic gas output will start next year.The benchmark TA-25 index on the Tel Aviv stock exchange is poised for a 12 per cent annual rally after two listed energy producers, Isramco Negev 2 and the Delek Group, surged by more than 24 per cent on forecasts that enough natural gas has been found to supply Israel's needs for 150 years.Earlier this month, the finance ministry raised its forecast for economic growth next year from 3 per cent to 3.5 per cent to include the effect of natural gas discoveries, with the offshore Tamar field expected to start production by the second quarter."The gas companies performed quite well this year as there was more clarity on production," the head of research at IBI-Israel Brokerage and Investments, Ori Licht, said last week.Israeli natural gas companies, working with the US firm Noble Energy, are examining plans to develop the Leviathan gas field, the world's largest find of its kind in a decade before 2010. Israel is considering exporting a portion of the gas to finance the projects.Three weeks ago, Woodside Petroleum confirmed it would make Australia's largest foreign direct investment into Israel, committing up to $US1.3 billion to take 30 per cent of the Leviathan field.The TA-25 also got a boost this year from banking stocks. Bank Hapoalim, the country's second-largest lender and the most heavily-weighted stock on the benchmark index, has gained 35 per cent after falling by 33 per cent last year. Bank Leumi Le-Israel, the largest lender, has gained 21 per cent.The shares had rallied after falling to "ridiculously low valuations", the head of international sales at Psagot Investment House in Tel Aviv, Zach Herzog, said last week.Israel's biggest mobile telephone companies, Cellcom and Partner, led the losers, as new wireless entrants forced the incumbent providers to lower their prices to keep customers.The emergence of low-cost mobile providers in Israel may reduce Cellcom's sales this year by 15 per cent to $US1.5 billion, estimates compiled by Bloomberg show. Partner's sales this year are expected to be down by 25 per cent to $US1.47 billion.Check Point Software Technologies, a security networks maker, has lost 10 per cent this year.
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