Bibi quits, stocks plunge
Tel Aviv stocks plunge immediately following finance minister resignation; MAOF index loses more than five percent, Tel Aviv 100 loses 4.54 percent, Teltech 15 down over 3.5 percent
The MAOF Index dropped 5.23 percent to close at 666.01; the Tel Aviv 100 lost 4.54 percent to close at 678.59, and the Tel Tek 15 closed at 380.09, a loss of 3.52 percent.
It should be noted that when Netanyahu took office in February, 2003, the MAOF Index traded at around 292 points. The index recently registered an all-time high, closing at 700 points – a 140 percent increase in two-and-a-half years.
Overall, the market registered a total trade volume of NIS 1.17 billion.
Scary times
Finance officials called the quick reaction to Netanyahu’s departure “frightening.”
“We don’t know what to expect in the coming days, with the situation so unstable,” they said.
Despite the fact that foreign traders usually take Sunday off, “foreign” stocks also registered drops.
Amongst stocks usually identified with foreign investors, Bank Leumi lost 5.3 percent, Bank Hapoalim lost 6 percent, and Bezeq lost 5.6 percent.
Praise for Netanyahu
Upon hearing of the resignation, Shlomo Maoz, chief economist at the Excellence Nessuah investment bank, praised Netanyahu, saying he was one of Israel’s best finance ministers.
“To a large degree, he took the bull by the horns, and strengthened investors’ faith in his policies,” said Maoz.
Maoz continued: “(Netanyahu) fought to keep the deficit low, and worked hard to bring about reform to the investment market, taxes, and he managed to capture the hearts of foreign investors.”
‘Market doesn’t like instability’
“The resignation will cause a terrible jump in instability,” said Maoz, “and the market doesn’t like that.”
He added he feared the government’s deficit would grow and negatively affect the bonds market.
“Prime Minister Ariel Sharon and Bank of Israel head Stanley Fischer must issue a joint declaration in order to stop the erosion,” he said.
