According to the "Globes" survey of investment houses for 2011, the local stock market will continue to rise in 2011, but by considerably less than in 2010. The average prediction for the level of the Tel Aviv 25 Index at the end of 2011 by the 27 investment houses surveyed is 1,369 points, just 5% above 2010's closing level. 14% of respondents predict that the stock market will fall next year.
The prediction for the S&P Index is a level of 1,349 points at the end of 2011, 7% higher than its current level.
77% of the respondents recommend equities as the best instrument in which to invest in 2011, while the least favored instrument, mentioned by 60%, is government bonds
Recommended sectors are finance and chemicals, while the sectors to avoid are oil and gas exploration, telecommunications, and real estate.
The stocks tipped to do well are Bank Hapoalim (TASE: POLI), Bank Leumi (TASE: LUMI), Israel Chemicals Ltd. (TASE: ICL), and Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA). Stocks expected to do badly are wireless carriers Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) and Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL). The overseas stock most highly recommended is US pharmaceuticals giant Pfizer.
The investment houses see the Israeli economy growing by 3.5% next year, inflation of 3%, a Bank of Israel interest rate of 3.3% at the end of the year, and the shekel-dollar exchange rate at NIS 3.52/$ by then. One respondent said that the shekel-dollar rate would fall below NIS 3/$, and one said it would rise above NIS 4/$.
In last year's survey, the Tel Aviv 25 Index was seen at 1,212 points; it closed the year at 1326.44. The most highly recommended sector for investment was finance; the Finance Index actually rose 6% in 2010. The sectors to be avoided were supposed to be real estate and telecommunications, which in fact rose by some 15%. Bezeq The Israeli Telecommunication Co. Ltd. (TASE: BEZQ) and Teva were the hot-tipped shares; Bezeq rose 30%, but Teva fell 11%. We were advised to shun Osem Investments Ltd. (controlled by Nestle (SWX:NESN)) (TASE: OSEM), Partner, and Africa-Israel Investments Ltd. (TASE:AFIL; Pink Sheets:AFIVY); in the event, Osem rose by 18%, and Partner by 16%, but Africa-Israel kept to the script and dropped about 50%.
Published by Globes [online], Israel business news - www.globes-online.com - on December 30, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010